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EFiled: Mar 13 2017 03:49PM EDT

Transaction ID 60332656
Case No. 2017-0177-JRS
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

KT4 PARTNERS LLC


Plaintiff, C.A. No. 2017-0177-JRS

v.
PUBLIC VERSION:
PALANTIR TECHNOLOGIES, INC. MARCH 13, 2017

Defendant.

PLAINTIFF KT4 PARTNERS LLCS VERIFIED COMPLAINT


AGAINST DEFENDANT PALANTIR TECHNOLOGIES, INC.
FOR INSPECTION OF BOOKS AND RECORDS
PURSUANT TO 8 DEL. C. 7-220

Plaintiff KT4 Partners LLC (KT4), by its undersigned attorneys, upon

knowledge, information and belief, states and alleges for its Verified Complaint

against Defendant Palantir Technologies, Inc. (Palantir or the Company) as

follows:

NATURE OF THE ACTION

1. This action is necessary because Palantir has deprived KT4an early

investor in Palantir that owns well over 5,000,000 common and preferred shares of

Palantir worth more than $60,000,000and other investors of any information

necessary to assess the value of their investments or to assess the nature and extent

of improper and illegal conduct perpetrated by Palantir and its officers, directors,

agents, and/or majority shareholders.


2. This Complaint and its exhibits have temporarily been filed pursuant

to the confidentiality provisions of Chancery Court Rule 5.1(e) because Palantir

has forced investors such as KT4 to accept unreasonable restraints on the

disclosure of information about the Company, as discussed in detail below.

Although KT4 does not agree that the disclosure of this Complaint and its exhibits

could properly be construed to constitute a violation of those restraints, KT4 has

filed the materials under seal to provide Palantir with an opportunity to seek the

Courts guidance on whether any information herein should be kept from public

disclosure.

3. The information requested herein is necessary to allow KT4 to

investigate whether and to what extent Palantir and its officers, directors, agents,

and/or majority shareholders have prevented disfavored investors such as KT4

from realizing the value of their investments by:

a. improperly interfering with KT4s and others efforts to sell

their Palantir shares;

b. permitting favored investors and insiders (such as Palantir CEO

Alexander Karp and Palantir Chairman and founding investor Peter Thiel) to

sell their Palantir shares while improperly preventing or hindering the ability

of disfavored investors (such as KT4) from selling theirs;

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c. improperly depriving disfavored investors of even basic

information required to be provided under Delaware law, including, for

example, refusing to provide a list of the Companys officers, directors, and

shareholders;

d. improperly depriving disfavored investors of information

necessary to assess the value of their investments, including, among other

things, by failing to hold annual shareholder meetings, by refusing to

provide information regarding the financial performance of the Company,

and by purportedly retroactively amending the Investors Rights Agreement

for the purpose of depriving KT4 (and possibly other disfavored investors)

of any information regarding the financial performance of the Company;

e. improperly refusing to consider or effect an initial public

offering of Palantir stock, contrary to the fiduciary duty owed to minority

shareholders to protect and maximize the value of their shares;

f. improperly refusing to consider or effect a partial or complete

sale of Palantir stock to one or more third parties;

g. improperly refusing to issue, or to consider issuing, dividends

to investors while nevertheless (i) approving excessive and unreasonable

compensation and benefits to officers that lower the value of Palantir stock

and serve no proper corporate purpose (including, without limitation,

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for Palantir CEO Alexander Karp); (ii) diluting the value of Palantir

stock held by minority shareholders by approving excessive grants of equity

and/or options to officers, directors, and/or other investors that serve no

proper corporate purpose; and (iii) providing (or causing others to provide)

excessive and unreasonable payments, compensation, and/or other

remuneration to third parties that serve no valid corporate purpose, including

excessive, unreasonable, and unjustified payments and/or commissions to

Alexander Fishman, Alexander Davis, Disruptive Technology Advisers

(DTA), other past and present employees or affiliates of DTA, and/or

Delectable, Inc.;

h. fraudulently and/or wrongfully depriving disfavored investors

of their preemptive purchase rights by selling Palantir shares to new

investors without offering disfavored investors the rights of first offer

provided in various corporate documents; and

i. fraudulently and/or wrongfully depriving disfavored investors

of their rights of first refusal and rights of co-sale by aiding founding

investors in Palantir (including Alexander Karp and Peter Thiel) in selling

their Palantir shares without offering the Company or disfavored investors

the rights of first refusal and rights of co-sale provided in various corporate

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documents; and by failing to disregard transactions effected in contravention

of such rights, as required by such corporate documents.

4. So extreme is Palantirs desire to deprive disfavored investors of even

basic information necessary to understand the value of their investments and the

extent of wrongdoing by Palantirs officers, directors, agents, and/or majority

shareholders that it took the extraordinary and unjustified step of retroactively

amending its corporate documents for the sole purpose of foreclosing KT4s

previously existing contractual right, under an Investors Rights Agreement, to

examine corporate books and records and talk with corporate officers

immediately after KT4 made written requests for information expressly allowed by

the Investors Rights Agreement. In so doing, Palantir expressly refused, and

continues to refuse, to provide KT4 with a copy of the purported retroactively

amended Investors Rights Agreement that Palantir claims revoked KT4s

contractual right of inspection.

5. KT4 therefore brings this action to enforce its statutory right as a

shareholder of Palantir to obtain information and copies of certain books and

records of Palantir pursuant to Section 7-220 of the Delaware General Corporation

Law (the General Corporation Law), having made the required written demand

for inspection under 220 more than five (5) business days prior to the filing of

this Verified Complaint.

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6. Despite KT4s lawful and appropriate requests for financial

information relating to the value and operations of Palantirincluding copies of

specified books and records on September 20, 2016 (the Demand, attached

hereto as Exhibit 21)Palantir has refused to produce any of the requested books

and records in the time provided by Section 7-220.

7. KT4s purposes for the inspection set forth in the Demand and herein

are reasonably related to its interests as a significant shareholder of Palantir, and

each category of books and records that KT4 seeks to inspect and copy is

necessary and essential to accomplish KT4s stated, proper purposes.

8. As a shareholder of the Company, KT4 is entitled to inspect and make

copies of the Companys books and records under Section 7-220 of the General

Corporation Law. Given KT4s unambiguous statutory rights, Palantir must make

the requested production.

9. KT4 seeks an Order from the Court, compelling Palantir to provide

KT4 and its duly authorized representatives with access to and copies of the books

and records requested in the Demand.

THE PARTIES

10. Defendant Palantir Technologies, Inc. is a Delaware corporation with

a registered agent at The Corporation Trust Company, Corporation Trust Center,

1209 Orange Street, Wilmington, DE 19801 and a principal place of business at

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100 Hamilton Ave.Palo Alto, CA 94301. A true and correct copy of the Palantir

Technologies, Inc. Fourth Amended and Restated Certificate of Incorporation,

dated as of February 14, 2008 is attached hereto as Exhibit 1.

11. Plaintiff KT4 Holdings, LLC is a Delaware limited liability company

with a registered agent at Incorp Services, Inc., 919 North Market Street, Suite

425, Wilmington, DE 19801 and a principal place of business at: c/o Manning

Fulton, 3605 Glenwood Ave #500, Raleigh, NC 27612. Marc L. Abramowitz is

the Managing Member of KT4.

JURISDICTION

12. The Court has jurisdiction over the claims asserted in this Verified

Complaint pursuant to 8 Del. C. 1-111 and 7-220(c).

FACTUAL ALLEGATIONS

13. In light of Palantirs persistent refusal to make even basic information

available to KT4, the allegations below are based upon what KT4 has been able to

adduce from its own experience, press reports, and accounts of others involved in

these events. Palantir has deprived KT4 of sufficient information to assess and

describe more fully the improper conduct of Palantir and its officers, directors,

agents, and majority shareholders.

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A. KT4 Invests in Palantir and Obtains Contractual Rights Pursuant to
Investors Rights Agreements and First Refusal and Co-Sale
Agreements

14. At various times from June 2006 through December 2012, KT4

purchased millions of common and preferred shares of Palantir stock. As of the

filing of this Verified Complaint, KT4 is the record holder of approximately

600,000 shares of Palantir common stock, 3,028,769 shares of Palantir Preferred B

stock, 1,792,690 shares of Palantir Preferred C stock, and 275,518 shares of

Palantir Preferred D stock. In sum, KT4 is the record holder of approximately

5,696,977 shares of Palantir common and preferred stock. (KT4 also owns 29,917

shares of Palantir Preferred E stock that Palantir refuses to release to it, as

discussed further below.)

15. In connection with these investments, Palantir, KT4, and each other

investor in Palantirs preferred shares executed an Investors Rights Agreement.

Although subsequent rounds of preferred investments generated amended

Investors Rights Agreements, all such agreements executed by KT4 contained the

provisions discussed in detail herein providing major investors such as KT4 with:

(a) a right to inspect Palantirs books and records and discuss the operations of

Palantir with company executives; and (b) rights of first offer as to any subsequent

rounds of financing.

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16. The Investors Rights Agreements into which KT4 entered in

connection with its investments in Palantir on June 15, 2006 and February 15, 2008

(and any subsequent iterations of those agreements that were executed by KT4)

provide KT4 with the right to receive certain financial statements and information

regarding the Company. Specifically, section 2.1 of the Investors Rights

Agreements states:

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Exhibit 2 (2008 Investors Rights Agreement).

17. The Investors Rights Agreements into which KT4 entered in

connection with its investments in Palantir on June 15, 2006 and February 15, 2008

(and any subsequent iterations of those agreements that were executed by KT4)

also provide major investors such as KT4 with a right of inspection of the

Companys properties and its books of account and records, as well as the right to

discuss the Companys affairs, finances, and accounts with its officers.

Specifically, section 2.2 of the Investors Rights Agreements states, in relevant

part:

Exhibit 2 (2008 Investors Rights Agreement).

18. The Investors Rights Agreements into which KT4 entered in

connection with its investments in Palantir on June 15, 2006 and February 15, 2008

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(and any subsequent iterations of those agreements that were executed by KT4)

also provide major investors such as KT4 with a right of first offer in the event

Palantir were to offer shares to any investor. To effectuate that right, the Investors

Rights Agreements require that the Company provide notice to all major investors

such as KT4 regarding its intent to make such an offering. Specifically, section 2.4

of the Investors Rights Agreements states:

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Exhibit 2 (2008 Investors Rights Agreement).

19. In connection with their investments in Palantir, the Company, KT4,

and each other investor in Palantirs preferred shares executed a First Refusal and

Co-Sale Agreement. Although subsequent rounds of financing generated amended

First Refusal and Co-Sale Agreements, all such agreements executed by KT4

contained the provisions discussed in detail herein providing investors such as KT4

with: (a) the right of first refusal in the event any founding investor (such as Karp

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and Thiel) were to sell their shares; (b) rights of co-sale in the event any founding

Investor (such as Karp and Thiel) were to offer to sell shares, to the extent

investors and the Company decline to purchase all, or a portion, of such shares

pursuant to their rights of first refusal; (c) the right to have Palantir disregard any

sale of shares by a founder in such a manner as to deprive KT4 of its rights of first

refusal and co-sale; and (d) the right to sell to any founder who purports to sell

shares in such a prohibited manner the type and number of shares equal to the

number of shares KT4 would have been entitled to transfer to a third-party

transferee had the transfer given effect to KT4s rights of first refusal and co-sale.

20. The First Refusal and Co-Sale Agreements into which KT4 entered in

connection with its investments in Palantir on June 15, 2006 and February 15, 2008

(and any subsequent iterations of those agreements that were executed by KT4)

provide holders of preferred shares, such as KT4, with a right of first refusal in the

event any founding Investor (such as Karp and Thiel) were to offer to sell their

shares, to the extent the Company declines to purchase all, or a portion, of such

shares. To effectuate that right, the First Refusal and Co-Sale Agreements require

that a founding Investor offering shares for sale provide notice to all preferred

stock holders such as KT4 regarding its intent to make such an offering.

Specifically, section 2.1 of the First Refusal and Co-Sale Agreements states, in

relevant part:

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Exhibit 3 (2008 Amended and Restated First Refusal and Co-Sale

Agreement).

21. The First Refusal and Co-Sale Agreements into which KT4 entered in

connection with its investments in Palantir on June 15, 2006 and February 15, 2008

(and any subsequent iterations of those agreements that were executed by KT4)

also provide holders of preferred shares, such as KT4, with a right of co-sale in the

event any founding Investor (such as Karp and Thiel) were to offer to sell shares,

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to the extent such holders and the Company decline to purchase all, or a portion, of

such shares pursuant to their rights of first refusal. To effectuate that right, the

First Refusal and Co-Sale Agreements require that a founding Investor offering

shares for sale provide notice to all preferred stock holders such as KT4 regarding

its intent to make such an offering. Specifically, section 2.2 of the First Refusal

and Co-Sale Agreements states:

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Exhibit 3 (2008 Amended and Restated First Refusal and Co-Sale

Agreement).

22. Founding investors such as Karp and Thiel are prohibited from

transferring, selling, assigning, pledging, hypothecating, or otherwise encumbering

or disposing of their preferred shares in a manner that deprives other holders of

preferred shares of the above-discussed rights of first refusal and co-sale, and the

First Refusal and Co-Sale Agreements obligate Palantir to rescind and disregard

any sale of shares in such a manner as to deprive shareholders of such rights. In

the event of such a prohibited transfer by a founding investor, shareholders such as

KT4 have the right to require such founding investor to purchase shares from other

shareholders (including KT4) as though the transfer had been effected in

accordance with the above right of co-sale. Specifically, section 2.5 of the First

Refusal and Co-Sale Agreements states:

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Exhibit 3 (2008 Amended and Restated First Refusal and Co-Sale

Agreement).

23. KT4 bargained for the above rights to financial information,

inspection, first offer, first refusal, and co-sale when it was solicited, and agreed, to

invest in Palantir.

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B. Palantir and Its Insiders Thwart and Hinder Disfavored Investors
Efforts To Sell Their Shares, and Misappropriate the Opportunities,
Without Offering Disfavored Investors the Required Rights of First
Offer, First Refusal, or Co-Sale

24. Through its officers, directors, agents, and majority shareholders,

Palantir has engaged in a pattern and practice of thwarting or hindering the efforts

of disfavored investors such as KT4as well as other Palantir minority investors

known to KT4 to have similar concerns to those discussed hereinto sell their

Palantir shares, and instead taking, or attempting to take, those opportunities for

itself or its officers, directors, agents, and/or majority shareholders, or otherwise

imposing onerous and improper conditions on such sales. As discussed in further

detail below, this pattern and practice generally proceeds as follows:

a. Palantir unilaterally establishes unspecified practices and

policies regarding transfers and sales of Palantir stock, and uses its position as

transfer agent of Palantir shares, to make clear to investors that no transfer or sale

of shares can be effected without the Companys approval. (These practices and

policies were referenced in an email by Palantirs Global Head of Business

Development Kevin Kawasaki, see Exhibit 4 (January 5, 2016 Selling Group email

and January 11, 2016 Kawasaki response), but Palantir has refused to make them

available to KT4even though it claims KT4s rights are circumscribed by them.)

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b. Disfavored investors such as KT4 therefore are required to

provide notice to the Company once they have fully negotiated a transfer or sale of

their Palantir shares.

c. When disfavored investors such as KT4 provide Palantir notice

of a fully negotiated, all-but-consummated stock transfer or sale transaction, the

Company and/or its officers, directors, agents, and/or majority shareholders then

use the information provided to them about potential sales of Palantir stock to

contact the intended transferee in order to interfere with the sale and dissuade the

intended transferee from consummating the transaction with the disfavored

investor.

d. Palantir and/or its officers, directors, agents, and/or majority

shareholders then assert itself/themselves as the counterparty to the deal in the

place of the disfavored investor, and effect its/their own sale of shares to the

intended transferee.

25. KT4 details herein two examples of such conduct, but it is informed

and believes, and on that basis alleges, that the Company and its officers, directors,

agents, and/or majority shareholders have engaged in this conduct on other

occasions, with respect to disfavored investors other than KT4.

26. One example of this pattern and practice is the conduct of Palantir and

those putatively acting on its behalf with respect to a sale of certain of KT4s

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Palantir shares to the hedge fund Highbridge Capital Management LLC

(Highbridge). In or about early-May, 2015, KT4 had fully negotiated a sale of a

large number of Preferred Class B Palantir shares to Highbridge, including the

purchase price and all material terms and conditions of the sale. On or about

May 7, 2015, KT4 notified Palantir of the impending sale, identified the shares to

be sold and their purchaser, and disclosed the consideration to be paid and all other

material terms and conditions of the sale.

27. Upon learning of the impending sale by KT4 to Highbridge, Palantir

held up approval for the transaction without any proper justification.

28. Next, Palantir informed its agent, Disruptive Technology Advisers, or

DTA (a firm that KT4 believes was supervised by, and conducted business under

the broker license of, SF Sentry Securities, Inc.), of this information and, upon

information and belief, instructed DTA to take the opportunity, on Palantirs

behalf, from KT4, and to effect a sale from Palantir to Highbridge instead. At the

time, DTA and its principals Alexander Fishman and Alexander Davis enjoyed a

very close relationship with Palantir CEO Alexander Karp.

29. Alexander Fishman then visited a senior Highbridge Managing

Director to seek to persuade Highbridge not to purchase the shares as to which

KT4 and other disfavored investors had negotiated a sale, and instead to purchase

shares directly from Palantir. Had Highbridge acceded to Palantirs and DTAs

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tactics and purchased shares directly from Palantir, such a transaction would have

resulted in a considerable windfall to Fishman, Davis, and DTA, in the form of a

lucrative commissionfor which Fishman, Davis, and DTA would have

performed no meaningful work at all.

30. In this instance, Palantirs and DTAs efforts ultimately were

unsuccessful. In his meeting with Fishman, the Managing Director informed

Fishman he had made a deal with KT4 for the purchase and that he did not break

deals, and instructed Fishman to leave his office.

31. It was only when Karp was informed that Highbridge was an affiliate

of JPMorgan Chase (reportedly Palantirs largest commercial customer), and that

JPMorgan CEO Jamie Dimon would be asked to contact Karp directly to express

displeasure at the Companys and DTAs tactics, that Karp intervened personally

and caused the Company and DTA finally to relent. At that point, apparently

fearing his relationship with a major client, Karp caused the planned transaction

between KT4 and Highbridge to be approved immediately (on or about May 31,

2015), demonstrating Karps personal influence and involvement in the approval,

and denial of approval, of sales of Palantir stock.

32. Palantir and DTA experienced more success in their next effort to

impede KT4s sale of stock and misappropriate the opportunity for themselves. By

December 2015, KT4 and others (collectively, the Selling Group) had negotiated

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a sale of hundreds of millions of dollars worth of Palantir shares to a special

purpose vehicle known as Brooklands Capital Strategies (Brooklands), put

together by the investment company TPG to represent Chinese investment

company The parties had negotiated and agreed upon

the purchase price and all material terms and conditions of the sale. All parties to

the transaction agreed that the sale had been fully negotiated, and were preparing

to close the transaction.

33. The Selling Group designated Rosco Hill (then part of the Selling

Group) to inform Palantir of the impending sale given the Companys role in

approving the transfer. Upon information and belief, Hill informed Kevin

Kawasaki at Palantir of the impending sale in or about December 2015.

34. Upon learning of the impending sale by the Selling Group to ,

Palantir caused DTA, on Palantirs behalf, to contact in an effort to dissuade

from purchasing shares from the Selling Group, and to arrange its own direct

sale of Palantir shares to . Among other things, Alexander Davis directly

contacted regarding the proposed transaction, see Exhibit 5 (A. Davis

LinkedIn message), and DTA principals Alexander Fishman and/or Alexander

Davis represented to TPG that they would meet with .

35. In or about early-January 2016, the Selling Group became aware that

DTA had directly contacted in connection with a proposed sale of Palantir

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shares by the Company; that as a result, came to believe it was required to

pursue a transaction directly with the Company instead of with the Selling Group;

and that was therefore planning to withdraw from the transaction. The

Selling Group wrote to the Company on January 5, 2016, asking it to direct its

agent DTA to clarify to that could still pursue the fully negotiated

transaction to purchase secondary shares from the Selling Group irrespective of

any other transaction it might be considering to purchase primary shares directly

from the Company. See Exhibit 4 (January 5, 2016 Selling Group email and

January 11, 2016 Kawasaki response).

36. Kawasaki responded to the Selling Groups correspondence on

January 11, 2016 by denying that DTA was representing Palantir in connection

with any sale of shares to , claiming it was that had approached Palantir

regarding such a sale (and not the other way around), and claiming that the

Company did not intend to pursue any transaction with . See Exhibit 4

(January 5, 2016 Selling Group email and January 11, 2016 Kawasaki response).

37. In fact, DTA had been operating on Palantirs behalf, and had made

the approach to in an effort to subvert the Selling Groups sale and effect its

own transaction, as revealed by a December 2015 email from DTAs Alexander

Davis to . In that email, Davis states:

Sorry to reach out to you this way but Im not sure


exactly how best to reach out or who to at your firm. I

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represent Palantir Technologies in Palo Alto and have
been asked by the company to reach out to your firm as
you guys demonstrated a level of interest in the company
through a third party [i.e., the Selling Group]. If this is
not the case, I apologize. In any event, I would appreciate
a response back at your convenience so I can discuss the
current offering, process and timing.

Exhibit 5 (A. Davis LinkedIn message).

38. In reality, Davis was seeking contact with not to discuss the

current offering, process and timing of the transaction that had been negotiated

with the Selling Group, but to dissuade from following through with that

transaction and to persuade it to purchase shares from Palantir and/or founding

investors, such as Alexander Karp and Peter Thiel, instead. These efforts by

Davis, Palantir, and the founding investors were successful: As a direct result of

those efforts, declined to consummate the transaction with the Selling Group.

39. Because Palantir has refused to provide any books and records

pertinent to these transactions, it is not clear to KT4 whether, at some point after

Kawasakis false denial regarding DTAs activities, Palantir and/or the relevant

founding investors effected a sale of primary and/or secondary stock to Brooklands

and/or as a result of Palantirs and DTAs purposeful and wrongful

interference with the Selling Groups planned sale to .

40. To the extent such a sale occurred and was comprised in part or in

whole of primary Palantir shares by the Company, Palantir would have been

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required, pursuant to the terms of the Investors Rights Agreement then in effect, to

provide investors such as KT4 with notice of the transaction and a right of first

offer. Palantir did not do so.

41. To the extent such a sale occurred and was comprised in part or in

whole of secondary Palantir shares by founding investors such as Karp and Thiel,

the relevant founding investors would have been required, pursuant to the terms of

the First Refusal and Co-Sale Agreement then in effect, to provide investors such

as KT4 with notice of the transaction and rights of first refusal and/or co-sale. The

relevant founding investors did not do so. The Company would therefore have

been required, pursuant to the terms of the First Refusal and Co-Sale Agreement

then in effect, to disregard these transactions by founding investors.

42. Without information regarding these and any other relevant

transactions, which Palantir has refused to provide to KT4, KT4 is unable to

exercise its rights, under the First Refusal and Co-Sale Agreements, to sell to the

founding investors involved in these possible transactions the type and number of

shares equal to the number of shares KT4 would have been entitled to transfer to

the transferees had these possible transfers been effected pursuant to and in

compliance with the terms of the First Refusal and Co-Sale Agreements.

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C. Palantir Leverages Its Control of Financial Information To Interfere
with Its Investors Ability To Sell Their Shares, To Force Potential
Buyers and Sellers of Palantir Stock To Use DTA and/or Fishman as
Intermediaries, and To Pay DTA and/or Fishman Unjustifiable
Commissions

43. As discussed in further detail below, KT4 is informed and believes,

and on that basis alleges, that Palantir also exerts control over sales or potential

sales of Palantir stock by restricting the availability of financial information

regarding Palantir.

44. KT4 is informed and believes, and on that basis alleges, that until

sometime after KT4 made the request and demand for financial information

discussed below in Paragraphs 76-78 and 86-87, Palantir refused to provide

financial information in connection with the sale of Palantir stock other than

through DTA and/or Alex Fishman. Accordingly, shareholders wishing to sell

Palantir shares, and potential buyers of Palantir shares, have been forced by

Palantir to effectuate such transactions, if at all, by using DTA and/or Fishman as

intermediary. Palantir thereby has used DTA and Fishman as additional means to

prevent stock sales by disfavored investors.

45. Even as to transactions on which DTA and Fishman performed no

legitimate work, and had no role in matching buyer to seller, Palantir often

required that such sales of Palantir stock result in a $0.25/share commission to

DTA and/or Fishman. Those who have been unwilling to effect sales or purchases

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through DTA have been unable to pursue the sale or purchase of Palantir stock.

This has enriched DTA and Fishman while harming Palantirs stockholders, who

ultimately bear the burden of these payments and who suffer the consequences of

the decreased liquidity of their stock.

46. As one example of the conduct alleged in Paragraphs 43 to 45 above,

KT4 was informed by a Managing Director at UBS Securities that in or about the

summer of 2016, UBS Securities brokered a transaction for the sale of a large

number of Palantir shares from the Company to a third party. Karp intervened and

demanded that UBS pay a commission of $0.25/share to Fishman and DTA,

notwithstanding that Fishman and DTA had performed no work on the transaction

and had no role in bringing the buyer and seller together. UBS acceded to

Palantirs demand.

47. As another example of the conduct alleged in Paragraphs 43 to 45

above, KT4 was informed, by a participant in the secondary market for Palantir

shares, of two different ERISA-compliant fund managers considering investments

in Palantir in or about May 2014. At that time, the Company did not have

sufficient primary shares available, so the funds were considering investments in

secondary shares.

48. Both funds were informed by Palantir and by DTA that they could

only purchase secondary Palantir shares by using DTA as intermediary. Both were

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further informed by Palantir and DTA that they could receive no financial

information regarding Palantir other than through DTAthat if they attempted to

purchase Palantir shares on the secondary market other than through DTA, they

would receive no information.

49. As managers of ERISA-compliant funds charged with investing

money on behalf of pension plans, these managers required certain basic

information about Palantir before investing. Neither manager was willing to

pursue a transaction using DTA. As a result of Palantirs and DTAs conduct

described above in Paragraph 48, each of these two funds determined it was unable

to make an investment in Palantir, and declined to make the planned investment in

Palantir.

D. While Thwarting Disfavored Investors Attempted Sales of Palantir


Shares, the Company Permits Favored Investors Such as Peter Thiel
and Alexander Karp To Liquidate Their SharesAgain Without
Offering Disfavored Investors the Required Right of First Refusal or
Right of Co-Sale

50. KT4 is informed and believes, and on that basis alleges, that Palantir

has permitted favored investors to sell their positions in Palantir, or portions

thereof, to third parties, while preventing disfavored investors from doing the

same. KT4 details herein certain examples of such conduct, but it is informed and

believes, and on that basis alleges, that the Company and its officers, directors,

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agents, and/or majority shareholders have engaged in this conduct on other

occasions as well.

51. KT4 has been informed, by individuals who have ongoing

relationships with Palantir or who participate in the secondary market for Palantir

shares, that Palantir has permitted founding investors Alexander Karp and Peter

Thiel, and entities they control, to sell Palantir shares (either directly or through

representatives including, among others, Jack Selby) while other shareholders

including KT4, other members of the Selling Group, participants in the secondary

market, and any number of current and former Palantir employeeshave been

prohibited by Palantir from selling their shares. Palantir has effected this

prohibition by using its role as transfer agent to prevent sales by disfavored

investors, by depriving potential sellers and purchasers of financial information,

and by imposing unjustifiably onerous terms upon disfavored investors wishing to

sell their Palantir stock and upon potential purchasers of Palantir shares from such

disfavored investors, as described herein.

52. Although the First Refusal and Co-Sale Agreement then in effect

required that Karp and Thiel, as founding investors, provide investors such as KT4

with notice of the transaction and rights of first refusal and/or co-sale as a

condition of transferring their shares, Karp and Thiel knowingly failed to do so,

with Palantirs knowledge and assistance. In light of this failure, the Company was

 30
required, pursuant to the terms of the First Refusal and Co-Sale Agreement then in

effect, to disregard these transactions by founding investors.

53. Without information regarding these transactions, which Palantir has

refused to provide, KT4 is unable to exercise its rights, under the First Refusal and

Co-Sale Agreements, to sell to the founding investors involved in these

transactions the type and number of shares equal to the number of shares KT4

would have been entitled to transfer to the transferees had these transfers been

effected pursuant to and in compliance with the terms of the First Refusal and Co-

Sale Agreements.

54. KT4 has further been informed, by an individual with an ongoing

relationship with Palantir, that Palantir has come to an understanding with

Alexander Karp pursuant to which Karp will be afforded the opportunity to sell his

position in Palantir either to the Company or a third party within a relatively short

timeframe, which would allow Karp to exit his position in Palantir without creating

a liquidity event for other shareholders.

E. To Prevent Investors from Obtaining Information About Palantirs


Financial Performance, Palantir Imposes a Gag Order Upon
Employees, Former Employees, and Others Who Sell or Transfer
Palantir Equity

55. As discussed in greater detail herein, KT4 is informed and believes,

and on that basis alleges, that Palantir has used its employees and former

employees need to sell their Palantir equity as another opportunity to prevent

 31
investors from learning information that could permit them to value their Palantir

investments or to assess the nature and extent of wrongdoing committed by

Palantirs officers, directors, agents, and majority shareholders.

56. This is especially damaging to the value of Palantir because it affects

the quality of employees Palantir is able to hire and retain. Palantir employees

were lured to the company with stock and option grants and promises of future

liquidity, only to learn later that they are prevented from realizing value from the

stock and option grants that comprise a significant portion of their compensation

due to the conduct of Palantirs officers, directors, agents, and majority

shareholders described herein, including without limitation the failure to consider

or effect an initial public offering and the unreasonably onerous conditions

including the imposition of gag ordersupon employees efforts to sell their stake

in the Company.

57. Various press articles have reported that Palantir is struggling to stem

staff departures. It has been reported that [m]ore than 100 Palantir employees,

including several prominent managers, have left the company this year [2016]

through April 15, a confidential log shows. At that rate, the company is on track to

turn over about 20% of its staff in 2016, almost double the average rate of the three

previous years, according to internal figures. Exhibit 6 (Inside Palantir, Silicon

Valleys Most Secretive Company, Buzzfeed, May 6, 2016).

 32
58. According to reports, [t]o participate in a company-arranged stock

sale, former Palantir employees first had to promise not to . . . talk to the media

without its approval. Further, according to the terms to which former employees

were required to assent as a condition of their sale of Palantir shares, [i]f they get

any inquiries about Palantir from reporters, . . . they must immediately notify

Palantir and then email the company a copy of the inquiry within three business

days. Exhibit 7 (Palantir Seeks To Muzzle Former Employees, Buzzfeed, June

22, 2016). Moreover, Palantir reportedly forces arbitration provisions upon

employees and former employees wishing to sell their Palantir stock, which

prevents any information about Palantir from being made available to investors

through the courts. Id.

59. Because Palantir compensates its employees in large measure with

stock options, and becauselargely due to Palantirs efforts described herein

there does not exist a liquid market in which to sell Palantir equity, many such

employees have no choice other than to agree to the onerous terms demanded by

Palantir as a condition of the sale.

60. Palantir also requires that disfavored investors wishing to transfer

shares sign a nondisclosure agreement that expressly prohibits signatories from

disclosing information, documents, or agreements regarding or relating to the

Companys operations, results, sales, financial or accounting reports, actual or

 33
potential customers (including any customer lists), capitalization, stockholders or

other investors. An example of the type of agreement Palantir forces upon

investors is attached as Exhibit 8 (Palantir Nondisclosure Agreement) 1.

Examples of this conduct include, among others:

a. KT4 was required to sign such a nondisclosure agreement as a

condition of sale of Palantir shares to Highbridgeas was Highbridge, as a

condition of purchasing the shares from KT4.

b. In or about April 2011, KT4 Managing Member Marc

Abramowitz purchased approximately 29,917 shares of Palantir preferred Class E

stock through an investment vehicle that was controlled by Meline von Brentano

and owned by Caedmon Partners, an entity known by Mr. Abramowitz to have

been jointly owned by Brentano and Alexander Karp. Those shares were held by

Caedmon Partners until approximately 2015, when Mr. Abramowitz requested

transfer of those shares to KT4. At that time, Palantir refused to effect the transfer

of these shareswhich Abramowitz had bought and paid for long agounless he

signed a nondisclosure agreement such as the one referenced above, even though

those shares had not previously been subject to any such restriction. Because KT4

has refused to sign this nondisclosure agreement, Palantir has held the shares in

suspension and has refused to deliver them to KT4.

 34
c. KT4 has been informed by another Palantir investor that even

when that investor sought to transfer shares into his own charitable trust in or about

December 2014, Palantir forced him to sign such a nondisclosure agreement, even

though he had not previously been subject to any such restriction.

61. The purpose and effect of these gag orders is not to protect any

genuinely proprietary or trade-secret information, but to ensure that no one outside

a small group within Palantir can have access to information regarding Palantirs

financial health and the activities of its officers, directors, agents, and majority

shareholdersand to prevent shareholders from communicating with each other

regarding concerns about the conduct of managementin the face of frequent

reports that the Company is mismanaged. See, e.g., Exhibit 9 (Palantir Cofounder

Fires Back at Recent Report of Company Struggles, Business Insider, May 8,

2016) (reporting that Palantir has struggled with high turnover and big-name

customer cancellations and that Palantir has raised $2.42 billion to date but spent

over $500 million in 2015 without making a profit); Exhibit 10 (Peter Thiels

Secretive $20 Billion Start-Up Is Buying Back Employee StockBut Theres a

Catch, Vanity Fair, June 23, 2016) (reporting that [t]he big-data company, whose

clients include the F.B.I. and N.S.A., has struggled to retain executives and

employees and that [o]ther big-name clients like Coca-Cola have declined to

continue working with Palantir, citing the start-ups high prices).

 35
F. Palantir Fails To Hold Annual Meetings or Otherwise Provide
Information to Its Shareholders Regarding Its Financial Performance

62. Nor can Palantirs investors obtain information regarding Palantirs

financial performance through annual shareholder meetings: During the more than

ten years KT4 has been a shareholder of Palantir, the Company has never held an

annual stockholders meeting or, if it has held such a meeting, it has never

provided the requisite notice of such a meeting to enable KT4 to attend.

63. Palantirs Bylaws require that the Company hold at least one annual

meeting of stockholders. Exhibit 11 (Palantir Bylaws) Art. II 2. The Bylaws

further require that stockholders be provided with notice of the date, time, and

location of all stockholder meetings. Id. Art. II 7. The Bylaws further require

that the Company prepare and make, at least ten days before every meeting of

stockholders, a complete list of the stockholders entitled to vote at the meeting,

arranged in alphabetical order, and showing the address of each stockholder and

the number of shares registered in the name of each stockholder; that such list be

open to the examination of any stockholder, for any purpose germane to the

meeting, during ordinary business hours, for a period of at least ten days prior to

the meeting; and that the list be produced and kept at the time and place of the

meeting during the whole time thereof, and may be inspected by any stockholder

who is present. Id. Art. II 8.

 36
64. To KT4s knowledge, Palantir has never held an annual stockholder

meeting and has never made available to its stockholders a stockholder list.

65. And while Palantir deprives KT4 and other investors of any

information necessary to value their investments in Palantir, the Company has

made or authorized statements to the press to the effect that Palantirs value is

approximately $20 billion. See, e.g., Exhibit 12 (Palantir Seeks New Funding at

$20 Billion Valuation, Bloomberg Technology, June 24, 2015) (Palantir

Technologies Inc. is in talks with investors to raise $500 million in a round of

financing that values the data-analysis company at $20 billion, people with

knowledge of the matter said.); Exhibit 13 (Peter Thiels Palantir Spreads Its

Tentacles Throughout Europe, Bloomberg Technology, Feb. 24, 2017) (reporting

on interview with Palantir CEO Alexander Karp in which Karp selectively

discloses financial information regarding Palantir to paint the Company in a good

light, and reporting that Palantir is a $20 billion startup).

66. Although Palantirs Bylaws also provide that actions that may be

taken, or are required to be taken, at any annual or special meeting of stockholders,

may be taken without a meeting, without prior notice and without a vote, if a

consent in writing, setting forth the action so taken, shall be signed by the holders

of outstanding stock having not less than the minimum number of votes that would

be necessary to authorize or take such action at a meeting at which all shares

 37
entitled to vote thereon were present and voted, Exhibit 11 Art. II 9, in such an

instance, [p]rompt notice of the taking of the corporate action without a meeting

by less than unanimous written consent shall be given to those stockholders who

have not consented in writing, id. Other than in connection with specific

transactions (e.g., his 2006 purchase of Palantir shares), KT4 has never provided

such written consent. Nor has KT4 ever received noticeprompt or otherwise

of the taking of corporate action without a meeting by less than unanimous written

consent.

G. The Company Further Deprives Disfavored Investors of Value of Their


Investments by Failing To Issue Dividends, by Reneging on Its Promise
To Effect an Initial Public Offering, and by Failing To Consider or
Effect Purchases of Palantir by Third Parties

67. During the ten years KT4 has owned shares of Palantir, Palantir has

never issued a dividend to its shareholders. It is unclear whether Palantir has even

considered returning any value to investors through the issuance of dividends.

This failure to issue dividends, combined with the Companys efforts to prevent

disfavored investors from selling their Palantir shares, means that, because of the

actions of Palantir and its officers, directors, agents, and majority shareholders,

disfavored investors such as KT4 have been hindered from receiving full value

from their investments in Palantir.

68. Further contributing to the illiquidity of Palantir stock and the

inability of disfavored investors to obtain full value from their investments, Karp

 38
who induced early investors to purchase Palantir shares, and induced employees to

come to Palantir and be paid in equity, with promises of an initial public offering

subsequently publicly stated that he would not consider taking Palantir public.

See, e.g., Exhibit 14 (Free advice: Dont go public, says Palantirs CEO,

CNBC.com, March 19, 2014). (After being served with the Initial Request and the

220 Demand, both of which requested information about whether the Company

had considered an initial public offering, Karp in October 2016 suddenly purported

to reverse his position and told the press that he was now positioning the company

so we could go public, though he also stated that Im not saying we will go

public. Exhibit 15 (Why the Secretive Startup Palantir Is Seriously

Considering an IPO, Fortune, October 26, 2016).)

69. KT4 is informed by an individual with an ongoing relationship with

Palantir that various third parties have sought to purchase Palantir in part or in

whole or to take Palantir public. It is unclear whether the Board of Directors even

considered these sales, as Delaware law requires, which would have been in the

best interests of Palantirs shareholders.

70. Because Palantir has refused to provide KT4 access to any of the

Companys books and records, KT4 cannot ascertain whether (a) the Board failed

to consider these offers in violation of its own duty in placing the interests of

corporate insiders such as Alexander Karp and Peter Thiel ahead of those of the

 39
Company and its shareholders; or (b) Palantir insiders who were approached

including Karp and Thielhave violated their fiduciary duties by failing even to

inform the Board of the offers in the first place.

71. In connection with recent sales of Palantir shares, the Company has

required disclosures to new investors that Palantir stock is illiquid, that there is no

market for Palantir stock, and that there may never be a market for Palantir stock.

See, e.g., Exhibit 16 (Palantir Preferred Stock Transfer Agreement) 3.6

(Purchaser is fully aware of: (a) the highly speculative nature of the Shares;

(b) the financial hazards involved; (c) the lack of liquidity of the Shares and the

restrictions on transferability of the Shares (e.g., that Purchaser may not be able to

sell or dispose of the Shares or use them as collateral for loans); . . . .). Tellingly,

these disclosures were inconsistent with the representations made to earlier

investors such as KT4.

H. Palantir Has Refused To Provide Basic Information That Investors


Need To Evaluate Whether Seemingly Unreasonable Expenses
Constitute Waste, Whether Corporate Officers Compensation Is
Reasonable, and Whether Investors Equity Has Been Unreasonably
Diluted Through Unjustified Grants of Stock, Options, and/or
Restricted Stock Units

72. Palantir has refused to provide to investors such as KT4 such basic

information as the compensation of the Companys top executives and details

regarding equity grants made to officers. Such information would permit investors

such as KT4 to ascertain whether, while Palantir has refused to issue dividends, it

 40
has at the same time spent unreasonable amounts on lavish expenses for its

executives that serve no valid corporate purpose, compensated its officers

unreasonably, or diluted investors equity by making unjustified grants of stock,

options, or restricted stock units to officers of the Company.

73. One reason KT4 questions whether Palantir has paid unreasonable

expenses is that KT4 has been informed by individuals with ongoing relationships

with Palantir that Palantir pays for to accompany CEO Alexander

Karp within the United States. There is no reason such would be

necessary or serve a valid corporate purpose. KT4 also has been informed by an

individual with an ongoing relationship with Palantir that Karp has an

unreasonably large number of executive assistants, paid by Palantir and known

colloquially at Palantir as Team Karp, whose employment by Palantir is

unnecessary for any valid corporate purpose.

74. Because Palantir refuses to provide investors with any information

whatsoever regarding the compensation of its officers and directors, it is

impossible for KT4 to assess the extent to which Palantirs officers and directors

have approved unreasonably excessive compensation.

75. Because Palantirs Board of Directors has the ability, pursuant to the

Investors Rights Agreements discussed above, to issue new Palantir stock to

corporate officers and others under certain circumstances without providing

 41
existing investors with the right to purchase newly issued stock, investors such as

KT4 must have the ability to examine Palantirs books and records to ascertain

whether Palantirs officers and directors, or others, have been granted excessive

stock or options in the Company that have resulted in unreasonable and improper

dilution of equity held by other investors.

I. KT4 Seeks Financial Information Pursuant to the Investors Rights


Agreement

76. By letter dated August 16, 2016, KT4, through its counsel, exercised

its rights under the Investors Rights Agreement by making a written demand on

Palantir for inspection of its books and records pursuant to Sections 2.1 and 2.2 of

the operative Amended and Restated Investors Rights Agreement (the Initial

Request). A true and correct copy of the Initial Request is attached hereto as

Exhibit 17 (Initial Request).

77. In the Initial Request, KT4 sought materials and information to which

KT4 was entitled, as a major investor in Palantir, pursuant to the Investors Rights

Agreement then in effect.

78. KT4 sought access to these materials and individuals at a mutually

convenient time and location, and requested a response from the Company within

five (5) business days confirming that it would meet its obligations under the

Investors Rights Agreement.

 42
J. Palantir Purports To Retroactively Amend the Investors Rights
Agreement To Foreclose KT4s Right to Financial InformationBut
Refuses To Provide a Copy of Itand Brings a Meritless Lawsuit in
California

79. While Palantirs in-house counsel claimed Palantir was preparing its

response to KT4s Initial Request, Palantir and its founding investors were instead

working to amend the Investors Rights Agreementretroactivelyfor the sole

and express purpose of avoiding any obligation to disclose financial information

regarding Palantir, and evidence of wrongdoing committed by Palantirs officers,

directors, agents, and majority shareholders, to disfavored investors. KT4 is

informed and believes, and on that basis alleges, that Palantir and its founding

investors undertook this retroactive amendment in or about late-August 2016.

80. KT4 has never been provided with any information concerning how

the Investors Rights Agreement supposedly was retroactively amended. KT4 also

has not been provided a copy of the purported retroactively amended Investors

Rights Agreementeven though Palantir takes the position that the amendment

eliminated KT4s (and possibly other shareholders) contractual rights to

information regarding Palantir. KT4 first learned of this purported retroactive

amendment when Palantir included allegations regarding the purported amendment

in a meritless complaint filed in California Superior Court against Mr.

Abramowitz, KT4, and a related entity, as described immediately below.

 43
81. On or about September 1, 2016, Palantir filed a complaint in Superior

Court of the State of California for the County of Santa Clara (the California

Complaint). Exhibit 18 (California Complaint). The purpose of the California

Complaint was twofold: (1) to seek to delay indefinitely, if not eliminate, Palantirs

obligation to provide the books and records (and, thus, evidence of wrongdoing by

Palantirs officers, directors, agents, and majority shareholders) being sought by

KT4 by purporting to seek a declaratory judgment that Palantir has no contractual

obligation to provide such information to KT4; and (2) to attempt to intimidate

KT4 and its Managing Member, Mr. Abramowitz (who was named personally in

the California Complaint), into dropping its quest for information by alleging that

various inventions of Mr. Abramowitz, for which he has sought patent protection,

were somehow stolen from Palantir.

82. Palantirs allegations regarding alleged theft of intellectual property

are meritless. This Complaint is not the appropriate avenue to resolve Palantirs

allegations, and it bears emphasizing that no matter at issue in the California

lawsuit must be resolved for this Court to grant KT4 the relief it seeks here.

However, it is significant that all of the conduct of which Palantir complains is

alleged to have occurred years ago, and the filing of the patent applications that

underlie Palantirs California lawsuit were fully known to Palantir as early as

 44
2014; yet Palantir made these allegations only after KT4 requested access to the

books and records of the Company.

83. Palantir also seeks in its California Complaint to justify its failure to

provide KT4 with any information about its investment in Palantir and the conduct

of Palantirs officers, directors, agents, and majority shareholdersor even to

provide KT4 with a list of officers, directors, and shareholdersby relying on its

false allegations of intellectual-property and trade-secret theft. This purported

justification merely demonstrates that the true purpose of Palantirs California

lawsuit is to deprive KT4 of the information to which it is entitled: The Initial

Request sought information regarding Palantirs finances and its managementnot

any trade secrets or intellectual property. Indeed, the Investors Rights Agreement

expressly provided that Palantir did not have to provide KT4 any information that

it reasonably considered to be a trade secret or similar confidential information.

Exhibit 2 (2008 Investors Rights Agreement) 2.2.

84. Palantirs motive in filing the California Complaint is further

demonstrated by its conduct after filing the lawsuit on September 1, 2016. Upon

information and belief, Palantirs first step upon filing was not to seek to serve Mr.

Abramowitz, KT4, or any of the other entities it named as defendants, but rather to

alert the press to the complaint. Palantirs actions had their intended consequence:

Starting the very next day, various publications reported on the lawsuit, all before

 45
Palantir had served a single defendant. See Exhibit 19 (Palantir Says Major

Investor Stole Business Secrets, Applied for Patents, Law.com, September 2,

2016); see also, e.g., Exhibit 20 (Palantir Has Filed a Dramatic Lawsuit Against a

Major Early Investor, Fortune, September 6, 2016).

85. Palantir sent an equally clear message to Mr. Abramowitz, through an

intermediary well known to all parties: If KT4 and Mr. Abramowitz were to

continue to push for information regarding Palantirs management and finances,

Palantir would bury Mr. Abramowitz in litigation.

K. The Books-and-Records Demand and Palantirs Continued Refusal To


Provide Financial Information

86. By letter dated September 20, 2016, KT4 exercised its rights under the

General Corporation Law by making a formal written demand on Palantir, for

inspection of its books and records pursuant to Section 7-220 of the General

Corporation Law (the Demand). A true and correct copy of the Demand is

attached hereto as Exhibit 21 (Demand). KT4 subsequently withdrew the Initial

Request, mooting any issue in Palantirs California Complaint pertaining to the

defendants contractual right of access to Palantirs financial information.

Exhibit 22 (October 7, 2016 letter to Palantir).

87. In the Demand, KT4 requested access to the books and records of the

Corporation (including hardcopy and electronic documents and information), its

stock ledger, and the list of shareholders, and to make copies or extracts therefrom;

 46
and, without limiting the foregoing, that it provide KT4 and its attorneys with

access to, and the ability to make copies of or extracts from certain materials

necessary for KT4 to: (1) ascertain the value of its investment in Palantir; and

(2) investigate the nature and extent of wrongdoing by Palantirs officers, directors,

agents, and majority shareholders, as alleged in this Verified Complaint.

88. Specifically, KT4 stated, under oath, that it sought these materials

in good faith and for a proper purpose, to wit, to


investigate fraud, mismanagement, abuse, and breach of
fiduciary duty committed by the Corporation, its officers,
its directors, its agents, and its majority shareholders,
including without limitation KT4s and its attorneys
investigation into the following issues:

1. whether the Corporation, its officers, its


directors, its agents, and/or its majority shareholders
improperly interfered with KT4s efforts to sell its
Palantir shares;

2. whether the Corporation, its officers, its


directors, its agents, and/or its majority shareholders have
improperly favored certain shareholders to the detriment
of others (such as KT4) by, for example and without
limitation, permitting favored investors and insiders
(such as Alexander Karp and Peter Thiel) to sell their
Palantir shares while preventing or hindering the ability
of disfavored investors from selling theirs;

3. whether the Corporation, its officers, its


directors, its agents, and/or its majority shareholders have
committed corporate waste and abuse by providing (or
causing others to provide) excessive and unreasonable
payments, compensation, and/or other remuneration to
third parties that serve no valid corporate purpose,
including without limitation excessive, unreasonable, and

 47
unjustified payments and/or commissions to Alexander
Fishman, Alexander Davis, Disruptive Technology
Advisers or DTA, other past and present employees or
affiliates of DTA, and/or Delectable, Inc.;

4. whether the Corporation, its officers, its


directors, its agents, and/or its majority shareholders have
improperly prevented disfavored investors from realizing
the value of their investments by, among other things,
improperly depriving such investors of information
necessary to assess the value of their investments
(including, without limitation, by failing to hold annual
shareholder meetings, by refusing to provide information
regarding the financial performance of the Corporation,
and by purportedly retroactively amending the Investors
Rights Agreement for the purpose of depriving
disfavored investors of any information regarding the
financial performance of the Corporation), improperly
interfering with the rights of disfavored investors to sell
their shares of Palantir stock, improperly refusing to
consider or effect an initial public offering of Palantir
stock, improperly refusing to consider or effect a partial
or complete sale of Palantir stock to one or more third
parties, and improperly refusing to issue, or to consider
issuing, dividends to such investors while approving
excessive and unreasonable compensation and benefits to
officers that serve no corporate purpose (including,
without limitation, for Palantir CEO
Alexander Karp);

5. whether the Corporation, its officers, its


directors, its agents, and/or its majority shareholders have
fraudulently and/or wrongfully deprived disfavored
investors of their preemptive purchase rights by selling
Palantir shares to new investors without offering
disfavored investors the rights of first refusal provided in
various corporate documents; and

6. whether the Corporation, its officers, its


directors, its agents, and/or its majority shareholders have

 48
committed securities fraud or other securities violations
in connection with the purchase and sale of Palantir
stock.

Exhibit 21 (Demand).

89. On September 28, 2016, Palantir responded to KT4s 220 request.

In a letter sent by counsel, Palantir repeated the false allegation that Mr.

Abramowitz misappropriated trade secrets as a purported basis for denying each

and every request in KT4s 220 letter, notwithstanding that those requests pertain

solely to the value of KT4s investment in Palantir and the misconduct of its

officers, directors, agents, and majority shareholders and have nothing to do with

any trade secrets supposedly misappropriated by Mr. Abramowitz. The letter

from Palantirs counsel further argued that Mr. Abramowitz failed to prove his

entitlement to even basic financial informationsuch as the shareholder lists that

Palantir was required to provide at the required annual stockholder meetings that

Palantir failed to holdbecause his letter request failed to state with particularity

every instance of the wrongdoing that Palantir has concealed from its investors. In

support of this argument, Palantirs counsel cited cases that govern the standards

for complaints, not for 220 demand letters. See Exhibit 23 (Palantir Response).

90. As of the date of this Verified Complaintwhich is more than five (5)

months after Palantirs receipt of the DemandPalantir has failed to produce, or

provide access to, any of the books and records described in the Demand.

 49
91. On Tuesday, February 14, 2017, after being advised that this 220

Complaint would soon be filed in Delaware, counsel for Palantir contacted counsel

for KT4 and offered to provide access to (i) its most recent audited consolidated

financial statements, containing consolidated balance sheets as of December 31,

2015 and 2014, and the related consolidated statements of operations,

comprehensive loss, changes in convertible preferred stock and stockholders

deficit and cash flows for the years then ended, and the related notes to the

consolidated financial statements, and (ii) its summary capitalization table as of a

recent date, aggregated by share class and series. Exhibit 24 (2/13/17 J. Zach

email). Counsel made this offer to resolve [KT4s] demandin other words, the

offer was conditional upon KT4 dropping nearly every one of the requests for

information described in the Demand. Id. Moreover, this offer was expressly

conditioned upon KT4 agreeing to terms of nondisclosure that would have

prevented it from ever using such information in a lawsuit against Palantir or

disclosing it to a potential purchaser of KT4s Palantir stock. Id.

92. In response, on February 22, 2017, KT4 stated that it is entitled,

pursuant to 220, to all of the information sought in the Demand; that if the

Company were to provide any such information, KT4 would omit that category of

information from the information sought in the instant Complaint; that Palantirs

offer (which still did not include so much as a list of the Companys officers and

 50
directors, or the list of stockholders the Company was required by law to produce

for inspection at the required annual stockholder meetings that Palantir never held)

was not a good-faith effort to resolve the requests; that the accusations regarding

misappropriation of trade-secret or confidential information are baseless; that KT4

would provide Palantirs email and KT4s response to this Court; that Palantirs

insistence that KT4 agree not to use any information in litigation against the

Company was improper; and that KT4 would abide by whatever restrictions might

be imposed by this Court governing the use of the information sought. Exhibit 25

(2/22/17 B. Simon email).

93. Without the critical pieces of information described in the Demand,

KT4 is wholly unable to value Palantir and its ownership interest in Palantir.

94. Without the requested information, KT4 is unable to investigate

whether Palantir or its officers, directors, agents, or majority shareholders engaged

in the fraud, mismanagement, abuse, and breach of fiduciary duty discussed herein.

95. To perform an analysis and investigation of these issues, the

Companys books and records listed in the Demand are required.

96. As the foregoing allegations demonstrate, each of the categories of

books and records demanded in KT4s September 20, 2016 letter (Exhibit 21) is

necessary to enable KT4 both to value its considerable investment in Palantir, and

to assess the nature and extent of fraud, mismanagement, abuse, and breach of

 51
fiduciary duty committed by Palantirs officers, directors, agents, and majority

shareholders. KT4 made each such demand in good faith and for a proper purpose.

COUNT I
DEMAND FOR INSPECTION OF PALANTIRS
BOOKS AND RECORDS UNDER 8 DEL. C. 7-220

97. KT4 repeats, re-alleges, and incorporates by reference the allegations

set forth in paragraphs 1 through 96 of this Verified Complaint, as if fully set forth

herein.

98. Under the General Corporation Law, stockholders of a corporation

have the right to inspect for any proper purpose, and make copies and extracts

from, the corporations stock ledger, a list of its stockholders, and its other books

and records. 8 Del. C. 7-220(b)(1).

99. Under the General Corporation Law, [i]f the corporation, or an

officer or agent thereof, refuses to permit an inspection sought by a stockholder or

attorney or other agent acting for the stockholder pursuant to subsection (b) of this

section or does not reply to the demand within 5 business days after the demand

has been made, the stockholder may apply to the Court of Chancery for an order to

compel such inspection. 8 Del. C. 7-220(c).

100. KT4, a major stockholder of Palantir, exercised its rights under the

General Corporation Law and delivered a Demand for inspection of Palantirs

books and records. See Exhibit 21.

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101. KT4s Demand fully complied with the provisions of Section 7-

220(b) of the General Corporation Law governing the form and manner of

demands for inspection of books and records.

102. KT4s stated purposes in the Demand are proper under Delaware law

and are directly related to KT4s interest as a stockholder of Palantir. No company

subject to Delaware law can be permitted to support a culture of secrecy as to its

financial condition and the conduct of management that violates stockholders

statutory rights.

103. Palantir has refused to provide KT4 with any of the books and records

requested in the Demand and has no legitimate basis for its refusal.

104. Pursuant to Section 7-220(c) of the General Corporation Law, the

Court should compel Palantir to produce to KT4 all of the books and records

requested in the Demand for KT4s inspection and copying.

WHEREFORE, KT4 respectfully requests that the Court issue an Order:

(a) entering judgment in favor of KT4 and against Palantir on this Verified

Complaint;

(b) summarily compelling Palantir to provide KT4 and its duly authorized

representatives with the books and records requested in the Demand or,

alternatively, directing Palantir to permit KT4 and its duly authorized

representatives to inspect and make copies of the same; and

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(c) granting KT4 such other and further relief as the Court deems just and

proper, including the costs and reimbursements of this action and reasonable

attorneys fees.

[THIS SPACE INTENTIONALLY LEFT BLANK]

WILLIAMS & CONNOLLY LLP DALTON & ASSOCIATES, P.A.

By: /s/ Barry S. Simon By: /s/ Bartholomew J. Dalton

Barry S. Simon (pro hac pending) Bartholomew J. Dalton, Esq. (ID: 808)
Jonathan B. Pitt (pro hac pending) Andrew C. Dalton, Esq. (ID: 5878)
725 Twelfth Street NW 1106 West 10th Street
Washington, DC 20005 Wilmington, DE 19806
(202) 434-5000 (telephone) (302) 652-2050 (telephone)
(202) 434-5029 (facsimile) (302) 652-0687 (facsimile)
bsimon@wc.com bdalton@bdaltonlaw.com
jpitt@wc.com adalton@bdaltonlaw.com

Attorneys for Plaintiff

Dated: March 13, 2017

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