GLU MOBILE INC. AMENDED AND RESTATED SERIES D AND SERIES D-1 PREFERRED STOCK PURCHASE AGREEMENT
Exhibit 10.26
THIS AMENDED AND RESTATED SERIES D PREFERRED STOCK PURCHASE AGREEMENT (this “Agreement”) is
made as of July 26, 2005, by and among Glu Mobile Inc., a California corporation formerly known as
Sorrent, Inc. (the “Company”), and the purchasers of the Company’s Series D Preferred Stock and
Series D-1 Preferred Stock (individually, the “Purchaser” and collectively, the “Purchasers”)
identified on the Schedule of Purchasers attached hereto as Exhibit A (the “Schedule of
Purchasers”). This Agreement supercedes in its entirety the Series D Preferred Stock Purchase
Agreement, dated as of April 25, 2005 (the “Original Purchase Agreement”), by and among the Company
and the Purchasers identified below the heading Initial Closing on the Schedule of Purchasers (the
“Initial Purchasers”).
RECITALS
WHEREAS, the Company and the Initial Purchasers were parties to the Original Purchase
Agreement whereby the Initial Purchasers purchased 6,644,513 shares of the Company’s Series D
Preferred Stock; and
WHEREAS, by this Agreement, made pursuant to Sections 7.5 and 8.5 of the Original Purchase
Agreement, the Company and Initial Purchasers wish to amend the Original Purchase Agreement to
provide for the issuance of up to 56,997 additional shares of the Company’s Series D Preferred
Stock (the “Series D Preferred”) and 2,491,694 shares of the Company’s Series D-1 Preferred Stock
(the “Series D-1 Preferred”) to the Purchasers identified below the heading Subsequent Closing July
26, 2005 on the Schedule of Purchasers (the “Subsequent Purchasers”) on the terms and conditions
hereof and make certain other changes to the Original Purchase Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises and covenants herein, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1. Authorization and Sale of Series D and Series D-1 Preferred Stock.
1.1 Authorization of Series D and Series D-1 Preferred Stock. The Company has authorized the
sale and issuance to the Purchasers of a total of 6,701,510 shares of Series D Preferred and
2,491,694 shares of Series D-1 Preferred (collectively,
“Shares”) at a per share purchase price of
$3.01 (the “Per Share Price”), having the rights, preferences, privileges and restrictions as set
forth in the Amended and Restated Articles of Incorporation of the Company in the form attached
hereto as Exhibit B (the “Restated
Articles”).
1.2 Sale and Issuance of Series D and Series D-1 Preferred. Subject to the terms and
conditions hereof, the Company will issue and sell to each Purchaser, and each
Purchaser, severally and not jointly, will buy from the Company, the number of Shares
specified opposite the name of such Purchaser in the columns designated “Number of Shares of Series
D” and “Number of Shares of Series D-1” at the aggregate purchase price specified opposite the name
of such Purchaser in the column designated “Purchase Price” on the Schedule of Purchasers. The
Company’s agreement with each Purchaser is a separate agreement, and the sale of the Shares to each
Purchaser is a separate sale.
1.3 Use of Proceeds from Sale of Stock. The net proceeds from the sale of the Shares issued
by the Company shall be used for general corporate purposes, including working capital.
2. Closing Date; Delivery.
2.1 Closing.
(a) The initial closing of the purchase and sale of the Shares hereunder (the “Initial
Closing”) was held at the offices of Fenwick & West LLP, Silicon Valley Center, 000 Xxxxxxxxxx
Xxxxxx, Xxxxxxxx Xxxx, Xxxxxxxxxx 00000, on April 25, 2005, at 10:00 a.m., local time. The date of
the Initial Closing shall hereinafter be referred to as the “Initial Closing Date.”
(b) A subsequent closing of the purchase and sale of the Shares hereunder (the “Subsequent
Closing”) shall be held at the offices of Fenwick & West LLP, Silicon Valley Center, 000 Xxxxxxxxxx
Xxxxxx, Xxxxxxxx Xxxx, Xxxxxxxxxx 00000, such date, time and place upon which the Company and the
Subsequent Purchasers shall mutually agree. The date of the Subsequent Closing shall hereinafter
be referred to as the “Subsequent Closing Date.”
The “Closing” shall hereinafter refer to both the Initial Closing and the Subsequent Closing,
and the “Closing Date” shall hereinafter refer to both the Initial Closing Date and the Subsequent
Closing Date.
2.2 Delivery and Payment.
(a) At the Initial Closing, the Company delivered to each Initial Purchaser a certificate or
certificates representing the number of Shares set forth opposite the name of such Initial
Purchaser in the column designated “Number of Shares of Series D” on the Schedule of Purchasers,
against delivery to the Company by such Initial Purchaser at the Initial Closing of (a) executed
counterparts of the Original Purchase Agreement, the Amended and Restated Investors’ Rights
Agreement dated as of April 25, 2005 by and among the Company and the Investors (as defined
therein), including the Initial Purchasers (the “Original Investors’ Rights Agreement”), the
Amended and Restated Right of First Refusal and Co-Sale Agreement dated as of April 25, 2005 by and
among the Company, the Shareholders (as defined therein) and the Investors (as defined therein),
including the Initial Purchasers (the “Original Co-Sale Agreement”), the Amended and Restated
Voting Agreement dated as of April 25, 2005 by and among the Company, the Shareholders and the
Investors (as defined therein), including the Initial Purchasers (the “Original Voting Agreement”);
and (b) payment of the purchase price therefor, by (i) check payable to the Company, (ii) wire
transfer made pursuant to the Company’s instructions, (iii) cancellation of indebtedness of the
Company to such Initial Purchaser, or
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(iv) any combination of the foregoing, in the amount set forth opposite the name of such
Initial Purchaser in the column designated “Purchase Price” on the Schedule of Purchasers.
(b) At the Subsequent Closing, the Company shall deliver to the Subsequent Purchasers a
certificate or certificates representing the number of Shares set forth opposite the name of each
such Subsequent Purchaser in the columns designated “Number of Shares of Series D” and “Number of
Shares of Series D-1”on the Schedule of Purchasers, underneath the heading Subsequent Closing July
26, 2005, against delivery to the Company by such Subsequent Purchaser at the Subsequent Closing of
(a) executed counterparts of this Agreement, the Amended and Restated Investors’ Rights Agreement
dated as of the date hereof by and among the Company and the Investors (as defined therein),
including the Purchasers, the form of which is attached hereto as Exhibit C (the
“Investors’ Rights Agreement”), the Amended and Restated Right of First Refusal and Co-Sale
Agreement dated as of the date hereof by and among the Company, the Shareholders (as defined
therein) and the Investors (as defined therein), including the Purchasers, the form of which is
attached hereto as Exhibit D (the “Co-Sale Agreement”), the Amended and Restated Voting
Agreement dated as of the date hereof by and among the Company, the Shareholders and the Investors
(as defined therein), including the Purchasers, the form of which is attached hereto as Exhibit
E (the “Voting Agreement” and, together with this Agreement, the Investors’ Rights Agreement
and the Co-Sale Agreement, the “Investment Agreements”); and (b) payment of the purchase price
therefor (less any deduction as set forth in Section 8.10), by (i) check payable to the Company,
(ii) wire transfer made pursuant to the Company’s instructions, (iii) cancellation of indebtedness
of the Company to such Subsequent Purchaser, or (iv) any combination of the foregoing, in the
amount set forth opposite the name of such Subsequent Purchaser in the column designated “Purchase
Price” on the Schedule of Purchasers, underneath the heading Subsequent Closing July 26, 2005.
3. Representations and Warranties of the Company. Except as set forth on Exhibit F
attached hereto (which schedule is referred to from time to time hereinafter as the “Disclosure
Schedule”), the Company represents and warrants to the Purchasers that the representations,
warranties and statements contained in this Article 3 are true and correct immediately prior to the
Initial Closing and the Subsequent Closing, provided, however, that items that speak specifically
“as of the Initial Closing” or “as of the Subsequent Closing” shall be true and correct as of the
Initial Closing or the Subsequent Closing, as the case may be. With respect to the representations
and warranties in Sections 3.7, 3.8, 3.9, 3.10, 3,11, 3.12, 3.13, 3.14, 3.16, 3.17, 3.18, 3.20,
3.21, 3.22, 3.23, 3.24, and 3.25, the term “Company” refers to the Company and its Subsidiaries (as
defined below) on a consolidated basis.
3.1 Organization, Good Standing and Qualification. The Company has been duly incorporated and
organized, and is validly existing and in good standing, under the laws of the State of California.
The Company is not qualified to conduct business as a foreign corporation in any jurisdiction, and
such qualification is not currently required in any jurisdiction in which the failure to do so
would have a material adverse effect on the Company. The Company has the corporate power and
authority to enter into and perform the Investment Agreements, the Time Warner Agreement (as
defined below), and the Amendment to the Glu UK Voting Agreement (as defined below) (collectively,
the “Related Agreements”) and any other agreement to which the Company is a party, the execution
and delivery of which is contemplated hereby, to sell and issue the Shares hereunder, to issue the
Common Stock of the
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Company
issuable upon conversion of the Shares (the “Conversion
Stock”), and to own and
operate its properties and assets and to carry on its business as currently conducted and as
presently proposed to be conducted.
3.2 Capitalization. Immediately prior to the Subsequent Closing, the authorized and issued
capital stock of the Company will consist of: (i) 68,500,000 shares of Common Stock authorized, of
which 15,178,534 shares are issued and outstanding; (ii) 6,940,096 shares of Series A Preferred
Stock authorized, all of which are issued and outstanding, (iii) 8,962,036 shares of Series B
Preferred Stock authorized, of which 8,593,750 are issued and outstanding, (iv) 12,046,016 shares
of Series C Preferred authorized, all of which are issued and outstanding, (v) 6,752,000 shares of
Series D Preferred authorized, of which 6,644,513 shares are issued and outstanding (and of which
no shares were issued and outstanding immediately prior to the Initial Closing) and (vi) 2,491,694
shares of Series D-1 Preferred authorized, of which no shares are issued and outstanding. All
issued and outstanding shares of Common Stock have been duly authorized and validly issued, and are
fully paid and non-assessable and have been issued in compliance with all applicable state and
federal laws concerning the issuance of securities. The Company has issued and outstanding
warrants to purchase an aggregate of 368,286 shares of Series B Preferred and 60,000 shares of
Common Stock. The Company has adopted and reserved 9,244,922 shares of Common Stock under its
Second Amended and Restated 2001 Stock Option Plan (the
“Plan”) as of the date hereof, of which (i)
options to purchase 5,925,433 shares of Common Stock have been granted and are currently
outstanding as of the date hereof and (ii) 2,333,257 shares of Common Stock have been issued under
the Plan and are currently outstanding. The holders of record of the presently issued and
outstanding Common Stock immediately prior to the Closing are set forth in the Disclosure Schedule.
Except as described in this Section 3.2 on the Disclosure Schedule, there are no options, rights,
warrants or convertible securities to purchase or acquire from the Company directly or indirectly
any of its shares of capital stock. The rights, preferences, privileges and restrictions of the
Common Stock and of the Preferred Stock are as stated in the Restated Articles. Each outstanding
series of Preferred Stock is convertible into Common Stock on a one-for-one basis as of the date
hereof and the consummation of the transactions contemplated hereunder will not result in any
anti-dilution adjustment or other similar adjustment to the outstanding shares of Preferred Stock.
Except as set forth in the Investors’ Rights Agreement, the Co-Sale Agreement and the Voting
Agreement, no holder of shares of Common Stock or any other security of the Company or any other
person is entitled to any preemptive right, right of first refusal or similar right as a result of
the issuance of securities of the Company or otherwise, nor are there any trusts, agreements or
arrangements with respect to the voting or, to the Company’s knowledge transfer or sale of any of
the Company’s capital stock. Except as set forth on the Schedule of Exceptions, all options
granted and Common Stock issued vest as follows: twenty-five percent (25%) of the shares vest one
(1) year following the vesting commencement date, with the remaining seventy-five percent (75%)
vesting in equal monthly installments over the next three (3) years. No stock plan, stock
purchase, stock option or other agreement or understanding between the Company and any holder of
any equity securities or rights to purchase equity securities provides for acceleration or other
changes in the vesting arrangements of such agreement or understanding. All outstanding shares of
Common Stock and Preferred Stock, and all shares of Common Stock and Preferred Stock issuable upon
the exercise or conversion of outstanding options, warrants or other exercisable or convertible
securities are subject to a market standoff or
“lockup” agreement of not less than 180 days
following the Company’s initial public offering.
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3.3
Subsidiaries. Glu Mobile Limited, formerly Macrospace Limited
(“Glu UK”), and Sorrent
Europe Limited (“Sorrent Europe” and together
with Glu UK, the “Subsidiaries”) are each wholly
owned subsidiaries of the Company. Each Subsidiary is validly existing and in good standing as a
limited company under the law of England and Wales and has the corporate power and authority to own
and operate its properties and assets and to carry on its business as currently conducted and as
presently proposed to be conducted. Other than the foregoing, the Company does not presently own
or control, directly or indirectly, any interest in any other corporation, partnership, trust,
joint venture, association or other entity.
3.4 Due Authorization. All corporate action on the part of the Company’s officers, directors
and shareholders necessary for the authorization, execution, delivery of, and the performance of
all obligations of the Company under the Related Agreements have been taken or will be taken prior
to the Closing, and the Related Agreements will constitute, valid and legally binding obligations
of the Company, enforceable in accordance with their respective terms, except as may be limited by
(a) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or other
laws of general application relating to or affecting the enforcement of creditors’ rights
generally, (b) the effect of rules of law governing the availability of specific performance,
injunctive relief, or other equitable remedies, and (c) and other equitable remedies and
limitations of public policy as applied to Section 5.7 of the Investors’ Rights Agreement.
3.5 Valid Issuance of Securities.
(a) The Shares, when issued, sold and delivered in accordance with the terms of this Agreement
for the consideration expressed herein and therein, will be duly and validly issued, fully paid,
and nonassessable, and will be (i) free of restrictions on transfer other than restrictions on
transfer under applicable state and federal securities laws and under the Related Agreements and
(ii) free and clear of any preemptive or similar rights or liens. The issued and outstanding
shares of the Company’s Common Stock, Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock and the Common Stock issuable upon conversion of the Series A Preferred Stock,
Series B Preferred Stock and Series C Preferred Stock are and will be duly and validly issued,
fully paid, and nonassessable. The Conversion Stock has been duly and validly reserved for
issuance and, upon issuance, will be duly and validly issued, fully paid, and nonassessable and
will be (i) free of restrictions on transfer other than restrictions on transfer under applicable
state and federal securities laws and (ii) free and clear of any preemptive or similar rights or
liens.
(b) Based in part on the representations made by the Purchasers in Section 4 hereof, the offer
and sale of the Shares in accordance with this Agreement and the issuance of the Conversion Stock
issuable upon conversion of the Shares, are exempt from the registration and prospectus delivery
requirements of the Securities Act of 1933, as amended (the “Securities Act”) and applicable state
securities laws. The issued and outstanding shares of the Company’s Common Stock, Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and the Common Stock issuable
upon conversion of the Series A Preferred Stock, Series B Preferred Stock and Series C Preferred
Stock were issued and will be issued pursuant to exemptions from the registration and prospectus
delivery requirements of the Securities Act and applicable state securities laws.
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3.6 Governmental Consents. No consent, approval, order or authorization of, or registration,
qualification, designation, declaration or filing with, any federal, state or local governmental
authority is required on the part of the Company in order to enable the Company to execute, deliver
and perform its obligations under the Related Agreements, except for such qualifications or filings
under applicable securities laws as may be required in connection with the transactions
contemplated by this Agreement. All such qualifications and filings will, in the case of
qualifications, be effective on the Initial Closing or the Subsequent Closing, as appropriate, and
will, in the case of filings, be made within the time prescribed by law.
3.7 Litigation. There is no action, suit, proceeding, claim, arbitration or investigation
(“Action”) pending or, to the Company’s knowledge, currently threatened against the Company that
questions the validity of the Related Agreements, or the right of the Company to enter into such
agreements, or to consummate the transactions contemplated hereby or thereby, or that might result,
either individually or in the aggregate, in any material adverse changes in the assets, condition
or affairs of the Company, financially or otherwise, when taken as a whole, or any change in the
current equity ownership of the Company. The foregoing includes, without limitation, Actions
pending or threatened involving the prior employment of any of the Company’s employees, their use
in connection with the Company’s business of any information or techniques allegedly proprietary to
any of their former employers, or their obligations under any agreements with prior employers. The
Company is not a party or subject to the provisions of any order, writ, injunction, judgment or
decree of any court or government agency or instrumentality. There is no Action by the Company
currently pending or that the Company intends to initiate.
3.8 Proprietary Information and Inventions Agreement. Each present and former officer,
employee and consultant of the Company has entered into and executed a Proprietary Information and
Inventions Agreement in the form made available to the Purchasers. The Company, after reasonable
investigation, is not aware that any of its present or former officers, employees or consultants is
in violation of the Proprietary Information and Inventions Agreement entered into by such officer,
employee or consultant and the Company, and no such present or former officer, employee or
consultant has excluded works or inventions from such officer’s, employee’s or consultant’s
Proprietary Information and Inventions Agreement. The Company, to the best of its knowledge, does
not know of the impending resignation or termination of any employment of any officer or key
employee.
3.9 Status of Proprietary Assets. To the best of its knowledge with respect to patents,
inventions, trademarks, service marks and trade names only, the Company has title and ownership of,
or all necessary rights with respect to, all patents, inventions, trademarks, service marks, trade
names, works of authorship (including software), copyrights, confidential information, trade
secrets, and other non-patentable proprietary rights and processes that the Company reasonably
believes are necessary for its business as now conducted and as proposed to be conducted
(“Intellectual Property”), without infringement of any patent rights or infringement or
misappropriation of other intellectual property rights of others. Except as set forth in Section
3.9 of the Disclosure Schedule, there are no outstanding options, licenses or agreements of any
kind relating to the Intellectual Property, nor is the Company bound by or a party to any options,
licenses or agreements of any kind with respect to the inventions, patents, trademarks, service
marks, trade names, works of authorship (including software), copyrights,
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trade secrets, information, proprietary rights or processes of any other person or entity,
excluding any licenses for off-the-shelf software. The Company has not received any communications
alleging that the Company has violated or, by conducting its business as currently conducted and as
proposed to be conducted, would violate any patents, trademarks, service marks, trade names,
copyrights or trade secret rights or other proprietary rights of any other person or entity, nor is
the Company aware of any basis therefor. Set forth in Section 3.9 of the Disclosure Schedule is a
list of the Company’s patents, patent applications, copyrights, copyright applications, trademarks
and trademark applications. The Company, after reasonable investigation, is not aware that any of
its employees is obligated under any contract (including licenses, covenants or commitments of any
nature) or other agreement, or subject to any judgment, decree or order of any court or
administrative agency, that would interfere with his or her duties for the Company or that would
conflict with the Company’s business as currently conducted and as proposed to be conducted.
Neither the execution nor delivery of this Agreement, nor the carrying on of the Company’s business
by the employees of the Company, nor the conduct of the Company’s business as proposed, will, to
the Company’s knowledge after reasonable investigation, conflict with or result in a breach of the
terms, conditions or provisions of, or constitute a default under, any contract, covenant or
instrument under which any of such employees is now obligated. The Company does not believe it is
or will be necessary to utilize any inventions of any of its employees (or people it currently
intends to hire) made prior to or outside the scope of their employment by the Company. The
Company is not subject to any “open source” or “copyleft” obligations or otherwise required to make
any public disclosure or general availability of source code either used or developed by the
Company.
3.10 Compliance with Law and Documents. The Company is not in violation of (a) any term of
its Restated Articles or Bylaws or other organizational documents, and is not in material violation
of (b) any term or provision of any mortgage, indebtedness, indenture, contract, agreement,
instrument, judgment or decree and (c) any order, statute, rule or regulation applicable to the
Company. The execution, delivery and performance of the Related Agreements and the consummation of
the transactions contemplated hereby and thereby will not result in any such violation or default,
or be in conflict with or result in a violation or breach of, with or without the passage of time
and the giving of notice, any judgment, order or decree of any court or arbitrator to which the
Company is a party or is subject, the Restated Articles, the Bylaws or any agreement or contract of
the Company, or, to the Company’s knowledge, a violation of any statute, law, regulation or order,
or an event which results in the creation of any lien, charge or encumbrance upon any asset of the
Company.
3.11 Related-Party Transactions. There are no agreements, understandings or proposed
transactions between the Company and any of its employees, officers, directors, affiliates, or any
affiliate thereof. No employee, officer or director of the Company or member of his or her
immediate family is indebted to the Company, nor is the Company indebted (or committed to make
loans or extend or guarantee credit) to any of them. To the best of the Company’s knowledge, none
of such persons has any direct or indirect ownership in any firm or corporation with which the
Company is affiliated or with which the Company has a business relationship, or any firm or
corporation that competes with the Company, except that employees, officers or directors of the
Company and members of their immediate families may own stock in (but not exceeding two percent of
the outstanding capital stock of) any publicly traded company that may compete with the Company.
No employee, officer or director or any member of their
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immediate families is, directly or indirectly, interested in any material contract with the
Company. The Company is not a guarantor or indemnitor of any indebtedness of any other person,
firm, or corporation.
3.12 Permits. The Company has obtained all franchises, permits, licenses and any similar
authority necessary for the conduct of its business as now being conducted by it, the lack of which
could materially and adversely affect the business, properties, prospects or financial condition of
the Company and believes it can obtain, without undue burden or expense, any similar authority for
the conduct of its business as planned to be conducted. The Company is not in default in any
material respect under any of such franchises, permits, licenses or other similar authority.
3.13 Registration Rights and Other Shareholder Rights. Except as set forth in the Investors’
Rights Agreement, the Company is not under any obligation to register or to agree to register under
the Securities Act any of its currently outstanding securities or any securities issuable upon
exercise or conversion of its currently outstanding securities nor is the Company obligated to
register or qualify any such securities under the securities laws of any state of the United
States. Except for the Voting Agreement, the Company is not a party to any voting or similar
agreements related to the Company’s securities which are presently outstanding or that may
hereafter be issued.
3.14 Title to Property and Assets. The Company owns, or has valid and binding licenses for,
all assets, rights and properties necessary to conduct its business as currently conducted and/or
presently proposed to be conducted. The properties and assets the Company owns are owned by the
Company free and clear of all mortgages, deeds of trust, liens, encumbrances and security interests
except for statutory liens for the payment of current taxes that are not yet delinquent and liens,
encumbrances and security interests which arise in the ordinary course of business and which do not
affect material properties and assets of the Company. With respect to the property and assets
leased by the Company, the Company is in compliance with such leases and, to the knowledge of the
Company, holds a valid leasehold interest free of any liens, claims or encumbrances.
3.15 Financial Statements. The Company has delivered to each Purchaser its unaudited
financial statements (balance sheet and statements of income and cash flows) as at and for the
twelve-month period ended December 31, 2004, to each Initial Purchaser its unaudited financial
statements (balance sheet and statements of income and cash flows) as at and for the two-month
period ended February 28, 2005, and to the Subsequent Purchasers its unaudited financial statements
(balance sheet and statements of income and cash flows) as at and for the three-month period ended
March 31, 2005 (collectively, the “Financial
Statements”). The unaudited Financial Statements are
(i) complete and correct in all material respects, (ii) fairly present the financial condition and
operating results of the Company as of the Statement Date (as defined below) for the Initial
Closing and the Subsequent Closing and (iii) have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout the periods indicated and
with each other, except for the omission of notes thereto and normal year-end audit adjustments.
For purposes of this Agreement, the “Statement Date” means February 28, 2005 with respect to the
Initial Closing and March 31, 2005 with respect to the Subsequent Closing. Except as disclosed in
the Financial Statements, the Company is not a
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guarantor or indemnitor of any indebtedness of any other person, firm or corporation. The
Company maintains and will continue to maintain a standard system of accounting established and
administered in accordance with generally accepted accounting principles.
3.16 Tax Returns, Payments and Elections. The Company has filed all tax returns and reports
required by law to be filed by the Company. These returns and reports are true and correct in all
material respects. The Company has paid all taxes and other assessments due. The provision for
taxes of the Company is adequate for taxes due or accrued as of the date thereof. The Company has
not elected pursuant to the Internal Revenue Code of 1986, as amended
(the “Code”), to be treated
as an S corporation, nor has it made any other elections pursuant to the Code (other than elections
which relate solely to methods of accounting, depreciation or amortization) which would have a
material adverse effect on the Company, its financial condition, its business as presently
conducted or proposed to be conducted or any of its material properties or material assets. The
Company has never had a tax deficiency or tax audit and the Company has made all withholdings or
collections for all taxes, including, without limitation, federal and state income taxes, Federal
Insurance Contribution Act taxes and federal and state unemployment taxes, of its employees. The
Company is not and has not been delinquent in the payment of any tax, assessment or governmental
charge. The Company has never had any tax deficiency proposed or assessed against it and has not
executed any waiver of any statute of limitations on the assessment or collection of any tax or
governmental charge which had a material adverse effect on the financial condition and business
prospect of the Company. None of the Company’s federal income tax returns nor any state income or
franchise tax returns have ever been audited by governmental authorities.
3.17 Absence of Material Liabilities. The Company has no liabilities, obligations or
indebtedness (whether accrued, absolute, contingent, liquidated or otherwise, whether due or to
become due) except: (i) those fully described and listed on the Financial Statements and
Disclosure Schedule; and (ii) those incurred by the Company in the ordinary course of its business
since its inception (x) which do not in the aggregate exceed fifty thousand dollars ($50,000) and
(y) which, individually or in the aggregate, are not material to the financial condition or
operating results of the Company.
3.18 Contracts. Except as set forth in this Agreement, and as disclosed in the Disclosure
Schedule, the Company has no currently existing contract, obligation, agreement, plan, arrangement,
commitment or the like (written or oral) of any material nature
(“Contracts”), including, without
limitation, the following:
(i) employment, bonus, pension, profit sharing, deferred compensation, stock bonus,
retirement, stock option, stock purchase, phantom stock or similar plans, including agreements
evidencing rights to purchase securities of the Company and agreements among the Company’s
shareholders and the Company;
(ii) loan agreements, notes, indentures or instruments relating to or evidencing indebtedness
for borrowed money, or mortgaging, pledging or granting or creating a lien or security interest or
other encumbrance on any of the Company’s property or any agreement or instrument evidencing any
guaranty by the Company of payment or performance by any other person;
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(iii) agreements with dealers, sales representatives, brokers or other distributors,
advertisers or sales agencies;
(iv) agreements with any labor union or collective bargaining organization or other labor
agreements;
(v) any contract or series of contracts with the same person for the furnishing or purchase of
machinery, equipment, goods or services, including, without limitation, agreements with equipment
lessors, processors, subcontractors, consultants and developers;
(vi) licenses of any patent, copyright, trade secret or other proprietary right to or from the
Company;
(vii) any joint venture contract or arrangement or other agreement involving a sharing of
profits or expenses or pursuant to which the Company has granted rights to manufacture, produce,
assemble, license, market or sell its products to any other person or that affects the Company’s
exclusive rights to develop, manufacture, assemble, distribute and sell its products and services;
(viii) agreements limiting the ability of the Company to compete in any line of business or in
any geographic area or with any person;
(ix) agreements providing for disposition of the business, assets or shares of capital stock
of the Company (other than provided for herein), agreements of merger or consolidation to which the
Company is a party or letters of intent with respect to any of the foregoing;
(x) letters of intent or agreements with respect to the acquisition of the business, assets or
shares of any other business;
(xi) agreements for the purchase of material fixed assets or for the purchase of materials,
supplies or equipment in excess of normal operating requirements;
(xii) agreements granting any preemptive right, right of first refusal or similar right to any
person;
(xiii) agreements obligating the Company to pay any royalty or similar charge for use or
exploitation of any tangible or intangible property;
(xiv) covenants not to compete or other restriction on the Company’s ability to conduct its
business or engage in any other activity; and
(xv) other agreements not made in the ordinary course of business that are material to the
Company.
All of the Contracts are valid and binding obligations of the Company and to the Company’s
knowledge in full force and effect in all material respects and enforceable by the Company in
accordance with their respective terms in all material respects. The Company has complied with
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all the material provisions of all said contracts, obligations, agreements, plans, arrangements and
commitments set forth in the Disclosure Schedule and is not in default in any material respect
thereunder. All contracts to which the Company is a party which are material to the Company’s
businesses are in writing.
3.19 Minute Books. The minute books of the Company provided to the Purchasers contain a
complete summary of all meetings of directors and shareholders and all actions by written consent
without a meeting by the directors and shareholders since the time of the Company’s incorporation
and accurately reflect in all material respects all actions by the directors (and any committee
thereof) and shareholders with respect to all transactions referred to in such minutes, and none of
such actions have been materially modified or rescinded except as reflected in the minute books of
the Company.
3.20 Section 83(b) Elections. To the best of the Company’s knowledge, all individuals who
have purchased unvested shares of the Company’s Common Stock have timely filed elections under
Section 83(b) of the Internal Revenue Code and any analogous provisions of applicable state tax
laws.
3.21 Labor Agreements and Actions; Employee Compensation. The Company is not bound by or
subject to (and none of its assets or properties is bound by or subject to) any written or oral,
express or implied, contract, commitment or arrangement with any labor union, and no labor union
has requested or, to the Company’s knowledge, has sought to represent any of the employees,
representatives or agents of the Company. There is no strike or other labor dispute involving the
Company pending, or to the Company’s knowledge, threatened, that could have a material adverse
effect on the assets, properties, financial condition, operating results, or business of the
Company (as such business is presently conducted and as it is proposed to be conducted), nor is the
Company aware of any labor organization activity involving its employees. The Company is not aware
that any officer or key employee, or that any group of key employees, intends to terminate their
employment with the Company, nor does the Company have a present intention to terminate the
employment of any of the foregoing. The employment of each officer and employee of the Company is
terminable at the will of the Company. To its knowledge, the Company has complied in all material
respects with all applicable state and federal equal employment opportunity and other laws related
to employment. The Company is not a party to or bound by any currently effective employment
contract, deferred compensation agreement, bonus plan, incentive plan, profit sharing plan,
retirement agreement, or other employee compensation agreement.
3.22 Obligations of Management. Each officer and key employee of the Company is currently
devoting substantially all of his or her business time to the conduct of the business of the
Company. The Company is not aware that any officer or key employee of the Company is planning to
work less than full time at the Company in the future. No officer or key employee is currently
working or, to the Company’s knowledge, plans to work for a competitive enterprise, whether or not
such officer or key employee is or will be compensated by such enterprise.
3.23 Changes. Since the respective Statement Date there has not been:
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(a) any change in the assets, liabilities, financial condition or operating results of the
Company from that reflected in the Financial Statements, except changes in the ordinary course of
business that have not been and are not reasonably expected to be, in the aggregate, materially
adverse;
(b) any damage, destruction or loss, whether or not covered by insurance, materially and
adversely affecting the assets, properties, financial condition, operating results, prospects or
business of the Company (as such business is presently conducted and as it is proposed to be
conducted);
(c) any waiver by the Company of a valuable right or of a material debt owed to it;
(d) any satisfaction or discharge of any lien, claim or encumbrance or payment of any
obligation by the Company, except in the ordinary course of business and that is not material to
the assets, properties, financial condition, operating results or business of the Company (as such
business is presently conducted and as it is proposed to be conducted);
(e) any material change or amendment to a material contract or arrangement by which the
Company or any of its assets or properties is bound or subject;
(f) any material change in any compensation arrangement or agreement with any employee,
officer, director or shareholder;
(g) any sale, assignment or transfer of any patents, trademarks, copyrights, trade secrets or
other intangible assets;
(h) any resignation or termination of employment of any key officer of the Company; and the
Company, to its knowledge, does not know of the impending resignation or termination of employment
of any such officer;
(i) receipt of notice that there has been a loss of, or material order cancellation by, any
major customer of the Company;
(j) any mortgage, pledge, transfer of a security interest in, or lien, created by the Company,
with respect to any of its material properties or assets, except liens for taxes not yet due or
payable;
(k) any loans or guarantees made by the Company to or for the benefit of its employees,
officers or directors, or any members of their immediate families, other than travel advances and
other advances made in the ordinary course of its business;
(l) any declaration, setting aside or payment or other distribution in respect of any of the
Company’s capital stock, or any direct or indirect redemption, purchase or other acquisition of any
of such stock by the Company;
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(m) to the Company’s knowledge, any change in any material agreement or other event or
condition of any character that might materially and adversely affect the assets, properties,
financial condition, operating results or business of the Company (as such business is presently
conducted and as it is proposed to be conducted); or
(n) any agreement or commitment by the Company to do any of the things described in this
Section 3.23.
3.24 Environmental and Safety Laws. The Company, the operation of its business and any real
property that the Company owns or has owned, leases or has leased or otherwise occupies or uses or
has occupied or used (the “Premises”) are, to the best of the Company’s knowledge, in compliance
with all applicable Environmental Laws (as defined below) and orders or directives of any
governmental authorities having jurisdiction under such Environmental Laws. The Company has not
received any citation, directive, letter or other communication, written or oral, or any notice of
any proceeding, claim or lawsuit, from any person arising out of the ownership or occupation of the
Premises, or the conduct of its operations, and the Company is not aware of any basis therefor.
To the best of the Company’s knowledge, no material expenditures are or will be required in order
to comply with any Environmental Laws. For purposes of this
Agreement, the term “Environmental
Laws” shall mean any Federal, state, local or foreign law, ordinance, rule, regulation, permit and
authorization pertaining to the protection of human health or the environment.
3.25 Disclosure. The Company has provided the Purchasers with all the information that the
Purchasers have requested for deciding whether to purchase the Shares hereunder and all information
that the Company believes is reasonably necessary to enable the Purchasers to make such a decision.
No representation, warranty or statement by the Company in this Agreement, or any exhibit,
schedule, statement or certificate furnished to the Purchasers pursuant to this Agreement or to be
furnished to the Purchasers at the Initial Closing or the Subsequent Closing, when read as a whole,
contains any untrue statement of a material fact or omits to state a material fact necessary to
make the statements made herein, in light of the circumstances under which they were made, not
misleading, except that with respect to any financial projections delivered to the Purchaser, the
Company represents only that such financial projections were prepared in good faith and the Company
believes there is a reasonable basis for such financial projections.
3.26
Small Business Concern. The Company is a “Small
Business Concern” as that term is
defined in the Small Business Investment Act of 1958, as amended, and in the regulations of the
Small Business Administration promulgated thereunder.
4. Representations and Warranties of the Purchasers. Each Purchaser hereby severally
represents and warrants to the Company as follows:
4.1 Investment Intent; Blue Sky. The Purchaser is acquiring the Shares and the underlying
Conversion Stock for investment for its own account, not as a nominee or agent, and not with a view
to, or for resale in connection with, any distribution thereof. The Purchaser understands that the
issuance of the Shares and the underlying Conversion Stock has not been, and will not be,
registered under the Securities Act by reason of a specific exemption from the
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registration provisions of the Securities Act, the availability of which depends upon, among
other things, the bona fide nature of the Purchaser’s investment intent and the accuracy of the
Purchaser’s representations as expressed herein. The Purchaser’s address set forth on the Schedule
of Purchasers represents the Purchaser’s true and correct state of domicile, upon which the Company
may rely for the purpose of complying with applicable “blue sky” laws.
4.2 Rule 144. The Purchaser acknowledges that the Shares and the underlying Conversion Stock
must be held indefinitely unless subsequently registered under the Securities Act or unless an
exemption from such registration is available. It is aware of the provisions of Rule 144
promulgated under the Securities Act (“Rule 144”) which permit the limited resale of shares
purchased in a private placement subject to the satisfaction of certain conditions, including,
among other things, the existence of a public market for such shares, the availability of certain
current public information about the Company, the resale occurring not less than one (1) year after
a party has purchased and paid for the security to be sold, the sale being effected through a
“brokers transaction” or in a transaction directly with a “market maker,” and the number of shares
being sold during any three (3) month period not exceeding limitations specified in Rule 144.
4.3 No Public Market. The Purchaser understands that no public market now exists for any of
the securities issued by the Company and that the Company has made no assurances that a public
market will ever exist for the Company’s securities.
4.4 Restrictions on Transfer, Restrictive Legends. The Purchaser understands that the
transfer of the Shares and the Conversion Stock is restricted by applicable state and federal
securities laws and by provisions of the Investors’ Rights Agreement, and that the certificates
representing the Shares and the Conversion Stock will be imprinted with legends substantially in
the form set forth in the Investors’ Rights Agreement.
4.5 Access to Information. The Purchaser has had an opportunity to discuss the Company’s
business, management and financial affairs with the Company’s management and has had the
opportunity to review the Company’s financial statements. The Purchaser has also had an
opportunity to ask questions of officers of the Company, which questions, if asked, were answered
to the Purchaser’s satisfaction. The foregoing, however, does not limit or modify the
representations and warranties of the Company in Section 3 of this Agreement or the right of the
Purchasers to rely thereon.
4.6 Investment Experience. The Purchaser understands that the purchase of the Shares involves
substantial risk. The Purchaser (a) has experience as an investor in securities of companies in
the development stage and acknowledges that the Purchaser is able to fend for itself or himself,
can bear the economic risk of the Purchaser’s investment in the Shares and has such knowledge and
experience in financial or business matters that the Purchaser is capable of evaluating the merits
and risks of this investment in the Shares and protecting its own interests in connection with this
investment, and/or (b) has a pre-existing personal or business relationship with the Company and
certain of its officers, directors or controlling persons of a nature and duration that enables the
Purchaser to be aware of the character, business acumen and financial circumstances of such
persons.
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4.7 Authorization. The Purchaser has the full power and authority to execute, deliver and
perform the Investment Agreements, and in the case of TWI Glu Mobile Holdings Inc. the Time Warner
Agreement, and to purchase and pay for the Shares and the Conversion Stock. The Investment
Agreements and, in the case of TWI Glu Mobile Holdings Inc., the Time Warner Agreement, when
executed and delivered by the Purchaser, shall constitute valid and binding obligations of such
Purchaser, enforceable in accordance with their terms, subject to laws of general application
relating to bankruptcy, insolvency and the relief of debtors and other laws of general application
affecting the enforcement of creditors’ rights generally, rules of law governing specific
performance, injunctive relief and other equitable remedies and limitations of public policy as
applied to Section 5.7 of the Investors’ Rights Agreement.
4.8 Purchaser Counsel. The Purchaser acknowledges that such Purchaser has had the opportunity
to review the Related Agreements, the exhibits and the schedules attached hereto and thereto, and
the transactions contemplated by this Agreement, with its own legal counsel.
4.9 Limited Operating History. The Purchaser acknowledges that the Company is a new business
with a limited operating history.
4.10 Accredited Investor. The Purchaser is an “accredited investor” as defined by Rule 501(a)
of Regulation D under the Securities Act.
5. Conditions to Closing of the Purchasers. Each Purchaser’s obligation to purchase
the Shares is, unless waived by the Purchaser, subject to the fulfillment of the following
conditions as of the Initial Closing Date, in the case of the Initial Purchasers, or the Subsequent
Closing Date, in the case of the Subsequent Purchasers:
5.1 Representations and Warranties Correct. The representations and warranties made by the
Company in Section 3 above shall be true and correct in all respects as of the Initial Closing and
the Subsequent Closing; provided, however, that representations and warranties that speak
specifically “as of the Initial Closing” or “as of the Subsequent Closing” shall be true and
correct as of the Initial Closing or the Subsequent Closing, as the case may be.
5.2 Covenants. All covenants, agreements and conditions contained in this Agreement to be
performed or complied with by the Company on or prior to the Closing Date shall have been performed
or complied with in all respects.
5.3 Blue Sky. The Company shall have obtained all necessary “blue sky” law permits and
qualifications, or shall have the availability of exemptions therefrom, required by any state for
the offer and sale of the Shares and the underlying Conversion Stock.
5.4 Board of Directors. As of the Subsequent Closing Date, the Board of Directors of the
Company shall be comprised of L. Xxxxxxx Xxxxxxx, Xxxxxxx Xxxxx, Xxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxx
Xxxxxxxxx, Xxx Xxxxxxxxx, Xxxxxx Xxxxxxx, Xxxx Xxxx and Xxxxxx Xxxxxx, elected in accordance with
the terms of the Voting Agreement.
5.5 Bylaws. As of the Subsequent Closing Date, the Bylaws of the Company shall provide that
the Board of Directors of the Company shall consist of nine (9) persons. The
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Purchasers have been provided with a copy of the Bylaws of the Company as amended to date and
in effect on the date hereof.
5.6 Authorizations. All authorizations, approvals or permits, if any, of any governmental
authority or regulatory body that are required in connection with the lawful issuance and sale of
the Shares pursuant to this Agreement shall have been duly obtained and shall be effective as of
the Closing.
5.7 Restated Articles of Incorporation. The Restated Articles shall have been duly adopted by
the Company by all necessary corporate action of its Board of Directors and shareholders, shall
have been duly submitted to, and accepted in, the office of the Secretary of State of the State of
California.
5.8 Investors’ Rights Agreement. The Company, the Initial Purchasers and the requisite
parties to the Prior Agreement (as such term is defined in the Original Investors’ Rights
Agreement) shall have executed and delivered the Original Investors’ Rights Agreement as of the
Initial Closing Date, and the Company, the Subsequent Purchasers and the requisite parties to the
Original Investors’ Rights Agreement shall have executed and delivered the Investors’ Rights
Agreement as of the Subsequent Closing Date.
5.9 Right of First Refusal and Co-Sale Agreement. The Company, the Initial Purchasers and the
requisite parties to the Prior Agreement (as such term is defined in the Original Co-Sale
Agreement) shall have executed and delivered the Original Co-Sale Agreement as of the Initial
Closing Date, and the Company, the Subsequent Purchasers and the requisite parties to the Original
Co-Sale Agreement shall have executed and delivered the Co-Sale Agreement as of the Subsequent
Closing Date.
5.10 Voting Agreement. The Company, the Initial Purchasers and the requisite parties to the
Prior Agreement (as such term is defined in the Original Voting Agreement) shall have executed and
delivered the Original Voting Agreement as of the Initial Closing Date, and the Company, the
Subsequent Purchasers and the requisite parties to the Original Voting Agreement shall have
executed and delivered the Voting Agreement as of the Subsequent Closing Date.
5.11 Legal Opinion. At the Initial Closing, the Initial Purchasers shall have received from
Fenwick & West LLP, legal counsel to the Company, a legal opinion dated as of the Initial Closing
Date, substantially in the form attached hereto as Exhibit G. At the Subsequent Closing,
the Subsequent Purchasers shall have received from Fenwick & West LLP, legal counsel to the
Company, a legal opinion dated as of the Subsequent Closing Date, substantially in the form
attached hereto as Exhibit H.
5.12 Indemnification Agreement. The Company and each of the members of the Company’s Board of
Directors shall each have entered into an Indemnification Agreement, substantially in the form
attached hereto as Exhibit I.
5.13 Compliance Certificate. The President of the Company shall have delivered to the
Purchasers at the Closing a certificate stating that the conditions specified in Sections 5.1 and
5.2 have been fulfilled and stating that there shall have been no adverse change
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in the business, affairs, operations, properties, assets or condition of the Company since the
Statement Date.
5.14 Non-Disclosure Agreements. All current employees and consultants shall have entered into
a standard non-disclosure and assignment of inventions agreements in form and substance reasonably
acceptable to Purchasers.
5.15 Proceedings and Documents. All corporate and other proceedings in connection with the
transactions contemplated at the Closing and all documents incident thereto shall be reasonably
satisfactory in form and substance to Purchasers’ counsel, and the Purchasers shall have received
all such counterpart original and certified or other copies of such documents as they may
reasonably request. This shall include, without limitation, certification by the Company’s
Secretary or Chief Financial Officer regarding the Company’s Restated Articles and Bylaws and Board
of Director and shareholder resolutions relating to this transaction.
5.16 Certificate of Corporate Proceedings. Purchasers shall have received from the Company’s
Secretary or Chief Financial Officer, a certificate having attached thereto (i) the Company’s
Restated Articles as in effect at the time of the Closing, (ii) the Company’s Bylaws as in effect
at the time of the Closing, (iii) resolutions approved by the Board of Directors authorizing the
transactions contemplated hereby, (iv) resolutions approved by the Company’s shareholders
authorizing the filing of the Restated Articles, and (v) good standing certificates (including tax
good standing) with respect to the Company from the applicable authority(ies) in California, dated
a recent date before the Closing.
5.17 Glu UK Voting Agreement. The Company and the requisite parties to the Glu UK Voting
Agreement (as such term is defined therein) shall have executed and delivered the Amendment to the
Glu UK Voting Agreement as of the Initial Closing Date in the form attached hereto as Exhibit
J (the “Amendment to the Glu UK Voting Agreement”).
5.18 Time Warner Agreement. At the Subsequent Closing Date, the Company and TWI Glu Mobile
Holdings Inc. shall have executed and delivered an agreement by and between the Company and TWI Glu
Mobile Holdings Inc. in substantially the form attached hereto as
Exhibit K (the “Time
Warner Agreement”).
6. Conditions to Closing of the Company. The Company’s obligation to sell and issue
the Shares is, unless waived in writing by the Company, subject to the fulfillment as of the
Initial Closing Date or the Subsequent Closing Date, as appropriate, of the following conditions:
6.1 Representations and Warranties Correct. The representations made in Section 4 above by
the Purchasers shall be true and correct in all material respects as of the Initial Closing Date or
the Subsequent Closing Date, as appropriate.
6.2 Covenants. All covenants, agreements, and conditions contained in this Agreement to be
performed or complied with by the Initial Purchasers on or prior to the Initial Closing Date or by
the Subsequent Purchasers on or prior to the Subsequent Closing Date shall have been performed or
complied with in all respects.
6.3 Blue Sky. The Company shall have obtained all necessary “blue sky” law
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permits and qualifications, or have the availability of exemptions therefrom, required by any
state for the offer and sale of the Shares and the underlying Conversion Stock.
6.4 Legal Matters. All approvals of the Company’s Board of Directors and shareholders
necessary for performance of the transactions contemplated by this Agreement shall have been
obtained, and all material matters of a legal nature which pertain to this Agreement and the
transactions contemplated hereby shall have been reasonably approved by counsel to the Company.
6.5 Payment of Purchase Price. At the Initial Closing Date, each Initial Purchaser shall have
delivered to the Company the purchase price for such Initial Purchaser’s Shares in the amount set
forth opposite such Purchaser’s name on the Schedule of Purchasers, and where the purchase price or
a portion of thereof is to be paid by the cancellation of indebtedness, such Initial Purchaser
shall have delivered the original instrument evidencing such indebtedness. At the Subsequent
Closing Date, each Subsequent Purchaser shall have delivered to the Company the purchase price for
such Subsequent Purchaser’s Shares in the amount set forth opposite such Subsequent Purchaser’s
name on the Schedule of Purchasers, and where the purchase price or a portion of thereof is to be
paid by the cancellation of indebtedness, such Subsequent Purchaser shall have delivered the
original instrument evidencing such indebtedness.
6.6 Restated Articles of Incorporation. Prior to the Subsequent Closing Date, the Restated
Articles shall have been filed in the office of the Secretary of State of the State of California.
6.7 Investors’ Rights Agreement. The Company, the Initial Purchasers and the requisite
parties to the Prior Agreement (as such term is defined in the Original Investors’ Rights
Agreement) shall have executed and delivered the Original Investors’ Rights Agreement as of the
Initial Closing Date and the Company, the Subsequent Purchasers and the requisite parties to the
Original Investors’ Rights Agreement shall have executed and delivered the Investors’ Rights
Agreement as of the Subsequent Closing Date.
6.8 Right of First Refusal and Co-Sale Agreement. The Company, the Initial Purchasers and the
requisite parties to the Prior Agreement (as such term is defined in the Original Co-Sale
Agreement) shall have executed and delivered the Original Co-Sale Agreement as of the Initial
Closing Date and the Company, the Subsequent Purchasers and the requisite parties to the Original
Co-Sale Agreement shall have executed and delivered the Co-Sale Agreement as of the Subsequent
Closing Date.
6.9 Voting Agreement. The Company, the Initial Purchasers and the requisite parties to the
Prior Agreement (as such term is defined in the Original Voting Agreement) shall have executed and
delivered the Original Voting Agreement as of the Initial Closing Date and the Company, the
Subsequent Purchasers and the requisite parties to the Original Voting Agreement shall have
executed and delivered the Voting Agreement as of the Subsequent Closing Date.
6.10 Authorizations. All authorizations, approvals or permits, if any, of any governmental
authority or regulatory body that are required in connection with the lawful
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issuance and sale of the Shares pursuant to this Agreement shall have been duly obtained and
shall be effective as of the Closing.
7. Covenants of the Company.
7.1 Vesting of Employee Options. Options granted to employees of the Company after the
Closing Date under the Company’s approved equity incentive plan shall vest, subject to the option
holder’s continued employment with or service to the Company, on terms no more favorable than
twenty-five percent (25%) after twelve (12) months and on an equal monthly basis over the
subsequent thirty-six (36) months or on an equal annual basis over the subsequent three (3) years,
as approved by the Company’s Board of Directors. Any unvested shares acquired by employees shall
be subject to a repurchase option by the Company exercisable at the original purchase price of such
options (the “Repurchase Option”). The Repurchase Option shall provide that upon termination of
the employment of the shareholder, with or without cause, the Company or its assignee (to the
extent permissible under applicable securities law qualification) may repurchase such unvested
shares at the lesser of the original purchase price of any shares subject to the Repurchase Option
or the fair market value of any such shares.
7.2 Prompt Payment of Taxes, etc. The Company will promptly pay and discharge, or cause to be
paid and discharged, when due and payable, all lawful taxes, assessments and governmental charges
or levies imposed upon the income, profits, property or business of the Company or any subsidiary;
provided, however, that any such tax, assessment, charge or levy need not be paid if the validity
thereof shall currently be contested in good faith by appropriate proceedings and if the Company
shall have set aside on its books adequate reserves with respect thereto, and provided further,
that the Company will pay all such taxes, assessments, charges or levies forthwith upon the
commencement of proceedings to foreclose any lien which may have attached as security therefor.
7.3 Insurance. The Company will keep its assets and those of its subsidiaries, if any, which
are of an insurable character insured by financially sound and reputable insurers against loss or
damage by fire, explosion and other risks customarily insured against by companies in the Company’s
line of business, in amounts reasonably sufficient to allow it to replace any of its properties
which might be damaged or destroyed. The Company will maintain with financially sound and
reputable insurers, insurance against other hazards and risks and liability to persons and property
to the extent and in the manner customary for companies in similar businesses similarly situated.
7.4 Accounts and Records. The Company will keep true records and books of account in which
full, true and correct entries will be made of all dealings or transactions in relation to its
business and affairs in accordance with generally accepted accounting principles applied on a
consistent basis.
7.5 Termination of Covenants. The covenants of the Company set forth in above in this Section
7 shall terminate in all respects on the date of the closing of a firm commitment underwritten
initial public offering pursuant to an effective registration statement under the Securities Act,
covering the offer and sale of the Company’s Common Stock, or at
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such time as the Company is required to file reports pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended, whichever shall occur first.
8. Miscellaneous.
8.1 Survival of Warranties. The warranties, representations and covenants of the Company and
Purchasers contained in or made pursuant to this Agreement shall survive the execution and delivery
of this Agreement and the Closing and shall in no way be affected by any investigation of the
subject matter thereof made by or on behalf of the Purchasers or the Company.
8.2 Successors and Assigns. Except as otherwise provided herein, the terms and conditions of
this Agreement shall inure to the benefit of and be binding upon the respective successors and
assigns of the parties (including transferees of any securities). Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations, or liabilities under or by
reason of this Agreement, except as expressly provided in this Agreement.
8.3 Finder’s Fee. Each party represents that it neither is nor will be obligated for any
finders’ fee or commission in connection with this transaction. Each Purchaser agrees to indemnify
and to hold harmless the Company from any liability for any commission or compensation in the
nature of a finders’ fee (and the costs and expenses of defending against such liability or
asserted liability) for which such Purchaser or any of its officers, partners, employees, or
representatives is responsible.
The Company agrees to indemnify and hold harmless each Purchaser from any liability for any
commission or compensation in the nature of a finders’ fee (and the costs and expenses of defending
against such liability or asserted liability) for which the Company or any of its officers,
employees or representatives is responsible.
8.4 Governing Law. This Agreement shall be governed in all respects by the laws of the State
of California as such laws are applied to agreements between or among California residents entered
into and to be performed entirely within California.
8.5 Entire Agreement; Amendment. This Agreement (including all exhibits hereto), the
Investors’ Rights Agreement, the Co-Sale Agreement, the Voting Agreement and the other documents
delivered pursuant hereto constitute the full and entire understanding and agreement between the
parties with regard to the subjects hereof and thereof. The Original Purchase Agreement is hereby
amended and restated in its entirety and shall be of no further force or effect. This Agreement
and any term hereof may be amended, waived, discharged or terminated by a written instrument signed
by the Company and holders of more than seventy-two percent (72%) of the Shares sold under this
Agreement or such number of shares of Conversion Stock, or any combination thereof; provided,
however, that any term hereof as it relates to the Time Warner Agreement (including without
limitation this proviso) may be amended, waived, discharged or terminated only by a written
instrument signed by the Company and TWI Glu Mobile Holdings Inc.
8.6 Notices, etc. All notices and other communications required or permitted
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hereunder shall be effective upon receipt, shall be in writing and shall be mailed by
registered or certified mail, postage prepaid, or otherwise delivered by facsimile transmission, by
hand or by messenger, addressed:
(a) if to a Purchaser, to the address or fax number listed after such Purchaser’s name on the
Schedule of Purchasers attached hereto as Exhibit A or at such other address as such
Purchaser shall have furnished to the Company, with a copy to:
(in the case Granite Global Ventures II L.P. Granite Global Ventures II L.P
Granite Global Ventures II L.P. Granite Global Ventures II L.P.)
Pillsbury Xxxxxxxx Xxxx Xxxxxxx LLP
0000 Xxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000-0000
Attn: Xxxxxxx Xxxxxxx Xxxxxx, Esq.
Fax: (000) 000-0000
Granite Global Ventures II L.P. Granite Global Ventures II L.P.)
Pillsbury Xxxxxxxx Xxxx Xxxxxxx LLP
0000 Xxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000-0000
Attn: Xxxxxxx Xxxxxxx Xxxxxx, Esq.
Fax: (000) 000-0000
(in the case of TWI Glu Mobile Holdings Inc.)
Time Warner Legal
Time Warner Inc.
One Time Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Deputy General Counsel
Fax: (000) 000-0000
Time Warner Legal
Time Warner Inc.
One Time Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Deputy General Counsel
Fax: (000) 000-0000
(b) if to the Company, to:
Glu Mobile Inc.
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Attn: President
Fax: (000) 000-0000
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Attn: President
Fax: (000) 000-0000
or at such other address as the Company shall have furnished to the Purchasers, with a copy to:
Fenwick & West LLP
Silicon Valley Center
000 Xxxxxxxxxx Xx.
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxxxxx, Esq.
Fax: (000) 000-0000
Silicon Valley Center
000 Xxxxxxxxxx Xx.
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxxxxx, Esq.
Fax: (000) 000-0000
Each such notice or other communication shall for all purposes of this Agreement be treated as
effective or having been given when received if delivered personally or by messenger, if sent by
facsimile, the first business day after the date of confirmation that the facsimile has been
successfully transmitted to the facsimile number for the party notified, or, if sent by mail, at
the earlier of its receipt or seventy-two (72) hours after the same has been deposited in a
regularly maintained receptacle for deposit of United States mail, addressed and mailed as
aforesaid.
-21-
8.7 Delays or Omissions. Except as expressly provided herein, no delay or omission to
exercise any right, power or remedy accruing to any party hereto upon any breach or default of
another party hereto under this Agreement shall impair any such right, power or remedy of such
party, nor shall it be construed to be a waiver of any such breach or default or an acquiescence
therein, or of any similar breach or default thereafter occurring; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part
of any party of any breach or default under this Agreement, or any waiver on the part of any party
hereto, of any provisions or conditions of this Agreement, must be in writing and shall be
effective only to the extent specifically set forth in such writing. All remedies, either under
this Agreement or by law or otherwise afforded to any party hereto, shall be alternative and not
cumulative.
8.8 Rights; Severability. Unless otherwise expressly provided herein, the rights of each
Purchaser hereunder are several rights and are not rights jointly held with any of the other
Purchasers.
8.9 California Corporate Securities Law. THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF
THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF
CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL UNLESS THE SALE OF SECURITIES IS
EXEMPT FROM THE QUALIFICATION BY SECTION 25100, 25102, OR 25105 OF THE CORPORATIONS CODE OF THE
STATE OF CALIFORNIA. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON
SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.
8.10 Expenses. At the Initial Closing, the Company will pay the reasonable fees and expenses,
including legal fees, incurred by Granite Global Ventures II L.P. in connection with the Original
Purchase Agreement, up to a maximum of $35,000, subject to the delivery of invoices therefor. At
the Subsequent Closing, the Company will pay the reasonable fees and expenses, including legal
fees, incurred by TWI Glu Mobile Holdings Inc. in connection with this Agreement, up to a maximum
of $20,000, subject to the delivery of invoices therefor; provided that TWI Glu Mobile Holdings
Inc. may elect to deduct the amount of such fees and expenses from the purchase price delivered by
it at the Subsequent Closing pursuant to Section 2.2 (provided invoices therefor have been provided
to the Company).
8.11 Attorneys’ Fees. If any legal action is necessary to enforce or interpret the terms of
this Agreement, the prevailing party shall be entitled to reasonable attorney’s fees, costs and
necessary disbursements in addition to any other relief to which such party may be entitled.
8.12 Severability. In the event any provision of this Agreement becomes or is declared by a
court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue
in full force and effect, with such provision being replaced with an enforceable provision closest
in intent and economic effect to the severed provision; provided,
however, that
-22-
no such severability shall be effective if it materially changes the economic benefit of any
party to this Agreement.
8.13 Titles and Subtitles. The titles and subtitles used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this Agreement.
8.14 Conflicts of Interest. Each Purchaser and the Company is aware that Fenwick & West LLP
(“F&W”) may have an investment in certain of the Purchasers or may have previously performed and
may continue to perform certain legal services for certain of the Purchasers in matters unrelated
to F&W’s representation of the Company. In connection with its Purchaser representation, F&W may
have obtained confidential information of such Purchasers that could be material to F&W’s
representation of the Company in connection with negotiation, execution and performance of this
Agreement. By signing this Agreement, each Purchaser and the Company hereby acknowledges that the
terms of this Agreement were negotiated between the Purchasers and the Company and are fair and
reasonable and waives any potential conflict of interest arising out of such representation or such
possession of confidential information. Each Purchaser and the Company further represents that it
has had the opportunity to be, or has been, represented by independent counsel in giving the
waivers contained in this Section 8.14.
8.15 Counterparts. This Agreement may be executed in any number of counterparts, each of
which shall be an original, and all of which together shall constitute one instrument.
8.16 Exculpation Among Purchasers. Each Purchaser acknowledges that it is not relying upon
any person, firm, or corporation, other than the Company and its officers and directors, in making
its investment or decision to invest in the Company. Each Purchaser agrees that no Purchaser nor
the respective controlling persons, officers, directors, partners, agents, or employees of any
Purchaser shall be liable to any other Purchaser for any action heretofore or hereafter taken or
omitted to be taken by any of them in connection with the Shares and Conversion Stock.
[SIGNATURE PAGE TO FOLLOW]
-23-
IN WITNESS WHEREOF, the parties have executed this agreement as of the day and year set forth
in the heading hereof.
| GLU MOBILE INC. | ||||||
| By: | /s/ L. Xxxxxxx Xxxxxxx | |||||
| L. Xxxxxxx Xxxxxxx, | ||||||
| Its: | President and Chief Executive Officer | |||||
| Address: | 0000 Xxxxxxx Xxxxx, Xxxxx 000 | |||||
| Xxx Xxxxx, XX 00000 |
SIGNATURE PAGE TO AMENDED AND RESTATED
SERIES D PURCHASE AGREEMENT
SERIES D PURCHASE AGREEMENT
| PURCHASERS: | ||||||
| TWI GLU MOBILE HOLDINGS INC. | ||||||
| By: | /s/ Xxxxxx Xxx | |||||
| Xxxxxx Xxx, | ||||||
| Its: | Vice President | |||||
| Address: | c/o Time Warner Investments | |||||
| Time Warner Inc. | ||||||
| One Time Xxxxxx Xxxxxx | ||||||
| Xxx Xxxx, XX 00000 | ||||||
| Fax: | (000) 000-0000 |
SIGNATURE PAGE TO AMENDED AND RESTATED
SERIES D PURCHASE AGREEMENT
SERIES D PURCHASE AGREEMENT
| PURCHASERS: | ||||||
| GRANITE GLOBAL VENTURES II L.P. | ||||||
| By: | Granite Global Ventures II L.L.C. | |||||
| Its: | General Partner | |||||
| By: | /s/ Hany Nada | |||||
| Name: | Hany Nada | |||||
| Its: | Managing Director | |||||
| Address: | c/o Granite Global Ventures | |||||
| 0000 Xxxx Xxxx Xxxx | ||||||
| Xxxxx 000 | ||||||
| Xxxxx Xxxx, XX 00000 | ||||||
| Fax: | (000) 000-0000 |
| GGV II ENTREPRENEURS FUND L.P. | ||||||
| By: | Granite Global Ventures II L.L.C. | |||||
| Its: | General Partner | |||||
| By: | /s/ Hany Nada | |||||
| Name: | Hany Nada | |||||
| Its: | Managing Director | |||||
| Address: | c/o Granite Global Ventures | |||||
| 0000 Xxxx Xxxx Xxxx | ||||||
| Xxxxx 000 | ||||||
| Xxxxx Xxxx, XX 00000 | ||||||
| Fax: | (000) 000-0000 |
SIGNATURE PAGE TO AMENDED AND RESTATED
SERIES D PURCHASE AGREEMENT
SERIES D PURCHASE AGREEMENT
| NEW ENTERPRISE ASSOCIATES 10, L.P. | ||||||
| By: | NEA Partners 10, L.P. | |||||
| Its: | General Partner | |||||
| By: | /s/ Xxxxxx X. Trainer III | |||||
| Name: | Xxxxxx X. Trainer III | |||||
| Its: | General Partner | |||||
| Address: | 0000 Xxxx Xxxx Xxxx | |||||
| Xxxxx Xxxx, XX 00000 Attn: Xxxxxxx Xxxxx |
||||||
| Fax: | (000) 000-0000 | |||||
SIGNATURE PAGE TO AMENDED AND RESTATED
SERIES D PURCHASE AGREEMENT
SERIES D PURCHASE AGREEMENT
| SIENNA LIMITED PARTNERSHIP III, L.P. | ||||||
| By: | Sienna Associates III, L.L.C. | |||||
| Its: | General Partner | |||||
| By: | /s/ Xxxxxx X. Xxxxx | |||||
| Xxxxxx X. Xxxxx, Managing Member | ||||||
| Address: | 0000 Xxxxxxxxx Xxx, Xxxxx 000 | |||||
| Xxxxxxxxx, XX 00000 | ||||||
| Attn: Xxxxxx Xxxxx | ||||||
| Fax: | (000) 000-0000 | |||||
SIGNATURE PAGE TO AMENDED AND RESTATED
SERIES D PURCHASE AGREEMENT
SERIES D PURCHASE AGREEMENT
| JAFCO AMERICA TECHNOLOGY FUND III, LP JAFCO AMERICA TECHNOLOGY CAYMAN FUND III, LP JAFCO USIT FUND III, LP JAFCO AMERICA TECHNOLOGY AFFILIATES FUND III, LP |
||||||
| By: | /s/ Xxxxx X. Xxxxxxxxx | |||||
| Xxxxx X. Xxxxxxxxx | ||||||
| Managing Member JAV Management Associates III, L.L.C. |
||||||
| Its General Partner | ||||||
| Address: | 000 Xxxxxxxx Xxxxxx Xxx Xxxxx | |||||
| Xxxx Xxxx, XX 00000 | ||||||
| Attn: Xxx Xxxxxxxxx | ||||||
| Fax: | (000) 000-0000 | |||||
| GLOBESPAN CAPITAL PARTNERS IV, L.P. GCP IV AFFILIATES FUND, L.P. JAFCO GLOBESPAN USIT IV, L.P. |
||||||
| By: | Globespan Management Associates IV, L.P., | |||||
| its sole General Partner | ||||||
| By: | Globespan Management Associates IV, LLC, its sole General Partner |
|||||
| By: | /s/ Xxxxx X. Xxxxxxxxx | |||||
| Xxxxx X. Xxxxxxxxx | ||||||
| Member | ||||||
| Address: | 000 Xxxxxxxx Xxxxxx Xxx Xxxxx | |||||
| Xxxx Xxxx, XX 00000 | ||||||
| Attn: Xxx Xxxxxxxxx | ||||||
| Fax: | (000) 000-0000 | |||||
SIGNATURE PAGE TO AMENDED AND RESTATED
SERIES D PURCHASE AGREEMENT
SERIES D PURCHASE AGREEMENT
| GLOBESPAN CAPITAL PARTNERS (CAYMAN) IV, L.P. | ||||||
| By: | Globespan Management Associates (Cayman) IV, L.P., | |||||
| its sole General Partner | ||||||
| By: | Globespan Management Associates IV, LLC, its sole General Partner |
|||||
| By: | /s/ Xxxxx X. Xxxxxxxxx | |||||
| Xxxxx X. Xxxxxxxxx Member |
||||||
| Address: | 000 Xxxxxxxx Xxxxxx Xxx Xxxxx | |||||
| Xxxx Xxxx, XX 00000 | ||||||
| Attn: Xxx Xxxxxxxxx | ||||||
| Fax: | (000) 000-0000 | |||||
| GLOBESPAN CAPITAL PARTNERS IV GmbH & Co. KG | ||||||
| By: | Globespan Management Associates IV, GmbH its General Partner |
|||||
| By: | /s/ Xxxxx X. Xxxxxxxxx | |||||
| Name: | Xxxxx X. Xxxxxxxxx | |||||
| Title: | Managing Director | |||||
| Address: | 000 Xxxxxxxx Xxxxxx Xxx Xxxxx | |||||
| Xxxx Xxxx, XX 00000 | ||||||
| Attn: Xxx Xxxxxxxxx | ||||||
| Fax: | (000) 000-0000 | |||||
SIGNATURE PAGE TO AMENDED AND RESTATED
SERIES D PURCHASE AGREEMENT
SERIES D PURCHASE AGREEMENT
| BAVP, L.P. | ||||||
| By: | BA Venture Partners VI, LLC | |||||
| Its: | General Partner | |||||
| By: | /s/ Xxxxxx Xxxxxxx | |||||
| Name: | Xxxxxx Xxxxxxx | |||||
| Its: | Managing Director | |||||
| Address: | 000 Xxxxx Xxxx, Xxxxx 000 | |||||
| Xxxxxx Xxxx, XX 00000 | ||||||
| Attn: Xxxxxx Xxxxxxx | ||||||
| Fax: | (000) 000-0000 | |||||
SIGNATURE PAGE TO AMENDED AND RESTATED
SERIES D PURCHASE AGREEMENT
SERIES D PURCHASE AGREEMENT
| /s/ Xxx Xxxxxxxxx | ||||||
| Xxx Xxxxxxxxx |
SIGNATURE PAGE TO AMENDED AND RESTATED
SERIES D PURCHASE AGREEMENT
SERIES D PURCHASE AGREEMENT
| Xxxxx Family 2003 Revocable Trust | ||||||
| /s/ Xxxxxxx X. Xxxxx | ||||||
| Xxxxxxx X. Xxxxx, Principal |
SIGNATURE PAGE TO AMENDED AND RESTATED
SERIES D PURCHASE AGREEMENT
SERIES D PURCHASE AGREEMENT
| CLEF, LP | ||||||
| By: | Clef General Partner, LLC | |||||
| its General Partner | ||||||
| By: | /s/ Xxxxxx Xxxxxxx | |||||
| Xxxxxx Xxxxxxx, sole member | ||||||
SIGNATURE PAGE TO AMENDED AND RESTATED
SERIES D PURCHASE AGREEMENT
SERIES D PURCHASE AGREEMENT
| PINNACLE VENTURES I-A (Q), L.P.
PINNACLE VENTURES I-B, L.P. PINNACLE VENTURES I AFFILIATES, L.P. |
||||||
| By: | Pinnacle Ventures Management I, L.L.C., | |||||
| their general partner | ||||||
| By: | /s/ Xxxxxx X. Xxxxxx | |||||
| Name: | Xxxxxx X. Xxxxxx |
|||||
| Title: | Chief Financial Officer | |||||
| PINNACLE VENTURES II-B, L.P. PINNACLE VENTURES II-C, L.P. PINNACLE VENTURES II-R, L.P. |
||||||
| By: | Pinnacle Ventures Management II, L.L.C., their general partner | |||||
| By: | /s/ Xxxxxx X. Xxxxxx | |||||
| Name: | Xxxxxx X. Xxxxxx |
|||||
| Title: | Chief Financial Officer | |||||
SIGNATURE PAGE TO AMENDED AND RESTATED
SERIES D PURCHASE AGREEMENT
SERIES D PURCHASE AGREEMENT
