Document:

Exhibit 10.1

 

NEITHER THE ISSUANCE AND SALE OF
THE SECURITIES REPRESENTED BY THIS NOTE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR
SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A
GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

	Principal Amount: $152,000	Issue Date: August 20, 2018       

Purchase Price: $132,000

 

Original Issue Discount: $20,000

 

CONVERTIBLE PROMISSORY NOTE

 

FOR
VALUE RECEIVED, DARKPULSE, INC a Delaware corporation (hereinafter called the “Borrower”), hereby
promises to pay to the order of MORE CAPITAL, LLC., a Minnesota limited liability company, or registered assigns (the “Holder”)
the sum of $152,000 together with any interest as set forth herein, on February 20, 2019 (the “Maturity
Date”), and to pay interest on the unpaid principal balance hereof at the rate of 12% (The “Interest Rate”) per
annum from the date hereof (the “Issue Date”) until the same becomes due and payable, whether at maturity or upon acceleration
or by prepayment or otherwise. Interest shall commence accruing on the date that the Note is fully paid and shall be computed on
the basis of a 365-day year and the actual number of days elapsed. All payments due hereunder (to the extent not converted into
common stock, no par value per share (the “Common Stock”) in accordance with the terms hereof) shall be made in lawful
money of the United States of America. All payments shall be made at such address as the Holder shall hereafter give to the Borrower
by written notice made in accordance with the provisions of this Note. Whenever any amount expressed to be due by the terms of
this Note is due on any day which is not a business day, the same shall instead be due on the next succeeding day which is a business
day and, in the case of any interest payment date which is not the date on which this Note is paid in full, the extension of the
due date thereof shall not be taken into account for purposes of determining the amount of interest due on such date. As used in
this Note, the term “business day” shall mean any day other than a Saturday, Sunday or a day on which commercial banks
in the city of New York, New York are authorized or required by law or executive order to remain closed. Each capitalized term
used herein, and not otherwise defined, shall have the meaning ascribed thereto in that certain Securities Purchase Agreement dated
the date hereof, pursuant to which this Note was originally issued (the “Purchase Agreement”).

 

This Note
carries an original issue discount of $7,000 (the “OID”). In addition, the Borrower shall authorize the
Holder, pursuant to a disbursement memorandum dated on or around the Issue Date, to pay $7,000.00 (the
“Transactional Expense Amount”) to the Holder or the Holder’s designee, to cover the Holder’s
accounting fees, due diligence fees, monitoring (including but not limited to ACH monitoring costs), and/or other
transactional costs incurred in connection with the purchase of the Note, all of which are included in the initial principal
balance of this Note. The Purchase Price of this Note shall be $132,000, computed as follows: $152,000 initial
principal balance less the OID. Accordingly, the net amount to be received by the Company shall be $125,000, computed
as follows: the purchase price of $132,000, less the Transactional Expense Amount.

 

This Note is free from
all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other
similar rights of shareholders of the Borrower and will not impose personal liability upon the holder thereof.

 

 

 

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The following terms shall apply to this Note:

 

ARTICLE I. CONVERSION RIGHTS

 

1.1       Conversion
Right. The Holder shall have the right from time to time, and at any time ending on the later of: (i) the Maturity Date
and (ii) the date of payment of the Default Amount (as defined in Article III) pursuant to Section 1.6(a) or Article III,
each in respect of the remaining outstanding principal amount of this Note to convert all or any part of the outstanding and
unpaid principal amount of this Note into fully paid and non- assessable shares of Common Stock, as such Common Stock exists
on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall
hereafter be changed or reclassified at the conversion price (the “Conversion Price”) determined as provided
herein (a “Conversion”); provided, however, that in no event shall the Holder be entitled to convert any portion
of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common
Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially
owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other
security of the Borrower subject to a limitation on conversion or exercise analogous to the limitations contained herein) and
(2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the
determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more
than 4.99% of the outstanding shares of Common Stock. For purposes of the proviso to the immediately preceding sentence,
beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), and Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such
proviso, provided, further, however, that the limitations on conversion may be waived by the Holder upon, at the election of
the Holder, not less than 61 days’ prior notice to the Borrower, and the provisions of the conversion limitation shall
continue to apply until such 61st day (or such later date, as determined by the Holder, as may be specified in such notice of
waiver). The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing
the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the
notice of conversion, in the form attached hereto as Exhibit A (the “Notice of Conversion”), delivered to the
Borrower by the Holder in accordance with Section 1.4 below; provided that the Notice of Conversion is submitted by facsimile
or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Borrower before 6:00 p.m., New
York, New York time on such conversion date (the “Conversion Date”). The term “Conversion
Amount” means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be
converted in such conversion plus (2) at the Holder’s option, accrued and unpaid interest, if any, on such principal
amount at the interest rates provided in this Note to the Conversion Date, plus (34) at the Holder’s option, any
amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof.

 

1.2Conversion Price.

 

Calculation of Conversion
Price. The conversion price (the “Conversion Price”) shall equal the Variable Conversion Price (as defined herein)
(subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower relating to the Borrower’s
securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary
distributions and similar events). The "Variable Conversion Price" shall mean 60% multiplied by the Market Price
(as defined herein) (representing a discount rate of 40%). In the case that shares of the Borrower’s common stock
are not deliverable via DWAC following the conversion of any amount hereunder, an additional Five Percent (5%) discount shall be
added to the amount being converted at such time. In the event that the Borrower’s shares of common stock are chilled for
deposit into the DTC system and only eligible for Xclearing deposit, an additional Ten percent (10%) discount shall be added to
the amount being converted at such time. “Market Price” means the average of the lowest three (3) Trading Prices
(as defined below) for the Common Stock during the twenty (20) Trading Day period ending on the latest complete Trading
Day prior to the Conversion Date. “Trading Price” means, for any security as of any date, the lowest price quoted on
the OTC Markets operated by the OTC Markets Group, Inc. or applicable trading market (the “OTC”) as reported by a reliable
reporting service (“Reporting Service”) designated by the Holder (i.e. Bloomberg) or, if the OTC Markets is not the
principal trading market for such security, the closing bid price of such security on the principal securities exchange or trading
market where such security is listed or traded. If the Trading Price cannot be calculated for such security on such date in the
manner provided above, the Trading Price shall be the fair market value as mutually determined by the Borrower and the holders
of a majority in interest of the Notes being converted for which the calculation of the Trading Price is required in order to determine
the Conversion Price of such Notes. “Trading Day” shall mean any day on which the Common Stock is tradable for any
period on the OTC Markets, or on the principal securities exchange or other securities market on which the Common Stock is then
being traded.

 

1.3Authorized
Shares. The Borrower covenants that during the period the conversion right exists, the Borrower will reserve from its
authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance
of Common Stock upon the full conversion of this Note issued pursuant to the Purchase Agreement. The Reserved Amount shall be
increased from time to time in accordance with the Borrower’s obligations pursuant to Section 4(g) of the Purchase
Agreement. The Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and
non-assessable. In addition, if the Borrower shall issue any securities or make any change to its capital structure which
would change the number of shares of Common Stock into which the Notes shall be convertible at the then current Conversion
Price, the Borrower shall at the same time make proper provision so that thereafter there shall be a sufficient number of
shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Notes. The
Borrower (i) acknowledges that it has irrevocably instructed its transfer agent to issue certificates for the Common Stock
issuable upon conversion of this Note, and (ii) agrees that its issuance of this Note shall constitute full authority to its
officers and agents who are charged with the duty of executing stock certificates to execute and issue the necessary
certificates for shares of Common Stock in accordance with the terms and conditions of this Note.

 

 

 

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If, at any time the Borrower
does not maintain the Reserved Amount it will be considered an Event of Default under Article III of the Note. However, upon receipt
of written notice from the Holder of Borrower’s failure to maintain the Reserved Amount, the Borrower shall have three (3)
days to cure any deficiencies in the Reserved Amount.

 

1.4       Method of Conversion.

 

(a)  
Mechanics of Conversion. Subject to Section 1.1, this Note may be converted by the Holder in whole or in part at
any time from time to time after One Hundred Eighty Days following the Issue Date, by (A) submitting to the Borrower a Notice of
Conversion (by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date prior to 6:00 p.m.,
New York, New York time) and (B) subject to Section 1.4(b), surrendering this Note at the principal office of the Borrower.

 

(b)  
Surrender of Note Upon Conversion. Notwithstanding anything to the contrary set forth herein, upon conversion of
this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Borrower
unless the entire unpaid principal amount of this Note is so converted. The Holder and the Borrower shall maintain records showing
the principal amount so converted and the dates of such conversions or shall use such other method, reasonably satisfactory to
the Holder and the Borrower, so as not to require physical surrender of this Note upon each such conversion. In the event of any
dispute or discrepancy, such records of the Borrower shall, prima facie, be controlling and determinative in the absence
of manifest error. Notwithstanding the foregoing, if any portion of this Note is converted as aforesaid, the Holder may not transfer
this Note unless the Holder first physically surrenders this Note to the Borrower, whereupon the Borrower will forthwith issue
and deliver upon the order of the Holder a new Note of like tenor, registered as the Holder (upon payment by the Holder of any
applicable transfer taxes) may request, representing in the aggregate the remaining unpaid principal amount of this Note. The Holder
and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following
conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note represented by this Note may be
less than the amount stated on the face hereof.

 

(c)  
Payment of Taxes. The Borrower shall not be required to pay any tax which may be payable in respect of any transfer
involved in the issue and delivery of shares of Common Stock or other securities or property on conversion of this Note in a name
other than that of the Holder (or in street name), and the Borrower shall not be required to issue or deliver any such shares or
other securities or property unless and until the person or persons (other than the Holder or the custodian in whose street name
such shares are to be held for the Holder’s account) requesting the issuance thereof shall have paid to the Borrower the
amount of any such tax or shall have established to the satisfaction of the Borrower that such tax has been paid.

 

(d)  
Delivery of Common Stock Upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission
or e-mail (or other reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided
in this Section 1.4, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder
certificates for the Common Stock issuable upon such conversion within three (3) business days after such receipt (the “Deadline”)
(and, solely in the case of conversion of the entire unpaid principal amount hereof, surrender of this Note) in accordance with
the terms hereof and the Purchase Agreement.

 

(e)  
Obligation of Borrower to Deliver Common Stock. Upon receipt by the Borrower of a Notice of Conversion, the Holder
shall be deemed to be the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount
and the amount of accrued and unpaid interest on this Note shall be reduced to reflect such conversion, and, unless the Borrower
defaults on its obligations under this Article I, all rights with respect to the portion of this Note being so converted shall
forthwith terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided,
on such conversion. If the Holder shall have given a Notice of Conversion as provided herein, the Borrower’s obligation to
issue and deliver the certificates for Common Stock shall be absolute and unconditional, irrespective of the absence of any action
by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against
any person or any action to enforce the same, any failure or delay in the enforcement of any other obligation of the Borrower to
the holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the
Holder of any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit such obligation
of the Borrower to the Holder in connection with such conversion. The Conversion Date specified in the Notice of Conversion shall
be the Conversion Date so long as the Notice of Conversion is received by the Borrower before 6:00 p.m., New York, New York time,
on such date.

 

 

 

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(f)   
Delivery of Common Stock by Electronic Transfer. In lieu of delivering physical certificates representing the Common
Stock issuable upon conversion, provided the Borrower is participating in the Depository Trust Company (“DTC”) Fast
Automated Securities Transfer (“FAST”) program, upon request of the Holder and its compliance with the provisions contained
in Section 1.1 and in this Section 1.4, the Borrower shall use its best efforts to cause its transfer agent to electronically transmit
the Common Stock issuable upon conversion to the Holder by crediting the account of Holder’s Prime Broker with DTC through
its Deposit Withdrawal Agent Commission (“DWAC”) system.

 

(g)  
Failure to Deliver Common Stock Prior to Deadline. Without in any way limiting the Holder’s right to pursue
other remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable
upon conversion of this Note is not delivered by the Deadline (other than a failure due to the circumstances described in Section
1.3 above, which failure shall be governed by such Section) the Borrower shall pay to the Holder $2,000 per day in cash, for each
day beyond the Deadline that the Borrower fails to deliver such Common Stock. Such cash amount shall be paid to Holder by the fifth
day of the month following the month in which it has accrued or, at the option of the Holder (by written notice to the Borrower
by the first day of the month following the month in which it has accrued), shall be added to the principal amount of this Note,
in which event interest shall accrue thereon in accordance with the terms of this Note and such additional principal amount shall
be convertible into Common Stock in accordance with the terms of this Note. The Borrower agrees that the right to convert is a
valuable right to the Holder. The damages resulting from a failure, attempt to frustrate, interference with such conversion right
are difficult if not impossible to qualify.

 

Accordingly, the parties acknowledge that
the liquidated damages provision contained in this Section 1.4(g) are justified.

 

1.5       Concerning
the Shares. The shares of Common Stock issuable upon conversion of this Note may not be sold or transferred unless (i) such
shares are sold pursuant to an effective registration statement under the Act or (ii) the Borrower or its transfer agent shall
have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of
counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant
to an exemption from such registration or (iii) such shares are sold or transferred pursuant to Rule 144 under the Act (or a successor
rule) (“Rule 144”) or (iv) such shares are transferred to an “affiliate” (as defined in Rule 144) of the
Borrower who agrees to sell or otherwise transfer the shares only in accordance with this Section 1.5 and who is an Accredited
Investor (as defined in the Purchase Agreement). Except as otherwise provided in the Purchase Agreement (and subject to the removal
provisions set forth below), until such time as the shares of Common Stock issuable upon conversion of this Note have been registered
under the Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities as of a particular
date that can then be immediately sold, each certificate for shares of Common Stock issuable upon conversion of this Note that
has not been so included in an effective registration statement or that has not been sold pursuant to an effective registration
statement or an exemption that permits removal of the legend, shall bear a legend substantially in the following form, as appropriate:

 

“NEITHER THE ISSUANCE AND SALE
OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE
FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING
THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT
SECURED BY THE SECURITIES.”

 

The legend set forth
above shall be removed and the Borrower shall issue to the Holder a new certificate therefore free of any transfer legend if (i)
the Borrower or its transfer agent shall have received an opinion of counsel, in form, substance and scope customary for opinions
of counsel in comparable transactions, to the effect that a public sale or transfer of such Common Stock may be made without registration
under the Act, which opinion shall be accepted by the Company so that the sale or transfer is effected or (ii) in the case of
the Common Stock issuable upon conversion of this Note, such security is registered for sale by the Holder under an effective
registration statement filed under the Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number
of securities as of a particular date that can then be immediately sold. In the event that the Company does not accept the opinion
of counsel provided by the Buyer with respect to the transfer of Securities pursuant to an exemption from registration, such as
Rule 144 or Regulation S, at the Deadline, it will be considered an Event of Default pursuant to Section 3.2 of the Note.

 

 

 

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1.6       Effect of Certain
Events.

 

(a)    
Effect of Merger, Consolidation, Etc. At the option of the Holder, the sale, conveyance or disposition of all or
substantially all of the assets of the Borrower, the effectuation by the Borrower of a transaction or series of related transactions
in which more than 50% of the voting power of the Borrower is disposed of, or the consolidation, merger or other business combination
of the Borrower with or into any other Person (as defined below) or Persons when the Borrower is not the survivor shall either:
(i) be deemed to be an Event of Default (as defined in Article III) pursuant to which the Borrower shall be required to pay to
the Holder upon the consummation of and as a condition to such transaction an amount equal to the Default Amount (as defined in
Article III) or (ii) be treated pursuant to Section 1.6(b) hereof. “Person” shall mean any individual, corporation,
limited liability company, partnership, association, trust or other entity or organization.

 

(b)    
Adjustment Due to Merger, Consolidation, Etc. If, at any time when this Note is issued and outstanding and prior
to conversion of all of the Notes, there shall be any merger, consolidation, or an exchange of shares, recapitalization or reorganization
pursuant to a merger or consolidation, or other similar event, as a result of which shares of Common Stock of the Borrower shall
be changed into the same or a different number of shares of another class or classes of stock or securities of the Borrower or
another entity, or in case of any sale or conveyance of all or substantially all of the assets or more than 50% of the total outstanding
shares of the Borrower other than in connection with a plan of complete liquidation of the Borrower, then the Holder of this Note
shall thereafter have the right to receive upon conversion of this Note, upon the basis and upon the terms and conditions specified
herein and in lieu of the shares of Common Stock immediately theretofore issuable upon conversion, such stock, securities or assets
which the Holder would have been entitled to receive in such transaction had this Note been converted in full immediately prior
to such transaction (without regard to any limitations on conversion set forth herein), and in any such case appropriate provisions
shall be made with respect to the rights and interests of the Holder of this Note to the end that the provisions hereof (including,
without limitation, provisions for adjustment of the Conversion Price and of the number of shares issuable upon conversion of the
Note) shall thereafter be applicable, as nearly as may be practicable in relation to any securities or assets thereafter deliverable
upon the conversion hereof. The Borrower shall not affect any transaction described in this Section 1.6(b) unless (a) it first
gives, to the extent practicable, thirty (30) days prior written notice (but in any event at least fifteen (15) days prior written
notice) of the record date of the special meeting of shareholders to approve, or if there is no such record date, the consummation
of, such merger, consolidation, exchange of shares, recapitalization, reorganization or other similar event or sale of assets (during
which time the Holder shall be entitled to convert this Note) and (b) the resulting successor or acquiring entity (if not the Borrower)
assumes by written instrument the obligations of this Section 1.6(b). The above provisions shall similarly apply to successive
consolidations, mergers, sales, transfers or share exchanges.

 

(c) Adjustment Due
to Distribution. If the Borrower shall declare or make any distribution of its assets (or rights to acquire its assets) to
holders of Common Stock as a dividend, stock repurchase, by way of return of capital or otherwise (including any dividend or distribution
to the Borrower’s shareholders in cash or shares (or rights to acquire shares) of capital stock of a subsidiary (i.e., a
spin-off)) (a “Distribution”), then the Holder of this Note shall be entitled, upon any conversion of this Note after
the date of record for determining shareholders entitled to such Distribution, to receive the amount of such assets which would
have been payable to the Holder with respect to the shares of Common Stock issuable upon such conversion had such Holder been the
holder of such shares of Common Stock on the record date for the determination of shareholders entitled to such Distribution.

 

(f) Notice of Adjustments.
Upon the occurrence of each adjustment or readjustment of the Conversion Price as a result of the events described in this Section
1.6, the Borrower, at its expense, shall promptly compute such adjustment or readjustment and prepare and furnish to the Holder
of a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment
is based. The Borrower shall, upon the written request at any time of the Holder, furnish to such Holder a like certificate setting
forth (i) such adjustment or readjustment, (ii) the Conversion Price at the time in effect and (iii) the number of shares of Common
Stock and the amount, if any, of other securities or property which at the time would be received upon conversion of the Note.

 

1.8Status as Shareholder. Upon submission of
a Notice of Conversion by a Holder, (i) the shares covered thereby (other than the shares, if any, which cannot be issued because
their issuance would exceed such Holder’s allocated portion of the Reserved Amount or Maximum Share Amount) shall be deemed
converted into shares of Common Stock and (ii) the Holder’s rights as a Holder of such converted portion of this Note shall
cease and terminate, excepting only the right to receive certificates for such shares of Common Stock and to any remedies provided
herein or otherwise available at law or in equity to such Holder because of a failure by the Borrower to comply with the terms
of this Note. Notwithstanding the foregoing, if a Holder has not received certificates for all shares of Common Stock prior to
the tenth (10th) business day after the expiration of the Deadline with respect to a conversion of any portion of this Note for
any reason, then (unless the Holder otherwise elects to retain its status as a holder of Common Stock by so notifying the Borrower)
the Holder shall regain the rights of a Holder of this Note with respect to such unconverted portions of this Note and the Borrower
shall, as soon as practicable, return such unconverted Note to the Holder or, if the Note has not been surrendered, adjust its
records to reflect that such portion of this Note has not been converted. In all cases, the Holder shall retain all of its rights
and remedies (including, without limitation, (i) the right to receive Conversion Default Payments pursuant to Section 1.3 to the
extent required thereby for such Conversion Default and any subsequent Conversion Default and (ii) the right to have the Conversion
Price with respect to subsequent conversions determined in accordance with Section 1.3) for the Borrower’s failure to convert
this Note.

 

 

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1.9Prepayment. Notwithstanding anything to the
contrary contained in this Note, the Borrower may prepay the amounts outstanding hereunder pursuant to the following terms
and conditions, and subject to the Holder’s acceptance in Holder’s sole discretion:

 

(a)       At any time during the period beginning on the Issue Date and ending on the date which is one hundred and eighty (180) days
following the Issue Date, the Borrower shall have the right, exercisable on not less than twenty (20) Trading Days prior written
notice to the Holder of the Note to prepay the outstanding Note (principal and accrued interest), in full by making a payment to
the Holder of an amount in cash equal to 130%, multiplied by the sum of: (w) the then outstanding principal amount of this Note
plus (x) accrued and unpaid interest on the unpaid principal amount of this Note.

 

(b)       At
any time during the period beginning the day which is one hundred and eighty one (181) days following the Issue Date and ending
on the date which is 364 days following the Issue Date, the Borrower shall have the right, exercisable on not less than twenty
(20) Trading Days prior written notice to the Holder of the Note to prepay the outstanding Note (principal and accrued interest),
in full by making a payment to the Holder of an amount in cash equal to 150%, multiplied by the sum of: (w) the then outstanding
principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note.

 

(c)        After the expiration of 364 the Borrower shall have no right of prepayment.

 

Any notice of prepayment
hereunder (an “Optional Prepayment Notice”) shall be delivered to the Holder of the Note at its registered addresses
and shall state: (1) that the Borrower is exercising its right to prepay the Note, and (2) the date of prepayment which shall be
not more than twenty (20) Trading Days from the date of the Optional Prepayment Notice. On the date fixed for prepayment (the “Optional
Prepayment Date”), the Borrower shall make payment of the applicable prepayment amount to or upon the order of the Holder
as specified by the Holder in writing to the Borrower at least one (1) business day prior to the Optional Prepayment Date. If the
Borrower delivers an Optional Prepayment Notice and fails to pay the applicable prepayment amount due to the Holder of the Note
within two (2) business days following the Optional Prepayment Date, the Borrower shall forever forfeit its right to prepay the
Note pursuant to this Section 1.9. Notwithstanding anything to the contrary in this Note, the Borrower’s right to prepay
the amounts outstanding under this Note, in accordance with the terms and conditions of this Note, is expressly conditional upon
the Holder’s written acceptance, in Holder’s sole discretion, of such applicable prepayment during the time that the
Borrower is exercising their right to prepay this Note.

 

ARTICLE II. CERTAIN COVENANTS

 

2.1 Distributions
on Capital Stock. So long as the Borrower shall have any obligation under this Note, the Borrower shall not without the Holder’s
written consent (a) pay, declare or set apart for such payment, any dividend or other distribution (whether in cash, property or
other securities) on shares of capital stock other than dividends on shares of Common Stock solely in the form of additional shares
of Common Stock or (b) directly or indirectly or through any subsidiary make any other payment or distribution in respect of its
capital stock except for distributions pursuant to any shareholders’ rights plan which is approved by a majority of the Borrower’s
disinterested directors.

 

2.3Sale of Assets. So long as the Borrower shall
have any obligation under this Note, the Borrower shall not, without the Holder’s written consent, sell, lease, exchange
(including but not limited to an exchange for assets of equal or greater value) or otherwise dispose of any significant portion
of its assets outside the ordinary course of business. Any consent to the disposition of any assets may be conditioned on a specified
use of the proceeds of disposition.

 

2.4Advances
and Loans. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s
written consent, lend money, give credit or make advances to any person, firm, joint venture or corporation, including, without
limitation, officers, directors, employees, subsidiaries and affiliates of the Borrower, except loans, credits or advances (a)
in existence or committed on the date hereof and which the Borrower has informed Holder in writing prior to the date hereof, (b)
made in the ordinary course of business, (c) made to a pending merging partner pursuant to an agreement of merger or (c) not in
excess of $100,000.

 

ARTICLE III. EVENTS OF DEFAULT

 

If any of the following events of default (each, an “Event
of Default”) shall occur:

 

 

 

    	 	6	 

     

    

 

3.1Failure to Pay Principal or Interest. The
Borrower fails to pay the principal hereof or interest thereon when due on this Note, whether at maturity, upon acceleration or
otherwise, following a five (5) day cure period.

 

3.2Conversion
and the Shares. The Borrower fails to issue shares of Common Stock to the Holder (or announces or threatens in writing that
it will not honor its obligation to do so) upon exercise by the Holder of the conversion rights of the Holder in accordance with
the terms of this Note, fails to transfer or cause its transfer agent to transfer (issue) (electronically or in certificated form)
any certificate for shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when
required by this Note, the Borrower directs its transfer agent not to transfer or delays, impairs, and/or hinders its transfer
agent in transferring (or issuing) (electronically or in certificated form) any certificate for shares of Common Stock to be issued
to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, or fails to remove (or
directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive
legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any shares of Common Stock issued
to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note (or makes any written announcement,
statement or threat that it does not intend to honor the obligations described in this paragraph) and any such failure shall continue
uncured (or any written announcement, statement or threat not to honor its obligations shall not be rescinded in writing) for
three (3) business days after the Holder shall have delivered a Notice of Conversion. It is an obligation of the Borrower to remain
current in its obligations to its transfer agent. It shall be an event of default of this Note, if a conversion of this Note is
delayed, hindered or frustrated due to a balance owed by the Borrower to its transfer agent. If at the option of the Holder, the
Holder advances any funds to the Borrower’s transfer agent in order to process a conversion, such advanced funds shall be
paid by the Borrower to the Holder within forty-eight (48) hours of a demand from the Holder.

 

3.3Breach of
Covenants. The Borrower breaches any covenant or other material term, or condition contained in this Note and any collateral
documents including but not limited to the Purchase Agreement and such breach continues for a period of ten (10) days after written
notice thereof to the Borrower from the Holder.

 

3.4Breach of Representations and Warranties. Any
representation or warranty of the Borrower made herein or in any agreement, statement or certificate given in writing pursuant
hereto or in connection herewith (including, without limitation, the Purchase Agreement), shall be false or misleading in any
material respect when made and the breach of which has (or with the passage of time will have) a material adverse effect on the
rights of the Holder with respect to this Note or the Purchase Agreement.

 

3.5Receiver or Trustee. The Borrower or
any subsidiary of the Borrower shall make an assignment for the benefit of creditors or apply for or consent to the
appointment of a receiver or trustee for it or for a substantial part of its property or business, or such a receiver or
trustee shall otherwise be appointed.

 

3.6Judgments. Any money judgment, writ or similar
process shall be entered or filed against the Borrower or any subsidiary of the Borrower or any of its property or other assets
for more than $50,000, and shall remain unvacated, unbonded or unstayed for a period of twenty (20) days unless otherwise consented
to by the Holder, which consent will not be unreasonably withheld.

 

3.7Bankruptcy. Bankruptcy, insolvency,
reorganization or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under any bankruptcy law
or any law for the relief of debtors shall be instituted by or against the Borrower or any subsidiary of the Borrower.

 

3.8Delisting of Common Stock. The Borrower
shall fail to maintain the listing of the Common Stock on at least one of the OTC Markets or an equivalent replacement
exchange, the Nasdaq National Market, the Nasdaq SmallCap Market, the New York Stock Exchange, or the American Stock
Exchange.

 

3.9Failure to Comply with the Exchange
Act. The Borrower shall fail to comply with the reporting requirements of the Exchange Act; and/or the Borrower shall
cease to be subject to the reporting requirements of the Exchange Act.

 

 

 

    	 	7	 

     

    

 

3.10 Liquidation.
Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.

 

3.11 Cessation of
Operations. Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to pay its debts as
such debts become due, provided, however, that any disclosure of the Borrower’s ability to continue as a “going concern”
shall not be an admission that the Borrower cannot pay its debts as they become due.

 

3.12 Maintenance
of Assets. The failure by Borrower to maintain any material intellectual property rights, personal, real property or
other assets which are necessary to conduct its business (whether now or in the future).

 

3.13 Financial Statement
Restatement. The restatement of any financial statements filed by the Borrower with the SEC for any date or period from two
years prior to the Issue Date of this Note and until this Note is no longer outstanding, if the result of such restatement would,
by comparison to the unrestated financial statement, have constituted a material adverse effect on the rights of the Holder with
respect to this Note or the Purchase Agreement.

 

3.14 Reverse Splits.
The Borrower effectuates a reverse split of its Common Stock without twenty (20) days prior written notice to the Holder.

 

3.15 Replacement of
Transfer Agent. In the event that the Borrower proposes to replace its transfer agent, the Borrower fails to provide, prior
to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered
pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in
the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower.

 

3.16 Cross-Default.
Notwithstanding anything to the contrary contained in this Note or other related or companion documents, a breach or default by
the Borrower of any covenant or other term or condition contained any other financial instrument, including but not limited to
all convertible promissory notes, already issued, or issued in the future, by the Borrower, to the Holder or any other 3rd
party, after the passage of all applicable notice and cure or grace periods, shall, at the option of the Holder, be considered
a default under this Note.

 

3.17 ACH Account Change.
The Borrower changes it bank account to an account that differs from the bank account specified on Exhibit B attached hereto, without
(i) prior signed written consent of the Holder and (ii) Borrower’s execution of a signed authorization agreement for preauthorized
payments that is exactly the same as the form attached hereto as Exhibit B (except for the new bank account information) with respect
to the new bank account.

 

3.18 ACH Payment Default.
The Borrower blocks, rejects, or otherwise restricts any action taken by Holder pursuant to Holder’s rights under this Note
with respect to the Borrower’s bank account, including but not limited to Holder’s withdrawal of the Specific Daily
Repayment Amount (as defined in Exhibit B attached hereto) pursuant to an ACH debit transaction or otherwise from the Borrower’s
bank account, or the Holder’s withdrawal of the Specific Daily Repayment Amount from the Borrower’s bank account pursuant
to an ACH debit transaction or otherwise is rejected for any reason.

 

3.19 Event of
Default. Upon the occurrence of any Event of Default specified in Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10,
3.11, 3.12, 3.13, 3.14, 3.15, and/or 3.16, exercisable through the delivery of written notice to the Borrower by such Holders
(the “Default Notice”), , the Note shall become immediately due and payable and the Borrower shall pay to the
Holder, in full satisfaction of its obligations hereunder, an amount equal to the greater of (i) 150% times the sum of (w)
the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of
this Note to the date of payment (the “Mandatory Prepayment Date”) plus any amounts owed to the Holder pursuant
to Sections 1.3 and 1.4(g) hereof (the then outstanding principal amount of this Note to the date of payment plus the amounts
referred to in clauses (x) and, (y) shall collectively be known as the “Default Sum”), and all other amounts
payable hereunder shall immediately become due and payable, all without demand, presentment or notice, all of which hereby
are expressly waived, together with all costs, including, without limitation, legal fees and expenses, of collection, and the
Holder shall be entitled to exercise all other rights and remedies available at law or in equity.

 

If the Borrower fails to pay the Default
Amount within five (5) business days of written notice that such amount is due and payable, then the Holder shall have the right
at any time, so long as the Borrower remains in default (and so long and to the extent that there are sufficient authorized shares),
to require the Borrower, upon written notice, to immediately issue, in lieu of the Default Amount, the number of shares of Common
Stock of the Borrower equal to the Default Amount divided by the Conversion Price then in effect.

 

 

 

    	 	8	 

     

    

 

ARTICLE IV. MISCELLANEOUS

 

4.1Failure or Indulgence Not Waiver. No
failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privileges. All rights and remedies existing hereunder are cumulative to,
and not exclusive of, any rights or remedies otherwise available.

 

4.2Notices. All notices, demands, requests,
consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt
requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by
hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have
specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder
shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal
business hours where such notice is to be received), or the first business day following such delivery (if delivered other
than on a business day during normal business hours where such notice is to be received) or (b) on the second business day
following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of
such mailing, whichever shall first occur. The addresses for such communications shall be:

 

If to the Borrower, to:

 

DarkPulse Technologies, Inc.

11 E 80 ST #4B

New York, New York 10075

Attention: Dennis O’Leary

Email: sgoodman@darkpulse.com

 

If to the Holder:

 

More Capital LLC

8995 Goldenrod Lane N

Maple Grove, Minnesota 55369

Attn: Mike Wruck, CEO

Email: mikewruck@morecapitalllc.com

 

4.3Amendments. This Note and any provision
hereof may only be amended by an instrument in writing signed by the Borrower and the Holder. The term “Note” and
all reference thereto, as used throughout this instrument, shall mean this instrument (and the other Notes issued pursuant to
the Purchase Agreement) as originally executed, or if later amended or supplemented, then as so amended or supplemented.

 

4.4Assignability. This Note shall be binding
upon the Borrower and its successors and assigns and shall inure to be the benefit of the Holder and its successors and assigns.
Each transferee of this Note must be an “accredited investor” (as defined in Rule 501(a) of the 1933 Act). Notwithstanding
anything in this Note to the contrary, this Note may be pledged as collateral in connection with a bona fide margin account or
other lending arrangement.

 

4.5Cost of Collection. If default is made
in the payment of this Note, the Borrower shall pay the Holder hereof costs of collection, including reasonable
attorneys’ fees.

 

4.6Governing Law.

 

(a).            
Except in the case of the Mandatory Forum Selection provisions in Section 4.6(b) below, which clause shall be governed and
interpreted in accordance with Minnesota law, this Agreement and all other Transaction Documents shall be delivered and accepted
in and shall be deemed to be contracts made under and governed by the internal laws of the State of Minnesota, and for all purposes
shall be construed in accordance with the laws of such State, without giving effect to the choice of law provisions of such state.
This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota without regard to principles
of conflicts of laws.

 

 

 

    	 	9	 

     

    

 

(b).            
Mandatory Forum Selection. Any action brought by either party against the other concerning the transactions contemplated
by this Note shall be brought only in the state courts or federal courts located in the state of Minnesota, County of Hennepin.
The parties to this Note hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and
shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Borrower and
Holder waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees
and costs. In the event that any provision of this Note or any other agreement delivered in connection herewith is invalid or
unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that
it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may
prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement.
Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding
in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail
or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

 

4.7Certain Amounts. Whenever pursuant to this Note
the Borrower is required to pay an amount in excess of the outstanding principal amount (or the portion thereof required to be
paid at that time) plus accrued and unpaid interest, the Borrower and the Holder agree that the actual damages to the Holder from
the receipt of cash payment on this Note may be difficult to determine and the amount to be so paid by the Borrower represents
stipulated damages and not a penalty and is intended to compensate the Holder in part for loss of the opportunity to convert this
Note and to earn a return from the sale of shares of Common Stock acquired upon conversion of this Note at a price in excess of
the price paid for such shares pursuant to this Note. The Borrower and the Holder hereby agree that such amount of stipulated
damages is not plainly disproportionate to the possible loss to the Holder from the receipt of a cash payment without the opportunity
to convert this Note into shares of Common Stock.

 

4.8       Usury Savings
Clause. Notwithstanding any provision in this Note or the other Transaction Documents to the contrary, the total liability
for payments of interest and payments in the nature of interest, including, without limitation, all charges, fees, exactions,
or other sums which may at any time be deemed to be interest, shall not exceed the limit imposed by the usury laws of the jurisdiction
governing this Note or any other applicable law. In the event the total liability of payments of interest and payments in the
nature of interest, including, without limitation, all charges, fees, exactions or other sums which may at any time be deemed
to be interest, shall, for any reason whatsoever, result in an effective rate of interest, which for any month or other interest
payment period exceeds the limit imposed by the usury laws of the jurisdiction governing this Note, all sums in excess of those
lawfully collectible as interest for the period in question shall, without further agreement or notice by, between, or to any
party hereto, be applied to the reduction of the outstanding principal balance due hereunder immediately upon receipt of such
sums by the Holder hereof, with the same force and effect as though the Company had specifically designated such excess sums to
be so applied to the reduction of the principal balance then outstanding, and the Holder hereof had agreed to accept such sums
as a penalty-free payment of principal; provided, however, that the Holder may, at any time and from time to time, elect, by notice
in writing to the Company, to waive, reduce, or limit the collection of any sums in excess of those lawfully collectible as interest,
rather than accept such sums as a prepayment of the principal balance then outstanding. It is the intention of the parties that
the Company does not intend or expect to pay, nor does the Holder intend or expect to charge or collect any interest under this
Note greater than the highest non-usurious rate of interest which may be charged under applicable law.

 

4.9Purchase Agreement. By its acceptance of
this Note, each party agrees to be bound by the applicable terms of the Purchase Agreement.

 

4.10 Notice of Corporate
Events. Except as otherwise provided below, the Holder of this Note shall have no rights as a Holder of Common Stock unless
and only to the extent that it converts this Note into Common Stock. The Borrower shall provide the Holder with prior notification
of any meeting of the Borrower’s shareholders (and copies of proxy materials and other information sent to shareholders).
In the event of any taking by the Borrower of a record of its shareholders for the purpose of determining shareholders who are
entitled to receive payment of any dividend or other distribution, any right to subscribe for, purchase or otherwise acquire (including
by way of merger, consolidation, reclassification or recapitalization) any share of any class or any other securities or property,
or to receive any other right, or for the purpose of determining shareholders who are entitled to vote in connection with any
proposed sale, lease or conveyance of all or substantially all of the assets of the Borrower or any proposed liquidation, dissolution
or winding up of the Borrower, the Borrower shall mail a notice to the Holder, at least twenty (20) days prior to the record date
specified therein (or thirty (30) days prior to the consummation of the transaction or event, whichever is earlier), of the date
on which any such record is to be taken for the purpose of such dividend, distribution, right or other event, and a brief statement
regarding the amount and character of such dividend, distribution, right or other event to the extent known at such time. The
Borrower shall make a public announcement of any event requiring notification to the Holder hereunder substantially simultaneously
with the notification to the Holder in accordance with the terms of this Section 4.9.

 

 

 

    	 	10	 

     

    

 

4.11       Remedies.
The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by
vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Borrower acknowledges that the
remedy at law for a breach of its obligations under this Note will be inadequate and agrees, in the event of a breach or
threatened breach by the Borrower of the provisions of this Note, that the Holder shall be entitled, in addition to all other
available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions
restraining, preventing or curing any breach of this Note and to enforce specifically the terms and provisions thereof,
without the necessity of showing economic loss and without any bond or other security being required.

 

4.12
ACH Payment Authorization. Borrower irrevocably authorizes Holder’s right to withdraw (through an ACH debit or otherwise),
subject to adjustment as provided herein, from the Borrower’s bank account (initially, the bank account identified on Exhibit
B attached hereto, but also including any subsequent bank account of the Borrower if such account is changed) (the “Bank
Account”), $844.00 on each business day, beginning November 25, 2018, until this Note is satisfied in full. Borrower shall
provide Holder with all required access codes to effectuate any and all ACH debit transactions as provided for in this Note. Borrower
understands that it is responsible for ensuring that at least the Specific Daily Repayment Amount remains in its Bank Account
on each business day until this Note is satisfied in full, and that the Borrower shall be responsible for any charges incurred
by the Holder resulting from a rejected ACH attempt, insufficient funds in the Bank Account, and/or all related bank charges. Such
charges shall be immediately added to the outstanding balance of the Note. The Specific Daily Repayment Amount shall automatically
adjust to such prorated higher amount based upon the addition of charges to the outstanding balance of Note, as well as to reflect
any penalties incurred or events of defaults triggered under the terms of the Note (to be calculated as follows: the total outstanding
amount under the Note (including but not limited to all principal, interest, charges, penalties, and additions due to any event
of default) divided by the number of business days remaining prior to the Maturity Date). Holder shall not be responsible for any
overdrafts or rejected transactions that result from Holder’s ACH debiting of the Specific Daily Repayment Amount as provided
in this Note and the exhibits hereto. Holder may debit the Specific Daily Repayment Amount each business day.

 

The Holder shall be
permitted to aggregate the Specific Daily Repayment Amount of all convertible promissory notes then issued by the Borrower to
the Holder and withdraw such aggregated amount from the Borrower’s bank account, in the interest of reducing overall fees
associated with the ACH debit transactions.

 

The Holder may, from
time to time, provide a schedule to the Borrower via electronic mail (each a “Schedule”) to
sgoodman@darkpulse.com, showing the outstanding balance of the Note as well as all ACH debits, conversion amounts, and/or
all other adjustments as provided in the Note (the “Schedule”). If the Borrower does not respond to the Holder, via
electronic mail to mikewruck@morecapitalllc.com, stating that the respective Schedule is
accurate or disputing the amounts contained therein (with objective documentation unequivocally supporting such dispute), within
two (2) business days of receipt of the respective Schedule, then the Borrower shall be deemed to have irrevocably approved the
amounts contained in such respective Schedule.

 

4.13       Terms
of Future Financings.  So long as this Note is outstanding, upon any issuance by the Borrower or any of its subsidiaries
of any security with any term more favorable to the holder of such security or with a term in favor of the holder of such
security that was not similarly provided to the Holder in this Note, then the Borrower shall notify the Holder of such
additional or more favorable term and such term, at Holder’s option, shall become a part of the transaction documents
with the Holder. The types of terms contained in another security that may be more favorable to the holder of such security
include, but are not limited to, terms addressing conversion discounts, prepayment rate, conversion lookback periods,
interest rates, original issue discounts, stock sale price, private placement price per share, and warrant coverage.

 

[SIGNATURE PAGE FOLLOWS]

 

 

 

 

    	 	11	 

     

    

 

 

IN WITNESS WHEREOF,
Borrower has caused this Note to be signed in its name by its duly authorized officer this August 20, 2018.

 

 

	 	 DarkPulse, Inc.

 

 

 

By: /s/ Dennis O’Leary

Name: Dennis O’Leary

Title: CEO

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	12znga-ex101_9.htm

Exhibit 10.1

Zynga Inc. 

Change in Control Severance Benefit Plan

(August 21, 2018, Amendment and Restatement)

1.Introduction. The Zynga Inc. Change in Control Severance Benefit Plan (the “Plan”) was established effective as of September 14, 2011 and is hereby amended and restated effective as of August 21, 2018 (the “Effective Date”).  The Plan provides for the payment of certain severance benefits to eligible employees of Zynga Inc. (the “Company”) in the event of a qualifying termination of employment in connection with a Change in Control, all on the terms and conditions described in the Plan. This document constitutes both the Plan document and the Summary Plan Description for the Plan.

2.Definitions. For purposes of the Plan, the following terms are defined as follows: 

(a)“Board” means the Board of Directors of the Company. 

(b)“Cause” means, with respect to a Participant: (i) any willful, material violation by the Participant of any law or regulation applicable to the business of the Company; (ii) the Participant’s conviction for, or plea of no contest to, a felony or a crime involving moral turpitude; (ii) commission of an act of personal dishonesty that in intended to result in the substantial personal enrichment of the Participant (excluding inadvertent acts that are promptly cured following notice); (iii) continued material violations by the Participant of the Participant’s lawful and reasonable duties of employment (including, but not limited to, compliance with material written policies of the Company and material written agreements with the Company), which violations are demonstrably willful and deliberate on the Participant’s part (but only after the Company has delivered a written demand for performance to the Participant that describes the basis for the Company’s belief that the Participant has not substantially performed the Participant's duties and the Participant has not cured within a period of (15) days following notice; (iv) a Participant’s willful failure (other than due to physical incapacity) to cooperate with an investigation by a governmental authority or the Company of the Company’s business or financial condition;  (v) any other willful misconduct or gross negligence by the Participant that is materially injurious to the financial condition or business reputation of the Company; or (vi) a material breach of the Participant’s fiduciary duty to the Company.

(c)“Change in Control” means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events:

(i)any person, entity or group (within the meaning of Section 13(2)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended) acquires beneficial ownership of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities other than by virtue of a merger, consolidation or similar transaction. 

1

 

 

 

 

(ii)there is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company and, immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not beneficially own, either (A) outstanding voting securities representing more than 50% of the combined outstanding voting power of the surviving entity in such merger, consolidation or similar transaction, or (B) more than 50% of the combined outstanding voting power of the parent of the surviving entity in such merger, consolidation or similar transaction, in each case in substantially the same proportions as their beneficial ownership of the outstanding voting securities of the Company immediately prior to such transaction;

(iii)there is consummated a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated assets of the Company and its subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its subsidiaries to an entity, more than 50% of the combined voting power of the voting securities of which are beneficially owned by stockholders of the Company in substantially the same proportions as their beneficial ownership of the outstanding voting securities of the Company immediately prior to such sale, lease, license or other disposition; or

(iv)individuals who, on the Effective Date, are members of the Board (the “Incumbent Board”) cease, during any period of 12 consecutive months, to constitute at least a majority of the members of the Board; provided, however, that if the appointment or election (or nomination for election) of any new Board member was approved or recommended by a majority vote of the members of the Incumbent Board then still in office, such new member will, for purposes of the Plan, be considered as a member of the Incumbent Board.

Notwithstanding the foregoing, a transaction will not constitute a Change in Control if its primary purpose is to (1) change the jurisdiction of the Company’s incorporation, or (2) create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s voting securities immediately before such transaction.  To the extent required to avoid the imposition of the tax under Section 409A of the Code, in no event will a Change in Control be deemed to have occurred if such transaction is not also a “change in the ownership or effective control of” the Company or “a change in the ownership of a substantial portion of the assets of” the Company as determined under Treasury Regulations Section 1.409A-3(i)(5) (without regard to any alternative definition thereunder). 

(d)“Code” means the Internal Revenue Code of 1986, as amended. Any reference to a specific section of the Code will include such section and any valid regulation or other applicable guidance that has been promulgated under such section and is in effect.

(e)“Good Reason Termination” means the voluntary termination of employment with the Company by the Participant resulting in a Separation from Service after one or more of the following is undertaken (through a single action or series of actions) without the Participant’s written consent: (i) the assignment to the Participant of any authority, duties or responsibilities or the reduction of the Participant’s authority, duties or responsibilities, either of which results in a material diminution in the Participant’s authority, duties or responsibilities at the Company as in effect immediately prior to the Change in Control (for example, but not by way of limitation, the 

 

2

 

 

 

Participant (A) ceasing to be an “officer” (as defined in Rule 16a-1(f) under the Securities Exchange Act of 1934, as amended) who is required to make filings under Section 16(a)(1) of the Securities Exchange Act of 1934, as amended, or (B) not having the same authority, duties or responsibilities with respect to the combined entity following the Change in Control); (ii) the Participant being required to report to any individual or board of directors other than the principal executive officer or board of directors of the ultimate parent of the entity that controls the Company’s assets and/or business, except that if the Participant, as of immediately prior to the Change in Control, did not previously report to the principal executive officer of the Company or Board, this clause (ii) will be triggered by a material diminution in the authority, duties or responsibilities of the supervisor to whom the Participant reports, as compared to immediately prior to the Change in Control; (iii) a material reduction by the Company in the Participant’s annual base salary or target annual bonus as in effect immediately prior to the Change in Control other than a one-time reduction of 15% or less that is applicable to substantially all other similarly-situated executives; or (iv) a non-temporary relocation of the Participant’s principal work location office to a location that increases the Participant’s one way commute from the Participant's principal residence by more than 35 miles as compared to the principal location at which the Participant performs duties as of immediately prior to the Change in Control. An event or action will not give the Participant grounds to voluntarily terminate employment as a Good Reason Termination unless (A) the Participant gives the Company written notice within 60 days after the Participant knows or should know of the initial existence of such event or action, (B) such event or action is not reversed, remedied or cured, as the case may be, by the Company as soon as possible but in no event later than 30 days of receiving such written notice from the Participant, and (C) the Participant terminates employment within 60 days following the end of the cure period. 

(f)“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

(g)“Involuntary Termination Without Cause” means a Participant’s involuntary termination of employment by the Company resulting in a Separation from Service for a reason other than death, disability or Cause. 

(h)“Participant” means an individual who has been designated by the Plan Administrator to participate in the Plan, but only if that individual also has executed and returned a valid Participation Notice to the Company. 

(i)“Participation Notice” means the latest notice delivered by the Company to a Participant informing the employee that the employee is eligible to participate in the Plan, substantially in the form of Exhibit A hereto.  

(j)“Plan Administrator” means the Board or any committee thereof duly authorized by the Board to administer the Plan. The Plan Administrator may, but is not required to be, the Compensation Committee of the Board. The Board may at any time administer the Plan, in whole or in part, notwithstanding that the Board has previously appointed a committee to act as the Plan Administrator. 

 

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(k)“Qualifying Termination” means either (i) an Involuntary Termination Without Cause, or (ii) a Good Reason Termination, in either case that occurs during the 3 month period immediately preceding a Change in Control or the 18 month period immediately following a Change in Control.  Termination of employment of a Participant due to death or disability or outside of the 21 month period described above (due to any reason) will not constitute a Qualifying Termination.

(l)“Separation from Service” means a “separation from service” within the meaning of Treasury Regulations Section 1.409A-1(h), without regard to any permissible alternative definition of “termination of employment” thereunder.

3.Conditions to Receipt of Benefits.  Notwithstanding any contrary Plan provision, as a condition to receiving any severance benefits under Section 4, a Participant will be required to comply with all of the provisions of this Section 3.

(a)The Participant must sign and return the Release to the Company so that the Release becomes effective and irrevocable by the Release Date.  Otherwise, the Participant will forfeit any right to receive the severance benefits under the Plan.  In no event will any severance benefits be paid or provided unless and until the Release becomes effective and irrevocable.

(b)The Participant must continue to comply with the form of Employee Invention Assignment and Confidentiality Agreement or any similar or successor document (the “Proprietary Agreement”) between the Participant and the Company.  If the Participant has not entered into a Proprietary Agreement, the Participant must sign and comply with the standard form in effect immediately prior to the Change in Control, however, the Company may revise that agreement to make it effective if it is being signed at or close to termination of employment and/or the Company may add terms incorporating the concepts from the Proprietary Agreement into the Release Agreement such a Participant is required to sign as a condition of receiving post-employment benefits under the Plan. 

(c)The Participant must return all Company Property. For this purpose, “Company Property” means all paper and electronic Company documents (and all copies thereof) created and/or received by the Participant during the Participant's period of employment with the Company and other Company materials and property that the Participant has in the Participant's possession, custody or control, including, without limitation, Company files, notes, drawings records, plans, forecasts, reports, studies, analyses, proposals, agreements, financial information, research and development information, sales and marketing information, operational information, specifications, code, software, databases, computer-recorded information, tangible property and equipment (including, without limitation, leased vehicles, computers, computer equipment, software programs, facsimile machines, mobile telephones, servers), credit and calling cards, entry cards, identification badges and keys, and any materials of any kind that contain or embody any proprietary or confidential information of the Company (and all reproductions thereof, in whole or in part). As a condition to receiving benefits under the Plan, a Participant must not make or retain copies, reproductions or summaries of any such Company documents, materials or property. However, a Participant is not required to return the Participant's personal copies of documents evidencing the Participant’s hire, termination, 

 

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compensation, benefits, equity awards, other terms and conditions of employment and any other documentation received as a stockholder of the Company.

(d)During the 12 month period following termination of employment, the Participant must not directly or indirectly, for the Participant's own account or the account of any other person or entity solicit, recruit, induce, or attempt to solicit, recruit, or induce, directly or by assisting others (including but not limited to, any new employer) any person who is, or within 12 months of that time has been, employed by or otherwise engaged to perform services for the Company.  A general advertisement by the Participant’s new employer that is not directed specifically at service providers of the Company shall not be deemed a violation of the preceding sentence.

(e)During the 12 month period following termination of employment, the Participant agrees to refrain from any disparagement, defamation, libel, or slander of any of the parties named in the Release.  If the Participant commits to complying with the preceding sentence, the Company will instruct its executive officers and members of the Board not to engage in any disparagement, defamation, libel, or slander of the Participant during the same period of 12 months. 

4.Benefits upon Termination of Employment. 

(a)Qualifying Termination.  If a Participant incurs a Qualifying Termination, then, subject to Sections 3, 5 and 6, the Participant will receive the following:

(i)A lump sum payment equal to 100% of the Participant’s annual base salary as in effect immediately prior to termination of employment (or, if greater, as in effect on the day that was 3 months and 1 day before the Change in Control).;

(ii)A lump sum payment equal to 100% of the Participant’s target annual bonus as in effect immediately prior to termination of employment (or, if greater, as in effect for the most recent annual bonus period that began prior to the Change in Control and for which a target annual bonus had been established for the Participant); 

(iii)any outstanding unvested equity-based compensation awards held by the Participant as of immediately prior to termination of employment automatically will become vested (it being understood that forfeiture of any equity awards due to termination of employment will be tolled to the extent necessary to implement this section (iii).  For this purpose and unless otherwise specifically provided in the applicable Award Agreement, any performance‐based restrictions or requirements applicable to any equity‐based compensation awards will be deemed to have been satisfied at the applicable target levels; and 

(iv)If the Participant, any spouse and/or other dependents of the Participant  have coverage under any group health plan(s) sponsored by the Company on the date of the Participant’s termination of employment (such coverage, “Qualifying Health Coverage”), a lump sum cash payment in an aggregate amount equal to 12 months of the Monthly COBRA Premium Amount (as defined below).  “Monthly COBRA Premium Amount” for this purpose means the applicable monthly premium that the Participant otherwise would be required to pay to continue 

 

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Qualifying Health Coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1986, as amended (“COBRA”), which amount will be determined based on the premium otherwise payable for the first month of such COBRA continuation coverage (calculated as the amount required for coverage for the Participant and any eligible family members, including the two-percent (2%) administrative charge).  For the avoidance of doubt, any such payment will be made regardless of whether the Participant (and/or any family members) actually elects COBRA continuation coverage.

(b)Timing of Payment. Provided that a Participant’s Release becomes effective and irrevocable by the Release Date (as defined below) and subject to Sections 3, 5 and 6, the above payments and benefits will be paid on the first business day following the Release Date (the “Payment Date”).

5.Limitations on Benefits. 

(a)Release. To be eligible to receive any benefits under the Plan that are triggered by a Qualifying Termination, a Participant must execute, in connection with the Participant’s Qualifying Termination, a general waiver and release in substantially the form attached hereto as Exhibit B, Exhibit C, or Exhibit D, as appropriate (the “Release”), and such release must become effective in accordance with its terms no later than 60 days following the Separation from Service (such 60th day being the “Release Date”).  The Plan Administrator, in its sole discretion, may modify the form of the required Release (before it first is delivered to the Participant) to comply with changes in applicable law, provided that any such revisions must be consistent with the original intended scope of the Release and must not add new post-employment obligations on the part of the Participant not already covered by the Plan, the Proprietary Agreement or a written agreement between the Company and the Participant.  Any Release may be incorporated into a termination agreement or other agreement with the Participant instead of being a stand-alone document.

(b)Prior Agreements; Certain Reductions. The Plan Administrator will reduce a Participant’s benefits under this Plan by any other statutory severance obligations or contractual severance benefits, obligations for pay in lieu of notice, and any other similar benefits payable to the Participant by the Company (or any successor thereto) that are due in connection with the Participant’s Qualifying Termination and that are in the same form as the benefits provided under this Plan.  Without limitation, this reduction includes a reduction for any benefits required pursuant to (i) any applicable legal requirement, including, without limitation, the Worker Adjustment and Retraining Notification Act (the “WARN Act”), (ii) any Company policy or practice providing for the Participant to remain on the payroll for a limited period of time after being given notice of the termination of the Participant’s employment, and (iii) any required salary continuation, notice pay, statutory severance payment, or other payments either required by local law, or owed pursuant to a collective labor agreement, as a result of the termination of the Participant’s employment.  The benefits provided under the Plan are intended to satisfy, to the greatest extent possible, and not to provide benefits duplicative of, any and all statutory, contractual and collective agreement obligations of the Company in respect of the form of benefits provided under this Plan that may arise out of a Qualifying Termination, and the Plan Administrator will so construe and implement the terms of the Plan. Reductions may be applied 

 

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on a retroactive basis, with benefits previously provided being recharacterized as benefits pursuant to the Company’s statutory or other contractual obligations.  The payments pursuant to the Plan are in addition to, and not in lieu of, any earned but unpaid salary, bonuses, other wages or employee welfare benefits to which a Participant may be entitled for the period ending with the Participant’s Qualifying Termination.

(c)Mitigation. A Participant will not be required to mitigate damages or the amount of any payment provided under the Plan by seeking other employment or otherwise, nor will the amount of any payment provided for under the Plan be reduced by any compensation earned by a Participant as a result of employment by another employer or any retirement benefits received by such Participant after the date of the Participant’s termination of employment with the Company.

(d)Indebtedness of Participants. If a Participant is indebted to the Company on the effective date of the Participant's Qualifying Termination, the Company reserves the right to offset the payment of any severance benefits under the Plan by the amount of such indebtedness.  Such offset shall be made only to the extent permitted under applicable laws.  The Participant’s execution of the Participant's Notice constitutes knowing written consent to the foregoing.

(e)Parachute Payments. Except as otherwise expressly provided in an agreement between a Participant and the Company, if any payment or benefit the Participant would receive in connection with a Change in Control from the Company or otherwise (a “Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment will be equal to the Reduced Amount. The “Reduced Amount” will be either (A) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax, or (B) the largest portion, up to and including the total, of the Payment, whichever amount, after taking into account all applicable federal, state, provincial, foreign and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in the Participant’s receipt, on an after-tax basis, of the greatest economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute payments” is necessary so that the Payment equals the Reduced Amount, reduction will occur in the following order: (1) reduction of cash payments; (2) cancellation of accelerated vesting of stock awards other than stock options; (3) cancellation of accelerated vesting of stock options; and (4) reduction of other benefits paid to the Participant. Within any such category of Payments (that is, (1), (2), (3) or (4)), a reduction will occur first with respect to amounts that are not “deferred compensation” within the meaning of Section 409A of the Code and then with respect to amounts that are. In the event that acceleration of vesting of stock award compensation is to be reduced, such acceleration of vesting will be cancelled in the reverse order of the date of grant of the Participant’s applicable type of stock award (i.e., earliest granted stock awards are cancelled last).  If Section 409A is not applicable by law to a Participant, the Company shall determine whether any similar law in the Participant’s jurisdiction applies and should be taken into account.

 

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6.Tax Matters.

(a)Application of Code Section 409A. It is intended that all of the benefits provided under the Plan satisfy, to the greatest extent possible, the exemptions from the application of Section 409A of the Code and the regulations and other guidance thereunder and any state law of similar effect (collectively, “Section 409A”) provided under Treasury Regulations Sections 1.409A-1(b)(4), 1.409A-1(b)(5) and 1.409A-1(b)(9), and the Plan will be construed to the greatest extent possible as consistent with those provisions. To the extent not so exempt, the Plan (and any definitions under the Plan) will be construed in a manner that complies with Section 409A, and incorporates by reference all required definitions and payment terms. For purposes of Section 409A (including, without limitation, for purposes of Treasury Regulations Section 1.409A-2(b)(2)(iii)), a Participant’s right to receive any installment payments under the Plan will be treated as a right to receive a series of separate payments and, accordingly, each installment payment under the Plan will at all times be considered a separate and distinct payment. If the Plan Administrator determines that any of the payments upon a Separation from Service provided under the Plan constitute “deferred compensation” under Section 409A and if the Participant is a “specified employee” of the Company, as such term is defined in Section 409A(a)(2)(B)(i), at the time of the Participant's Separation from Service, then, solely to the extent necessary to avoid the incurrence of the adverse personal tax consequences under Section 409A, the timing of the payments upon a Separation from Service will be delayed as follows: on the earlier to occur of (i) the date that is six months and one day after the effective date of the Participant’s Separation from Service, and (ii) the date of the Participant’s death (such earlier date, the “Delayed Initial Payment Date”), the Company will (A) pay to the Participant a lump sum amount equal to the sum of the payments upon Separation from Service that the Participant would otherwise have received through the Delayed Initial Payment Date if the commencement of the payments had not been delayed pursuant to this Section 6(a), and (b) commence paying the balance of the payments in accordance with the applicable payment schedules set forth in above. No interest will be due on any amounts so deferred.  If Section 409A is not applicable by law to a Participant, the Company shall determine whether any similar law in the Participant’s jurisdiction applies and should be taken into account.

(b)Withholding. All payments under the Plan will be subject to all applicable withholding obligations of the Company, including, without limitation, obligations to withhold for federal, state, provincial, foreign and local income and employment taxes. 

(c)Tax Advice.  By becoming a Participant in the Plan, Participant agrees to review with Participant’s own tax advisors the federal, state, provincial, local and foreign tax consequences of participation in this Plan.  Participant shall rely solely on such advisors and not on any statements or representations of the Company or any of its agents.  Participant understands that Participant (and not the Company) shall be responsible for the Participant's own tax liability that may arise as a result of becoming a Participant in the Plan.  

7.Reemployment. In the event of a Participant’s reemployment by the Company during the period of time in respect of which severance benefits have been provided (that is, benefits as a result of a Qualifying Termination), the Company, in its sole and absolute discretion, may 

 

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require such Participant to repay to the Company all or a portion of such severance benefits as a condition of reemployment.

8.Right to Interpret Plan; Term of Plan; Amendment and Termination. 

(a)Exclusive Discretion. The Plan Administrator will have the exclusive discretion and full authority to administer the Plan and to establish rules, forms, and procedures for the administration of the Plan and to construe and interpret the Plan and to decide any and all questions of fact, interpretation, definition, computation or administration arising in connection with the operation of the Plan, including, without limitation, the eligibility to participate in the Plan, the amount of benefits paid under the Plan and any adjustments that need to be made in accordance with the laws applicable to a Participant. The rules, interpretations, computations and other actions of the Plan Administrator will be binding and conclusive on all persons. 

(b)Term of Plan. The Plan will become effective upon the Effective Date and will terminate automatically on the third anniversary of the Effective Date, except that the Plan will not terminate and automatically will be extended for additional one year terms thereafter unless the Corporation provides written notice to the affected Participant(s) at least six (6) months in advance of the expiration of the then-current term (that is, either the initial three-year term or any subsequent one-year term).  A termination of the Plan pursuant to the preceding sentence shall be effective for all purposes, except that such termination shall not affect the payment or provision of compensation or benefits on account of a qualifying termination of employment occurring prior to the termination of the terms of this Amended Agreement.  

(c)Amendment or Termination. The Company (by action of the Board or any committee thereof) reserves the right to amend or (subject to Section 8(b)) terminate the Plan, any Participation Notice issued pursuant to the Plan or the benefits provided hereunder at any time, subject to the following provisions of this Section 8(c). Any amendment or termination of the Plan will be in writing.  Any amendment to the Plan that (1) causes an individual or group of individuals to cease to be a Participant, or (2) reduces or alters to the detriment of the Participant the severance benefits potentially payable to the Participant (including, without limitation, imposing additional conditions or modifying the timing of payment) (an amendment described in clause (1) and/or clause (2) being an “adverse amendment”), will not be effective during the three-year period beginning on the Effective Date.  After the third anniversary of the Effective Date and subject to Section 8(b), an adverse amendment will be effective only if (A) it is approved by the Company and communicated to the affected individual(s) in writing more than 6 months before both the effective date of the adverse amendment or termination and the end of the then-current term of the Plan.  Once a Participant has incurred a Qualifying Termination, no amendment or termination of the Plan may, without that Participant’s written consent, reduce or alter to the detriment of the Participant, the severance benefits payable to the Participant. In addition and notwithstanding the preceding, beginning on the date that is 3 months before a Change in Control, the Company may not, without a Participant’s written consent, amend or terminate the Plan in any way, nor take any other action under the Plan, which (i) prevents that Participant from becoming eligible for severance benefits, or (ii) reduces or alters to the detriment of the Participant the severance benefits payable, or potentially payable, to the Participant (including, without limitation, imposing additional conditions).  The preceding 

 

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sentence shall not apply to any amendment that otherwise both (x) would take effect before a Change in Control, and (y) meets the requirements of this Section 8 without regard to the preceding sentence.  Any action of the Company in amending or terminating the Plan will be taken solely in a non‐fiduciary capacity. 

9.No Implied Employment Contract. The Plan will not be deemed (i) to give any employee or other person any right to be retained in the employ of the Company, or (ii) to interfere with the right of the Company to discharge any employee or other person at any time, with or without cause, for any reason or no reason, with or without notice, which right is hereby reserved.

10.Legal Construction. The Plan will be governed by and construed under the laws of the State of California (without regard to principles of conflict of laws), except to the extent preempted by ERISA.

11.Claims, Inquiries And Appeals. 

(a)Applications for Benefits and Inquiries. Any application for benefits under the Plan must be submitted to the Plan Administrator in writing by an applicant (or the applicant's authorized representative). The Plan Administrator is set forth in Section 13(d). 

(b)Denial of Claims. In the event that any application for benefits is denied in whole or in part, the Plan Administrator must provide the applicant with written or electronic notice of the denial of the application, and of the applicant’s right to review the denial. Any electronic notice will comply with the regulations of the U.S. Department of Labor. The notice of denial will be set forth in a manner designed to be understood by the applicant and will include the following:

(1)the specific reason or reasons for the denial;

(2)references to the specific Plan provisions upon which the denial is based;

(3)a description of any additional information or material that the Plan Administrator needs to complete the review and an explanation of why such information or material is necessary; and

(4)an explanation of the Plan’s review procedures and the time limits applicable to such procedures, including a statement of the applicant’s right to bring a civil action under Section 502(a) of ERISA following a denial on review of the claim, as described in Section 11(d).

The notice of denial will be given to the applicant within 90 days after the Plan Administrator receives the application, unless special circumstances require an extension of time, in which case, the Plan Administrator has up to an additional 90 days for processing the application. If an extension of time for processing is required, written notice of the extension will be furnished to the applicant before the end of the initial 90 day period.

 

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The notice of extension will describe the special circumstances necessitating the additional time and the date by which the Plan Administrator expects to render its decision on the application. 

(c)Request for a Review. Any person (or that person’s authorized representative) for whom an application for benefits is denied, in whole or in part, may appeal the denial by submitting a request for a review to the Plan Administrator within 60 days after the Participant receives notification that the Participant's application was denied. A request for a review will be in writing and will be addressed to:

Zynga Inc.

Attn: Chief Legal Officer

699 8th Street

San Francisco, CA 94103

A request for review must set forth all of the grounds on which it is based, all facts in support of the request and any other matters that the applicant feels are pertinent. The applicant (or the applicant's representative) will have the opportunity to submit (or the Plan Administrator may require the applicant to submit) written comments, documents, records, and other information relating to the applicant's claim. The applicant (or the applicant's representative) will be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the applicant's claim. The review will take into account all comments, documents, records and other information submitted by the applicant (or the applicant's representative) relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

(d)Decision on Review. The Plan Administrator will act on each request for review within 60 days after receipt of the request, unless special circumstances require an extension of time (not to exceed an additional 60 days), for processing the request for a review. If an extension for review is required, written notice of the extension will be furnished to the applicant within the initial 60 day period. This notice of extension will describe the special circumstances necessitating the additional time and the date by which the Plan Administrator expects to render its decision on the review. The Plan Administrator will give prompt, written or electronic notice of its decision to the applicant. Any electronic notice will comply with the regulations of the U.S. Department of Labor. In the event that the Plan Administrator confirms the denial of the application for benefits, in whole or in part, the notice will set forth, in a manner designed to be understood by the applicant, the following:

(1)the specific reason or reasons for the denial;

(2)references to the specific Plan provisions upon which the denial is based;

(3)a statement that the applicant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the applicant's claim; and

 

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(4)a statement of the applicant’s right to bring a civil action under Section 502(a) of ERISA. 

(e)Rules and Procedures. The Plan Administrator will establish rules and procedures, consistent with the Plan and with ERISA, as necessary and appropriate in carrying out its responsibilities in reviewing benefit claims.

(f)Exhaustion of Remedies. No legal action for benefits under the Plan may be brought until the applicant (i) has submitted a written application for benefits in accordance with the procedures described by Section 11(a), (ii) has been notified by the Plan Administrator that the application is denied, (iii) has filed a written request for a review of the application in accordance with the appeal procedure described in Section 11(c), and (iv) has been notified that the Plan Administrator has denied the appeal. Notwithstanding the foregoing, if the Plan Administrator does not respond to an applicant’s claim or appeal within the relevant time limits specified in this Section 11, the applicant may bring legal action for benefits under the Plan pursuant to Section 502(a) of ERISA. 

12.Basis Of Payments To And From Plan. All benefits under the Plan will be paid by the Company. The Plan will be unfunded, and benefits hereunder will be paid only from the general assets of the Company.

13.Other Plan Information.

(a)Employer and Plan Identification Numbers. The Employer Identification Number assigned to the Company (which is the “Plan Sponsor” as that term is used in ERISA) by the Internal Revenue Service is 42-1733483. The Plan Number assigned to the Plan by the Plan Sponsor pursuant to the instructions of the Internal Revenue Service is 525.

(b)Ending Date for Plan’s Fiscal Year. The date of the end of the fiscal year for the purpose of maintaining the Plan’s records is December 31.

(c)Agent for the Service of Legal Process. The agent for the service of legal process with respect to the Plan is:

Zynga Inc.

Attn: Chief Legal Officer

699 8th Street

San Francisco, CA 94103

(d)Plan Sponsor and Administrator. The “Plan Sponsor” and the “Plan Administrator” of the Plan is:

 

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Zynga Inc.

Attn: Chief Legal Officer

699 8th Street

San Francisco, CA 94103

The Plan Sponsor’s and Plan Administrator’s telephone number is (800) 762-2530. The Plan Administrator is the named fiduciary charged with the responsibility for administering the Plan.

14.Statement Of ERISA Rights.

Participants in the Plan (which is a welfare benefit plan sponsored by Zynga Inc.) are entitled to certain rights and protections under ERISA. If you are a Participant, you are considered a Participant in the Plan for the purposes of this Section 14 and, under ERISA, you are entitled to:

 

Receive Information About Your Plan and Benefits

(a)Examine, without charge, at the Plan Administrator’s office and at other specified locations, such as worksites, all documents governing the Plan and a copy of the latest annual report (Form 5500 Series), if applicable, filed by the Plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration;

(b)Obtain, upon written request to the Plan Administrator, copies of documents governing the operation of the Plan and copies of the latest annual report (Form 5500 Series), if applicable, and an updated (as necessary) Summary Plan Description. The Plan Administrator may make a reasonable charge for the copies; and

(c)Receive a summary of the Plan’s annual financial report, if applicable. The Plan Administrator is required by law to furnish each Participant with a copy of this summary annual report.

Prudent Actions by Plan Fiduciaries

In addition to creating rights for Plan participants, ERISA imposes duties upon the people who are responsible for the operation of the employee benefit plan. The people who operate the Plan, called “fiduciaries” of the Plan, have a duty to do so prudently and in the interest of you and other Plan participants and beneficiaries. No one, including your employer, your union or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a Plan benefit or exercising your rights under ERISA.

Enforce Your Rights

If your claim for a Plan benefit is denied or ignored, in whole or in part, you have a right to know why this was done, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules.

 

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Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request a copy of Plan documents or the latest annual report from the Plan, if applicable, and do not receive them within 30 days, you may file suit in a federal court. In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Plan Administrator.

If you have a claim for benefits that is denied or ignored, in whole or in part, you may file suit in a state or federal court.

If you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a federal court. The court will decide who should pay court costs and legal fees. If you are successful, the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous.

Assistance with Your Questions

If you have any questions about the Plan, you should contact the Plan Administrator. If you have any questions about this statement or about your rights under ERISA, or if you need assistance in obtaining documents from the Plan Administrator, you should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in your telephone directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210. You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.

15.General Provisions.

(a)Notices. Any notice, demand or request required or permitted to be given by either the Company or a Participant pursuant to the terms of the Plan will be in writing and will be deemed given when delivered personally, when received electronically (including email addressed to the Participant’s Company email account and to the Company email account of the Company’s Chief Legal Officer), or deposited in the U.S. mail, First Class with postage prepaid, and addressed to the parties, in the case of the Company, at the address set forth in Section 13(d), in the case of a Participant, at the address as set forth in the Company’s employment file maintained for the Participant as previously furnished by the Participant or such other address as a party may request by notifying the other in writing.

(b)Transfer and Assignment. The rights and obligations of a Participant under the Plan may not be transferred or assigned without the prior written consent of the Company. The Plan will be binding upon any surviving entity resulting from a Change in Control and upon any other person who is a successor by merger, acquisition, consolidation or otherwise to the business formerly carried on by the Company without regard to whether or not such person or entity actively assumes the obligations hereunder.

 

14

 

 

 

(c)Waiver. Any party’s failure to enforce any provision or provisions of the Plan will not in any way be construed as a waiver of any such provision or provisions, nor prevent any party from thereafter enforcing each and every other provision of the Plan. The rights granted to the parties herein are cumulative and will not constitute a waiver of any party’s right to assert all other legal remedies available to it under the circumstances. 

(d)Protected Activity. Notwithstanding any contrary provision of the Plan or of the Release, nothing in this Agreement or the Release shall prohibit or impede Participant from engaging in any Protected Activity.  For purposes of this Agreement, “Protected Activity” shall mean communicating, cooperating or filing a complaint with any U.S. federal, state or local governmental or law enforcement branch, agency or entity, including, but not limited to, the Securities and Exchange Commission, the Equal Employment Opportunity Commission, the Occupational Safety and Health Administration, and the National Labor Relations Board (collectively, a “Governmental Entity”) with respect to possible violations of any U.S. federal, state or local law or regulation, or otherwise making disclosures to any Governmental Entity, in each case, that are protected under the whistleblower provisions of any such law or regulation; provided that, in each case, such communications and disclosures are consistent with applicable law.  Notwithstanding the foregoing, the Participant agrees to take all reasonable precautions to prevent any unauthorized use or disclosure of any information that may constitute Company confidential information (as defined in the Proprietary Agreement or any other agreement between the Participant and the Company relating to the protection of confidential information) to any parties other than the Governmental Entities.  The Participant further understands that Protected Activity does not include disclosure of any Company attorney-client privileged communications or attorney work product.  Any language in the Proprietary Agreement (or in any other agreement between the Participant and the Company relating to the protection of confidential information) that conflicts with, or is contrary to, this paragraph is superseded by this Agreement.  The Participant understands and acknowledges that pursuant to the Defend Trade Secrets Act of 2016 (A) an individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that is made (i) in confidence to a Federal, state, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal and (B) an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal, and does not disclose the trade secret, except pursuant to court order.

(e)Severability. Should any provision of the Plan be declared or determined to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired.

(f)Section Headings. Section headings in the Plan are included only for convenience of reference and will not be considered part of the Plan for any other purpose.

16.Execution. To record the adoption of the Plan as set forth herein, Zynga Inc. has caused its duly authorized officer to execute the same as of the Effective Date.

 

15

 

 

 

	
 
	
Zynga Inc.:

 

(Signature)

By:

Title:

 

 

 

 

 

 

16

 

 

 

Exhibit A

Zynga Inc.

Change in Control Severance Benefit Plan

Participation Notice

To:

Date:

Zynga Inc. (the “Company”) has adopted the Zynga Inc. Change in Control Severance Benefit Plan (the “Plan”). The Company is providing you this Participation Notice to inform you that you have been designated as a Participant in the Plan. A copy of the Plan document is attached to this Participation Notice. The terms and conditions of your participation in the Plan are as set forth in the Plan and this Participation Notice, which together constitute the Summary Plan Description for the Plan.

Please return to the Company’s Chief Legal Officer a copy of this Participation Notice signed by you and retain a copy of this Participation Notice, along with the Plan document, for your records. Your signature below confirms your agreement (1) to all of the terms and conditions of the Plan, including (but not limited to) that you will not be entitled to benefits under the original version of the Plan, and (2) that you may receive benefits only under the Plan or under the severance provisions of your offer letter with the Company dated [DATE], but not under both. For the avoidance of doubt, you will receive benefits under whichever arrangement (the Plan or the offer letter) provides greater benefits to you (comparing each arrangement in total) and all of your benefits will be under the single arrangement that is more beneficial to you in total.

	
 
	
Zynga Inc.:

 

(Signature)

By:

Title:

 

 

 

xvii

 

 

 

Exhibit B

Release Agreement
[Employees Age 40 or Over; Individual Termination]

This Release Agreement (“Release”) is made by and between [CLICK AND TYPE NAME] (“I” or “my”).

I understand and agree completely to the terms set forth in the Zynga Inc. Change in Control Severance Benefit Plan (the “Plan”). The benefits offered to me in the Plan are the consideration for this release. Accordingly, in order to obtain the benefits under the Plan, I am voluntarily executing this Release. I understand that this Release, together with the Plan and the Proprietary Agreement, constitutes the complete, final and exclusive embodiment of the entire agreement between the Company, affiliates of the Company, and me with regard to the subject matter hereof. I am not relying on any promise or representation by the Company or an affiliate of the Company that is not expressly stated therein. Certain capitalized terms used in this Release are defined in the Plan.

I hereby confirm my obligations under my Proprietary Agreement.

I agree that the benefits under the Plan represent settlement in full of all outstanding obligations owed to me by the Company and its current and former affiliates, and their parents, subsidiaries, successors, predecessors and affiliates, and their partners, members, directors, officers, employees, stockholders, shareholders, agents, attorneys, predecessors, investors, administrators, benefit plans, plan administrators, professional employer organization or co-employer, insurers, trustees, divisions, insurers, affiliates and assigns (collectively, the “Releasees”). I, on my own behalf and on behalf of my respective heirs, family members, executors, agents, and assigns, hereby and forever releases the Releasees from, and agree not to sue concerning, or in any manner to institute, prosecute, or pursue, any and all claims, complaints, charges, duties, demands, causes of action, liabilities and obligations relating to any matters of any kind, both presently known and unknown, suspected or unsuspected,  that I may possess against any of the Releasees arising from any omissions, acts, facts, or damages that have occurred up until and including the Effective Date of this Release. 

This general release includes, but is not limited to: (a) all claims arising out of or in any way related to my employment with the Company and its affiliates, or their affiliates, or the termination of that employment; (b) all claims related to my compensation or benefits, including salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership interests in the Company and its affiliates, or their affiliates; (c) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (d) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; (e) all federal, state, provincial and local statutory claims, including claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990 (as amended), the federal Age Discrimination in Employment Act (as amended) (“ADEA”), the federal Employee Retirement 

 

xviii

 

 

 

Income Security Act of 1974 (as amended), and the California Fair Employment and Housing Act (as amended); (f) any and all claims relating to, or arising from, my right to purchase, or actual purchase of shares of stock of the Company, including, without limitation, any claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law, and securities fraud under any state or federal law; (g) any claim for any loss, cost, damage, or expense arising out of any dispute over the nonwithholding or other tax treatment of any of the proceeds received by me as a result of this Release; and (h) any and all claims for attorneys’ fees and costs.

Notwithstanding the foregoing, I understand that the following rights or claims are not included in my Release: (a) any rights or claims for indemnification I may have pursuant to any written indemnification agreement with the Company or its affiliate to which I am a party; the charter, bylaws, or operating agreements of the Company or its affiliate; or under applicable law; (b) any rights which cannot be waived as a matter of law, including, but not necessarily limited to, any Protected Activity; (c) any right I may have to unemployment compensation benefits; or (d) vested benefits under any employee benefit plan or arrangement. In addition, I understand that nothing in this Release prevents me from filing, cooperating with, or participating in any proceeding before the Equal Employment Opportunity Commission, the Department of Labor, or the California Department of Fair Employment and Housing. I hereby represent and warrant that I have no lawsuits, claims, or actions pending in my name, or on behalf of any other person or entity, against the Company or any of the other Releasees. I also represent that I do not intend to bring any claims on my own behalf or on behalf of any other person or entity against the Company or any of the other Releasees.

I acknowledge that I am knowingly and voluntarily waiving and releasing any rights I may have under the ADEA, and that the consideration given under the Plan for the waiver and release in the preceding paragraph hereof is in addition to anything of value to which I was already entitled. I agree that this waiver and release does not apply to any rights or claims that may arise under the ADEA after the Effective Date of this Release. I further acknowledge that I have been advised by this writing, as required by the ADEA, that: (a) my waiver and release do not apply to any rights or claims that may arise after the date I sign this Release; (b) I should consult with an attorney prior to signing this Release; (c) I have 21 days to consider this Release; (d) I have seven days following the date I sign this Release to revoke the Release by providing written notice to an officer of the Company; (e) this Release will not be effective until the date upon which the revocation period has expired, which will be the eighth day after I sign this Release, and (f) nothing in this Release prevents or precludes me from challenging or seeking a determination in good faith of the validity of this waiver under the ADEA, nor does it impose any condition precedent, penalties, or costs for doing so, unless specifically authorized by federal law. In the event I sign this Release and return it to the Company in less than the 21-day period identified above, I hereby acknowledge that I have freely and voluntarily chosen to waive the time period allotted for considering this Release. I acknowledge and understand that revocation must be accomplished by a written notification to the person executing this Release on the Company’s behalf that is received prior to the Effective Date. The Company and I agree that changes, whether material or immaterial, do not restart the running of the 21-day period.

 

xix

 

 

 

I acknowledge that I have read and understand Section 1542 of the California Civil Code which reads as follows: “A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.” I hereby expressly waive and relinquish all rights and benefits under that section and any law of any jurisdiction of similar effect with respect to my release of any claims hereunder.

I hereby represent that I have been paid all compensation owed and for all hours worked; I have received all the leave and leave benefits and protections for which I am eligible pursuant to the Family and Medical Leave Act, the California Family Rights Act, or otherwise; and I have not suffered any on-the-job injury for which I have not already filed a workers’ compensation claim.

I understand and acknowledge that this Release constitutes a compromise and settlement of any and all actual or potential disputed claims by me. No action taken by the Company hereto, either previously or in connection with this Release, shall be deemed or construed to be (a) an admission of the truth or falsity of any actual or potential claims or (b) an acknowledgment or admission by the Company of any fault or liability whatsoever to me or to any third party.

I understand and agree that the Company and I shall each bear our own costs, attorneys’ fees, and other fees incurred in connection with the preparation of this Release.

I agree and acknowledge that the payments made pursuant to the Plan and this Release are not related to sexual harassment or sexual abuse and not intended to fall within the scope of 26 U.S.C. Section 162(q). [Note: only include if applicable.]

This Release shall be governed by the laws of the State of [insert state in which employee worked], without regard for choice-of-law provisions. Employee consents to personal and exclusive jurisdiction and venue in the State of [insert state].

I acknowledge that to become effective, I must sign and return this Release to the Company so that it is received not later than 21 days following the date it is provided to me. This Release will become effective on the eighth (8th) day after I have signed this Release, so long as it has been signed by the Company and me and has not been revoked by either the Company or me before that date (the “Effective Date”).

I understand and agree that I executed this Release voluntarily, without any duress or undue influence on the part or behalf of the Company or any third party, with the full intent of releasing all of my claims against the Company and any of the other Releasees. I acknowledge that:

 

(a)I have read this Release;

 

	
 
	
(b)
	
I have been represented in the preparation, negotiation, and execution of this Release by legal counsel of my own choice or have elected not to retain legal counsel;

 

 

xx

 

 

 

	
 
	
(c)
	
I understand the terms and consequences of this Release and of the releases it contains; 

 

	
 
	
(d)
	
I am fully aware of the legal and binding effect of this Release; and

 

	
 
	
(e)
	
I have not relied upon any representations or statements made by the Company that are not specifically set forth in this Release.

 

IN WITNESS WHEREOF, the parties have executed this Release on the respective dates set forth below.

 

	
COMPANY:

 

(Signature)

By:

Date:

 
	
Participant:

 

(Signature)

By:

Date:

 

 

 

 

xxi

 

 

 

Exhibit C

Release Agreement
[Employees Age 40 or Over; Group Termination]

This Release Agreement (“Release”) is made by and between [CLICK AND TYPE NAME] (“I” or “my”).

I understand and agree completely to the terms set forth in the Zynga Inc. Change in Control Severance Benefit Plan (the “Plan”). The benefits offered to me in the Plan are the consideration for this release. Accordingly, in order to obtain the benefits under the Plan, I am voluntarily executing this Release.

I understand that this Release, together with the Plan, and the Proprietary Agreement constitutes the complete, final and exclusive embodiment of the entire agreement between the Company, affiliates of the Company, and me with regard to the subject matter hereof. I am not relying on any promise or representation by the Company or an affiliate of the Company that is not expressly stated therein. Certain capitalized terms used in this Release are defined in the Plan.

I hereby confirm my obligations under my Proprietary Agreement. I agree that the benefits under the Plan represent settlement in full of all outstanding obligations owed to me by the Company and its current and former affiliates, and their parents, subsidiaries, successors, predecessors and affiliates, and their partners, members, directors, officers, employees, stockholders, shareholders, agents, attorneys, predecessors, investors, administrators, benefit plans, plan administrators, professional employer organization or co-employer, insurers, trustees, divisions, insurers, affiliates and assigns (collectively, the “Releasees”). I, on my own behalf and on behalf of my respective heirs, family members, executors, agents, and assigns, hereby and forever releases the Releasees from, and agree not to sue concerning, or in any manner to institute, prosecute, or pursue, any and all claims, complaints, charges, duties, demands, causes of action, liabilities and obligations relating to any matters of any kind, both presently known and unknown, suspected or unsuspected,  that I may possess against any of the Releasees arising from any omissions, acts, facts, or damages that have occurred up until and including the Effective Date of this Release.  

This general release includes, but is not limited to: (a) all claims arising out of or in any way related to my employment with the Company and its affiliates, or their affiliates, or the termination of that employment; (b) all claims related to my compensation or benefits, including salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership interests in the Company and its affiliates, or their affiliates; (c) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (d) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; (e) all federal, state, provincial and local statutory claims, including claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990 (as amended), the federal Age 

 

xxii

 

 

 

Discrimination in Employment Act (as amended) (“ADEA”), the federal Employee Retirement Income Security Act of 1974 (as amended), and the California Fair Employment and Housing Act (as amended); (f) any and all claims relating to, or arising from, my right to purchase, or actual purchase of shares of stock of the Company, including, without limitation, any claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law, and securities fraud under any state or federal law; (g) any claim for any loss, cost, damage, or expense arising out of any dispute over the nonwithholding or other tax treatment of any of the proceeds received by me as a result of this Release; and (h) any and all claims for attorneys’ fees and costs. 

Notwithstanding the foregoing, I understand that the following rights or claims are not included in my Release: (a) any rights or claims for indemnification I may have pursuant to any written indemnification agreement with the Company or its affiliate to which I am a party; the charter, bylaws, or operating agreements of the Company or its affiliate; or under applicable law; or (b) any rights which cannot be waived as a matter of law, including, but not necessarily limited to, any Protected Activity; (c) any right I may have to unemployment compensation benefits; or (d) vested benefits under any employee benefit plan or arrangement. In addition, I understand that nothing in this Release prevents me from filing, cooperating with, or participating in any proceeding before the Equal Employment Opportunity Commission, the Department of Labor, or the California Department of Fair Employment and Housing. I hereby represent and warrant that I have no lawsuits, claims, or actions pending in my name, or on behalf of any other person or entity, against the Company or any of the other Releasees. I also represent that I do not intend to bring any claims on my own behalf or on behalf of any other person or entity against the Company or any of the other Releasees.

I acknowledge that I am knowingly and voluntarily waiving and releasing any rights I may have under the ADEA, and that the consideration given under the Plan for the waiver and release in the preceding paragraph hereof is in addition to anything of value to which I was already entitled. I agree that this waiver and release does not apply to any rights or claims that may arise under the ADEA after the Effective Date of this Release. I further acknowledge that I have been advised by this writing, as required by the ADEA, that: (a) my waiver and release do not apply to any rights or claims that may arise after the date I sign this Release; (b) I should consult with an attorney prior to signing this Release; (c) I have 45 days to consider this Release; (d) I have seven days following the date I sign this Release to revoke the Release by providing written notice to an office of the Company; (e) this Release will not be effective until the date upon which the revocation period has expired, which will be the eighth day after I sign this Release; (f) I have received with this Release a detailed list, in writing, of the class, unit, or group of individuals covered by the reduction in force, the eligibility factors for the reduction in force, of the job titles and ages of all employees who were terminated in this group termination and the ages of all employees of the Company in the same job classification or organizational unit who were not terminated; and (g) nothing in this Release prevents or precludes me from challenging or seeking a determination in good faith of the validity of this waiver under the ADEA, nor does it impose any condition precedent, penalties, or costs for doing so, unless specifically authorized by federal law. In the event I sign this Release and return it to the Company in less than the 45-day period identified above, I hereby acknowledge that I have freely and voluntarily chosen to waive the time period allotted for considering this Release. I 

 

xxiii

 

 

 

acknowledge and understand that revocation must be accomplished by a written notification to the person executing this Release on the Company’s behalf that is received prior to the Effective Date. The Company and I agree that changes, whether material or immaterial, do not restart the running of the 45-day period.

I acknowledge that I have read and understand Section 1542 of the California Civil Code which reads as follows: “A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.” I hereby expressly waive and relinquish all rights and benefits under that section and any law of any jurisdiction of similar effect with respect to my release of any claims hereunder.

I hereby represent that I have been paid all compensation owed and for all hours worked; I have received all the leave and leave benefits and protections for which I am eligible pursuant to the Family and Medical Leave Act, the California Family Rights Act, or otherwise; and I have not suffered any on-the-job injury for which I have not already filed a workers’ compensation claim.

I understand and acknowledge that this Release constitutes a compromise and settlement of any and all actual or potential disputed claims by me. No action taken by the Company hereto, either previously or in connection with this Release, shall be deemed or construed to be (a) an admission of the truth or falsity of any actual or potential claims or (b) an acknowledgment or admission by the Company of any fault or liability whatsoever to me or to any third party.

I understand and agree that the Company and I shall each bear our own costs, attorneys’ fees, and other fees incurred in connection with the preparation of this Release.

I agree and acknowledge that the payments made pursuant to the Plan and this Release are not related to sexual harassment or sexual abuse and not intended to fall within the scope of 26 U.S.C. Section 162(q). [Note: only include if applicable.]

This Release shall be governed by the laws of the State of [insert state], without regard for choice-of-law provisions. Employee consents to personal and exclusive jurisdiction and venue in the State of [insert state].

I acknowledge that to become effective, I must sign and return this Release to the Company so that it is received not later than 45 days following the date it is provided to me. This Release will become effective on the eighth (8th) day after I have signed this Release, so long as it has been signed by the Company and me and has not been revoked by either the Company or me before that date (the “Effective Date”).

I understand and agree that I executed this Release voluntarily, without any duress or undue influence on the part or behalf of the Company or any third party, with the full intent of releasing all of my claims against the Company and any of the other Releasees. I acknowledge that:

 

(a)I have read this Release;

 

 

xxiv

 

 

 

	
 
	
(b)
	
I have been represented in the preparation, negotiation, and execution of this Release by legal counsel of my own choice or have elected not to retain legal counsel;

 

	
 
	
(c)
	
I understand the terms and consequences of this Release and of the releases it contains; 

 

	
 
	
(d)
	
I am fully aware of the legal and binding effect of this Release; and

 

	
 
	
(e)
	
I have not relied upon any representations or statements made by the Company that are not specifically set forth in this Release.

 

IN WITNESS WHEREOF, the parties have executed this Release on the respective dates set forth below.

 

	
COMPANY:

 

(Signature)

By:

Date:

 
	
Participant:

 

(Signature)

By:

Date:

 

 

 

 

 

xxv

 

 

 

 

Exhibit D

Release Agreement
[Employees Under Age 40]

This Release Agreement (“Release”) is made by and between [CLICK AND TYPE NAME] (“I” or “my”).

I understand and agree completely to the terms set forth in the Zynga Inc. Change in Control Severance Benefit Plan (the “Plan”). The benefits offered to me in the Plan are the consideration for this release. Accordingly, in order to obtain the benefits under the Plan, I am voluntarily executing this Release.

I understand that this Release, together with the Plan, and the Proprietary Agreement constitutes the complete, final and exclusive embodiment of the entire agreement between the Company, affiliates of the Company, and me with regard to the subject matter hereof. I am not relying on any promise or representation by the Company or an affiliate of the Company that is not expressly stated therein. Certain capitalized terms used in this Release are defined in the Plan.

I hereby confirm my obligations under my Employee Proprietary Agreement.

I agree that the benefits under the Plan represent settlement in full of all outstanding obligations owed to me by the Company and its current and former affiliates, and their parents, subsidiaries, successors, predecessors and affiliates, and their partners, members, directors, officers, employees, stockholders, shareholders, agents, attorneys, predecessors, investors, administrators, benefit plans, plan administrators, professional employer organization or co-employer, insurers, trustees, divisions, insurers, affiliates and assigns (collectively, the “Releasees”). I, on my own behalf and on behalf of my respective heirs, family members, executors, agents, and assigns, hereby and forever releases the Releasees from, and agree not to sue concerning, or in any manner to institute, prosecute, or pursue, any and all claims, complaints, charges, duties, demands, causes of action, liabilities and obligations relating to any matters of any kind, both presently known and unknown, suspected or unsuspected,  that I may possess against any of the Releasees arising from any omissions, acts, facts, or damages that have occurred up until and including the Effective Date of this Release. 

This general release includes, but is not limited to: (a) all claims arising out of or in any way related to my employment with the Company and its affiliates, or their affiliates, or the termination of that employment; (b) all claims related to my compensation or benefits, including salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership interests in the Company and its affiliates, or their affiliates; (c) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (d) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; (e) all federal, state, provincial and local statutory claims, including claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990 (as amended), the federal Employee 

xxvi

 

 

 

Retirement Income Security Act of 1974 (as amended), and the California Fair Employment and Housing Act (as amended); (f) any and all claims relating to, or arising from, my right to purchase, or actual purchase of shares of stock of the Company, including, without limitation, any claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law, and securities fraud under any state or federal law; (g) any claim for any loss, cost, damage, or expense arising out of any dispute over the nonwithholding or other tax treatment of any of the proceeds received by me as a result of this Release; and (h) any and all claims for attorneys’ fees and costs. 

Notwithstanding the foregoing, I understand that the following rights or claims are not included in my Release: (a) any rights or claims for indemnification I may have pursuant to any written indemnification agreement with the Company or its affiliate to which I am a party; the charter, bylaws, or operating agreements of the Company or its affiliate; or under applicable law; or (b) any rights which cannot be waived as a matter of law, including, but not necessarily limited to, any Protected Activity; (c) any right I may have to unemployment compensation benefits; or (d) vested benefits under any employee benefit plan or arrangement. In addition, I understand that nothing in this Release prevents me from filing, cooperating with, or participating in any proceeding before the Equal Employment Opportunity Commission, the Department of Labor, or the California Department of Fair Employment and Housing. I hereby represent and warrant that I have no lawsuits, claims, or actions pending in my name, or on behalf of any other person or entity, against the Company or any of the other Releasees. I also represent that I do not intend to bring any claims on my own behalf or on behalf of any other person or entity against the Company or any of the other Releasees.

I acknowledge that I have read and understand Section 1542 of the California Civil Code which reads as follows: “A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.” I hereby expressly waive and relinquish all rights and benefits under that section and any law of any jurisdiction of similar effect with respect to my release of any claims hereunder.

I hereby represent that I have been paid all compensation owed and for all hours worked; I have received all the leave and leave benefits and protections for which I am eligible pursuant to the Family and Medical Leave Act, the California Family Rights Act, or otherwise; and I have not suffered any on-the-job injury for which I have not already filed a workers’ compensation claim.

I understand and acknowledge that this Release constitutes a compromise and settlement of any and all actual or potential disputed claims by me. No action taken by the Company hereto, either previously or in connection with this Release, shall be deemed or construed to be (a) an admission of the truth or falsity of any actual or potential claims or (b) an acknowledgment or admission by the Company of any fault or liability whatsoever to me or to any third party.

I understand and agree that the Company and I shall each bear our own costs, attorneys’ fees, and other fees incurred in connection with the preparation of this Release.

 

xxvii

 

 

 

I agree and acknowledge that the payments made pursuant to the Plan and this Release are not related to sexual harassment or sexual abuse and not intended to fall within the scope of 26 U.S.C. Section 162(q). [Note: only include if applicable.]

This Release shall be governed by the laws of the State of [insert state], without regard for choice-of-law provisions. Employee consents to personal and exclusive jurisdiction and venue in the State of [insert state].

I acknowledge that to become effective, I must sign and return this Release to the Company so that it is received not later than 14 days following the date it is provided to me. This Release will become effective once it is signed by both parties (the “Effective Date”).

I understand and agree that I executed this Release voluntarily, without any duress or undue influence on the part or behalf of the Company or any third party, with the full intent of releasing all of my claims against the Company and any of the other Releasees. I acknowledge that:

 

(a)I have read this Release;

 

	
 
	
(b)
	
I have been represented in the preparation, negotiation, and execution of this Release by legal counsel of my own choice or have elected not to retain legal counsel;

 

	
 
	
(c)
	
I understand the terms and consequences of this Release and of the releases it contains; 

 

	
 
	
(d)
	
I am fully aware of the legal and binding effect of this Release; and

 

	
 
	
(e)
	
I have not relied upon any representations or statements made by the Company that are not specifically set forth in this Release.

 

IN WITNESS WHEREOF, the parties have executed this Release on the respective dates set forth below.

 

 

 

xxviii

 

 

 

	
COMPANY:

 

(Signature)

By:

Date:

 
	
Participant:

 

(Signature)

By:

Date:

 

 

 

 

 

 

xxix

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