Document:

Exhibit
10.43

[CEO
THREE YEAR CLIFF VESTING]

HEALTH CARE PROPERTY INVESTORS, INC.

2006 PERFORMANCE INCENTIVE PLAN

PERFORMANCE
RESTRICTED STOCK UNIT AGREEMENT

James F. Flaherty III[                          ],
Grantee:

As of the [              ]
day of [           
20    ] (the “Grant
Date”), Health Care Property Investors, Inc., a Maryland corporation (the “Company”),
pursuant to the Health Care Property Investors, Inc. 2006 Performance Incentive
Plan, as amended and/or restated from time to time (the “Plan”), has
granted to you, the Grantee named above, [                ]
performance restricted stock units (the “Units”) with respect to [             ]
shares of Common Stock on the terms and conditions set forth in this
Performance Restricted Stock Unit Agreement (this “Agreement”) and the
Plan.  The Units are subject to
adjustment as provided in Section 7.1 of the Plan.  Capitalized terms not defined herein shall
have the meanings assigned to such terms in the Plan.  The Compensation Committee (the “Committee”)
of the Board of Directors of the Company (the “Board”) is the
administrator of the Plan for purposes of your Units.

I.              Forfeiture of Units.

(a)           Forfeiture Based Upon Company
Performance.  Your Units will be paid
only to the extent your Units are not forfeited pursuant to this Section I and
only to the extent such non-forfeited Units vest pursuant to this Section I or
Section II below.  Your Units are subject
to forfeiture if the Company’s Funds From Operations Per Share for the 2007
calendar year (the “Performance Period”) is less than [$     ].  If the Company’s Funds From Operations Per
Share for the Performance Period is less than [$     ],
the aggregate percentage of Units that you will forfeit will be determined in
accordance with Exhibit A hereto.  For purposes of this Agreement, “Funds From
Operations Per Share” means the Company’s funds from operations per share
during the Performance Period, as prescribed by the National Association of
Real Estate Investment Trusts (NAREIT) as in effect on the first day of the
Performance Period, and shall be calculated on a fully diluted basis using the
weighted average of diluted shares of Common Stock outstanding during the
Performance Period.  Funds From
Operations Per Share shall be calculated before taking into account any
non-recurring charges incurred by the Company with respect to the Performance
Period for (i) material strategic or financing transactions approved by the
Board of Directors and (ii) impairments. 
The determination as to whether the Company has attained the performance
goals with respect to the Performance Period shall be made by the Committee
acting in good faith.  The Committee’s
determination regarding whether the Company has attained the performance goals
(the “Committee Determination”) shall be made no later than the March 15
following the end of the Performance Period. 
Your Units shall not be deemed vested pursuant to any other provision of
this Agreement earlier than the date that the Committee makes such
determination, as required by Section 162(m) of the Code and the regulations
promulgated thereunder.  Any Units
forfeited pursuant to this Section I(a) shall be deemed to have been forfeited
as of the last day of the Performance Period.

(b)           Forfeiture of Units Upon
Termination of Employment.  Except as
provided in Section I(c), if at any time during the Performance Period your
employment with the Company is terminated, all of your Units shall be
automatically forfeited and cancelled in full effective as of such termination
of employment and this Agreement shall be null and void and of no further force
and effect.

 1
 

(c)           Certain Terminations during the
Performance Period.  This Section
I(c) applies in the event your employment with the Company is terminated as a
result of (i) your death, Disability or Retirement, (ii) a Termination Other
Than For Cause, (iii) a Termination For Good Reason, or (iv) a Termination Upon
a Change in Control (including a Covered Resignation).  In the event of any such termination during
the Performance Period, your Units will remain outstanding during the remainder
of the Performance Period and will be subject to forfeiture in the manner set
forth in subsection (a) upon completion of the Performance Period.  In such a case, any Units not so forfeited
pursuant to subsection (a) shall fully vest as of the date of the Committee
Determination.  For purposes of this
Agreement, the terms “Covered Resignation,” “Disability,” “Termination
Other Than For Cause,” “Termination For Good Reason,” and “Termination
Upon a Change in Control” shall have the meanings ascribed to such terms in
your Employment Agreement with the Company dated October 26, 2005 (the “Employment
Agreement”).  Such meanings shall
continue to apply for purposes of this Agreement notwithstanding any termination
of the “Employment Period” (as such term is defined in the Employment
Agreement) in accordance with the Employment Agreement.

II.            Vesting.

(a)           Vesting of Non-Forfeited Units.  You will have no further rights with respect
to any Units that are forfeited in accordance with Section I.  Subject to the terms and conditions of this
Agreement, your Units that (i) are not forfeited in accordance with Section I
and (ii) do not otherwise vest in accordance with Section I, if any, shall vest
upon the third anniversary of the Grant Date (the “Vesting Date”),
subject to your continuous service to the Company until the Vesting Date.

The vesting schedule
requires continued employment through the Vesting Date as a condition to
vesting of the Units and the rights and benefits under this Agreement.  Unless otherwise expressly provided herein
with respect to accelerated vesting of the Units under certain circumstances,
employment for only a portion of the vesting period, even if a substantial
portion, will not entitle you to any proportionate vesting or avoid or mitigate
a termination of rights and benefits upon or following a termination of
employment as provided in this Agreement.

(b)           Acceleration on Certain
Terminations Following Performance Period. 
If at any time following the completion of the Performance Period and
prior to the Vesting Date, your employment with the Company is terminated as a
result of (i) your death, Disability or Retirement, (ii) a Termination Other
Than For Cause (iii) a Termination For Good Reason, or (iv) a Termination Upon
a Change in Control (including a Covered Resignation), your then outstanding
Units (to the extent not previously forfeited and otherwise unvested) shall
fully vest immediately upon such termination of employment.

(c)           No Acceleration or Vesting Upon
Other Terminations.  Except as
otherwise provided in the Plan, if at any time your employment with the Company
is terminated (i) by the Company, or (ii) by you, under any circumstances
(other than as a result of your death, Disability or Retirement, a Termination
Other Than For Cause, a Termination For Good Reason, or a Termination Upon a
Change in Control, including a Covered Resignation), any of your Units that
remain outstanding and otherwise unvested at the time of such termination of
employment shall be automatically forfeited and cancelled in full, effective as
of such termination of employment.

 2
 

(d)           Employment Termination Date.  If the Employment Period is in effect, the
date of your termination of employment for purposes of this Agreement shall be
no earlier than the “Date of Termination,” as such term is defined in
the Employment Agreement.  If the
Employment Period is not then in effect, the date of termination of your
termination of employment for purposes of this Agreement shall be your actual
date of termination of employment.

III.           Timing and Form of Payment.

(a)           Distribution Date.  Unless you elect otherwise on or before the
Grant Date, the distribution date (the “Distribution Date”) for your
Units that become vested pursuant to this Agreement will be the date that such
Units vest; provided that in no event shall the Distribution Date occur earlier
than the date of the Committee Determination. 
Distribution of your vested Units will be made by the Company in shares
of Common Stock (on a one-to-one basis) on or as soon as practicable after the
Distribution Date with respect to such vested Units.  You will only receive distributions in
respect of your vested Units and will have no right to distribution of your
unvested Units unless and until such Units vest (and are not otherwise
forfeited pursuant to Section I(a)). 
Once a vested Unit has been paid pursuant to this Agreement, you will
have no further rights with respect to that Unit.  You may, however, elect (a “Distribution
Election”) to (A) defer your Distribution Date with respect to some or all
of your vested Units and/or (B) have your vested Units distributed to you in
annual installments as provided in Section IV(b), provided that such election
complies with this Section IV.  You may
change your Distribution Election up to three times without the approval of the
Committee, provided such Distribution Election is made in a timely manner.  Any Distribution Elections with respect to
your vested Units in addition to the three provided in the preceding sentence
may only be made with the approval of the Committee, in its sole
discretion.  In order for a Distribution
Election to be valid, it must be made at least one year prior to the
then-existing Distribution Date, the new Distribution Date must be at least
five years after the then-existing Distribution Date, and the election must
otherwise be consistent with the “subsequent election” rules of Section
409A(a)(4)(C) of the Code so as to prevent application of the penalty and
interest provisions of Section 409A(a)(1)(B) of the Code.  Your Distribution Date with respect to any
portion of your Units may not be prior to the earlier of the Vesting Date for
such vested Units or the date of the Committee Determination.  Distribution Elections may only be made by
delivering a written election to the Company care of its General Counsel in the
form attached as Exhibit B hereto.

(b)           Form of Distribution.  Unless you elect otherwise on or before the
Grant Date, distribution of your vested Units will be made in a lump sum on or
as soon as practicable after your Distribution Date.  You may, however, elect to have vested Units
distributed in the form of two or more annual installments over a fixed number
of years, provided that each installment payment must be for a minimum of 1,000
shares of Common Stock.  If you elect to
have your vested Units distributed in annual installments, the first
installment will be paid on or as soon as practicable after the Distribution
Date and subsequent installments will be paid on or 

 3
 

as soon as
administratively practicable after each of the anniversaries of the
Distribution Date during your elected installment period.  You may change an election you make pursuant
to this Section IV(b) (or you may make an initial election in the event that
you did not elect a form of payment at the time of your award and, accordingly,
your Units were subject to the lump sum default payment rule) by filing a new
written election with the Committee; provided that you must also elect a later
Distribution Date pursuant to Section IV(a) as to any Units that are subject to
such election and in no event may such an election result in an acceleration of
distributions within the meaning of Section 409A of the Code so as to prevent
application of the penalty and interest provisions of Section 409A(a)(1)(B) of
the Code.  Distribution Elections may
only be made by delivering a written election to the Company care of its
General Counsel in the form attached as Exhibit B hereto.

(c)           Hardship Distribution.  If you experience an Unforeseeable Emergency
(as defined below) you may elect to receive immediate distribution of some or
all or your vested Units upon such Unforeseeable Emergency.  Distribution upon an Unforeseeable Emergency
shall be made no later than thirty (30) days following written notice to the
Company care of its General Counsel of the Unforeseeable Emergency.  For purposes of this Agreement, an “Unforeseeable
Emergency” shall mean a severe financial hardship resulting from (i) an illness
or accident of you, your spouse, or your dependent (as defined in Section
152(a) of the Code), (ii) loss of your property due to casualty, or (iii) any
other similar extraordinary and unforeseeable circumstances arising as a result
of events beyond your control, all as reasonably determined by the Committee in
good faith.  No distribution shall be
made in respect of an Unforeseeable Emergency to the extent that such
Unforeseeable Emergency is or may be relieved through reimbursement or
compensation by insurance or otherwise or by liquidation of your assets (to the
extent such liquidation would not itself cause a severe financial
hardship).  Any distribution of your
vested Units as a result of an Unforeseeable Emergency shall be limited to the
amount reasonably necessary to relieve the Unforeseeable Emergency (which may
include amounts necessary to pay any federal, state or local income taxes or
penalties reasonably anticipated to result from the distribution).

IV.           Dividend Equivalent Rights.  During such time as each Unit remains
outstanding and prior to the distribution of such Unit in accordance with
Section IV, you will have the right to receive, in cash, with respect to such
Unit, the amount of any cash dividend paid on a share of Common Stock (a “Dividend
Equivalent Right”).  You will have a
Dividend Equivalent Right with respect to each Unit that is outstanding on the
record date of such dividend.  Dividend
Equivalent Rights will be paid to you at the same time or within 30 days after
dividends are paid to stockholders of the Company.  Dividend Equivalent Rights will not be paid
to you with respect to any Units that are forfeited pursuant to Sections I and
II, effective as of the date such Units are forfeited.  You will have no Dividend Equivalent Rights
as of the record date of any such cash dividend in respect of any Units that
have been paid in Common Stock; provided that you are the record holder of such
Common Stock on or before such record date.

V.            Transferability. 
No benefit payable under, or interest in, the Units or this Agreement
shall be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or charge and any such attempted action shall
be void and no such benefit or interest shall be, in any manner, liable for, or
subject to, your or your beneficiary’s debts, contracts, liabilities or torts; provided, however, nothing in this Section VI shall prevent
transfer of your Units by will or by applicable laws of descent and
distribution.  You may designate a beneficiary
to receive distribution of your vested Units upon your death by submitting a
written beneficiary designation to the Committee in the form attached hereto as
Exhibit B.  You may revoke a beneficiary
designation by submitting a new beneficiary designation.

 4
 

VI.           Withholding.  Subject to Section 8.1 of the Plan and such
rules and procedures as the Committee may impose, upon any distribution of
shares of Common Stock in respect of your Units, the Company shall
automatically reduce the number of shares to be delivered by (or otherwise
reacquire) the appropriate number of whole shares, valued at their then fair
market value (with the “fair market value” of such shares determined in
accordance with the applicable provisions of the Plan), to satisfy any withholding
obligations of the Company or its Subsidiaries with respect to such
distribution of shares at the minimum applicable withholding rates; provided,
however, that the foregoing provision shall not apply in the event that you
have made other provision in advance of the date of such distribution for the
satisfaction of such withholding obligations. 
In the event that the Company cannot legally satisfy such withholding
obligations by such reduction of shares, or in the event of a cash payment or
any other withholding event in respect of your Units, the Company (or a
Subsidiary) shall be entitled to require a cash payment by you or on your
behalf and/or to deduct from other compensation payable to you any sums
required by federal, state or local tax law to be withheld with respect to such
distribution or payment.

VII.          No Contract for Employment.  This Agreement is not an employment or
service contract and nothing in this Agreement shall be deemed to create in any
way whatsoever any obligation on your part to continue in the employ or service
of the Company, or of the Company to continue your employment or service with
the Company.

VIII.        Notices.  Any notices provided for in this Agreement or
the Plan, including a Distribution Election, shall be given in writing and
shall be deemed effectively given upon receipt if delivered by hand or, in the
case of notices delivered by United States mail, five (5) days after deposit in
the United States mail, postage prepaid, addressed, as applicable, to the
Company or if to you, at such address as is currently maintained in the Company’s
records or at such other address as you hereafter designate by written notice
to the Company.

IX.           Plan.  The provisions of the Plan are hereby made a
part of this Agreement.  In the event of any
conflict between the provisions of this Agreement and those of the Plan, the
provisions of this Agreement shall control.

X.            Entire Agreement. 
This Agreement, together with the Employment Agreement, contains the
entire understanding of the parties in respect of the Units and supersedes upon
its effectiveness all other prior agreements and understandings between the
parties with respect to the Units.  In
the event of any discrepancy between this Agreement and the Employment
Agreement, the Employment Agreement shall control.

XI.           Amendment.  This Agreement may be amended by the
Committee; provided, however that no such amendment shall, without your prior
written consent, alter, terminate, impair or adversely affect your rights under
this Agreement.

 5
 

XII.         Governing Law.  This Agreement shall be construed and
interpreted, and the rights of the parties shall be determined, in accordance
with the laws of the State of Maryland, without regard to conflicts of law
provisions thereof.

XIII.        Tax Consequences.  You may be subject to adverse tax
consequences as a result of the issuance, vesting and/or distribution of your
Units.  YOU ARE ENCOURAGED TO CONSULT A
TAX ADVISOR AS TO THE TAX CONSEQUENCES OF YOUR UNITS AND SUBSEQUENT DISTRIBUTION
OF COMMON STOCK.

XIV.        Construction.  To the extent that this Agreement is subject
to Section 409A of the Code, you and the Company agree to cooperate and work
together in good faith to timely amend this Agreement to prevent application of
the penalty and interest provisions of Section 409A(a)(1)(B) of the Code.  In the event that you and the Company do not
agree as to the necessity, timing or nature of a particular amendment intended
to prevent application of the penalty and interest provisions of Section
409A(a)(1)(B) of the Code, reasonable deference will be given to your
reasonable interpretation of such provisions. 
Notwithstanding anything to the contrary contained in this Agreement or
the Plan, in the event that you are to receive a payment hereunder in
connection with your termination of employment (other than due to your death)
at a time when you are a “specified employee” (within the meaning of Section
409A of the Code), the Company shall delay the making of such payment to a date
that is not earlier than the first to occur of six months and one day after
your “separation from service” (within the meaning of Section 409A of the Code)
or the date of your death.

[Remainder
of page intentionally left blank]

 6
 

Very truly yours,

	
  

  	
  HEALTH CARE
  PROPERTY INVESTORS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  And:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
				

 

Accepted and Agreed,

effective as of the date first written above.

	
  By:

  	
   

  	
   

  
	
  Name: James F.
  Flaherty III

  

 

 7

[CEO
THREE YEAR CLIFF VESTING]

EXHIBIT A

PERFORMANCE
GOALS

	
  Funds From Operations Per Share

  	
   

  	
  Aggregate Percentage Forfeited

  	
   

  
	
  [$     ]
  or greater

  	
   

  	
  0

  	
  %

  	
   

  
	
  Equal to or greater
  than [$    ] but less than [$    ]

  	
   

  	
  2

  	
  %

  	
   

  
	
  Equal to or greater
  than [$    ] but less than [$    ]

  	
   

  	
  4

  	
  %

  	
   

  
	
  Equal to or greater
  than [$    ] but less than [$    ]

  	
   

  	
  6

  	
  %

  	
   

  
	
  Equal to or greater
  than [$    ] but less than [$    ]

  	
   

  	
  8

  	
  %

  	
   

  
	
  Equal to or greater
  than [$    ] but less than [$    ]

  	
   

  	
  10

  	
  %

  	
   

  
	
  Equal to or greater
  than [$    ] but less than [$    ]

  	
   

  	
  12

  	
  %

  	
   

  
	
  Equal to or greater
  than [$    ] but less than [$    ]

  	
   

  	
  14

  	
  %

  	
   

  
	
  Equal to or greater
  than [$    ] but less than [$    ]

  	
   

  	
  16

  	
  %

  	
   

  
	
  Equal to or greater
  than [$    ] but less than [$    ]

  	
   

  	
  18

  	
  %

  	
   

  
	
  Equal to or greater
  than [$    ] but less than [$    ]

  	
   

  	
  20

  	
  %

  	
   

  
	
  Equal to or greater
  than [$    ] but less than [$    ]

  	
   

  	
  22

  	
  %

  	
   

  
	
  Equal to or greater
  than [$    ] but less than [$    ]

  	
   

  	
  24

  	
  %

  	
   

  
	
  Equal to or greater
  than [$    ] but less than [$    ]

  	
   

  	
  26

  	
  %

  	
   

  
	
  Equal to or greater
  than [$    ] but less than [$    ]

  	
   

  	
  28

  	
  %

  	
   

  
	
  Equal to or greater
  than [$    ] but less than [$    ]

  	
   

  	
  30

  	
  %

  	
   

  
	
  Equal to or greater
  than [$    ] but less than [$    ]

  	
   

  	
  32

  	
  %

  	
   

  
	
  Equal to or greater
  than [$    ] but less than [$    ]

  	
   

  	
  34

  	
  %

  	
   

  
	
  Equal to or greater
  than [$    ] but less than [$    ]

  	
   

  	
  36

  	
  %

  	
   

  
	
  Equal to or greater
  than [$    ] but less than [$    ]

  	
   

  	
  38

  	
  %

  	
   

  
	
  Equal to or greater
  than [$    ] but less than [$    ]

  	
   

  	
  40

  	
  %

  	
   

  
	
  Equal to or greater
  than [$    ] but less than [$    ]

  	
   

  	
  50

  	
  %

  	
   

  
	
  Equal to or greater
  than [$    ] but less than [$    ]

  	
   

  	
  60

  	
  %

  	
   

  
	
  Equal to or greater
  than [$    ] but less than [$    ]

  	
   

  	
  70

  	
  %

  	
   

  
	
  Equal to or greater
  than [$    ] but less than [$    ]

  	
   

  	
  80

  	
  %

  	
   

  
	
  Equal to or greater
  than [$    ] but less than [$    ]

  	
   

  	
  90

  	
  %

  	
   

  
	
  Equal to or greater than [$    ] but less than [$    ]

  	
   

  	
  100

  	
  %

  	
   

  

 

 A-1

EXHIBIT B

HEALTH
CARE PROPERTY INVESTORS, INC.

2006 PERFORMANCE INCENTIVE PLAN

RESTRICTED
STOCK UNITS

DISTRIBUTION ELECTION AND BENEFICIARY DESIGNATION FORM

	
  Name: James F. Flaherty III

  	
  Social Security No.:                                             

  

 

In connection with your award of Performance
Restricted Stock Units on [                  ,
20   ] under the Health Care Property Investors, Inc. 2006
Performance Incentive Plan, as amended and/or restated from time to time (the “Plan”),
you have the option of selecting the timing and form of payment of the shares
of Common Stock underlying your vested Units.

Please complete this election
form and return it to Edward J. Henning, the Company’s General Counsel and
Corporate Secretary.

Deferral of Distribution Date

Unless you elect otherwise, the Distribution Date for
your Units that vest will be the vesting date of such Units; provided that in
no event shall the Distribution Date occur earlier than the date of the
Committee Determination with respect to such Units.  You may elect a new Distribution Date with
respect to your Units that vest by completing the information request
below.  Please note
that, subject to the restrictions set forth below and in the Agreement, your
new Distribution Date can take any of the following forms:

·                                          You
may elect a date certain for your Distribution Date (e.g., January 1, 2011),

·                                          You
may elect that your Distribution Date will be the date of your death or
termination of employment, or

·                                          You
may elect a Distribution Date that is the earlier of two dates/events (e.g.,
the earlier of January 1, 2011, or termination of your employment).

If you do not elect a
Distribution Date on or before the Grant Date, you will be deemed to have
elected distribution of your vested Units on or as soon as administratively
practical after the vesting date of your Units. 
If, after the Grant Date, you want to change the Distribution Date with
respect to any of your vested Units, your new election must be made at least
one year prior to the then-existing Distribution Date, the new Distribution
Date you elect must be at least five years after the then-existing
Distribution Date, and the change must otherwise satisfy the “subsequent
election” rules of Section 409A(a)(4)(C) of the Code.  If your election to defer your Distribution
Date is not timely, it will not be valid.

You acknowledge and understand
that by electing a new Distribution Date, you are hereby revoking the
then-existing Distribution Date.  You
further acknowledge and agree that the distribution of the shares of Common
Stock underlying your Units may coincide with a 

 B-1
 

period during which you are
prohibited from selling, disposing or otherwise transferring such shares
pursuant to the Company’s Insider Trading Policy, or by law, and therefore, you
may not be able to sell, dispose or otherwise transfer such shares to pay any
sums required by federal, state or local tax law to be withheld with respect to
the issuance of such shares.

I elect the following
Distribution Date with respect to the shares of Common Stock underlying my
Units:                   
                                              (Specify “Vesting Date” if
you desire payment of the vested Units on or as soon as administratively
practical after the vesting date of the Units. 
Otherwise, indicate the Distribution Date you elect.  In all events your election is subject to the
rules stated above (including, without limitation, the 5-year deferral
requirement set forth above if you are electing a change after the Grant Date).

Form of Payment

Distribution of all of your vested Units will be made
in shares of Common Stock in a lump sum on or as soon as practicable after the
Distribution Date with respect to such Units. 
You may, however, elect at the time of your award to have vested Units
distributed in the form of two or more annual installments over a fixed number
of years.  For example, if you elect to
have your vested Units distributed in five installments, your vested Units will
be distributed to you in five equal payments on or as soon as practicable after
the Distribution Date and each of the first four anniversaries of the
Distribution Date.

If you elect to have your vested
Units distributed in installments, you must elect a number of equal annual
installments which will result in a distribution of at least 1,000 shares of
Common Stock per installment (otherwise, the number of installments you elected
will be reduced by the Company to produce a distribution of at least 1,000
shares of Common Stock per installment).  If you would like to change a form of
distribution election you have made (or if you would like to make an initial
form of distribution election in the event that you did not make such an
election at the time of the award), your election must be made at least one
year prior to the then-existing Distribution Date, and you must elect a new
Distribution Date that is at least five years after the then-existing
Distribution Date.  If your election to
defer your Distribution Date is not timely, it will not be valid.  Furthermore, if you are changing an existing
form of distribution election, your election change cannot result in an
acceleration (within the meaning of Section 409A of the Code) of payments, and
the change must otherwise satisfy the “subsequent election” rules of Section
409A(a)(4)(C) of the Code.

I elect the following
number of annual installments with respect to the distribution of the shares of
Common Stock underlying my Units: 

Beneficiary
Designation

I hereby designate the following individual as
beneficiary to receive distribution of my vested Units, if any, in the event of
my death.  Distribution of such vested
Units will be in the 

 B-2
 

form, and on the Distribution Date(s), in effect with
respect to such vested Units as of the date of my death.

Beneficiary
Information

 

Name:

(Please print)                                                 Last                                                    First                                        Middle
Initial

Sex:                 Relationship to Participant:

Social Security No.:                                              Date of Birth:

Address:

City:                                                         State:                                                                   Zip Code:                                     

Please retain a copy of
this Distribution Election Form for your records.

	
  

  	
   

  	
   

  
	
  Signature: James F. Flaherty III

  	
   

  	
  Date Signed

  

 

 B-3Exhibit
10.1

FAVRILLE, INC.

COMMON STOCK PURCHASE AGREEMENT

THIS COMMON STOCK
PURCHASE AGREEMENT (the “Agreement”) is
made as of the 12th day of February, 2007, by and between Favrille, Inc.,
a Delaware corporation (the “Company”), and
the undersigned (the “Investor”).

THE PARTIES HEREBY AGREE AS FOLLOWS:

1.                 Purchase and Sale
of Stock.

1.1                Sale
and Issuance of Common Stock. The Investor agrees to purchase at the
Closing, and the Company agrees to sell and issue to the Investor at the
Closing, the number of shares of the Company’s Common Stock, $0.001 par value
(the “Common Stock”), set forth on the
Investor’s signature page hereto next to the heading “Shares” (the “Stock”) at a price of $3.00 per share, for
a total subscription amount equal to the amount set forth on the Investor’s
signature page hereto next to the heading “Subscription Amount”.

1.2                Closing. The
purchase and sale of the Stock shall take place at the offices of Cooley
Godward Kronish LLP located at 4401 Eastgate Mall, San Diego, California at 10:00
A.M., on February 13, 2007, or at such other time and place as the Company
and the Investor may mutually agree upon orally or in writing (which time and
place are designated as the “Closing”).
At the Closing, the Company shall cause its transfer agent to deliver to each
Investor, via electronic book-entry, the Stock such Investor is purchasing
hereunder against payment of the purchase price therefor by wire transfer of
immediately available funds to the following account:

[                ]

[                ]

[                ]

Account Name: Favrille,
Inc.

Account No.: [                ]

ABA/Routing No.: [                ]

2.                 Representations
and Warranties of the Company. The Company hereby represents and warrants
to each Investor that:

(a)                 The Company meets
the requirements for use of Form S-3 under the Securities Act of 1933, as
amended (the “Securities Act”),
and has filed with the Securities and Exchange Commission (the “Commission”) a registration statement on
such Form (Registration File No. 333-135169), which became effective as of
July 11, 2006, for the registration under the Securities Act of the Stock.
Such registration statement meets the requirements set forth in Rule
415(a)(1)(x) under the Securities Act and complies with said Rule. The Company
will file with

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the Commission pursuant to Rule 424(b) under the
Securities Act, and the rules and regulations (the “Rules and
Regulations”) of the Commission promulgated thereunder, a supplement
to the form of prospectus included in such registration statement relating to
the offer to sell and proposed sale of the Stock and the plan of distribution
thereof. Such registration statement, including the exhibits thereto, as
amended at the date of this Agreement, is hereinafter called the “Registration Statement”; such prospectus in
the form in which it appears in the Registration Statement is hereinafter
called the “Base Prospectus”; and
the supplemented form of prospectus, in the form in which it will be filed with
the Commission pursuant to Rule 424(b) (including the Base Prospectus as so
supplemented) is hereinafter called the “Prospectus
Supplement.” Any reference herein to the Registration Statement, the
Base Prospectus or the Prospectus Supplement shall be deemed to refer to and
include the documents incorporated by reference therein (the “Incorporated Documents”) pursuant to Item
12 of Form S-3 which were filed under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), on
or before the date of this Agreement, or the issue date of the Base Prospectus
or the Prospectus Supplement, as the case may be; and any reference herein to
the terms “amend,” “amendment” or “supplement” with respect to the Registration
Statement, the Base Prospectus or the Prospectus Supplement shall be deemed to
refer to and include the filing of any document under the Exchange Act after
the date of this Agreement, or the issue date of the Base Prospectus or the
Prospectus Supplement, as the case may be, deemed to be incorporated therein by
reference. All references in this Agreement to financial statements and
schedules and other information which is “contained,” “included,” “described,” “set
forth” or “stated” in the Registration Statement, the Base Prospectus or the
Prospectus Supplement (and all other references of like import) shall be deemed
to mean and include all such financial statements and schedules and other
information which is or is deemed to be incorporated by reference in the
Registration Statement, the Base Prospectus or the Prospectus Supplement, as the
case may be. No stop order suspending the effectiveness of the Registration
Statement or the use of the Base Prospectus or the Prospectus Supplement has
been issued, and no proceeding for any such purpose is pending or has been
initiated or, to the Company’s knowledge, is threatened by the Commission.

(b)                 The Registration
Statement (and any further documents to be filed with the Commission) contains
all exhibits and schedules as required by the Securities Act. Each of the
Registration Statement and any post-effective amendment thereto, at the time it
became effective, complied in all material respects with the Securities Act and
the Exchange Act and the applicable Rules and Regulations and did not and, as
amended or supplemented, if applicable, will not, contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. The Base
Prospectus and the Prospectus Supplement, each as of its respective date, comply
in all material respects with the Securities Act and the Exchange Act and the
applicable Rules and Regulations. Each of the Base Prospectus and the
Prospectus Supplement, as amended or supplemented, did not and will not contain
as of the date thereof any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The Incorporated
Documents, when they were filed with the Commission, conformed in all material
respects to the requirements of the Exchange Act and the applicable Rules and
Regulations and none of such Incorporated Documents, when they were filed with
the Commission, contained any untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and any

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further documents so filed and incorporated by
reference in the Base Prospectus or Prospectus Supplement, when such documents
are filed with the Commission, will conform in all material respects to the
requirements of the Exchange Act and the applicable Rules and Regulations, as
applicable and will not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in light of
the circumstances under which they are made, not misleading. Notwithstanding
the foregoing, the Company makes no representations or warranties as to
information, if any, contained in or omitted from the Prospectus Supplement or
any amendment thereof or supplement thereto in reliance upon and in conformity
with information furnished in writing to the Company by or on behalf of any
Investor specifically for use in the Registration Statement or the Prospectus
Supplement, which information the parties hereto agree is limited to the
Investor Information as defined in Section 4.1. No post-effective amendment to
the Registration Statement reflecting any facts or events arising after the
date thereof which represent, individually or in the aggregate, a fundamental
change in the information set forth therein is required to be filed with the
Commission. There are no documents required to be filed with the Commission in
connection with the transaction contemplated hereby that have not been filed as
required pursuant to the Securities Act or will not be filed within the
requisite time period. There are no contracts or other documents required to be
described in the Base Prospectus or Prospectus Supplement, or to be filed as
exhibits or schedules to the Registration Statement, which have not been
described or filed as required.

(c)                 The Company has
delivered, or will as promptly as practicable deliver, to each Investor
complete conformed copies of the Registration Statement and of each consent and
certificate of experts filed as a part thereof, and conformed copies of the
Registration Statement (without exhibits) and the Base Prospectus and the
Prospectus Supplement, as amended or supplemented, in such quantities and at
such places as such Investor reasonably requests. Neither the Company nor any
of its directors and officers has distributed and none of them will distribute,
prior to the Closing, any offering material in connection with the offering and
sale of the Stock other than the Base Prospectus, the Prospectus Supplement,
the Registration Statement, copies of the documents incorporated by reference
therein and any other materials permitted by the Securities Act.

3.                 Representations
and Warranties of the Investor. The Investor hereby represents and warrants
to the Company that:

(a)                 (i)                   Such Investor has full right, power
and authority to enter into this Agreement and to consummate the transactions
contemplated hereby and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement, and (ii) this Agreement
constitutes a valid and binding obligation of such Investor enforceable against
such Investor in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors’ and contracting parties’ rights generally and
except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).

(b)                 Such Investor, in
connection with its decision to purchase the Stock, relied only upon the Base
Prospectus, the Prospectus Supplement, the Incorporated Documents, and any
representations and warranties of the Company contained herein.

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(c)                 Such Investor
acknowledges, represents and agrees that no action has been or will be taken in
any jurisdiction outside the United States by the Company that would permit an
offering of the Stock, or possession or distribution of offering materials in
connection with the issue of the Stock in any jurisdiction outside the United
States where action for that purpose is required.

(d)                 Such Investor
understands that nothing in this Agreement or any other materials presented to
such Investor in connection with the purchase and sale of the Stock constitutes
legal, tax or investment advice. Such Investor has consulted such legal, tax
and investment advisors as it, in its sole discretion, has deemed necessary or
appropriate in connection with its purchase of the Stock.

4.                 Miscellaneous.

4.1                Investor
Information. The parties hereto acknowledge and agree that, for all
purposes of this Agreement, “Investor Information” means solely the statements
concerning the Investor contained under the heading “Plan of Distribution” in
the Prospectus Supplement.

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

4.3                Governing Law. This
Agreement shall be governed by and construed under the laws of the State of
California as applied to agreements among California residents entered into and
to be performed entirely within California.

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

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

4.6                Notices. Unless
otherwise provided, any notice required or permitted under this Agreement shall
be given in writing and shall be deemed effectively given upon personal
delivery to the party to be notified or upon deposit with the United States
Post Office, by registered or certified mail, postage prepaid and addressed to
the party to be notified at the address indicated for such party on the
signature page hereof, or at such other address as such party may designate by
10 days’ advance written notice to the other parties.

4.7                Finder’s Fee. Each
party represents that it neither is nor will be obligated for any finders’ fee
or commission in connection with this transaction. Each Investor, severally and
not jointly, agrees to indemnify and to hold harmless the Company from any
liability for any commission or compensation in the nature of a finders’ fee
(and the costs and expenses of defending against such liability or asserted
liability) for which such Investor or any of its

 4
 

officers, partners, employees, or representatives is
responsible. The Company agrees to indemnify and hold harmless each Investor
from any liability for any commission or compensation in the nature of a
finders’ fee (and the costs and expenses of defending against such liability or
asserted liability) for which the Company or any of its officers, employees or
representatives is responsible.

4.8                Amendments and
Waivers. Any term of this Agreement may be amended and the observance of
any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written
consent of the Company and the Investor.

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

4.10            Entire Agreement. This
Agreement and the other documents referred to herein constitute the entire
agreement among the parties and no party shall be liable or bound to any other
party in any manner by any warranties, representations, or covenants except as
specifically set forth herein or therein.

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In Witness Whereof, the parties hereto have executed
this Agreement as of the day and year first above written.

	
  Favrille, Inc.

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
  10445 Pacific Center Court

  
	
   

  	
  San Diego, California 92121

  
				

 

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IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.

	
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[Investor Signature Page]

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