Document:

Document

Exhibit 10.26
Early Exercise Form

NEXTDOOR.COM, INC.
2008 EQUITY INCENTIVE PLAN
NOTICE OF STOCK OPTION GRANT
You have been granted the following option to purchase shares of the Common Stock of Nextdoor.com, Inc., a Delaware corporation (the “Company”):
									
	Participant:		
			
	Social Security Number:		
			
	Address:		
			
			
			
	Total Option Shares:		
			
	Exercise Price Per Share:	$	
			
	Date of Grant:		
			
	Exercise Period:	This Option will become vested and exercisable as to portions of the Shares as follows: (i) this Option shall not vest nor be exercisable with respect to any of the Shares until the First Vesting Date set forth below, (ii) on the First Vesting Date the Option will become vested and exercisable as to 1/4th of the Shares and (iii) thereafter at the end of each full succeeding calendar month this Option will become vested and exercisable as to 1/48th of the Shares until the Shares are vested with respect to all of the Shares.____________________________
			
	First Vesting Date:		
			
	Expiration Date:		
		(unless earlier terminated under Section 5.6 of the Plan (as defined below))
			
	Classification of Optionee	[ ] Exempt Employee	
			
		[ ] Nonexempt Employee	
			
	Type of Stock Option		
	(Check one):	[ ] Incentive Stock Option	
			
		[ ] Nonqualified Stock Option	

Participant hereby acknowledges receipt of a copy of the Company’s 2008 Equity Incentive Plan (the “Plan”) and the Stock Option Agreement, both of which are attached to and made a part of this document.  By Participant’s signature and the signature of the Company’s representative below, Participant and the Company agree that this Option is granted under and governed by the terms and conditions of this Notice of Stock Option Grant, the Stock Option Agreement and the Plan.  Participant has read and understands the terms and provisions hereof and thereof, and accepts the Option subject to all the terms and conditions of this Notice of Stock Option Grant, the Stock Option Agreement and the Plan.  Participant acknowledges that there may be adverse tax consequences upon exercise of this Option or disposition of the Shares and that Participant should consult a tax adviser prior to such exercise or disposition.

												
	NEXTDOOR.COM, INC.
		PARTICIPANT

				
				
	By:			
				(Signature)
				
			
	(Please print name)		(Please print name)
				
			
	(Please print title)		

2

NEXTDOOR.COM, INC.
2008 EQUITY INCENTIVE PLAN
STOCK OPTION AGREEMENT
1.    GRANT OF OPTION.  The Company hereby grants to Participant an option (this “Option”) to purchase the total number of shares of the Company’s Common Stock, $0.0001 par value per share, set forth in the Notice of Stock Option Grant as Total Option Shares (the “Shares”) at the Exercise Price Per Share set forth in the Notice of Stock Option Grant (the “Exercise Price”), subject to all of the terms and conditions of this Agreement, the Notice of Stock Option Grant and the Plan.  If designated as an Incentive Stock Option in the Notice of Stock Option Grant, the Option is intended to qualify as an “incentive stock option” (the “ISO”) within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).
2.    EXERCISE PERIOD.
2.1    Exercise Period of Option.  Subject to the conditions set forth in this Agreement, all or part of this Option may be exercised at any time after the Date of Grant.  Shares purchased by exercising this Option may be subject to the Repurchase Option as set forth in Section 8 below and as further described in the Exercise Agreement.  Provided Participant continues to provide services to the Company or any Subsidiary or Parent of the Company, the Option will become vested and exercisable as to portions of the Shares as set forth in the Notice of Stock Option Grant.  If application of the vesting percentage causes a fractional share, such share shall be rounded down to the nearest whole share for each month except for the last month in such vesting period, at the end of which last month this Option shall become exercisable for the full remainder of the Shares.  
2.2    Additional Agreement(s).  Participant acknowledges and agrees, that if upon exercise of this Option pursuant to Section 4 hereof Participant holds shares of the Company’s capital stock constituting one percent (1%) of the Company’s issued and outstanding shares of capital stock (treating for this purpose all shares of Common Stock issuable upon exercise of or conversion of outstanding options, warrants or convertible securities, as if exercised or converted), then Participant shall become bound by, and subject to, Section 3 of that certain Voting and Drag-Along Agreement, dated as of January 25, 2008, as such agreement may be amended or amended and restated from time to time, as a “Holder” thereto.  
2.3    Vesting of Options.  Shares that are vested pursuant to the schedule set forth in the Notice of Stock Option Grant and Section 2.1 are “Vested Shares.”  Shares that are not vested pursuant to the schedule set forth in the Notice of Stock Option Grant and Section 2.1 are “Unvested Shares.”
2.4    Expiration.  The Option shall expire on the Expiration Date set forth in the Notice of Stock Option Grant or earlier as provided in Section 3 below or pursuant to Section 5.6 of the Plan.
3.    TERMINATION.
3.1    Termination for Any Reason Except Death, Disability or Cause.  If Participant is Terminated for any reason, except death, Disability or for Cause, the Option, to the extent (and only to the extent) that it would have been exercisable by Participant on the Termination Date, may be exercised by Participant no later than three (3) months after the Termination Date, but in any event no later than the Expiration Date.

3.2    Termination Because of Death or Disability.  If Participant is Terminated because of death or Disability of Participant (or Participant dies within three (3) months of Termination when Termination is for any reason other than Participant’s Disability or for Cause), the Option, to the extent that it is exercisable by Participant on the Termination Date, may be exercised by Participant (or Participant’s legal representative) no later than twelve (12) months after the Termination Date, but in any event no later than the Expiration Date.  Any exercise beyond (i) three (3) months after the Termination Date when the Termination is for any reason other than the Participant’s death or disability, within the meaning of Section 22(e)(3) of the Code; or (ii) twelve (12) months after the Termination Date when the termination is for Participant’s disability, within the meaning of Section 22(e)(3) of the Code, is deemed to be an NQSO.
3.3    Termination for Cause.  If the Participant is terminated for Cause, the Participant may exercise such Participant’s Options, but not to an extent greater than such Options are exercisable as to Vested Shares upon the Termination Date and Participant’s Options shall expire on such Participant’s Termination Date, or at such later time and on such conditions as are determined by the Committee.
3.4    No Obligation to Employ.  Nothing in the Plan, the Notice of Stock Option Grant or this Agreement shall confer on Participant any right to continue in the employ of, or other relationship with, the Company or any Parent or Subsidiary of the Company, or limit in any way the right of the Company or any Parent or Subsidiary of the Company to terminate Participant’s employment or other relationship at any time, with or without Cause.
4.    MANNER OF EXERCISE.
4.1    Stock Option Exercise Agreement.  To exercise this Option, Participant (or in the case of exercise after Participant’s death or incapacity, Participant’s executor, administrator, heir or legatee, as the case may be) must deliver to the Company an executed stock option exercise agreement in the form attached hereto as Exhibit A, or in such other form as may be approved by the Committee from time to time (the “Exercise Agreement”), which shall set forth, inter alia, (i) Participant’s election to exercise the Option, (ii) the number of Shares being purchased, (iii) any restrictions imposed on the Shares and (iv) any representations, warranties and agreements regarding Participant’s investment intent and access to information as may be required by the Company to comply with applicable securities laws.  If someone other than Participant exercises the Option, then such person must submit documentation reasonably acceptable to the Company verifying that such person has the legal right to exercise the Option and such person shall be subject to all of the restrictions contained herein as if such person were the Participant.
4.2    Limitations on Exercise.  The Option may not be exercised unless such exercise is in compliance with all applicable federal and state securities laws, as they are in effect on the date of exercise.  The Option may not be exercised as to fewer than one hundred (100) Shares unless it is exercised as to all Shares as to which the Option is then exercisable.
4.3    Payment.  The Exercise Agreement shall be accompanied by full payment of the Exercise Price for the shares being purchased in cash (by check), or where permitted by law:
(a)    by cancellation of indebtedness of the Company to the Participant;
(b)    by waiver of compensation due or accrued to Participant for services rendered;

(c)    provided that a public market for the Company’s stock exists: (i) through a “same day sale” commitment from Participant and a broker-dealer that is a member of the National Association of Securities Dealers (an “NASD Dealer”) whereby Participant irrevocably elects to exercise the Option and to sell a portion of the Shares so purchased sufficient to pay for the total Exercise Price and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to forward the total Exercise Price directly to the Company, or (ii) through a “margin” commitment from Participant and an NASD Dealer whereby Participant irrevocably elects to exercise the Option and to pledge the Shares so purchased to the NASD Dealer in a margin account as security for a loan from the NASD Dealer in the amount of the total Exercise Price, and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to forward the total Exercise Price directly to the Company; 
(d)    any other form of consideration approved by the Committee; or
(e)    by any combination of the foregoing.
4.4    Tax Withholding.  Prior to the issuance of the Shares upon exercise of the Option, Participant must pay or provide for any applicable federal, state and local withholding obligations of the Company.  If the Committee permits, Participant may provide for payment of withholding taxes upon exercise of the Option by requesting that the Company retain the minimum number of Shares with a Fair Market Value equal to the minimum amount of taxes required to be withheld; but in no event will the Company withhold Shares if such withholding would result in adverse accounting consequences to the Company.  In such case, the Company shall issue the net number of Shares to the Participant by deducting the Shares retained from the Shares issuable upon exercise.
4.5    Issuance of Shares.  Provided that the Exercise Agreement and payment are in form and substance satisfactory to counsel for the Company, the Company shall issue the Shares registered in the name of Participant, Participant’s authorized assignee, or Participant’s legal representative, and shall deliver certificates representing the Shares with the appropriate legends affixed thereto.
5.    NOTICE OF DISQUALIFYING DISPOSITION OF ISO SHARES.  If the Option is an ISO, and if Participant sells or otherwise disposes of any of the Shares acquired pursuant to the ISO on or before the later of (i) the date two (2) years after the Date of Grant, and (ii) the date one (1) year after transfer of such Shares to Participant upon exercise of the Option, Participant shall immediately notify the Company in writing of such disposition.  Participant agrees that Participant may be subject to income tax withholding by the Company on the compensation income recognized by Participant from the early disposition by payment in cash or out of the current wages or other compensation payable to Participant.
6.    COMPLIANCE WITH LAWS AND REGULATIONS.  The Plan, the Notice of Stock Option Grant and this Agreement are intended to comply with Section 25102(o) of the California Corporations Code and any regulations relating thereto.  Any provision of the Notice of Stock Option Grant or this Agreement which is inconsistent with Section 25102(o) or any regulations relating thereto shall, without further act or amendment by the Company or the Board, be reformed to comply with the requirements of Section 25102(o) and any regulations relating thereto.  The exercise of the Option and the issuance and transfer of Shares shall be subject to compliance by the Company and Participant with all applicable requirements of federal and state securities laws and with all applicable requirements of any stock exchange on which the Company’s Common Stock may be listed at the time of such issuance or transfer.  Participant understands that the Company is under no obligation to register or qualify the Shares with the SEC, any state securities commission or any stock exchange to effect such compliance.

7.    NONTRANSFERABILITY OF OPTION.  The Option may not be transferred in any manner other than by will or by the laws of descent and distribution, and, with respect to NQSOs, by instrument to an inter vivos or testamentary trust in which the options are to be passed to beneficiaries upon the death of the trustor (settlor), or by gift to “immediate family” as that term is defined in 17 C.F.R. 240.16a-1(e), and may be exercised during the lifetime of Participant only by Participant or in the event of Participant’s incapacity, by Participant’s legal representative.  The terms of the Option shall be binding upon the executors, administrators, successors and assigns of Participant.
8.    COMPANY’S REPURCHASE OPTION FOR UNVESTED SHARES. If Participant is Terminated for any reason, or no reason, including without limitation, Participant’s death, Disability, voluntary resignation or termination by the Company with or without Cause, then the Company and/or its assignee(s) shall have the option to repurchase all or a portion of the Participant’s Unvested Shares (as defined in Section 2.3 of this Agreement) as of the Termination Date on the terms and conditions set forth in Section 9 of the Exercise Agreement. (the “Repurchase Option”).  Notwithstanding the foregoing, the Company shall retain the Repurchase Option for Unvested Shares only as to that number of Unvested Shares (whether or not exercised) that exceeds the number of Vested Shares which remain unexercised and issuable upon exercise of this Option.
9.    COMPANY’S RIGHT OF FIRST REFUSAL.  Unvested Shares may not be sold or otherwise transferred, or pledged by Participant or made subject to a security interest, pledge or other lien without the Company’s prior written consent, which may be withheld in the Company’s sole and absolute discretion.  Before any Vested Shares held by Participant or any transferee of such Vested Shares may be sold or otherwise transferred (including without limitation a transfer by gift or operation of law), the Company and/or its assignee(s) shall have an assignable right of first refusal to purchase the Vested Shares to be sold or transferred on the terms and conditions set forth in the Exercise Agreement (the “Right of First Refusal”).  The Company’s Right of First Refusal will terminate when the Company’s securities become publicly traded.
10.    TAX CONSEQUENCES.  Set forth below is a brief summary as of the Effective Date of the Plan of some of the federal and California tax consequences of exercise of the Option and disposition of the Shares.  THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.  PARTICIPANT SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES.
10.1    Exercise of ISO.  If the Option qualifies as an ISO, there will be no regular federal or California 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 a tax preference item for federal alternative minimum tax purposes and may subject the Participant to the alternative minimum tax in the year of exercise.
10.2    Exercise of Nonqualified Stock Option.  If the Option does not qualify as an ISO, there may be a regular federal and California income tax liability upon the exercise of the Option.  Participant 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 Participant is a current or former employee of the Company, the Company may be required to withhold from Participant’s compensation or collect from Participant and pay to the applicable taxing authorities an amount equal to a percentage of this compensation income at the time of exercise.

10.3    Disposition of Shares.  The following tax consequences may apply upon disposition of the Shares.
(a)    Incentive Stock Options.  If the Shares are held for more than twelve (12) months after the date of purchase of the Shares pursuant to the exercise of an ISO and are disposed of more than two (2) years after the Date of Grant, any gain realized on disposition of the Shares will be treated as long term capital gain for federal and California income tax purposes.  If Vested Shares purchased under an ISO are disposed of within the applicable one (1) year or two (2) year period, any gain realized on such disposition will be treated as compensation income (taxable at ordinary income rates in the year of the disposition) to the extent of the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price.  
(b)    Nonqualified Stock Options.  If the Shares are held for more than twelve (12) months after the date of purchase of the Shares pursuant to the exercise of an NQSO, any gain realized on disposition of the Shares will be treated as long term capital gain.
(c)    Withholding.  The Company may be required to withhold from the Participant’s compensation or collect from the Participant and pay to the applicable taxing authorities an amount equal to a percentage of this compensation income.
10.4    Section 83(b) Election for Unvested Shares.  With respect to Unvested Shares, which are subject to the Repurchase Option, unless an election is filed by Participant with the Internal Revenue Service (and, if necessary, the proper state taxing authorities), within thirty (30) days of the purchase of the Unvested Shares, electing pursuant to Section 83(b) of the Code (and similar state tax provisions, if applicable) to be taxed currently on any difference between the Exercise Price of the Unvested Shares and their Fair Market Value on the date of purchase, there may be a recognition of taxable income (including, where applicable, alternative minimum taxable income) to Participant, measured by the excess, if any, of the Fair Market Value of the Unvested Shares at the time they cease to be Unvested Shares, over the Exercise Price of the Unvested Shares.
11.    PRIVILEGES OF STOCK OWNERSHIP.  Participant shall not have any of the rights of a stockholder with respect to any Shares until the Shares are issued to Participant.
12.    INTERPRETATION.  Any dispute regarding the interpretation of the Notice of Stock Option Grant or this Agreement shall be submitted by Participant or the Company to the Committee for review.  The resolution of such a dispute by the Committee shall be final and binding on the Company and Participant.
13.    ENTIRE AGREEMENT.  The Notice of Stock Option Grant and the Plan is incorporated herein by reference.  This Agreement, the Notice of Stock Option Grant and the Plan constitute the entire agreement of the parties and supersede all prior undertakings and agreements with respect to the subject matter hereof.
14.    NOTICES.  Any notice required to be given or delivered to the Company under the terms of this Agreement shall be in writing and addressed to the Corporate Secretary of the Company at its principal corporate offices.  Any notice required to be given or delivered to Participant shall be in writing and addressed to Participant at the address set forth in the Notice of Stock Option Grant or to such other address as such party may designate in writing from time to time to the Company.  All notices shall be deemed to have been given or delivered upon:  (i) personal delivery; (ii) three (3) days after deposit in the United States mail by certified or registered mail (return receipt requested); (iii) one (1) business day 

after deposit with any return receipt express courier (prepaid); or (iv) one (1) business day after transmission by facsimile, rapifax or telecopier.
15.    SUCCESSORS AND ASSIGNS.  The Company may assign any of its rights under the Notice of Stock Option Grant and this Agreement, including its rights to purchase Shares under the Right of First Refusal.  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, the Notice of Stock Option Grant and this Agreement shall be binding upon Participant and Participant’s heirs, executors, administrators, legal representatives, successors and assigns.
16.    GOVERNING LAW.  The Notice of Stock Option Grant and this Agreement shall be governed by and construed in accordance with the laws of the State of California as such laws are applied to agreements between California residents entered into and to be performed entirely within California.  If any provision of the Notice of Stock Option Grant or 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.

EXHIBIT A
FORM OF STOCK OPTION EXERCISE AGREEMENT

NEXTDOOR.COM, INC. 
2008 EQUITY INCENTIVE PLAN
STOCK OPTION EXERCISE AGREEMENT
This Stock Option Exercise Agreement (the “Exercise Agreement”) is made and entered into as of _________________________ (the “Effective Date”) by and between Nextdoor.com, Inc., a Delaware corporation (the “Company”), and the purchaser named below (the “Purchaser”).  Capitalized terms not defined herein shall have the meanings ascribed to them in the Company’s 2008 Equity Incentive Plan (the “Plan”).
						
	Purchaser:	
		
	Social Security Number:	
		
	Address:	
		
		
		
	Total Number of Shares:
	
		
	Exercise Price Per Share:	$
		
	Date of Grant:	
		
	First Vesting Date:	
		
	Expiration Date:	
		(Unless earlier terminated under Section 5.6 of the Plan)
		
	Type of Stock Option	
	(Check one):	[ ] Incentive Stock Option
		
		[ ] Nonqualified Stock Option

1.    EXERCISE OF OPTION.
1.1    Exercise.  Pursuant to exercise of that certain option (the “Option”) granted to Purchaser under the Plan and subject to the terms and conditions of this Exercise Agreement, Purchaser hereby purchases from the Company, and the Company hereby sells to Purchaser, the Total Number of Shares set forth above (the “Shares”) of the Company’s Common Stock, par value $0.0001 per share, at the Exercise Price Per Share set forth above (the “Exercise Price”).  As used in this Exercise Agreement, the term “Shares” refers to the Shares purchased under this Exercise Agreement and includes all securities received (i) in replacement of the Shares, (ii) as a result of stock dividends or stock splits with respect to the Shares, and (iii) all securities received in replacement of the Shares in a merger, recapitalization, reorganization or similar corporate transaction.
1.2    Additional Agreement(s).  If, upon the purchase of the Shares, Purchaser holds shares of the Company’s capital stock constituting one percent (1%) of the Company’s issued and outstanding shares of capital stock (treating for this purpose all shares of Common Stock issuable upon exercise of or conversion of outstanding options, warrants or convertible securities, as if exercised or converted), then Purchaser shall become bound by, and subject to, Section 3 of that certain Voting and 
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Drag-Along Agreement, dated as of January 25, 2008, a copy of which has been provided to Purchaser if this Section 1.2 is applicable to Purchaser, as such agreement may be amended or amended and restated from time to time, as a “Holder” thereto.  Purchaser further agrees to execute such agreements, documents and/or counterpart signature pages that are necessary to give effect to this Section 1.2 and as may be reasonably requested by the Company.
1.3    Title to Shares.  The exact spelling of the name(s) under which Purchaser will take title to the Shares is:
________________________________________________________________________
________________________________________________________________________
Purchaser desires to take title to the Shares as follows:
[  ]    Individual, as separate property
[  ]    Husband and wife, as community property
[  ]    Joint Tenants
[  ]    Other; please specify:___________________________________________________
To assign the Shares to a trust, a stock transfer agreement in the form provided by the Company (the “Stock Transfer Agreement”) must be completed and executed.
1.4    Payment.  Purchaser hereby delivers payment of the Exercise Price in the manner permitted in the Stock Option Agreement as follows (check and complete as appropriate):  
[ ]    in cash (by check) in the amount of $_______________, receipt of which is acknowledged by the Company; 
[ ]    by cancellation of indebtedness of the Company owed to Purchaser in the amount of $_______________; and/or
[ ]    by the waiver hereby of compensation due or accrued for services rendered in the amount of $_________.
2.    DELIVERY.
2.1    Deliveries by Purchaser.  Purchaser hereby delivers to the Company (i) this Exercise Agreement, (ii) two (2) copies of a blank Stock Power and Assignment Separate from Stock Certificate in the form of Exhibit 1 attached hereto (the “Stock Powers”), both executed by Purchaser (and Purchaser’s spouse, if any), (iii) if Purchaser is married, a Consent of Spouse in the form of Exhibit 2 attached hereto (the “Spouse Consent”) executed by Purchaser’s spouse,(iv) the Exercise Price and payment or other provision for any applicable tax obligations in the form of a check or other proofs of payment, as the case may be, a copy of which is attached hereto as Exhibit 3.
2.2    Deliveries by the Company.  Upon its receipt of the Exercise Price, payment or other provision for any applicable tax obligations and all the documents to be executed and delivered by Purchaser to the Company under Section 2.1, 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 10.
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3.    REPRESENTATIONS AND WARRANTIES OF PURCHASER.  Purchaser represents and warrants to the Company that:
3.1    Agrees to Terms of the Plan.  Purchaser has received a copy of the Plan, the Notice of Stock Option Grant and the Stock Option Agreement, has read and understands the terms of the Plan, the Notice of Stock Option Grant, the Stock Option Agreement and this Exercise Agreement, and agrees to be bound by their terms and conditions.  Purchaser acknowledges that there may be adverse tax consequences upon exercise of the Option or disposition of the Shares, and that Purchaser should consult a tax adviser prior to such exercise or disposition.
3.2    Purchase for Own Account for Investment.  Purchaser is purchasing the Shares for Purchaser’s own account for investment purposes only and not with a view to, or for sale in connection with, a distribution of the Shares within the meaning of the Securities Act.  Purchaser has no present intention of selling or otherwise disposing of all or any portion of the Shares and no one other than Purchaser has any beneficial ownership of any of the Shares.
3.3    Access to Information.  Purchaser has had access to all information regarding the Company and its present and prospective business, assets, liabilities and financial condition that Purchaser reasonably considers important in making the decision to purchase the Shares, and Purchaser has had ample opportunity to ask questions of the Company’s representatives concerning such matters and this investment.
3.4    Understanding of Risks.  Purchaser is fully aware of:  (i) the highly speculative nature of the investment in the Shares; (ii) the financial hazards involved; (iii) the lack of liquidity of the Shares and the restrictions on transferability of the Shares (e.g., that Purchaser may not be able to sell or dispose of the Shares or use them as collateral for loans); (iv) the qualifications and backgrounds of the management of the Company; and (v) the tax consequences of investment in the Shares.  Purchaser is capable of evaluating the merits and risks of this investment, has the ability to protect Purchaser’s own interests in this transaction and is financially capable of bearing a total loss of this investment.
3.5    No General Solicitation.  At no time was Purchaser presented with or solicited by any publicly issued or circulated newspaper, mail, radio, television or other form of general advertising or solicitation in connection with the offer, sale and purchase of the Shares.
4.    COMPLIANCE WITH SECURITIES LAWS.
4.1    Compliance with U.S. Federal Securities Laws.  Purchaser understands and acknowledges that the Shares have not been registered with the SEC under the Securities Act and that, notwithstanding any other provision of the Notice of Stock Option Grant or the Stock Option Agreement to the contrary, the exercise of any rights to purchase any Shares is expressly conditioned upon compliance with the Securities Act and all applicable state securities laws.  Purchaser agrees to cooperate with the Company to ensure compliance with such laws.  
4.2    Compliance with California Securities Laws.  THE PLAN, THE NOTICE OF STOCK OPTION GRANT, THE STOCK OPTION AGREEMENT, AND THIS EXERCISE AGREEMENT ARE INTENDED TO COMPLY WITH SECTION 25102(o) OF THE CALIFORNIA CORPORATIONS CODE AND ANY RULES (INCLUDING COMMISSIONER RULES, IF APPLICABLE) OR REGULATIONS PROMULGATED THEREUNDER BY THE CALIFORNIA DEPARTMENT OF CORPORATIONS (THE “REGULATIONS”).  ANY PROVISION OF THIS EXERCISE AGREEMENT THAT IS INCONSISTENT WITH SECTION 25102(o) SHALL, WITHOUT FURTHER ACT OR AMENDMENT BY THE COMPANY OR THE BOARD, BE REFORMED TO COMPLY WITH THE 
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REQUIREMENTS OF SECTION 25102(o).  THE SALE OF THE SECURITIES THAT ARE THE SUBJECT OF THIS EXERCISE AGREEMENT, IF NOT YET QUALIFIED WITH THE CALIFORNIA COMMISSIONER OF CORPORATIONS AND NOT EXEMPT FROM SUCH QUALIFICATION, IS SUBJECT TO SUCH QUALIFICATION, AND THE ISSUANCE OF SUCH SECURITIES, AND THE RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL UNLESS THE SALE IS EXEMPT.  THE RIGHTS OF THE PARTIES TO THIS EXERCISE AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED OR AN EXEMPTION BEING AVAILABLE.
5.    RESTRICTED SECURITIES.
5.1    No Transfer Unless Registered or Exempt.  Purchaser understands that Purchaser may not transfer any Shares unless such Shares are registered under the Securities Act or qualified under applicable state securities laws or unless, in the opinion of counsel to the Company, exemptions from such registration and qualification requirements are available.  Purchaser understands that only the Company may file a registration statement with the SEC and that the Company is under no obligation to do so with respect to the Shares.  Purchaser has also been advised that exemptions from registration and qualification may not be available or may not permit Purchaser to transfer all or any of the Shares in the amounts or at the times proposed by Purchaser.
5.2    SEC Rule 144.  In addition, Purchaser has been advised that SEC Rule 144 promulgated under the Securities Act, which permits certain limited sales of unregistered securities, is not presently available with respect to the Shares and, in any event, requires that the Shares be held for a minimum of one (1) year, and in certain cases two (2) years, after they have been purchased and paid for (within the meaning of Rule 144).  Purchaser understands that Rule 144 may indefinitely restrict transfer of the Shares so long as Purchaser remains an “affiliate” of the Company or if “current public information” about the Company (as defined in Rule 144) is not publicly available.
5.3    SEC Rule 701.  The Shares are issued pursuant to SEC Rule 701 promulgated under the Securities Act and may become freely tradeable by non-affiliates (under limited conditions regarding the method of sale) ninety (90) days after 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 SEC, subject to the lengthier market standoff agreement contained in Section 7 of this Exercise Agreement or any other agreement entered into by Purchaser.  Affiliates must comply with the provisions (other than the holding period requirements) of Rule 144.
6.    RESTRICTIONS ON TRANSFERS.
6.1    Disposition of Shares.  Purchaser hereby agrees that Purchaser shall make no disposition of the Shares (other than as permitted by this Exercise Agreement) unless and until:
(a)    Purchaser shall have notified the Company of the proposed disposition and provided a written summary of the terms and conditions of the proposed disposition;
(b)    Purchaser shall have complied with all requirements of this Exercise Agreement applicable to the disposition of the Shares;
(c)    Purchaser shall have provided the Company with written assurances, in form and substance satisfactory to counsel for the Company, that (i) the proposed disposition does not require registration of the Shares under the Securities Act or (ii) 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 (including Rule 144) have been taken; and
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(d)    Purchaser shall have provided the Company with written assurances, in form and substance satisfactory to the Company, that the proposed disposition will not result in the contravention of any transfer restrictions applicable to the Shares pursuant to the provisions of the Regulations referred to in Section 4.2 hereof.
6.2    Restriction on Transfer.  Purchaser shall not transfer, assign, grant a lien or security interest in, pledge, hypothecate, encumber or otherwise dispose of any of the Shares which are subject to the Company’s Right of First Refusal described below, except as permitted by this Exercise Agreement.
6.3    Transferee Obligations.  Each person (other than the Company) to whom the Shares are transferred by means of one of the permitted transfers specified in this Exercise Agreement must, as a condition precedent to the validity of such transfer, acknowledge in writing to the Company that such person is bound by the provisions of this Exercise Agreement and that the transferred Shares are subject to (i) both the Company’s Right of First Refusal granted hereunder and (ii) the market stand-off provisions of Section 7 hereof, to the same extent such Shares would be so subject if retained by the Purchaser.
7.    MARKET STANDOFF AGREEMENT.  Purchaser agrees 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, Purchaser 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 period of time (not to exceed one hundred eighty (180) days; provided, however, that, if during the last seventeen (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 sixteen (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 thereof applies, then the restrictions imposed by this Section 7 shall continue to apply until the expiration of the eighteen (18)-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event; provided, further, in no event will the restricted period extend beyond two hundred fifteen (215) days after the effective date of the registration statement) after the effective date of such registration requested by such managing underwriters and subject to all restrictions as the Company or the underwriters may specify.  Purchaser further agrees to enter into any agreement reasonably required by the underwriters to implement the foregoing.
8.    COMPANY’S RIGHT OF FIRST REFUSAL.  Unvested Shares may not be sold or otherwise transferred, or pledged by Participant or made subject to a security interest, pledge or other lien without the Company’s prior written consent, which may be withheld in the Company’s sole and absolute discretion.  Before any Vested Shares held by Purchaser or any transferee of such Vested Shares (either sometimes referred to herein as the “Holder”) may be sold or otherwise transferred (including, without limitation, a transfer by gift or operation of law), the Company and/or its assignee(s) will have a right of first refusal to purchase the Vested Shares to be sold or transferred (the “Offered Shares”) on the terms and conditions set forth in this Section 8 (the “Right of First Refusal”).
8.1    Notice of Proposed Transfer.  The Holder of the Offered Shares will deliver to the Company a written notice (the “Notice”) stating:  (i) the Holder’s bona fide intention to sell or otherwise transfer the Offered Shares; (ii) the name and address of each proposed purchaser or other transferee (the “Proposed Transferee”); (iii) the number of Offered Shares to be transferred to each Proposed Transferee; (iv) the bona fide cash price or other consideration for which the Holder proposes to transfer the Offered Shares (the “Offered Price”); and (v) that the Holder acknowledges this Notice is an 
5

offer to sell the Offered Shares to the Company and/or its assignee(s) pursuant to the Company’s Right of First Refusal at the Offered Price as provided for in this Exercise Agreement.
8.2    Exercise of Right of First Refusal.  At any time within thirty (30) days after the date of the Notice, the Company and/or its assignee(s) may, by giving written notice to the Holder, elect to purchase all (or, with the consent of the Holder, less than all) the Offered Shares proposed to be transferred to any one or more of the Proposed Transferees named in the Notice, at the purchase price, determined as specified below.
8.3    Purchase Price.  The purchase price for the Offered Shares purchased under this Section 8 will be the Offered Price, provided that if the Offered Price consists of no legal consideration (as, for example, in the case of a transfer by gift) the purchase price will be the fair market value of the Offered Shares as determined in good faith by the Company’s Board of Directors.  If the Offered Price includes consideration other than cash, then the value of the non-cash consideration, as determined in good faith by the Company’s Board of Directors, will conclusively be deemed to be the cash equivalent value of such non-cash consideration.
8.4    Payment.  Payment of the purchase price for the Offered Shares will be payable, at the option of the Company and/or its assignee(s) (as applicable), by check or by cancellation of all or a portion of any outstanding purchase money indebtedness owed by the Holder to the Company (or to such assignee, in the case of a purchase of Offered Shares by such assignee) or by any combination thereof.  The purchase price will be paid without interest within sixty (60) days after the Company’s receipt of the Notice, or, at the option of the Company and/or its assignee(s), in the manner and at the time(s) set forth in the Notice.
8.5    Holder’s Right to Transfer.  If all of the Offered 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 8, then the Holder may sell or otherwise transfer such Offered Shares to each Proposed Transferee at the Offered Price or at a higher price, provided that (i) such sale or other transfer is consummated within one hundred twenty (120) days after the date of the Notice, (ii) any such sale or other transfer is effected in compliance with all applicable securities laws, and (iii) each Proposed Transferee agrees in writing that the provisions of this Section 8 will continue to apply to the Offered Shares in the hands of such Proposed Transferee.  If the Offered Shares described in the Notice are not transferred to each Proposed Transferee within such one hundred twenty (120) day period, then a new Notice must be given to the Company pursuant to which the Company will again be offered the Right of First Refusal before any Shares held by the Holder may be sold or otherwise transferred.
8.6    Exempt Transfers.  Notwithstanding anything to the contrary in this Section 8, the following transfers of Vested Shares will be exempt from the Right of First Refusal: (i) the transfer of any or all of the Vested Shares during Purchaser’s lifetime by gift or on Purchaser’s death by will or intestacy to Purchaser’s “Immediate Family” (as defined below) or to a trust for the benefit of Purchaser or Purchaser’s Immediate Family, provided that each transferee or other recipient agrees in a writing satisfactory to the Company that the provisions of this Section 8 will continue to apply to the transferred Vested Shares in the hands of such transferee or other recipient; (ii) any transfer or conversion of Vested Shares made pursuant to a statutory merger or statutory consolidation of the Company with or into another corporation or corporations (except that the Right of First Refusal will continue to apply thereafter to such Vested Shares, in which case the surviving corporation of such merger or consolidation shall succeed to the rights of the Company under this Section 8 unless (i)  the common stock of the surviving corporation or any direct or indirect parent corporation thereof is registered under the Securities Exchange Act of 1934, as amended; or (ii) the agreement of merger or consolidation expressly otherwise 
6

provides); or (iii) any transfer of Vested Shares pursuant to the winding up and dissolution of the Company.  As used herein, the term “Immediate Family” will mean Purchaser’s spouse, the lineal descendant or antecedent, father, mother, brother or sister, child, adopted child, grandchild or adopted grandchild of the Purchaser or the Purchaser’s spouse, or the spouse of any of the above.  
8.7    Termination of Right of First Refusal.  The Right of First Refusal will terminate as to all Shares on the effective date of 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 SEC under the 1933 Act (other than a registration statement relating solely to the issuance of Common Stock pursuant to a business combination or an employee incentive or benefit plan).
8.8    Encumbrances on Vested Shares.  Purchaser may grant a lien or security interest in, or pledge, hypothecate or encumber Vested Shares only if each party to whom such lien or security interest is granted, or to whom such pledge, hypothecation or other encumbrance is made, agrees in a writing satisfactory to the Company that:  (i) such lien, security interest, pledge, hypothecation or encumbrance will not apply to such Vested Shares after they are acquired by the Company and/or its assignees under this Section 8; and (ii) the provisions of this Section 8 will continue to apply to such Vested Shares in the hands of such party and any transferee of such party.  Purchaser may not grant a lien or security interest in, or pledge, hypothecate or encumber, any Unvested Shares.
9.    COMPANY’S REPURCHASE OPTION FOR UNVESTED SHARES. If Purchaser is Terminated for any reason, or no reason, including without limitation, Purchaser’s death, Disability, voluntary resignation or termination by the Company with or without Cause, then the Company and/or its assignee(s) shall have the option to repurchase all or a portion of the Purchaser’s Unvested Shares (as defined in Section 2.3 of this Agreement) as of the Termination Date on the terms and conditions set forth in this Exercise Agreement. (the “Repurchase Option”).  Notwithstanding the foregoing, the Company shall retain the Repurchase Option for Unvested Shares only as to that number of Unvested Shares (whether or not exercised) that exceeds the number of Vested Shares which remain unexercised and issuable upon exercise of this Option.
9.1    Termination and Termination Date.  In case of any dispute as to whether Purchaser is Terminated, the Committee shall have discretion to determine whether Purchaser has been Terminated and the effective date of such Termination (the “Termination Date”).
9.2    Exercise of Repurchase Option.  Subject to the foregoing provisions of this Section, at any time within ninety (90) days after the Purchaser’s Termination Date (or, in the case of securities issued upon exercise of this Option after the Purchaser’s Termination Date, within ninety (90) days after the date of such exercise), the Company and/or its assignee(s), may elect to repurchase any or all the Purchaser’s Unvested Shares by giving Purchaser written notice of exercise of the Repurchase Option.
9.3    Calculation of Repurchase Price for Unvested Shares.  The Company or its assignee shall have the option to repurchase from Purchaser (or from Purchaser’s personal representative as the case may be) the Unvested Shares at the lower of (i) the Fair Market Value (as defined in the Plan) per Share of such Shares on the Termination Date or (ii) Purchaser’s Exercise Price, as such may be proportionately adjusted for any stock split or similar change in the capital structure of the Company as set forth in Section 2.2 of the Plan (the “Repurchase Price”).
9.4    Payment of Repurchase Price.  The Repurchase Price shall be payable, at the option of the Company or its assignee, by check or by cancellation of all or a portion of any outstanding indebtedness owed by Purchaser to the Company and/or such assignee, or by any combination thereof.  
7

The Repurchase Price shall be paid without interest within the term of the Repurchase Option as described in Section 8.2.
9.5    Right of Termination Unaffected.  Nothing in this Agreement shall be construed to limit or otherwise affect in any manner whatsoever the right or power of the Company (or any Parent or Subsidiary of the Company) to terminate Purchaser’s employment or other relationship with Company (or any Parent or Subsidiary of the Company) at any time, for any reason or no reason, with or without Cause.
10.    RIGHTS AS A STOCKHOLDER.  Subject to the terms and conditions of this Exercise Agreement, Purchaser will have all of the rights of a stockholder of the Company with respect to the Shares from and after the date that Shares are issued to Purchaser until such time as Purchaser disposes of the Shares or the Company and/or its assignee(s) exercise(s) the Right of First Refusal.  Upon an exercise of the Right of First Refusal, Purchaser will have no further rights as a holder of the Shares so purchased upon such exercise, other than the right to receive payment for the Shares so purchased in accordance with the provisions of this Exercise Agreement, and Purchaser will promptly surrender the stock certificate(s) evidencing the Shares so purchased to the Company for transfer or cancellation.
11.    ESCROW.  As security for Purchaser’s faithful performance of this Exercise Agreement, Purchaser agrees, immediately upon receipt of the stock certificate(s) evidencing the Shares, to deliver such certificate(s), together with the Stock Powers executed by Purchaser and by Purchaser’s spouse, if any (with the date and number of Shares left blank), to the Secretary of the Company or other designee of the Company (the “Escrow Holder”), who is hereby appointed to hold such certificate(s) and Stock Powers 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 Exercise Agreement.  Purchaser and the Company agree that Escrow Holder will not be liable to any party to this Exercise 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 Exercise Agreement.  Escrow Holder may rely upon 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 Exercise Agreement.  The Shares will be released from escrow upon termination of and the Right of First Refusal.
12.    RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS.
12.1    Legends.  Purchaser understands and agrees that the Company will place the legends set forth below or similar legends on any stock certificate(s) evidencing the Shares, together with any other legends that may be required by state or U.S. Federal securities laws, the Company’s Certificate of Incorporation or Bylaws, any other agreement between Purchaser and the Company or any agreement between Purchaser and any third party:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES.  THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.  INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.  THE ISSUER OF THESE SECURITIES 
8

MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON PUBLIC RESALE AND TRANSFER, INCLUDING THE RIGHT OF FIRST REFUSAL OPTIONS HELD BY THE ISSUER AND/OR ITS ASSIGNEE(S) AS SET FORTH IN A STOCK OPTION EXERCISE 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.  SUCH PUBLIC SALE AND TRANSFER RESTRICTIONS INCLUDING THE RIGHT OF FIRST REFUSAL ARE BINDING ON TRANSFEREES OF THESE SHARES.
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 ANY PUBLIC OFFERING OF THE COMMON STOCK OF THE ISSUER HEREOF.  SUCH RESTRICTION IS BINDING ON TRANSFEREES OF THESE SHARES.
12.2    Stop-Transfer Instructions.  Purchaser agrees that, to ensure compliance with the restrictions imposed by this Exercise 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.
12.3    Refusal to Transfer.  The Company will 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 Exercise 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 have been so transferred.
13.    TAX CONSEQUENCES.  PURCHASER UNDERSTANDS THAT PURCHASER MAY SUFFER ADVERSE TAX CONSEQUENCES AS A RESULT OF PURCHASER’S PURCHASE OR DISPOSITION OF THE SHARES.  PURCHASER REPRESENTS:  (i) THAT PURCHASER HAS CONSULTED WITH ANY TAX ADVISER THAT PURCHASER DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR DISPOSITION OF THE SHARES AND (ii) THAT PURCHASER IS NOT RELYING ON THE COMPANY FOR ANY TAX ADVICE.  Set forth below is a brief summary as of the date the Plan was adopted by the Board of some of the U.S. Federal and California tax consequences of exercise of the Option and disposition of the Shares.  THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.  PURCHASER SHOULD CONSULT HIS OR HER OWN TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
13.1    Exercise of Incentive Stock Option.  If the Option qualifies as an ISO, there will be no regular U.S. Federal income tax liability or California 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 
9

over the Exercise Price will be treated as a tax preference item for U.S. Federal alternative minimum tax purposes and may subject Purchaser to the alternative minimum tax in the year of exercise.
13.2    Exercise of Nonqualified Stock Option.  If the Option does not qualify as an ISO, there may be a regular U.S. Federal income tax liability and a California income tax liability upon the exercise of the Option.  Purchaser 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 Purchaser is or was an employee of the Company, the Company may be required to withhold from Purchaser’s compensation or collect from Purchaser and pay to the applicable taxing authorities an amount equal to a percentage of this compensation income at the time of exercise.
13.3    Disposition of Shares. The following tax consequences may apply upon disposition of the Shares.
(a)    Incentive Stock Options.  If the Shares are held for more than twelve (12) months after the date of purchase of the Shares pursuant to the exercise of an ISO and are disposed of more than two (2) years after the Date of Grant, any gain realized on disposition of the Shares will be treated as long term capital gain for federal and California income tax purposes.  If Vested Shares purchased under an ISO are disposed of within the applicable one (1) year or two (2) year period, any gain realized on such disposition will be treated as compensation income (taxable at ordinary income rates in the year of the disposition) to the extent of the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price.  
(b)    Nonqualified Stock Options.  If the Shares are held for more than twelve (12) months after the date of purchase of the Shares pursuant to the exercise of an NQSO, any gain realized on disposition of the Shares will be treated as long term capital gain.
(c)    Withholding.  The Company may be required to withhold from the Purchaser’s compensation or collect from the Purchaser and pay to the applicable taxing authorities an amount equal to a percentage of this compensation income.
IMPORTANT NOTE: IF UNVESTED PURCHASED SHARES ARE SUBJECT TO REPURCHASE BY THE COMPANY, PLEASE CONSULT WITH YOUR TAX ADVISER CONCERNING THE ADVISABILITY OF FILING AN 83(b) ELECTION WITH THE INTERNAL REVENUE SERVICE WHICH MUST BE FILED WITHIN THIRTY (30) DAYS AFTER THE PURCHASE OF SHARES TO BE EFFECTIVE.  
A form of Election under Section 83(b) is attached hereto as Exhibit 4 for reference.  Unless an 83(b) election is timely filed with the Internal Revenue Service (and, if necessary, the proper state taxing authorities), electing pursuant to Section 83(b) of the Code (and similar state tax provisions, if applicable) to be taxed currently on any difference between the purchase price of the Unvested Purchased Shares and their fair market value on the date of purchase, there may be a recognition of taxable income (including, where applicable, alternative minimum taxable income) to you, measured by the excess, if any, of the Fair Market Value of the Unvested Purchased Shares at the time they cease to be Unvested Purchased Shares, over the purchase price of the Unvested Purchased Shares.
14.    COMPLIANCE WITH LAWS AND REGULATIONS.  The issuance and transfer of the Shares will be subject to and conditioned upon compliance by the Company and Purchaser with all applicable state and U.S. Federal laws and regulations and with all applicable requirements of any stock 
10

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.
15.    SUCCESSORS AND ASSIGNS.  The Company may assign any of its rights under this Exercise Agreement, including its rights to purchase Shares under the Right of First Refusal.  This Exercise Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Company.  Subject to the restrictions on transfer herein set forth, this Exercise Agreement will be binding upon Purchaser and Purchaser’s heirs, executors, administrators, legal representatives, successors and assigns.
16.    GOVERNING LAW; SEVERABILITY.  This Exercise Agreement shall be governed by and construed in accordance with the internal laws of the State of California as such laws are applied to agreements between California residents entered into and to be performed entirely within California.  If any provision of this Exercise 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.
17.    NOTICES.  Any notice required to be given or delivered to the Company shall be in writing and addressed to the Corporate Secretary of the Company at its principal corporate offices.  Any notice required to be given or delivered to Purchaser shall be in writing and addressed to Purchaser at the address indicated above or to such other address as Purchaser may designate in writing from time to time to the Company.  All notices shall be deemed effectively given upon personal delivery, (i) three (3) days after deposit in the United States mail by certified or registered mail (return receipt requested), (ii) one (1) business day after its deposit with any return receipt express courier (prepaid), or (iii) one (1) business day after transmission by rapifax or telecopier.
18.    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 Exercise Agreement.
19.    HEADINGS.  The captions and headings of this Exercise Agreement are included for ease of reference only and will be disregarded in interpreting or construing this Exercise Agreement.  All references herein to Sections will refer to Sections of this Exercise Agreement.
20.    ENTIRE AGREEMENT.  The Plan, the Notice of Stock Option Grant, the Stock Option Agreement and this Exercise Agreement, together with all Exhibits thereto, constitute the entire agreement and understanding of the parties with respect to the subject matter of this Exercise Agreement, and supersede all prior understandings and agreements, whether oral or written, between the parties hereto with respect to the specific subject matter hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Company has caused this Exercise Agreement to be executed in triplicate by its duly authorized representative and Purchaser has executed this Exercise Agreement in triplicate as of the Effective Date, indicated above.
												
	NEXTDOOR.COM, INC.
		PURCHASER

				
				
	By:			
				(Signature)
				
			
	(Please print name)		(Please print name)
				
			
	(Please print title)		

[SIGNATURE PAGE TO NEXTDOOR.COM, INC. STOCK OPTION EXERCISE AGREEMENT]

LIST OF EXHIBITS
Exhibit 1:    Stock Power and Assignment Separate from Stock Certificate
Exhibit 2:    Spouse Consent
Exhibit 3:    Copy of Purchaser’s Check 
Exhibit 4:    Section 83(b) Election

EXHIBIT 1
STOCK POWER AND ASSIGNMENT
SEPARATE FROM STOCK CERTIFICATE

Stock Power And Assignment
Separate From Stock Certificate
FOR VALUE RECEIVED and pursuant to that certain Stock Option Exercise Agreement dated as of _______________, _____, (the “Agreement”), the undersigned hereby sells, assigns and transfers unto _______________________________, __________ shares of the Common Stock, $0.0001 par value per share, of Nextdoor.com, Inc., a Delaware corporation (the “Company”), standing in the undersigned’s name on the books of the Company represented by Certificate No(s).  ______ delivered herewith, and does hereby irrevocably constitute and appoint the Secretary of the Company as the undersigned’s attorney-in-fact, with full power of substitution, to transfer said stock on the books of the Company.  THIS ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND ANY EXHIBITS THERETO.
												
	Dated:			
				
				PURCHASER
				
				(Signature)
				
				(Please Print Name)
				
				(Spouse’s Signature, if any)

				
				(Please Print Spouse’s Name)

Instructions to Purchaser:  Please do not fill in any blanks other than the signature line.  The purpose of this Stock Power and Assignment is to enable the Company to acquire the shares pursuant to “Right of First Refusal” set forth in the Exercise Agreement without requiring additional signatures on the part of the Purchaser or Purchaser’s Spouse.

EXHIBIT 2
SPOUSE CONSENT

Spouse Consent
The undersigned spouse of _______________ (the “Purchaser”) has read, understands, and hereby approves the Stock Option Exercise Agreement between Purchaser and the Company (the “Agreement”).  In consideration of the Company’s granting my spouse the right to purchase the Shares as set forth in the Agreement, the undersigned hereby agrees to be irrevocably bound by the Agreement and further agrees that any community property interest I may have in the Shares shall similarly be bound by the Agreement.  The undersigned hereby appoints Purchaser as my attorney-in-fact with respect to any amendment or exercise of any rights under the Agreement.
												
	Dated:			
				
				Print Name of Purchaser’s Spouse
				
				Signature of Purchaser’s Spouse
				
		Address:		

				
				
				
				
				

EXHIBIT 4
SECTION 83(b) ELECTION

SECTION 83(b) ELECTION
IF YOU WISH TO MAKE A SECTION 83(B) ELECTION, THE FILING OF SUCH ELECTION IS YOUR RESPONSIBILITY.
THE FORM FOR MAKING THIS SECTION 83(B) ELECTION IS ATTACHED TO THIS AGREEMENT AS EXHIBIT D.  
YOU MUST FILE THIS FORM WITHIN 30 DAYS OF PURCHASING THE SHARES.
YOU (AND NOT THE COMPANY OR ANY OF ITS AGENTS) SHALL BE SOLELY RESPONSIBLE FOR FILING YOUR SECTION 83(B) ELECTION WITH THE IRS, EVEN IF YOU REQUEST THE COMPANY OR ITS AGENTS TO MAKE THIS FILING ON YOUR BEHALF AND EVEN IF THE COMPANY OR ITS AGENTS HAVE PREVIOUSLY MADE THIS FILING ON YOUR BEHALF.
The election should be filed by mailing a signed election form by certified mail, return receipt requested to the IRS Service Center where you file your tax returns. See www.irs.gov

ELECTION UNDER SECTION 83(b) OF THE INTERNAL REVENUE CODE
The undersigned Taxpayer hereby elects, pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended, to include the excess, if any, of the fair market value of the property described below at the time of transfer over the amount paid for such property, as compensation for services in the calculation of: (1) regular gross income; (2) alternative minimum taxable income or (3) disqualifying disposition gross income, as the case may be.
1.    TAXPAYER’S NAME:    _____________________________________________
TAXPAYER’S ADDRESS:    _____________________________________________
_____________________________________________
SOCIAL SECURITY NUMBER:    _____________________________________________
2.    The property with respect to which the election is made is described as follows: _______ shares of Common Stock of NEXTDOOR.COM, INC., a Delaware corporation (the “Company”) which were transferred upon exercise of an option by Company, which is Taxpayer’s employer or the corporation for whom the Taxpayer performs services.
3.    The date on which the shares were transferred pursuant to the exercise of the option was ____________________, _____ and this election is made for calendar year _____.
4.    The shares received upon exercise of the option are subject to the following restrictions:  The Company may repurchase all or a portion of the shares at Taxpayer’s original purchase price per share, under certain conditions at the time of Taxpayer’s termination of employment or services.  
5.    The fair market value of the shares (without regard to restrictions other than restrictions which by their terms will never lapse) was $_____ per share at the time of exercise of the option.
6.    The amount paid for such shares upon exercise of the option was $____ per share.
7.    The Taxpayer has submitted a copy of this statement to the Company.
THIS ELECTION MUST BE FILED WITH THE INTERNAL REVENUE SERVICE (“IRS”), AT THE OFFICE WHERE THE TAXPAYER FILES ANNUAL INCOME TAX RETURNS, WITHIN 30 DAYS AFTER THE DATE OF TRANSFER OF THE SHARES, AND MUST ALSO BE FILED WITH THE TAXPAYER’S INCOME TAX RETURNS FOR THE CALENDAR YEAR.  THE ELECTION CANNOT BE REVOKED WITHOUT THE CONSENT OF THE IRS.
												
	Dated:			
				NameDocument

Exhibit 10.27

NEXTDOOR.COM, INC.
2008 EQUITY INCENTIVE PLAN 
NOTICE OF STOCK OPTION GRANT
You  have  been  granted  the  following  option  to  purchase  shares  of  the  Common  Stock  of Nextdoor.com, Inc., a Delaware corporation (the “Company”):
									
	Participant:		
			
	Social Security Number: 		
			
	Address:		
			
			
	Total Option Shares:		
			
	Exercise Price Per Share:	$	
			
	Date of Grant:		
			
	Exercise Period:	This Option will become vested and exercisable as to portions of the  Shares  as  follows:   (i) this  Option  shall  not  vest  nor  be exercisable with respect to any of the Shares until the First Vesting Date set forth below, (ii) on the First Vesting Date the Option will become vested and exercisable as to 1/4th of the Shares  and  (iii) thereafter  at  the  end  of  each  full  succeeding calendar month this Option will become vested and exercisable as to 1/48th of the Shares until the Shares are vested with respect to all of the Shares._______________________________

			
	First Vesting Date: 		
			
	Expiration Date:		
		(unless  earlier  terminated  under  Section 5.6  of  the  Plan  (as defined below))
			
	Classification of Optionee	[  ] Exempt Employee	
		[  ] Nonexempt Employee	
			
	Type of Stock Option		
	(Check one):	[  ] Incentive Stock Option	
		[  ] Nonqualified Stock Option	

Participant hereby acknowledges receipt of a copy of the Company’s 2008 Equity Incentive Plan (the “Plan”) and the Stock Option Agreement, both of which are attached to and made a part of this document. By Participant’s signature and the signature of the Company’s representative below, Participant and the Company agree that this Option is granted under and governed by the terms and conditions of this Notice of Stock Option Grant, the Stock Option Agreement and the Plan.  Participant has read and understands the terms and provisions hereof and thereof, and accepts the Option subject to all the terms and conditions of  this  Notice  of  Stock  Option  Grant,  the  Stock  Option  Agreement  and  the  Plan.  Participant 

acknowledges that there may be adverse tax consequences upon exercise of this Option or disposition of the Shares and that Participant should consult a tax adviser prior to such exercise or disposition.
												
	NEXTDOOR.COM, INC.
		PARTICIPANT

				
	By:			
				(Signature)
				
			
	(Please print name)		(Please print name)
				
			
	(Please print title)		

2

NEXTDOOR.COM, 
INC.
2008 EQUITY INCENTIVE
PLAN STOCK OPTION
AGREEMENT
1.    GRANT OF OPTION.  The Company hereby grants to Participant an option (this “Option”) to purchase the total number of shares of the Company’s Common Stock, $0.0001 par value per share, set forth in the Notice of Stock Option Grant as Total Option Shares (the “Shares”) at the Exercise Price Per Share set forth in the Notice  of Stock  Option  Grant (the “Exercise Price”), subject to all of the terms and conditions  of this Agreement, the Notice of Stock Option Grant and the Plan.  If designated as an Incentive Stock Option in the Notice of Stock Option Grant, the Option is intended to qualify as an “incentive stock option” (the “ISO”) within  the meaning of Section 422 of the Internal  Revenue Code of 1986, as amended  (the “Code”).
2.    EXERCISE PERIOD.
2.1    Exercise Period of Option.   Provided  Participant  continues  to  provide services to the Company or any Subsidiary or Parent of the Company, the Option will become vested and exercisable as to portions of the Shares as set forth in the Notice of Stock Option Grant.  If application  of the vesting percentage causes a fractional share, such share shall be rounded  down to the nearest whole share for each month except  for the last month in such vesting period, at the end of which last month this Option shall become exercisable for the full remainder of the Shares.
2.2    Additional Agreement(s).  Participant  acknowledges  and agrees, that if upon  exercise  of  this  Option  pursuant  to  Section  4 hereof  Participant  holds  shares of  the Company’s  capital   stock   constituting   one  percent   (1%)   of  the   Company’s  issued  and outstanding  shares of capital  stock  (treating  for  this  purpose  all shares of Common  Stock issuable  upon  exercise  of  or  conversion  of  outstanding  options,  warrants  or  convertible securities, as if exercised or converted), then Participant shall become bound by, and subject to, Section 3 of that certain Voting and Drag-Along Agreement, dated as of January 25, 2008, as  such  agreement  may  be  amended  or  amended  and  restated  from  time  to  time,  as  a “Holder” thereto.
2.3    Vesting of Options.  Shares that are vested pursuant to the schedule set forth in the Notice of Stock Option Grant and Section 2.1 are “Vested Shares.”   Shares that are not vested  pursuant  to the schedule  set forth  in the Notice  of Stock  Option  Grant and Section 2.1 are “Unvested Shares.”
2.4    Expiration.   The Option  shall expire on the Expiration Date set forth in the Notice  of Stock  Option  Grant or earlier as provided  in Section 3 below  or  pursuant  to Section 5.6 of the Plan.
3.    TERMINATION.
3.1    Termination  for Any Reason  Except  Death,  Disability or Cause.   If Participant  is Terminated for any reason, except death, Disability or for Cause, the Option, to the extent 
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(and only to the extent) that it would  have been exercisable by Participant  on the Termination  Date, may be exercised  by Participant  no later than three  (3) months  after the Termination Date, but in any event no later than the Expiration Date.
3.2    Termination   Because   of  Death   or   Disability.     If  Participant   is Terminated  because  of death or Disability  of Participant  (or  Participant  dies within  three (3) months of Termination when Termination is for any reason other than Participant’s Disability or for Cause),  the Option,  to the extent that it is exercisable  by Participant  on  the Termination Date,  may  be  exercised  by  Participant  (or Participant’s legal  representative)  no  later  than twelve (12) months  after the Termination  Date, but in any  event no later than the Expiration Date.     Any  exercise  beyond   (i) three  (3)  months   after  the  Termination  Date  when  the Termination is for any reason other than the Participant’s death or disability, within the meaning of Section 22(e)(3) of the Code; or (ii) twelve (12) months after the Termination Date when the termination is for Participant’s disability, within the meaning of Section 22(e)(3) of the Code, is deemed to be an NQSO.
3.3    Termination for Cause.   If the Participant  is terminated  for Cause, the Participant  may exercise such Participant’s Options,  but not to an extent  greater  than such Options  are exercisable  as to  Vested  Shares upon  the  Termination  Date and  Participant’s Options shall expire on such Participant’s Termination Date, or at such later time and on such conditions as are determined by the Committee.
3.4    No  Obligation  to  Employ.   Nothing  in the Plan, the Notice  of  Stock Option Grant or this Agreement shall confer on Participant any right to continue in the employ of, or other relationship with, the Company or any Parent or Subsidiary of the Company, or limit in any way the right of the Company or any Parent or Subsidiary of the Company to terminate Participant’s employment or other relationship at any time, with or without Cause.
4.    MANNER OF EXERCISE.
4.1    Stock Option Exercise Agreement.  To exercise this Option, Participant (or in  the  case  of  exercise  after  Participant’s   death  or  incapacity,  Participant’s   executor, administrator,  heir or legatee, as the case may be) must deliver to the Company an executed stock option exercise agreement in the form attached hereto as Exhibit A, or in such other form as may be approved by the Committee  from time to time (the “Exercise Agreement”),  which shall set  forth,  inter alia, (i) Participant’s election  to  exercise  the  Option,  (ii) the  number  of Shares   being   purchased,    (iii) any   restrictions    imposed    on   the   Shares   and   (iv) any representations,  warranties  and  agreements  regarding  Participant’s   investment  intent  and access to information as may be required by the Company to comply with applicable securities laws.  If someone other than Participant  exercises the Option, then such person must submit documentation reasonably acceptable to the Company verifying that such person has the legal right to exercise the Option and such person shall be subject to all of the restrictions contained herein as if such person were the Participant.
4.2    Limitations on Exercise.  The Option may not be exercised unless such exercise is in compliance  with all applicable  federal and state securities laws, as they are in effect on the date of exercise.  The Option may not be exercised as to fewer than one hundred (100) Shares unless it is exercised as to all Shares as to which the Option is then exercisable.
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4.3    Payment.     The  Exercise  Agreement  shall  be  accompanied   by   full payment  of the Exercise Price for the shares being purchased  in cash (by  check),  or  where permitted by law:
(a)    by   cancellation   of   indebtedness    of   the   Company   to   the Participant;
(b)    by  waiver  of  compensation   due  or  accrued  to  Participant for services rendered;
(c)    provided  that  a public  market  for  the  Company’s stock  exists: (i) through  a “same day  sale”  commitment   from  Participant  and  a broker-dealer  that  is  a member  of  the  National  Association  of  Securities  Dealers  (an  “NASD  Dealer”)  whereby Participant  irrevocably  elects  to exercise  the Option  and to sell a  portion  of the Shares so purchased  sufficient  to  pay  for  the  total  Exercise  Price  and  whereby  the  NASD  Dealer irrevocably commits upon receipt of such Shares to forward the total Exercise Price directly to the Company,  or (ii) through  a “margin” commitment  from  Participant  and an NASD Dealer whereby  Participant  irrevocably  elects  to  exercise  the Option  and to  pledge  the Shares so purchased  to  the NASD Dealer in a margin  account  as security  for a loan from  the NASD Dealer in the amount  of the total  Exercise  Price, and whereby  the NASD Dealer irrevocably commits  upon  receipt  of  such  Shares  to  forward  the  total  Exercise  Price  directly  to  the Company;
(d)    any other form of consideration approved by the Committee; or
(e)    by any combination  of the foregoing.
4.4    Tax Withholding.  Prior to the issuance of the Shares upon exercise of the  Option,  Participant   must  pay  or  provide  for  any  applicable   federal,  state  and  local withholding  obligations of the Company.  If the Committee permits, Participant may provide for payment  of withholding  taxes upon  exercise of the Option  by requesting  that  the Company retain the minimum number of Shares with a Fair Market Value equal to the minimum amount of taxes required  to be withheld;  but in no event will the Company  withhold  Shares if such withholding  would result in adverse accounting  consequences to the Company.  In such case, the Company shall issue the net number of Shares to the Participant by deducting  the Shares retained from the Shares issuable upon exercise.
4.5    Issuance   of  Shares.     Provided   that  the  Exercise  Agreement   and payment  are in form and substance  satisfactory  to counsel for the Company,  the  Company shall issue the Shares registered in the name of Participant, Participant’s authorized assignee, or Participant’s legal representative, and shall deliver certificates representing the Shares with the appropriate legends affixed thereto.
5.    NOTICE OF DISQUALIFYING DISPOSITION OF ISO SHARES.  If the Option is an ISO, and if Participant sells or otherwise disposes of any of the Shares acquired pursuant to the ISO on or before the later of (i) the date two (2) years after the Date of Grant, and (ii) the date  one (1) year after transfer  of such  Shares to  Participant  upon  exercise  of the Option, Participant  shall immediately  notify  the Company  in writing  of such disposition.    Participant agrees that  Participant  may be subject  to  income  tax  withholding  by the Company  on the compensation  income recognized by Participant from the early disposition  by payment in cash or out of the current wages or other compensation  payable to Participant.
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6.    COMPLIANCE WITH LAWS AND REGULATIONS.     The  Plan,  the  Notice  of Stock  Option Grant and this Agreement are intended  to comply  with Section 25102(o) of the California Corporations  Code and any regulations relating thereto.  Any provision of the Notice of Stock  Option  Grant or this Agreement which  is inconsistent  with Section 25102(o) or any regulations  relating thereto  shall, without  further  act or amendment  by  the Company  or the Board, be reformed to comply  with the requirements of Section 25102(o) and any regulations relating thereto.   The exercise of the Option and the issuance and transfer of Shares shall be subject  to  compliance  by the Company  and  Participant  with  all applicable  requirements  of federal and state securities laws and with all applicable requirements of any stock exchange on which the Company’s Common Stock may be listed at the time of such issuance or transfer. Participant  understands  that  the Company  is under  no obligation  to  register  or qualify  the Shares with the SEC, any state securities commission  or any stock  exchange to effect such compliance.
7.    NONTRANSFERABILITY OF OPTION.   The Option  may not  be transferred  in any manner other than by will or by the laws of descent and distribution,  and, with respect to NQSOs, by instrument  to an inter vivos or testamentary  trust in which the options  are to be passed to beneficiaries upon the death of the trustor (settlor), or by gift to “immediate family” as that term is defined in 17 C.F.R. 240.16a-1(e), and may be exercised during the lifetime of Participant only by Participant or in the event of Participant’s incapacity,  by Participant’s legal representative.   The terms of the Option shall be binding upon the executors,  administrators, successors and assigns of Participant.
8.    COMPANY’S  RIGHT OF FIRST REFUSAL.  Before any Vested Shares held by Participant  or any transferee  of  such  Vested  Shares may  be sold  or otherwise  transferred (including  without  limitation  a transfer  by gift  or operation  of law),  the  Company  and/or  its assignee(s) shall have an assignable right of first refusal to purchase the Vested Shares to be sold or transferred on the terms and conditions  set forth in the Exercise Agreement (the “Right of First Refusal”).   The Company’s Right of First Refusal will terminate when the Company’s securities become publicly traded.
9.    TAX CONSEQUENCES.   Set forth below is a brief summary as of the Effective Date of the Plan of some of the federal and California tax consequences  of  exercise of the Option and disposition  of the Shares.  THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.   PARTICIPANT SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE  OPTION OR DISPOSING OF THE SHARES.
9.1    Exercise  of ISO.   If the  Option  qualifies  as an ISO, there  will  be  no regular federal or California 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 a tax preference item for federal alternative minimum tax purposes and may subject the Participant to the alternative minimum tax in the year of exercise.
9.2    Exercise of Nonqualified Stock Option.  If the Option does not qualify as an ISO, there may be a regular federal and California income tax liability upon the exercise of the Option.  Participant 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 Participant  is a current or former employee of the Company, the Company may be required to withhold from Participant’s  compensation  or collect  from  Participant  and pay  to  the applicable  taxing  authorities  an amount  equal to  a percentage of this compensation  income at the time of exercise.
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9.3    Disposition  of  Shares.    The following  tax  consequences  may  apply upon disposition of the Shares.
(a)    Incentive  Stock  Options.    If the Shares are held for more  than twelve (12) months after the date of purchase of the Shares pursuant to the exercise of an ISO and are disposed  of more than two  (2) years after the Date of Grant, any  gain  realized on disposition  of the Shares will be treated  as long term capital  gain for  federal and California income  tax purposes.   If Vested Shares purchased  under an ISO  are disposed  of within the applicable  one (1) year or two  (2) year period,  any gain  realized on such disposition  will be treated  as  compensation   income  (taxable  at  ordinary  income  rates  in  the  year  of  the disposition) to the extent of the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price.
(b)    Nonqualified Stock Options.  If the Shares are held for more than twelve (12) months  after the date of purchase  of the Shares pursuant  to the  exercise of an NQSO, any gain realized on disposition of the Shares will be treated as long-term capital gain.
(c)    Withholding.  The Company may be required to withhold from the Participant’s compensation  or collect  from  the Participant  and pay to the applicable  taxing authorities an amount equal to a percentage of this compensation  income.
10.    PRIVILEGES OF STOCK OWNERSHIP.   Participant  shall not have any of the rights of a stockholder  with respect to any Shares until the Shares are issued to Participant.
11.    INTERPRETATION.   Any dispute  regarding  the interpretation  of the Notice  of Stock Option Grant or this Agreement shall be submitted  by Participant or the Company to the Committee  for review.   The resolution  of such a dispute  by the Committee  shall be final and binding on the Company and Participant.
12.    ENTIRE  AGREEMENT.   The Notice  of Stock  Option  Grant and the Plan  are incorporated  herein by reference.  This Agreement, the Notice of Stock Option Grant and the Plan constitute  the entire agreement of the parties and supersede all prior undertakings  and agreements with respect to the subject matter hereof.
13.    NOTICES.   Any notice required to be given or delivered to the Company under the terms of this Agreement shall be in writing and addressed to the Corporate Secretary of the Company  at its principal  corporate  offices.   Any notice  required  to be given or delivered  to Participant  shall be in writing  and addressed  to  Participant  at the address  set forth  in  the Notice of Stock Option Grant or to such other address as such party may designate in writing from time to time to the Company.  All notices shall be deemed to have been given or delivered upon:  (i) personal delivery; (ii) three (3) days after deposit in the United States mail by certified or registered  mail (return  receipt  requested); (iii) one (1) business  day after deposit  with  any return  receipt  express  courier  (prepaid);  or  (iv) one  (1)  business  day  after  transmission  by facsimile, rapifax or telecopier.
14.    SUCCESSORS  AND  ASSIGNS.   The Company  may assign  any of its  rights under the Notice of Stock  Option  Grant and this Agreement, including  its rights to purchase Shares under the Right of First Refusal.  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, the Notice of Stock  Option Grant and this Agreement shall be binding  upon Participant and Participant’s heirs, executors, administrators,  legal representatives, successors and assigns.
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15.    GOVERNING LAW.  The Notice of Stock Option Grant and this Agreement shall be governed by and construed  in accordance  with the laws of the State of California as such laws are applied to agreements between California residents entered into and to be performed entirely  within  California.    If  any  provision  of  the  Notice  of  Stock  Option  Grant  or  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.
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EXHIBIT A
FORM OF STOCK OPTION EXERCISE AGREEMENT
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NEXTDOOR.COM,
INC.
2008 EQUITY INCENTIVE PLAN STOCK
OPTION EXERCISE AGREEMENT
This  Stock  Option  Exercise  Agreement (the “Exercise Agreement”) is made and entered into as of _________________________ (the “Effective Date”) by and between Nextdoor.com, Inc., a Delaware corporation  (the “Company”), and the purchaser named below (the “Purchaser”). Capitalized terms not defined herein shall have the meanings ascribed to them in the Company’s 2008 Equity Incentive Plan (the “Plan”).
						
	Purchaser:	
		
	Social Security Number:	
		
	Address:	
		
		
		
	Total Number of Shares:
	
		
	Exercise Price Per Share:	$
		
	Date of Grant:	
		
	First Vesting Date:	
		
	Expiration Date:	
		(Unless earlier terminated under Section 5.6 of the Plan)
		
	Type of Stock Option	
	(Check one):	[ ] Incentive Stock Option
		
		[ ] Nonqualified Stock Option

16.    EXERCISE OF OPTION.
16.1    Exercise.    Pursuant  to  exercise  of  that  certain  option  (the  “Option”) granted to Purchaser under the Plan and subject to the terms and conditions  of this Exercise Agreement, Purchaser hereby purchases from the Company, and the Company hereby sells to Purchaser,  the  Total  Number  of  Shares set  forth  above  (the  “Shares”)  of  the  Company’s Common Stock, par value $0.0001 per share, at the Exercise Price Per Share set forth above (the “Exercise Price”).   As used in this Exercise Agreement, the term “Shares” refers to the Shares purchased  under  this  Exercise  Agreement  and  includes  all securities  received  (i) in replacement of the Shares, (ii) as a result of stock dividends or stock splits with respect to the Shares,   and   (iii) all   securities   received   in   replacement   of   the   Shares   in   a   merger, recapitalization, reorganization or similar corporate transaction.
16.2    Additional   Agreement(s).     If,  upon   the  purchase   of  the   Shares, Purchaser holds shares of the Company’s capital stock  constituting  one percent (1%) of the Company’s 
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issued and outstanding  shares of capital stock (treating for this purpose all shares of Common Stock issuable upon exercise of or conversion of outstanding  options, warrants or convertible  securities, as if exercised or converted), then  Purchaser shall become  bound  by, and  subject  to,  Section  3  of  that  certain  Voting  and Drag-Along  Agreement,  dated  as of January  25, 2008,  a copy  of  which  has been  provided  to  Purchaser  if this  Section  1.2 is applicable  to Purchaser, as such agreement may be amended or amended and restated from time to time, as a “Holder” thereto.   Purchaser further agrees to execute  such agreements, documents and/or counterpart signature pages that are necessary to give effect to this Section 1.2 and as may be reasonably requested by the Company.
16.3    Title  to  Shares.     The  exact  spelling  of  the  name(s)   under   which Purchaser will take title to the Shares is:
________________________________________________________________
________________________________________________________________
Purchaser desires to take title to the Shares as follows:
[  ]    Individual, as separate property
[  ]    Husband and wife, as community property
[  ]    Joint Tenants
[  ]    Other; please specify:___________________________________________
To assign the Shares to a trust, a stock transfer agreement in the form provided by the Company (the “Stock Transfer Agreement”) must be completed and executed.
16.4    Payment.   Purchaser hereby delivers payment  of the Exercise Price  in the  manner  permitted  in the  Stock  Option  Agreement  as follows  (check  and  complete  as appropriate):
[ ]    in  cash  (by  check)  in  the  amount  of  $_____________,  receipt  of  which  is acknowledged  by the Company;
[ ]    by cancellation  of indebtedness  of the Company owed to Purchaser in the amount of $_______________; and/or
[ ]    by the waiver hereby of compensation  due or accrued for services rendered in the amount of $_______________.
17.    DELIVERY.
17.1    Deliveries by Purchaser.   Purchaser hereby delivers to the  Company (i) this Exercise Agreement, (ii) two (2) copies of a blank Stock Power and Assignment Separate from  Stock  Certificate  in the form  of Exhibit 1 attached  hereto  (the “Stock Powers”),  both executed by Purchaser (and Purchaser’s spouse, if any), (iii) if Purchaser is married, a Consent of  Spouse  in  the  form  of  Exhibit 2  attached  hereto  (the  “Spouse  Consent”)  executed  by Purchaser’s  spouse,  and  (iv) the  Exercise  Price  and  payment  or  other  provision  for  any applicable tax obligations  in the form of a check or other proofs of payment, as the case may be, a copy of which is attached hereto as Exhibit 3.
17.2    Deliveries  by the  Company.   Upon  its  receipt  of the Exercise  Price, payment  or other  provision  for any applicable  tax obligations  and all the  documents  to  be executed  and delivered by Purchaser to the Company  under Section 17.1, the Company  will issue a duly executed 
2

stock certificate  evidencing the Shares in the name of Purchaser to be placed in escrow as provided in Section 25.
18.    REPRESENTATIONS   AND   WARRANTIES   OF   PURCHASER.    Purchaser represents and warrants to the Company that:
18.1    Agrees to Terms of the Plan.   Purchaser has received a copy  of  the Plan,  the  Notice  of  Stock  Option  Grant  and  the  Stock  Option  Agreement,  has  read  and understands  the  terms  of  the  Plan,  the  Notice  of  Stock  Option  Grant,  the  Stock  Option Agreement  and  this  Exercise  Agreement,  and  agrees  to  be  bound  by  their  terms  and conditions.    Purchaser  acknowledges  that  there  may  be  adverse  tax  consequences  upon exercise of the Option or disposition  of the Shares, and that Purchaser should consult  a tax adviser prior to such exercise or disposition.
18.2    Purchase for Own Account for Investment.   Purchaser is purchasing the Shares for Purchaser’s own account for investment purposes only and not with a view to, or for sale in connection  with, a distribution  of the Shares within the meaning of the Securities Act.  Purchaser has no present intention of selling or otherwise disposing  of all or any portion of the Shares and no one other than Purchaser has any  beneficial  ownership  of any of the Shares.
18.3    Access to Information.   Purchaser has had access  to all  information regarding  the  Company  and  its  present  and  prospective   business,  assets,  liabilities  and financial condition  that Purchaser reasonably  considers  important  in  making  the decision  to purchase  the  Shares,  and  Purchaser  has  had  ample  opportunity  to  ask  questions  of  the Company’s representatives concerning such matters and this investment.
18.4    Understanding  of  Risks.   Purchaser  is  fully  aware  of:    (i) the  highly speculative  nature of the investment  in the Shares; (ii) the financial hazards  involved;  (iii) the lack of liquidity  of the Shares and the restrictions  on transferability  of  the  Shares (e.g.,  that Purchaser may not be able to sell or dispose of the Shares or use them as collateral for loans); (iv) the qualifications  and backgrounds  of the management  of the Company;  and (v) the tax consequences of investment in the Shares.  Purchaser is capable of evaluating the merits and risks of this investment, has the ability to protect Purchaser’s own interests in this transaction and is financially capable of bearing a total loss of this investment.
18.5    No General Solicitation.   At no time was Purchaser presented  with or solicited by any publicly issued or circulated newspaper, mail, radio, television or other form of general advertising or solicitation in connection with the offer, sale and purchase of the Shares.
19.    COMPLIANCE WITH SECURITIES LAWS.
4.1    Compliance with U.S. Federal Securities Laws.  Purchaser understands and acknowledges that the Shares have not been registered with the SEC under the Securities Act and that, notwithstanding any other provision of the Notice of Stock Option Grant or the Stock Option Agreement to the contrary, the exercise of any rights to purchase any Shares is expressly conditioned  upon compliance with the Securities Act and all applicable state securities laws.  Purchaser agrees to cooperate with the Company to ensure compliance with such laws.
4.2    Compliance with California Securities Laws.  THE PLAN, THE NOTICE OF STOCK  OPTION  GRANT,  THE STOCK  OPTION  AGREEMENT, AND  THIS  EXERCISE AGREEMENT ARE INTENDED TO COMPLY WITH SECTION 25102(o) OF THE CALIFORNIA 
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CORPORATIONS  CODE  AND   ANY  RULES  (INCLUDING   COMMISSIONER   RULES,  IF APPLICABLE)  OR  REGULATIONS  PROMULGATED  THEREUNDER BY  THE  CALIFORNIA DEPARTMENT OF CORPORATIONS (THE  “REGULATIONS”).    ANY PROVISION OF THIS EXERCISE  AGREEMENT  THAT  IS   INCONSISTENT  WITH   SECTION  25102(o)   SHALL, WITHOUT  FURTHER ACT  OR  AMENDMENT  BY  THE  COMPANY  OR  THE  BOARD,  BE REFORMED TO COMPLY WITH THE REQUIREMENTS OF SECTION 25102(o). THE SALE OF THE SECURITIES THAT ARE THE SUBJECT OF THIS EXERCISE AGREEMENT, IF NOT YET QUALIFIED   WITH  THE  CALIFORNIA  COMMISSIONER  OF  CORPORATIONS  AND  NOT EXEMPT FROM SUCH QUALIFICATION, IS SUBJECT TO SUCH QUALIFICATION, AND THE ISSUANCE   OF   SUCH   SECURITIES,  AND   THE   RECEIPT  OF   ANY   PART   OF   THE CONSIDERATION THEREFOR PRIOR TO SUCH  QUALIFICATION IS UNLAWFUL  UNLESS THE SALE IS EXEMPT.  THE RIGHTS OF THE PARTIES TO THIS EXERCISE  AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING  OBTAINED OR AN EXEMPTION BEING AVAILABLE.
20.    RESTRICTED SECURITIES.
20.1    No Transfer  Unless  Registered  or Exempt.   Purchaser  understands that  Purchaser  may  not  transfer  any Shares unless  such  Shares  are  registered  under  the Securities Act or qualified  under applicable  state securities  laws or  unless, in the opinion  of counsel to the Company, exemptions from such registration and qualification  requirements are available.  Purchaser understands that only the Company may file a registration statement with the SEC and that the Company  is under no  obligation  to do so with respect  to the Shares. Purchaser has also been advised that exemptions  from registration  and qualification  may not be available or may not permit Purchaser to transfer all or any of the Shares in the amounts or at the times proposed by Purchaser.
20.2    SEC  Rule 144.    In  addition,  Purchaser  has  been  advised  that  SEC Rule 144  promulgated   under  the  Securities  Act,  which  permits   certain  limited   sales  of unregistered securities, is not presently available with respect to the Shares and, in any event, requires that the Shares be held for a minimum  of one (1) year, and in certain cases two (2) years,  after  they  have  been  purchased   and  paid  for  (within  the  meaning  of  Rule 144). Purchaser understands that Rule 144 may indefinitely restrict transfer of the Shares so long as Purchaser remains an “affiliate” of the Company  or if  “current public  information” about  the Company (as defined in Rule 144) is not publicly available.
20.3    SEC  Rule 701.    The  Shares  are  issued  pursuant  to  SEC  Rule 701 promulgated  under the Securities Act and may become freely tradeable by non-affiliates (under limited conditions  regarding the method of sale) ninety (90) days after 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 SEC, subject to the lengthier market standoff agreement contained in Section 22 of  this  Exercise  Agreement  or any  other  agreement  entered  into  by  Purchaser. Affiliates  must  comply  with  the  provisions  (other  than  the  holding  period  requirements)  of Rule 144.
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21.    RESTRICTIONS ON TRANSFERS.
21.1    Disposition of Shares.   Purchaser hereby agrees that Purchaser  shall make no disposition  of the Shares (other than as permitted by this Exercise Agreement) unless and until:
(a)    Purchaser  shall  have  notified  the  Company  of  the  proposed disposition  and  provided  a written  summary  of  the  terms  and  conditions  of  the  proposed disposition;
(b)    Purchaser  shall  have  complied   with  all  requirements   of  this Exercise Agreement applicable to the disposition of the Shares;
(c)    Purchaser   shall   have   provided   the   Company   with   written assurances,  in  form  and  substance  satisfactory   to  counsel  for  the  Company,  that  (i) the proposed  disposition  does not require registration  of the Shares under the  Securities Act or (ii) 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 (including Rule 144) have been taken; and
(d)    Purchaser   shall   have   provided   the   Company   with   written assurances, in form and substance satisfactory to the Company, that the proposed disposition will not result in the contravention of any transfer restrictions applicable to the Shares pursuant to the provisions of the Regulations referred to in Section 4.2 hereof.
21.2    Restriction on Transfer.   Purchaser  shall not  transfer,  assign, grant  a lien or security interest in, pledge, hypothecate,  encumber or otherwise dispose of any of the Shares which are subject to the Company’s Right of First Refusal described  below, except as permitted by this Exercise Agreement.
21.3    Transferee  Obligations.    Each  person  (other  than  the  Company)  to whom the Shares are transferred by means of one of the permitted  transfers specified in this Exercise  Agreement   must,   as  a  condition   precedent   to   the  validity   of  such   transfer, acknowledge  in writing  to the Company  that such person is bound  by the  provisions  of this Exercise Agreement  and  that  the transferred  Shares are subject  to  (i) both  the Company’s Right of First Refusal granted hereunder and (ii) the market stand-off provisions  of Section 22 hereof, to the same extent such Shares would be so subject if retained by the Purchaser.
22.    MARKET STANDOFF AGREEMENT.   Purchaser agrees 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, Purchaser 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 period of time (not to exceed one hundred eighty (180)  days; provided,  however,  that,  if during  the last seventeen (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 sixteen (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 thereof applies, then the restrictions  imposed  by this Section 7 shall continue  to apply until the  expiration  of the eighteen (18)-day  period  beginning  on the issuance  of the earnings  release or the occurrence  of the material  news or material event; provided, further, in no event will the restricted period extend beyond two hundred fifteen (215) 
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days  after  the  effective  date  of  the  registration  statement) after  the  effective  date  of  such registration  requested  by such  managing  underwriters  and subject  to  all restrictions  as the Company  or  the  underwriters  may  specify.     Purchaser  further  agrees  to  enter  into  any agreement reasonably required by the underwriters to implement the foregoing.
23.    COMPANY’S  RIGHT OF FIRST REFUSAL.  Before any Vested Shares held by Purchaser or any transferee of such Vested Shares (either sometimes referred to herein as the “Holder”) may be sold or otherwise transferred (including, without  limitation,  a transfer by gift or operation  of law),  the Company  and/or  its assignee(s)  will have a right  of first refusal to purchase the Vested Shares to be sold or transferred (the “Offered Shares”) on the terms and conditions set forth in this Section (the “Right of First Refusal”).
23.1    Notice  of Proposed  Transfer.   The Holder  of the Offered  Shares  will deliver  to  the  Company  a written  notice  (the  “Notice”) stating:    (i) the  Holder’s  bona  fide intention  to sell or otherwise  transfer the Offered Shares; (ii) the name and  address  of each proposed   purchaser  or  other  transferee  (the  “Proposed  Transferee”);  (iii) the  number  of Offered Shares to be transferred to each Proposed Transferee; (iv) the bona fide cash price or other consideration  for which the Holder proposes to transfer the Offered Shares (the “Offered Price”); and (v) that the Holder acknowledges  this Notice is an offer to sell the Offered Shares to the Company and/or its assignee(s) pursuant to the Company’s Right of First Refusal at the Offered Price as provided for in this Exercise Agreement.
23.2    Exercise of Right of First Refusal.   At any time within thirty (30) days after the date of the Notice, the Company and/or its assignee(s) may, by giving written notice to the Holder, elect to purchase all (or, with the consent of the Holder, less than all) the Offered Shares proposed  to be transferred to any one or more of the Proposed Transferees named in the Notice, at the purchase price, determined as specified below.
23.3    Purchase Price.  The purchase price for the Offered Shares purchased under this Section will be the Offered Price, provided  that if the Offered Price consists  of no legal consideration  (as, for example, in the case of a transfer by gift) the purchase price will be the fair market  value of the Offered  Shares as determined  in good  faith by the Company’s Board of Directors.  If the Offered Price includes consideration other than cash, then the value of  the  non-cash  consideration,  as  determined  in  good  faith  by  the  Company’s  Board  of Directors,  will  conclusively  be  deemed  to  be  the  cash  equivalent  value of  such  non-cash consideration.
23.4    Payment.  Payment of the purchase price for the Offered Shares will be payable, at the option  of the Company and/or  its assignee(s) (as applicable), by check or by cancellation  of all or a portion of any outstanding  purchase money indebtedness owed by the Holder to the Company (or to such assignee, in the case of a purchase of Offered Shares by such assignee) or by any combination  thereof.  The purchase price will be paid without interest within  sixty  (60)  days  after  the  Company’s receipt  of  the  Notice, or,  at  the  option  of  the Company and/or its assignee(s), in the manner and at the time(s) set forth in the Notice.
23.5    Holder’s Right to Transfer.  If all of the Offered 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 the Holder may sell or otherwise transfer such Offered Shares to each Proposed  Transferee at the Offered Price  or at a higher price, provided  that (i) such sale or other transfer is consummated  within one hundred twenty (120) days after the date of the Notice, (ii) any such sale or other transfer is effected  in compliance with all applicable securities laws, and (iii) each Proposed 
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Transferee agrees in writing that the provisions  of this Section  will continue  to  apply to the Offered Shares in the hands of such Proposed Transferee.  If the Offered Shares described in the Notice are not transferred to each Proposed  Transferee within  such  one hundred  twenty  (120) day period,  then a new Notice must be given to the Company pursuant to which the Company will again be offered the Right of First Refusal before any Shares held by the Holder may be sold or otherwise transferred.
23.6    Exempt  Transfers.    Notwithstanding anything  to  the  contrary  in  this Section, the following transfers of Vested Shares will be exempt from the Right of First Refusal: (i) the  transfer  of  any or all of  the  Vested  Shares during  Purchaser’s  lifetime  by gift  or on Purchaser’s death by will or intestacy to Purchaser’s “Immediate Family” (as defined below) or to a trust  for the benefit  of Purchaser or Purchaser’s  Immediate  Family,  provided  that each transferee or other recipient agrees in a writing satisfactory to the Company that the provisions of this Section  will continue  to apply to the transferred  Vested Shares in the hands of such transferee or other recipient; (ii) any transfer or conversion of Vested Shares made pursuant to a statutory  merger or statutory consolidation of the Company with or into another corporation  or corporations  (except that the Right of First Refusal will continue to apply thereafter to such Vested Shares, in which case the surviving corporation  of such merger or consolidation  shall succeed to the rights of the Company under this Section unless (i)  the common  stock of the surviving corporation  or any direct or indirect parent corporation  thereof is registered under the Securities Exchange Act of 1934, as amended; or (ii) the agreement of merger or consolidation  expressly otherwise provides); or (iii) any transfer of Vested Shares pursuant to the winding up and dissolution  of the Company.   As used herein, the term  “Immediate Family”  will mean Purchaser’s  spouse,  the lineal descendant  or  antecedent,  father,  mother,  brother  or sister, child,  adopted  child,  grandchild  or  adopted  grandchild  of the Purchaser or the Purchaser’s spouse, or the spouse of any of the above.
23.7    Termination  of Right of First Refusal.   The Right of First Refusal  will terminate  as to  all Shares on the  effective  date  of  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 SEC under the 1933 Act (other than a registration statement relating solely to the issuance of Common Stock pursuant to a business combination  or an employee incentive or benefit plan).
23.8    Encumbrances  on  Vested  Shares.    Purchaser  may  grant  a  lien  or security interest in, or pledge, hypothecate  or encumber  Vested Shares only if each party to whom such lien or security interest is granted, or to whom such pledge, hypothecation  or other encumbrance  is made,  agrees in a writing  satisfactory  to  the  Company  that:   (i) such  lien, security interest, pledge, hypothecation  or encumbrance  will not apply to such Vested Shares after they are acquired  by the Company  and/or  its  assignees under this Section;  and (ii) the provisions  of this Section will continue  to apply to such Vested Shares in the hands of such party and any transferee of such party.   Purchaser may not grant a lien or security interest in, or pledge, hypothecate or encumber, any Unvested Shares.
24.    RIGHTS AS A STOCKHOLDER.    Subject  to  the terms  and conditions  of  this Exercise Agreement, Purchaser will have all of the rights of a stockholder  of the Company with respect to the Shares from and after the date that Shares are issued to Purchaser until such time as Purchaser disposes of the Shares or the Company and/or its assignee(s) exercise(s) the Right of First Refusal.  Upon an exercise of the Right of First Refusal, Purchaser will have no further rights as a holder of the Shares so purchased upon such exercise, other than the right to  receive payment  for the Shares so purchased  in  accordance  with  the provisions  of this Exercise Agreement, and Purchaser will promptly surrender the stock certificate(s) evidencing the Shares so purchased to the Company for transfer or cancellation.
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25.    ESCROW.    As security  for  Purchaser’s  faithful  performance  of  this  Exercise Agreement, Purchaser agrees, immediately  upon receipt of the stock certificate(s) evidencing the  Shares,  to  deliver  such  certificate(s),  together  with  the  Stock  Powers  executed   by Purchaser and by Purchaser’s spouse, if any (with the date and number of Shares left blank), to the Secretary of the Company or other designee of the Company (the “Escrow Holder”), who is hereby appointed to hold such certificate(s) and Stock Powers 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  Exercise Agreement.   Purchaser and the Company  agree that Escrow Holder will not be liable to any party to this Exercise 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 Exercise Agreement.  Escrow Holder  may  rely  upon  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 Exercise Agreement.   The Shares will be released from escrow upon termination of and the Right of First Refusal.
26.    RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS.
26.1    Legends.    Purchaser  understands  and  agrees  that  the  Company  will place the legends set forth below or similar legends on any stock certificate(s) evidencing the Shares,  together  with  any  other  legends  that  may  be  required  by  state  or  U.S.  Federal securities  laws, the Company’s  Certificate  of Incorporation  or  Bylaws,  any other agreement between  Purchaser  and the Company  or any agreement  between  Purchaser  and any third party:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON PUBLIC RESALE AND TRANSFER, INCLUDING THE RIGHT OF FIRST REFUSAL OPTIONS HELD BY THE ISSUER AND/OR ITS ASSIGNEE(S) AS SET FORTH IN A STOCK OPTION EXERCISE 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. SUCH PUBLIC SALE AND TRANSFER RESTRICTIONS INCLUDING THE RIGHT OF FIRST REFUSAL ARE BINDING ON TRANSFEREES OF THESE SHARES.
8

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 ANY PUBLIC OFFERING OF THE COMMON STOCK OF THE ISSUER HEREOF. SUCH RESTRICTION IS BINDING ON TRANSFEREES OF THESE SHARES.
26.2    Stop-Transfer Instructions.        Purchaser    agrees    that,    to    ensure compliance with the restrictions imposed by this Exercise 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.
26.3    Refusal to Transfer.  The Company will 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 Exercise 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 have been so transferred.
27.    TAX  CONSEQUENCES.    PURCHASER UNDERSTANDS THAT  PURCHASER MAY   SUFFER  ADVERSE  TAX   CONSEQUENCES  AS   A   RESULT  OF   PURCHASER’S PURCHASE  OR DISPOSITION OF THE SHARES.   PURCHASER  REPRESENTS:   (i) THAT PURCHASER  HAS  CONSULTED  WITH  ANY  TAX  ADVISER  THAT  PURCHASER  DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR DISPOSITION OF THE  SHARES AND (ii) THAT PURCHASER IS NOT RELYING ON THE COMPANY FOR ANY  TAX ADVICE. Set forth below is a brief summary as of the date the Plan was adopted by the Board of some of the U.S. Federal and California tax consequences  of exercise of the Option and disposition  of the Shares.  THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.  PURCHASER SHOULD CONSULT HIS OR HER OWN TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
27.1    Exercise of Incentive Stock Option.  If the Option qualifies as an ISO, there will be no regular U.S. Federal income tax liability or California 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 a tax preference item for U.S. Federal  alternative  minimum  tax  purposes  and  may  subject  Purchaser  to  the  alternative minimum tax in the year of exercise.
27.2    Exercise of Nonqualified Stock Option.  If the Option does not qualify as an ISO, there may be a regular U.S. Federal income tax liability and a California income tax liability  upon  the  exercise  of  the  Option.    Purchaser  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 Purchaser is or  was  an  employee  of  the  Company,  the  Company  may  be  required  to  withhold  from Purchaser’s  compensation   or  collect   from   Purchaser  and  pay  to  the  applicable   taxing authorities  an amount  equal  to  a  percentage  of  this  compensation  income  at  the  time  of exercise.
27.3    Disposition of Shares. The following tax consequences may apply upon disposition of the Shares.
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(a)    Incentive  Stock  Options.    If the Shares are held for more  than twelve (12) months after the date of purchase of the Shares pursuant to the exercise of an ISO and are disposed  of more than two  (2) years after the Date of Grant, any  gain  realized on disposition  of the Shares will be treated  as long term capital  gain for  federal and California income  tax purposes.   If Vested Shares purchased  under an ISO  are disposed  of within the applicable  one (1) year or two  (2) year period,  any gain  realized on such disposition  will be treated  as  compensation   income  (taxable  at  ordinary  income  rates  in  the  year  of  the disposition) to the extent of the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price.
(b)    Nonqualified Stock Options.  If the Shares are held for more than twelve (12) months  after the date of purchase  of the Shares pursuant  to the  exercise of an NQSO, any gain realized on disposition of the Shares will be treated as long term capital gain.
(c)    Withholding.  The Company may be required to withhold from the Purchaser’s  compensation  or collect  from  the  Purchaser  and  pay  to  the  applicable  taxing authorities an amount equal to a percentage of this compensation  income.
28.    COMPLIANCE WITH LAWS AND REGULATIONS.   The issuance and  transfer of  the  Shares  will  be  subject  to  and  conditioned  upon  compliance  by  the  Company  and Purchaser  with  all  applicable   state  and  U.S.  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.
29.    SUCCESSORS AND ASSIGNS.    The Company  may  assign  any  of  its  rights under this Exercise Agreement, including its rights to purchase Shares under the Right of First Refusal.    This Exercise  Agreement  shall  be  binding  upon  and  inure  to  the  benefit  of  the successors  and assigns of the Company.   Subject  to the restrictions  on transfer herein set forth,   this  Exercise  Agreement   will  be  binding   upon  Purchaser   and  Purchaser’s   heirs, executors, administrators, legal representatives, successors and assigns.
30.    GOVERNING LAW; SEVERABILITY.       This   Exercise   Agreement   shall   be governed by and construed  in accordance  with the internal laws of the State of California as such  laws  are applied  to  agreements  between  California  residents  entered  into  and  to  be performed entirely within California.  If any provision of this Exercise 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.
31.    NOTICES.  Any notice required to be given or delivered to the Company shall be in writing and addressed to the Corporate Secretary of the Company at its principal corporate offices.    Any notice  required  to  be given or delivered  to  Purchaser  shall be  in  writing  and addressed to Purchaser at the address indicated above or to such other address as Purchaser may designate  in writing  from  time  to  time  to  the Company.    All  notices  shall be deemed effectively given upon personal delivery, (i) three (3) days after deposit in the United States mail by  certified  or  registered  mail  (return  receipt  requested), (ii) one  (1)  business  day  after  its deposit  with  any return  receipt  express  courier  (prepaid),  or (iii) one (1)  business  day  after transmission by rapifax or telecopier.
32.    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 Exercise Agreement.
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33.    HEADINGS.     The  captions   and  headings  of  this  Exercise  Agreement  are included  for ease of reference only and will be disregarded  in interpreting  or  construing  this Exercise Agreement.   All references herein to Sections  will refer to  Sections  of this Exercise Agreement.
34.    ENTIRE AGREEMENT.   The Plan, the Notice of Stock Option Grant, the Stock Option  Agreement and this Exercise Agreement, together  with all Exhibits thereto, constitute the entire agreement and understanding of the parties with respect to the subject matter of this Exercise Agreement, and supersede all prior understandings  and agreements, whether oral or written, between the parties hereto with respect to the specific subject matter hereof.
[REMAINDER  OF PAGE INTENTIONALLY LEFT BLANK]
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IN  WITNESS  WHEREOF,  the Company  has caused  this  Exercise  Agreement  to  be executed  in triplicate  by its duly authorized  representative  and Purchaser has  executed  this Exercise Agreement in triplicate as of the Effective Date, indicated above.
												
	NEXTDOOR.COM, INC.
		PURCHASER

				
	By:			
				(Signature)
				
			
	(Please print name)		(Please print name)
				
			
	(Please print title)		

[SIGNATURE  PAGE TO NEXTDOOR.COM,  INC. STOCK  OPTION  EXERCISE  AGREEMENT]

LIST OF EXHIBITS
Exhibit 1:    Stock Power and Assignment Separate from Stock Certificate
Exhibit 2:    Spouse Consent
Exhibit 3:    Copy of Purchaser’s Check

EXHIBIT 1
STOCK POWER AND ASSIGNMENT SEPARATE FROM STOCK CERTIFICATE

Stock Power And Assignment
Separate From Stock Certificate
FOR VALUE RECEIVED and pursuant to that certain Stock Option Exercise Agreement dated as of ________________,_____, (the “Agreement”), the undersigned hereby sells, assigns and  transfers  unto _______________________________, _______ shares  of  the  Common Stock,  $0.0001  par  value  per  share,  of  Nextdoor.com,  Inc.,  a  Delaware  corporation  (the “Company”), standing in the undersigned’s name on the books of the Company represented by Certificate  No(s).  _________ delivered herewith,  and does hereby irrevocably  constitute  and appoint the Secretary of the Company as the undersigned’s attorney-in-fact, with full power of substitution,  to transfer said stock  on the books of the Company.   THIS ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND ANY EXHIBITS THERETO.
												
	Dated:			
				
				PURCHASER
				
				(Signature)
				
				(Please Print Name)
				
				(Spouse’s Signature, if any)

				
				(Please Print Spouse’s Name)

Instructions to Purchaser:  Please do not fill in any blanks other than the signature line.  The purpose of this Stock Power and Assignment is to enable the Company to acquire the shares pursuant  to  “Right of  First  Refusal” set  forth  in the  Exercise  Agreement  without  requiring additional signatures on the part of the Purchaser or Purchaser’s Spouse.

EXHIBIT 2
SPOUSE CONSENT

Spouse Consent
The undersigned spouse of _______________ (the “Purchaser”) has read, understands, and  hereby  approves  the  Stock  Option  Exercise  Agreement  between  Purchaser  and  the Company (the “Agreement”).  In consideration  of the Company’s granting my spouse the right to purchase the Shares as set forth in the Agreement, the  undersigned  hereby agrees to be irrevocably bound by the Agreement and further agrees that any community  property interest I may have in the Shares shall similarly be bound by the Agreement.   The undersigned  hereby appoints  Purchaser as my attorney-in-fact with respect to any amendment or exercise of any rights under the Agreement.
												
	Dated:			
				
				Print Name of Purchaser’s Spouse
				
				Signature of Purchaser’s Spouse
				
		Address:

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