As filed with the Securities and Exchange Commission on
February 16, 2007
Registration No.
333-139493
UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
AMENDMENT NO. 5
to
Form S-1
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
GLU MOBILE INC.
(Exact name of registrant as
specified in its charter)
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Delaware
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7371
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91-2143667
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(State or other jurisdiction
of
incorporation or organization)
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(Primary standard industrial
classification code number)
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(I.R.S. employer identification
no.)
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1800 Gateway Drive, Second Floor
San Mateo, CA 94404
(650) 571-1550
(Address, including zip code,
and telephone number, including area code, of Registrants
principal executive offices)
L. Gregory Ballard
Chief Executive Officer and President
Glu Mobile Inc.
1800 Gateway Drive, Second Floor
San Mateo, CA 94404
(650) 571-1550
(Name, address, including zip
code, and telephone number, including area code, of agent for
service)
Copies to:
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David A. Bell, Esq.
Laird H. Simons III, Esq.
Mark C. Stevens, Esq.
Fenwick & West LLP
Silicon Valley Center
801 California Street
Mountain View, CA 94041
(650) 988-8500
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Robert V.
Gunderson, Jr., Esq.
Craig M. Schmitz, Esq.
Natalie A. Kaniel, Esq.
Gunderson Dettmer Stough Villeneuve
Franklin & Hachigian, LLP
155 Constitution Drive
Menlo Park, CA 94025
(650) 321-2400
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Approximate date of commencement of proposed sale to the
public:
As soon as practicable after the
effective date of this Registration Statement.
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to
Rule 415 under the Securities Act of 1933, check the
following box.
o
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act
of 1933, check the following box and list the Securities Act
registration statement number of the earlier effective
registration statement for the same
offering.
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If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act of 1933, check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the
same
offering.
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If this Form is a post-effective amendment filed pursuant to
Rule 462(d) under the Securities Act of 1933, check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the
same
offering.
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The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the Registrant shall file a further amendment that
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a)
of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission,
acting pursuant to said Section 8(a), may determine.
Explanatory
Note
This amendment is being filed solely to file exhibits previously
omitted from the Registration Statement on Form S-1
(333-139493)
(the Registration Statement). Otherwise, no changes
have been made to Part I or Part II of the
Registration Statement.
PART II
INFORMATION NOT
REQUIRED IN PROSPECTUS
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ITEM 13.
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Other Expenses
of Issuance and Distribution.
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The following table sets forth the costs and expenses to be paid
by the Registrant in connection with the sale of the shares of
common stock being registered hereby. All amounts are estimates
except for the SEC registration fee, the NASD filing fee and The
NASDAQ Global Market listing fee.
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SEC registration fee
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$
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9,844
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NASD filing fee
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9,700
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The NASDAQ Global Market listing
fee
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100,000
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Printing and engraving
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*
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Legal fees and expenses
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*
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Accounting fees and expenses
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*
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Blue sky fees and expenses
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*
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Road show expenses
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*
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Transfer agent and registrar fees
and expenses
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*
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Miscellaneous
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*
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Total
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$
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*
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* To be filed by amendment.
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ITEM 14.
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Indemnification
of Directors and Officers.
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Section 145 of the Delaware General Corporation Law
authorizes a court to award, or a corporations board of
directors to grant, indemnity to directors and officers under
certain circumstances and subject to certain limitations. The
terms of Section 145 of the Delaware General Corporation
Law are sufficiently broad to permit indemnification under
certain circumstances for liabilities, including reimbursement
of expenses incurred, arising under the Securities Act of 1933,
as amended (the Securities Act).
As permitted by the Delaware General Corporation Law, the
Registrants restated certificate of incorporation contains
provisions that eliminate the personal liability of its
directors for monetary damages for any breach of fiduciary
duties as a director, except liability for the following:
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any breach of the directors duty of loyalty to the
Registrant or its stockholders;
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acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law;
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under Section 174 of the Delaware General Corporation Law
(regarding unlawful dividends and stock purchases); or
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any transaction from which the director derived an improper
personal benefit.
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As permitted by the Delaware General Corporation Law, the
Registrants restated bylaws provide that:
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the Registrant is required to indemnify its directors and
officers to the fullest extent permitted by the Delaware General
Corporation Law, subject to very limited exceptions;
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the Registrant may indemnify its other employees and agents as
set forth in the Delaware General Corporation Law;
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the Registrant is required to advance expenses, as incurred, to
its directors and officers in connection with a legal proceeding
to the fullest extent permitted by the Delaware General
Corporation Law, subject to very limited exceptions; and
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the rights conferred in the bylaws are not exclusive.
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Prior to the completion of this offering, the Registrant intends
to enter into indemnity agreements with each of its current
directors and executive officers to provide these directors and
executive officers additional contractual assurances regarding
the scope of the indemnification set forth in the
Registrants restated
II-1
certificate of incorporation and restated bylaws and to provide
additional procedural protections. At present, there is no
pending litigation or proceeding involving a director, executive
officer or employee of the Registrant regarding which
indemnification is sought. Reference is also made to
Section 9 of the Underwriting Agreement, which provides for
the indemnification of executive officers, directors and
controlling persons of the Registrant against certain
liabilities. The indemnification provision in the
Registrants restated certificate of incorporation,
restated bylaws and the indemnification agreements entered into
or to be entered into between the Registrant and each of its
directors and executive officers may be sufficiently broad to
permit indemnification of the Registrants directors and
executive officers for liabilities arising under the Securities
Act.
The Registrant has directors and officers liability
insurance for securities matters.
Certain of Registrants directors (Sharon L. Weinbar,
Daniel L. Skaff and A. Brooke Seawell) are also indemnified by
their respective employers with regards to their serving on the
Registrants board.
Reference is made to the following documents filed as exhibits
to this Registration Statement regarding relevant
indemnification provisions described above and elsewhere herein:
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Exhibit
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Exhibit
Title
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Number
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Form of Underwriting Agreement
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1.01
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Form of Restated Certificate of
Incorporation of the Registrant
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3.02
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Form of Amended and Restated
Bylaws of the Registrant
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3.04
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Amended and Restated
Investors Rights Agreement, dated as of March 29,
2006, by and among the Registrant and certain investors of the
Registrant and the Amendment No. 1 and Joinder to the
Amended and Restated Investors Rights Agreement dated May 5,
2006 by and among the Registrant and certain investors of the
Registrant
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4.02
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Form of Indemnity Agreement
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10.01
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ITEM 15.
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Recent Sales
of Unregistered Securities.
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Since December 1, 2003, the Registrant has issued and sold
the following securities:
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1.
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In March 2004, the Registrant issued warrants to purchase
156,250 shares of its common stock to Silicon Valley Bank.
In June 2004, the warrants were converted into warrants to
purchase 156,250 shares of the Registrants
Series B Preferred Stock. The warrants have an exercise
price of $0.64.
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2.
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In June 2004 and August 2004, the Registrant sold an aggregate
of 12,046,016 shares of its Series C Preferred Stock
at $1.6603 per share for an aggregate purchase price of
approximately $20.0 million to 12 accredited investors.
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3.
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In December 2004, the Registrant issued 8,199,233 shares of
its common stock (valued at approximately $15.4 million) in
connection with its acquisition of Macrospace Limited, a company
registered in England and Wales.
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4.
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In April 2005 and July 2005, the Registrant sold an aggregate of
6,701,510 shares of its Series D Preferred Stock at
$3.01 per share for an aggregate purchase price of
approximately $20.2 million to 23 accredited investors.
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5.
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In April 2005, the Registrant sold an aggregate of
249,169 shares of its common stock at $1.00 per share
for an aggregate purchase price of $249,169 to two entities
affiliated with Granite Global Ventures.
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6.
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In July 2005, the Registrant sold an aggregate of
2,491,694 shares of its
Series D-1
Preferred Stock at $3.01 per share for an aggregate
purchase price of approximately $7.5 million to TWI Glu
Mobile Holdings Inc.
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II-2
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7.
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In March 2006, the Registrant issued an aggregate of
10,267,879 shares of its Special Junior Preferred Stock, in
connection with its acquisition of iFone Holdings Limited, a
company registered in England and Wales.
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8.
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In May 2006, the Registrant issued warrants to purchase an
aggregate of 318,937 shares of its Series D Preferred
Stock at an exercise price of $3.01 per share to three entities
affiliated with Pinnacle Ventures.
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9.
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In June and July 2006, the Registrant issued 30,000 shares of
its common stock to each of two accredited investors upon the
exercise of a warrant, with an exercise price of $0.12, that the
accredited investor had purchased from the original individual
warrantholder.
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10.
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In November 2006, the Registrant issued an aggregate of
43,383 shares of its common stock to seven former employees
of iFone.
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11.
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Since December 1, 2003, the Registrant has issued options
to its employees, consultants and directors to purchase an
aggregate of 12,888,899 shares of its common stock under
its 2001 Stock Option Plan.
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12.
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Since December 1, 2003, the Registrant has issued
3,481,873 shares of its common stock to its employees,
directors, consultants and other service providers upon exercise
of options granted by it under its 2001 Stock Option Plan, with
exercise prices ranging from $0.06 to $1.60 per share.
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Unless otherwise stated, the sales of the above securities were
deemed to be exempt from registration under the Securities Act
in reliance upon Section 4(2) of the Securities Act or
Regulation D or Regulation S promulgated thereunder,
or Rule 701 promulgated under Section 3(b) of the
Securities Act as transactions by an issuer not involving any
public offering or pursuant to benefit plans and contracts
relating to compensation as provided under Rule 701. The
recipients of the securities in each of these transactions
represented their intentions to acquire the securities for
investment only and not with a view to or for sale in connection
with any distribution thereof, and appropriate legends were
placed upon the share certificates issued in these transactions.
All recipients had adequate access, through their relationships
with the Registrant, to information about the Registrant. In
particular, with regard to the sales identified in paragraphs 5,
6 and 8, we relied on an exemption from registration provided by
Section 4(2) of the Securities Act, whereby the investors
represented to us that they were accredited
investors as defined by Rule 501(a) of
Regulation D under the Securities Act and Rule 506 of
Regulation D under the Securities Act. Each investor in the
transactions identified in paragraphs 5, 6, and 8 was also
sophisticated. In connection with the sale described in
paragraph 9, we relied on an exemption from registration
provided by Regulation S under the Securities Act.
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ITEM 16.
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Exhibits and
Financial Statement Schedules.
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(a) Exhibits.
EXHIBIT INDEX
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Exhibit
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Number
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Exhibit
Title
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1
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.01*
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Form of Underwriting Agreement.
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2
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.01
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Exchange Agreement dated as of
November 29, 2004 by and among the shareholders of
Macrospace Limited and the Registrant.
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2
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.02
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Exchange Agreement dated as of
March 29, 2006 by and among the shareholders of iFone
Holdings Limited and the Registrant.
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3
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.01
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Restated Certificate of
Incorporation of the Registrant.
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3
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.02
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Form of Restated Certificate of
Incorporation of the Registrant, to be effective upon the
completion of this offering.
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3
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.03
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Bylaws of the Registrant.
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3
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.04
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Form of Amended and Restated
Bylaws of the Registrant, to be effective upon completion of
this offering.
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II-3
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Exhibit
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Number
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Exhibit
Title
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4
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.01
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Form of Registrants Common
Stock certificate.
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4
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.02
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Amended and Restated
Investors Rights Agreement, dated as of March 29,
2006, by and among the Registrant and certain investors of the
Registrant and the Amendment No. 1 and Joinder to the
Amended and Restated Investor Rights Agreement dated May 5,
2006, by and among the Registrant and certain investors of the
Registrant.
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5
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.01
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Form of Opinion of
Fenwick & West LLP regarding the legality of the
securities being registered.
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10
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.01
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Form of Indemnity Agreement.
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10
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.02
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2001 Stock Option Plan, form of
stock option agreement used from December 19, 2001 to
May 2, 2006, form of stock option agreement used from
December 8, 2004 to May 2, 2006 and forms of stock
option agreement used since May 2, 2006.
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10
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.03
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2007 Equity Incentive Plan and
forms of (a) Notice of Stock Option Grant, Stock Option
Award Agreement and Stock Option Exercise Agreement,
(b) Notice of Restricted Stock Award and Restricted Stock
Agreement, (c) Notice of Stock Appreciation Right Award and
Stock Appreciation Right Award Agreement, (d) Notice of
Restricted Stock Unit Award and Restricted Stock Unit Agreement
and (e) Notice of Stock Bonus Award and Stock Bonus
Agreement.
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10
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.04
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2007 Employee Stock Purchase Plan.
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10
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.05
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Lease Agreement at San Mateo
Centre II and III dated as of January 23, 2003,
as amended on June 26, 2003, December 5, 2003,
October 11, 2004 and May 31, 2005, by and between
CarrAmerica Realty, L.P. and the Registrant.
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10
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.06*
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Agreement to Lease dated as of
November 24, 2006 by and between The Royal Bank of
Scotland, Plc and the Registrant.
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10
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.07
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Publishing and Distribution
Agreement dated as of October 1, 2004, as amended, by and
among PopCap Games, Inc., PopCap Games International, Ltd. and
the Registrant.
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10
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.08
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Wireless Games Agreement dated as
of December 8, 2004, as amended, by and between Celador
International Limited and the Registrant.
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10
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.09
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Wireless Content License Agreement
dated as of December 16, 2004, as amended, by and between
Fox Mobile Entertainment Inc. and the Registrant.
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10
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.10
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Wireless Information Service
Licensing Agreement dated as of October 15, 2004 by and
between Cingular Wireless, LLC and the Registrant.
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10
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.11.1
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BREW Application License Agreement
dated as of February 12, 2002 by and between Cellco
Partnership (d.b.a. Verizon Wireless) and the Registrant.
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10
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.11.2
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BREW Developer Agreement dated as
of November 2, 2001, as amended, by and between Qualcomm
Inc. and the Registrant.
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10
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.12
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Master Reseller Agreement dated as
of July 7, 2003 by and between Vodafone Global Content
Services Limited and the Registrant.
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10
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.13
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Amended and Restated Voting
Agreement dated as of March 29, 2006 by and among the
persons listed on Exhibit A attached thereto, certain
shareholders listed on Exhibit B attached thereto, the
iFone Shareholders listed on Exhibit C attached thereto and
the Registrant.
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10
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.14
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Offer Letter Agreement dated
September 17, 2002 by and between Alessandro Galvagni and
the Registrant.
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10
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.15
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Offer Letter Agreement dated
September 22, 2003 by and between L. Gregory Ballard
and the Registrant.
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10
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.16
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Offer Letter Agreement dated
December 22, 2003 by and between Jill S. Braff and the
Registrant.
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10
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.17
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Offer Letter Agreement dated
September 23, 2004 by and between Albert A. Pimentel and
the Registrant.
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II-4
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Exhibit
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Number
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Exhibit
Title
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10
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.18
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Employee Contract dated
July 25, 2003 by and between Kristian Segerstrale and the
Registrant.
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10
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.19
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Loan and Security Agreement dated
as of May 2, 2006 by and between Pinnacle Ventures LLC and
the Registrant.
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10
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.20
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Form of Warrant dated as of
May 2, 2006 by and between Pinnacle Ventures I Equity
Holdings LLC and the Registrant, by and between Pinnacle
Ventures I Affiliates, L.P. and the Registrant, and by and
between Pinnacle Ventures II Equity Holdings, LLC and the
Registrant.
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10
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.21
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Form of Warrant dated as of
March 6, 2003 by and between New Enterprise
Associates 10, LP and the Registrant, by and between Sienna
Limited Partnership III, LP and the Registrant, and by and
between Preston Gates & Ellis Investments LLC and the
Registrant.
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10
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.22
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Warrant dated March 31, 2004
by and between Silicon Valley Bank and the Registrant.
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10
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.23
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Form of Severance and Change in
Control Agreement dated as of March 22, 2006 by and between
L. Gregory Ballard and the Registrant, and by and between
Albert A. Pimentel and the Registrant.
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10
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.24
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Summary of Bonus Plan of the
Registrant.
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10
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.25
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Series D Preferred Stock Purchase
Agreement dated as of April 25, 2005 by and among certain
investors of the Registrant and the Registrant.
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10
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.26
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Amended and Restated Series D and
Series D-1 Preferred Stock Purchase Agreement dated as of July
26, 2005 by and among certain investors of the Registrant and
the Registrant.
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10
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.27
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Restricted Stock Purchase
Agreement dated as of April 25, 2005 by and among Granite Global
Ventures II L.P., GGVII Entrepreneurs Fund L.P., and the
Registrant.
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10
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.28
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Loan and Security Agreement dated
as of February 14, 2007 by and between Silicon Valley Bank
and the Registrant.
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10
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.29
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Wireless Internet Service
Agreement dated as of March 28, 2003, as amended, by and
between Sprint Spectrum L.P. and the Registrant.
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10
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.30
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Digital Item License and
Distribution Agreement dated as of August 15, 2004, as
amended, by and between Nextel Operations, Inc. and the
Registrant.
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21
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.01
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List of Subsidiaries of the
Registrant.
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23
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.01
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Consent of Fenwick & West
LLP (included in Exhibit 5.01).
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23
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.02
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Consent of PricewaterhouseCoopers
LLP, independent registered public accounting firm
Glu Mobile Inc.
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23
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.03
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Consent of PricewaterhouseCoopers
LLP, independent accountants iFone Holdings Limited.
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23
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.04
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Consent of Duff & Phelps,
LLC, an independent valuation firm, dated as of
December 18, 2006.
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24
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.01
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Power of Attorney.
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24
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.02
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Power of Attorney for William J.
Miller.
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99
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.01
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Consent of m:metrics, Inc., a
market research firm, dated as December 8, 2006.
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99
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.02
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Consent of Juniper Research, a
market research firm, dated as of December 11, 2006.
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* To be filed by amendment.
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Previously filed.
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Registrant has omitted portions of the referenced exhibit and
filed such exhibit separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment
under Rule 406 promulgated under the Securities Act of 1933.
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II-5
(b) Financial Statement Schedules.
All financial statement schedules are omitted because they are
not applicable or the information is included in the
Registrants consolidated financial statements or related
notes.
The undersigned Registrant hereby undertakes to provide to the
underwriters at the closing specified in the underwriting
agreement certificates in such denominations and registered in
such names as required by the underwriters to permit prompt
delivery to each purchaser.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the Registrant pursuant to provisions
described in Item 14 above, or otherwise, the Registrant
has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and
will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(1) for purposes of determining any liability under the
Securities Act, the information omitted from the form of
prospectus filed as part of this registration statement in
reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities
Act shall be deemed to be part of this registration statement as
of the time it was declared effective.
(2) for the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a
form of prospectus shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial
bona fide
offering thereof.
II-6
SIGNATURES
Pursuant to the requirements of the Securities Act, the
Registrant has duly caused this Amendment No. 5 to
Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of San
Mateo, State of California, on February 16, 2007.
GLU MOBILE INC.
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By:
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/s/ Albert
A. Pimentel
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Albert A. Pimentel
Chief Financial Officer
Pursuant to the requirements of the Securities Act, this
Amendment No. 5 to Registration Statement has been signed
by the following persons in the capacities and on the date
indicated:
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Name
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Title
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Date
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Principal Executive Officer:
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*
L.
Gregory Ballard
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President, Chief Executive Officer
and Director
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February 16, 2007
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Principal Financial Officer:
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/s/ Albert
A. Pimentel
Albert
A. Pimentel
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Executive Vice President and Chief
Financial Officer
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February 16, 2007
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|
|
|
Principal Accounting Officer:
|
|
|
|
|
|
|
|
|
|
|
|
*
Eric
R. Ludwig
|
|
Vice President, Finance
|
|
February 16, 2007
|
|
|
|
|
|
|
|
Additional Directors:
|
|
|
|
|
|
|
|
|
|
|
|
*
Daniel
L. Skaff
|
|
Lead Independent Director
|
|
February 16, 2007
|
|
|
|
|
|
*
Ann
Mather
|
|
Director
|
|
February 16, 2007
|
|
|
|
|
|
*
William
J. Miller
|
|
Director
|
|
February 16, 2007
|
|
|
|
|
|
*
Richard
A. Moran
|
|
Director
|
|
February 16, 2007
|
|
|
|
|
|
*
Hany
M. Nada
|
|
Director
|
|
February 16, 2007
|
|
|
|
|
|
*
A.
Brooke Seawell
|
|
Director
|
|
February 16, 2007
|
|
|
|
|
|
*
Sharon
L. Wienbar
|
|
Director
|
|
February 16, 2007
|
|
|
|
|
|
*By:
/s/ Albert
A. Pimentel
Albert
A. Pimentel
Attorney-in-fact
|
|
|
|
February 16, 2007
|
II-7
EXHIBIT INDEX
|
|
|
|
|
Exhibit
|
|
|
Number
|
|
Exhibit
Title
|
|
|
1
|
.01*
|
|
Form of Underwriting Agreement.
|
|
2
|
.01
|
|
Exchange Agreement dated as of
November 29, 2004 by and among the shareholders of
Macrospace Limited and the Registrant.
|
|
2
|
.02
|
|
Exchange Agreement dated as of
March 29, 2006 by and among the shareholders of iFone
Holdings Limited and the Registrant.
|
|
3
|
.01
|
|
Restated Certificate of
Incorporation of the Registrant.
|
|
3
|
.02
|
|
Form of Restated Certificate of
Incorporation of the Registrant, to be effective upon the
completion of this offering.
|
|
3
|
.03
|
|
Bylaws of the Registrant.
|
|
3
|
.04
|
|
Form of Amended and Restated
Bylaws of the Registrant, to be effective upon completion of
this offering.
|
|
4
|
.01
|
|
Form of Registrants Common
Stock certificate.
|
|
4
|
.02
|
|
Amended and Restated
Investors Rights Agreement, dated as of March 29,
2006, by and among the Registrant and certain investors of the
Registrant and the Amendment No. 1 and Joinder to the
Amended and Restated Investor Rights Agreement dated May 5,
2006, by and among the Registrant and certain investors of the
Registrant.
|
|
5
|
.01
|
|
Form of Opinion of
Fenwick & West LLP regarding the legality of the
securities being registered.
|
|
10
|
.01
|
|
Form of Indemnity Agreement.
|
|
10
|
.02
|
|
2001 Stock Option Plan, form of
stock option agreement used from December 19, 2001 to
May 2, 2006, form of stock option agreement used from
December 8, 2004 to May 2, 2006 and forms of stock
option agreement used since May 2, 2006.
|
|
10
|
.03
|
|
2007 Equity Incentive Plan and
forms of (a) Notice of Stock Option Grant, Stock Option
Award Agreement and Stock Option Exercise Agreement,
(b) Notice of Restricted Stock Award and Restricted Stock
Agreement, (c) Notice of Stock Appreciation Right Award and
Stock Appreciation Right Award Agreement, (d) Notice of
Restricted Stock Unit Award and Restricted Stock Unit Agreement
and (e) Notice of Stock Bonus Award and Stock Bonus
Agreement.
|
|
10
|
.04
|
|
2007 Employee Stock Purchase Plan.
|
|
10
|
.05
|
|
Lease Agreement at San Mateo
Centre II and III dated as of January 23, 2003,
as amended on June 26, 2003, December 5, 2003,
October 11, 2004 and May 31, 2005, by and between
CarrAmerica Realty, L.P. and the Registrant.
|
|
10
|
.06*
|
|
Agreement to Lease dated as of
November 24, 2006 by and between The Royal Bank of
Scotland, Plc and the Registrant.
|
|
10
|
.07
|
|
Publishing and Distribution
Agreement dated as of October 1, 2004, as amended, by and
among PopCap Games, Inc., PopCap Games International, Ltd. and
the Registrant.
|
|
10
|
.08
|
|
Wireless Games Agreement dated as
of December 8, 2004, as amended, by and between Celador
International Limited and the Registrant.
|
|
10
|
.09
|
|
Wireless Content License Agreement
dated as of December 16, 2004, as amended, by and between
Fox Mobile Entertainment Inc. and the Registrant.
|
|
10
|
.10
|
|
Wireless Information Service
Licensing Agreement dated as of October 15, 2004 by and
between Cingular Wireless, LLC and the Registrant.
|
|
10
|
.11.1
|
|
BREW Application License Agreement
dated as of February 12, 2002 by and between Cellco
Partnership (d.b.a. Verizon Wireless) and the Registrant.
|
|
|
|
|
|
Exhibit
|
|
|
Number
|
|
Exhibit
Title
|
|
|
10
|
.11.2
|
|
BREW Developer Agreement dated as
of November 2, 2001, as amended, by and between Qualcomm
Inc. and the Registrant.
|
|
10
|
.12
|
|
Master Reseller Agreement dated as
of July 7, 2003 by and between Vodafone Global Content
Services Limited and the Registrant.
|
|
10
|
.13
|
|
Amended and Restated Voting
Agreement dated as of March 29, 2006 by and among the
persons listed on Exhibit A attached thereto, certain
shareholders listed on Exhibit B attached thereto, the
iFone Shareholders listed on Exhibit C attached thereto and
the Registrant.
|
|
10
|
.14
|
|
Offer Letter Agreement dated
September 17, 2002 by and between Alessandro Galvagni and
the Registrant.
|
|
10
|
.15
|
|
Offer Letter Agreement dated
September 22, 2003 by and between L. Gregory Ballard
and the Registrant.
|
|
10
|
.16
|
|
Offer Letter Agreement dated
December 22, 2003 by and between Jill S. Braff and the
Registrant.
|
|
10
|
.17
|
|
Offer Letter Agreement dated
September 23, 2004 by and between Albert A. Pimentel and
the Registrant.
|
|
10
|
.18
|
|
Employee Contract dated
July 25, 2003 by and between Kristian Segerstrale and the
Registrant.
|
|
10
|
.19
|
|
Loan and Security Agreement dated
as of May 2, 2006 by and between Pinnacle Ventures LLC and
the Registrant.
|
|
10
|
.20
|
|
Form of Warrant dated as of
May 2, 2006 by and between Pinnacle Ventures I Equity
Holdings LLC and the Registrant, by and between Pinnacle
Ventures I Affiliates, L.P. and the Registrant, and by and
between Pinnacle Ventures II Equity Holdings, LLC and the
Registrant.
|
|
10
|
.21
|
|
Form of Warrant dated as of
March 6, 2003 by and between New Enterprise
Associates 10, LP and the Registrant, by and between Sienna
Limited Partnership III, LP and the Registrant, and by and
between Preston Gates & Ellis Investments LLC and the
Registrant.
|
|
10
|
.22
|
|
Warrant dated March 31, 2004
by and between Silicon Valley Bank and the Registrant.
|
|
10
|
.23
|
|
Form of Severance and Change in
Control Agreement dated as of March 22, 2006 by and between
L. Gregory Ballard and the Registrant, and by and between
Albert A. Pimentel and the Registrant.
|
|
10
|
.24
|
|
Summary of Bonus Plan of the
Registrant.
|
|
10
|
.25
|
|
Series D Preferred Stock Purchase
Agreement dated as of April 25, 2005 by and among certain
investors of the Registrant and the Registrant.
|
|
10
|
.26
|
|
Amended and Restated Series D and
Series D-1 Preferred Stock Purchase Agreement dated as of July
26, 2005 by and among certain investors of the Registrant and
the Registrant.
|
|
10
|
.27
|
|
Restricted Stock Purchase
Agreement dated as of April 25, 2005 by and among Granite Global
Ventures II L.P., GGVII Entrepreneurs Fund L.P., and the
Registrant.
|
|
10
|
.28
|
|
Loan and Security Agreement dated
as of February 14, 2007 by and between Silicon Valley Bank
and the Registrant.
|
|
10
|
.29
|
|
Wireless Internet Service
Agreement dated as of March 28, 2003, as amended, by and
between Sprint Spectrum L.P. and the Registrant.
|
|
10
|
.30
|
|
Digital Item License and
Distribution Agreement dated as of August 15, 2004, as
amended, by and between Nextel Operations, Inc. and the
Registrant.
|
|
21
|
.01
|
|
List of Subsidiaries of the
Registrant.
|
|
23
|
.01
|
|
Consent of Fenwick & West
LLP (included in Exhibit 5.01).
|
|
23
|
.02
|
|
Consent of PricewaterhouseCoopers
LLP, independent registered public accounting firm
Glu Mobile Inc.
|
|
|
|
|
|
Exhibit
|
|
|
Number
|
|
Exhibit
Title
|
|
|
23
|
.03
|
|
Consent of PricewaterhouseCoopers
LLP, independent accountants iFone Holdings Limited.
|
|
23
|
.04
|
|
Consent of Duff & Phelps,
LLC, an independent valuation firm, dated as of
December 18, 2006.
|
|
24
|
.01
|
|
Power of Attorney.
|
|
24
|
.02
|
|
Power of Attorney for William J.
Miller.
|
|
99
|
.01
|
|
Consent of m:metrics, Inc., a
market research firm, dated as December 8, 2006.
|
|
99
|
.02
|
|
Consent of Juniper Research, a
market research firm, dated as of December 11, 2006.
|
* To be filed by amendment.
|
|
|
|
|
Registrant has omitted portions of the referenced exhibit and
filed such exhibit separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment
under Rule 406 promulgated under the Securities Act of 1933.
|
Exhibit 10.03
GLU MOBILE INC.
2007 Equity Incentive Plan
(adopted
by the Board on January 25, 2007)
1.
PURPOSE
. The purpose of this Plan is to provide incentives to attract,
retain and motivate eligible persons whose present and potential contributions are important to the
success of the Company, and any Parents and Subsidiaries that exist now or in the future, by
offering them an opportunity to participate in the Companys future performance through the grant
of Awards. Capitalized terms not defined elsewhere in the text are defined in Section 27.
2.
SHARES SUBJECT TO THE PLAN
.
2.1
Number of Shares Available
. Subject to Sections 2.6 and 22 and any
other applicable provisions hereof, the total number of Shares reserved and available for grant and
issuance pursuant to this Plan as of the date of adoption of the Plan
by the Board, is Five Million Three Hundred Thousand (5,300,000) Shares plus (i) any reserved shares not issued or
subject to outstanding grants under the Companys 2001 Stock Option Plan (the
Prior Plan
) on the
Effective Date (as defined below), (ii) shares that are subject to stock options granted under the
Prior Plan that cease to be subject to such stock options after the Effective Date and (iii) shares
issued under the Prior Plan before or after the Effective Date pursuant to the exercise of stock
options that are, after the Effective Date, forfeited or shares issued under the Prior Plan that
are repurchased by the Company at the original issue price.
2.2
Lapsed, Returned Awards
. Shares subject to Awards, and Shares issued
upon exercise of Awards, will again be available for grant and issuance in connection with
subsequent Awards under this Plan to the extent such Shares: (i) are subject to issuance upon
exercise of an Option or SAR granted under this Plan but which cease to be subject to the Option or
SAR for any reason other than exercise of the Option or SAR; (ii) are subject to Awards granted
under this Plan that are forfeited or are repurchased by the Company at the original issue price;
(iii) are surrendered pursuant to an Exchange Program; or (iv) are subject to Awards granted under
this Plan that otherwise terminate without such Shares being issued. With respect to SARs, only
Shares actually issued pursuant to a SAR will cease to be available under the Plan; all remaining
Shares under SARs will remain available for future grant or sale under the Plan. Shares used to
pay the exercise price of an Award or to satisfy the tax withholding obligations related to an
Award will become available for future grant or sale under the Plan. To the extent an Award under
the Plan is paid out in cash rather than Shares, such cash payment will not result in reducing the
number of Shares available for issuance under the Plan.
2.3
Minimum Share Reserve
. At all times the Company shall reserve and keep
available a sufficient number of Shares as shall be required to satisfy the requirements of all
outstanding Awards granted under this Plan and all other outstanding but unvested Awards granted
under this Plan.
2.4
Automatic Share Reserve Increase
. The number of Shares available for
grant and issuance under the Plan shall be increased on January 1, of each of 2008 through 2011, by
the lesser of (i) three percent (3%) of the number of Shares issued and
outstanding on each December 31 immediately prior to the date of increase or (ii) such number of
Shares determined by the Board.
2.5
Limitations
. No more than Fifty Million (50,000,000)
Shares shall be issued pursuant to the exercise of ISOs.
2.6
Adjustment of Shares
. If the number of outstanding Shares is changed by
a stock dividend, recapitalization, stock split, reverse stock split, subdivision, combination,
reclassification or similar change in the capital structure of the Company, without consideration,
then (a) the number of Shares reserved for issuance and future grant under the Plan set forth in
Section 2.1, (b) the Exercise Prices of and number of Shares subject to outstanding Options and
SARs, (c) the number of Shares subject to other outstanding Awards, (d) the maximum number of
shares that may be issued as ISOs set forth in Section 2.5, (e) the maximum number of Shares that
may be issued to an individual or to a new Employee in any one
calendar year set forth in Section 3
and (f) the number of Shares that are granted as Awards to Outside Directors as set forth in
Section 12, shall be proportionately adjusted, subject to any required action by the Board or the
stockholders of the Company and in compliance with applicable securities laws; provided that
fractions of a Share will not be issued.
3.
ELIGIBILITY
. ISOs may be granted only to Employees. All other Awards
may be granted to Employees, Consultants, Directors and Outside Directors of the Company or any
Parent or Subsidiary of the Company;
provided
such Consultants, Directors and Outside
Directors render bona fide services not in connection with the offer and sale of securities in a
capital-raising transaction. No Participant will be eligible to receive more than one million
(1,000,000) Shares in any calendar year under this Plan pursuant to the grant of Awards except that
new Employees of the Company or of a Parent or Subsidiary of the Company (including new Employees
who are also officers and directors of the Company or any Parent or Subsidiary of the Company) are
eligible to receive up to a maximum of two million (2,000,000) Shares in the calendar year in which
they commence their employment.
4.
ADMINISTRATION
.
4.1
Committee Composition; Authority
. This Plan will be administered by the
Committee or by the Board acting as the Committee. Subject to the general purposes, terms and
conditions of this Plan, and to the direction of the Board, the Committee will have full power to
implement and carry out this Plan, except, however, the Board shall
establish the terms for the grant of an Award to Outside Directors. The Committee will have the authority to:
(a) construe and interpret this Plan, any Award Agreement and any other agreement or document
executed pursuant to this Plan;
(b) prescribe, amend and rescind rules and regulations relating to this Plan or any Award;
(c) select persons to receive Awards;
(d) determine the form and terms and conditions, not inconsistent with the terms of the Plan,
of any Award granted hereunder. Such terms and conditions include, but are not limited to, the
exercise price, the time or times when Awards may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or
limitation regarding any Award or the Shares relating thereto, based in each case on such factors
as the Committee will determine;
(e) determine the number of Shares or other consideration subject to Awards;
(f) determine the Fair Market Value in good faith, if necessary;
2
(g) determine whether Awards will be granted singly, in combination with, in tandem with, in
replacement of, or as alternatives to, other Awards under this Plan or any other incentive or
compensation plan of the Company or any Parent or Subsidiary of the Company;
(h) grant waivers of Plan or Award conditions;
(i) determine the vesting, exercisability and payment of Awards;
(j) correct any defect, supply any omission or reconcile any inconsistency in this Plan, any
Award or any Award Agreement;
(k) determine whether an Award has been earned;
(l) determine the terms and conditions of any, and to institute any Exchange Program;
(m) reduce or waive any criteria with respect to Performance Factors;
(n) adjust Performance Factors to take into account changes in law and accounting or tax rules
as the Committee deems necessary or appropriate to reflect the impact of extraordinary or unusual
items, events or circumstances to avoid windfalls or hardships provided that such adjustments are
consistent with the regulations promulgated under Section 162(m) of the Code with respect to
persons whose compensation is subject to Section 162(m) of the Code; and
(o) make all other determinations necessary or advisable for the administration of this Plan.
4.2
Committee Interpretation and Discretion
. Any determination made by the
Committee with respect to any Award shall be made in its sole discretion at the time of grant of
the Award or, unless in contravention of any express term of the Plan or Award, at any later time,
and such determination shall be final and binding on the Company and all persons having an interest
in any Award under the Plan. Any dispute regarding the interpretation of the Plan or any Award
Agreement shall be submitted by the Participant or Company to the Committee for review. The
resolution of such a dispute by the Committee shall be final and binding on the Company and the
Participant. The Committee may delegate to one or more executive officers the authority to review
and resolve disputes with respect to Awards held by Participants who are not Insiders, and such
resolution shall be final and binding on the Company and the Participant.
4.3
Section 162(m) of the Code and Section 16 of the Exchange Act
. When
necessary or desirable for an Award to qualify as performance-based compensation under Section
162(m) of the Code the Committee shall include at least two persons who are outside directors (as
defined under Section 162(m) of the Code) and at least two (or a majority if more than two then
serve on the Committee) such outside directors shall approve the grant of such Award and timely
determine (as applicable) the Performance Period and any Performance Factors upon which vesting or
settlement of any portion of such Award is to be subject. When required by Section 162(m) of the
Code, prior to settlement of any such Award at least two (or a majority if more than two then serve
on the Committee) such outside directors then serving on the Committee shall determine and
certify in writing the extent to which such Performance Factors have been timely achieved and the
extent to which the Shares subject to such Award have thereby been earned. Awards granted to
Insiders must be approved by two or more non-employee directors (as defined in the regulations
promulgated under Section 16 of the Exchange Act).
5.
OPTIONS
. The Committee may grant Options to Participants and will
determine whether such Options will be Incentive Stock Options within the meaning of the Code
(
ISOs
) or Nonqualified Stock Options (
NQSOs
), the number of Shares subject to the Option, the
Exercise Price of the Option, the period during which the Option may be exercised, and all other
terms and conditions of the Option, subject to the following:
3
5.1
Option Grant
. Each Option granted under this Plan will identify the
Option as an ISO or an NQSO. An Option may be, but need not be, awarded upon satisfaction of such
Performance Factors during any Performance Period as are set out in advance in the Participants
individual Award Agreement. If the Option is being earned upon the satisfaction of Performance
Factors, then the Committee will: (x) determine the nature, length and starting date of any
Performance Period for each Option; and (y) select from among the Performance Factors to be used to
measure the performance, if any. Performance Periods may overlap and Participants may participate
simultaneously with respect to Options that are subject to different performance goals and other
criteria.
5.2
Date of Grant
. The date of grant of an Option will be the date on which
the Committee makes the determination to grant such Option, or a specified future date. The Award
Agreement and a copy of this Plan will be delivered to the Participant within a reasonable time
after the granting of the Option.
5.3
Exercise Period
. Options may be exercisable within the times or upon
the conditions as set forth in the Award Agreement governing such Option;
provided
,
however
, that no Option will be exercisable after the
expiration of ten (10) years from the date
the Option is granted; and
provided further
that no ISO granted to a person who, at the
time the ISO is granted, directly or by attribution owns more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or of any Parent or Subsidiary of the
Company (
Ten Percent Shareholder
) will be exercisable after the expiration of five (5) years from
the date the ISO is granted. The Committee also may provide for Options to become exercisable at
one time or from time to time, periodically or otherwise, in such number of Shares or percentage of
Shares as the Committee determines.
5.4
Exercise Price
. The Exercise Price of an Option will be determined by
the Committee when the Option is granted; provided that: (i) the Exercise Price of an ISO will be
not less than one hundred percent (100%) of the Fair Market Value of the Shares on the date of
grant and (ii) the Exercise Price of any ISO granted to a Ten Percent Shareholder will not be less
than one hundred ten percent (110%) of the Fair Market Value of the Shares on the date of grant.
Payment for the Shares purchased may be made in accordance with Section 11. The Exercise Price of
a NQSO may be less than one hundred percent (100%) of the Fair Market Value per Share on the date
of grant in the Committees discretion.
5.5
Method of Exercise
. Any Option granted hereunder will be exercisable
according to the terms of the Plan and at such times and under such conditions as determined by the
Committee and set forth in the Award Agreement. An Option may not be exercised for a fraction of a
Share. An Option will be deemed exercised when the Company receives: (i) notice of exercise (in
such form as the Committee may specify from time to time) from the person entitled to exercise the
Option, and (ii) full payment for the Shares with respect to which the Option is exercised
(together with applicable withholding taxes). Full payment may consist of any consideration and
method of payment authorized by the Committee and permitted by the Award Agreement and the Plan.
Shares issued upon exercise of an Option will be issued in the name of the Participant. Until the
Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive dividends or any other
rights as a stockholder will exist with respect to the Shares, notwithstanding the exercise of the
Option. The Company will issue (or cause to be issued) such Shares promptly after the Option is
exercised. No adjustment will be made for a dividend or other right for which the record date is
prior to the date the Shares are issued, except as provided in Section 2.6 of the Plan. Exercising
an Option in any manner will decrease the number of Shares thereafter available, both for purposes
of the Plan and for sale under the Option, by the number of Shares as to which the Option is
exercised.
4
5.6
Termination
. The exercise of an Option will be subject to the following
(except as may be otherwise provided in an Award Agreement):
(a) If the Participant is Terminated for any reason except for Cause or the Participants
death or Disability, then the Participant may exercise such Participants Options only to the
extent that such Options would have been exercisable by the Participant on the Termination Date no
later than three (3) months after the Termination Date (or such shorter time period or longer time
period not exceeding five (5) years as may be determined by the Committee,
with any exercise beyond three (3) months after the Termination Date deemed to be an NQSO), but in
any event no later than the expiration date of the Options.
(b) If the Participant is Terminated because of the Participants death (or the Participant
dies within three (3) months after a Termination other than for Cause or because of the
Participants Disability), then the Participants Options may be exercised only to the extent that
such Options would have been exercisable by the Participant on the Termination Date and must be
exercised by the Participants legal representative, or authorized assignee, no later than twelve
(12) months after the Termination Date (or such shorter time period not less than six (6) months or
longer time period not exceeding five (5) years as may be determined by the Committee, with any
exercise beyond (a) three (3) months after the Termination Date when the Termination is for any
reason other than the Participants death, or (b) twelve (12) months after the Termination Date
when the Termination is for the Participants death, deemed to be an NQSO), but in any event no
later than the expiration date of the Options.
(c) If the Participant is Terminated because of the Participants Disability, then the
Participants Options may be exercised only to the extent that such Options would have been
exercisable by the Participant on the Termination Date and must be exercised by the Participant (or
the Participants legal representative or authorized assignee) no later than twelve (12) months
after the Termination Date (with any exercise beyond (a) three (3) months after the Termination
Date when the Termination is for a Disability that
is not
a permanent and total
disability as defined in Section 22(e)(3) of the Code, or (b) twelve (12) months after the
Termination Date when the Termination is for a Disability that
is
a permanent and total
disability as defined in Section 22(e)(3) of the Code, deemed to be exercise of an NQSO), but in
any event no later than the expiration date of the Options.
(d) If the Participant is terminated for Cause, then Participants Options shall expire on
such Participants Termination Date, or at such later time and on such conditions as are determined
by the Committee, but in any no event later than the expiration date of the Options.
5.7
Limitations on Exercise
. The Committee may specify a minimum number of
Shares that may be purchased on any exercise of an Option, provided that such minimum number will
not prevent any Participant from exercising the Option for the full number of Shares for which it
is then exercisable.
5.8
Limitations on ISOs
. With respect to Awards granted as ISOs, to the
extent that the aggregate Fair Market Value of the Shares with respect to which such ISOs are
exercisable for the first time by the Participant during any calendar year (under all plans of the
Company and any Parent or Subsidiary) exceeds one hundred thousand dollars ($100,000), such Options
will be treated as NQSOs. For purposes of this Section 5.8, ISOs will be taken into account in the
order in which they were granted. The Fair Market Value of the Shares will be determined as of the
time the Option with respect to such Shares is granted. In the event that the Code or the
regulations promulgated thereunder are amended after the Effective Date to provide for a different
limit on the Fair Market Value of Shares permitted to be subject to ISOs, such different limit will
be automatically incorporated herein and will apply to any Options granted after the effective date
of such amendment.
5
5.9
Modification, Extension or Renewal
. The Committee may modify, extend or
renew outstanding Options and authorize the grant of new Options in substitution therefor, provided
that any such action may not, without the written consent of a Participant, impair any of such
Participants rights under any Option previously granted. Any outstanding ISO that is modified,
extended, renewed or otherwise altered will be treated in accordance with Section 424(h) of the
Code. Subject to Section 18 of this Plan, by written notice to affected Participants, the
Committee may reduce the Exercise Price of outstanding Options without the consent of such
Participants;
provided
,
however
, that the Exercise Price may not be reduced below
the Fair Market Value on the date the action is taken to reduce the Exercise Price.
5.10
No Disqualification
. Notwithstanding any other provision in this Plan,
no term of this Plan relating to ISOs will be interpreted, amended or altered, nor will any
discretion or authority granted under this Plan be exercised, so as to disqualify this Plan under
Section 422 of the Code or, without the consent of the Participant affected, to disqualify any ISO
under Section 422 of the Code.
6.
RESTRICTED STOCK AWARDS
.
6.1
Awards of Restricted Stock
. A Restricted Stock Award is an offer by the
Company to sell to a Participant Shares that are subject to restrictions (
Restricted Stock
). The
Committee will determine to whom an offer will be made, the number of Shares the Participant may
purchase, the Purchase Price, the restrictions under which the Shares will be subject and all other
terms and conditions of the Restricted Stock Award, subject to the Plan.
6.2
Restricted Stock Purchase Agreement
. All purchases under a Restricted
Stock Award will be evidenced by an Award Agreement. A Participant accepts a Restricted Stock
Award by signing and delivering to the Company an Award Agreement with full payment of the Purchase
Price, within thirty (30) days from the date the Award Agreement was delivered to the Participant.
If the Participant does not accept such Award within thirty (30) days, then the offer of such
Restricted Stock Award will terminate, unless the Committee determines otherwise.
6.3
Purchase Price
. The Purchase Price for a Restricted Stock Award will be
determined by the Committee and may be less than Fair Market Value on the date the Restricted Stock
Award is granted. Payment of the Purchase Price must be made in accordance with Section 11 of the
Plan, and the Award Agreement.
6.4
Terms of Restricted Stock Awards
. Restricted Stock Awards will be
subject to such restrictions as the Committee may impose or are required by law. These
restrictions may be based on completion of a specified number of years of service with the Company
or upon completion of Performance Factors, if any, during any Performance Period as set out in
advance in the Participants Award Agreement. Prior to the grant of a Restricted Stock Award, the
Committee shall: (a) determine the nature, length and starting date of any Performance Period for
the Restricted Stock Award; (b) select from among the Performance Factors to be used to measure
performance goals, if any; and (c) determine the number of Shares that may be awarded to the
Participant. Performance Periods may overlap and a Participant may participate simultaneously with
respect to Restricted Stock Awards that are subject to different Performance Periods and having
different performance goals and other criteria.
6.5
Termination of Participant
. Except as may be set forth in the
Participants Award Agreement, vesting ceases on such Participants Termination Date (unless
determined otherwise by the Committee).
6
7.
STOCK BONUS AWARDS
.
7.1
Awards of Stock Bonuses
. A Stock Bonus Award is an award to an eligible
person of Shares (which may consist of Restricted Stock or Restricted Stock Units) for services to
be rendered or for past services already rendered to the Company or any Parent or Subsidiary. All
Stock Bonus Awards shall be made pursuant to an Award Agreement. No
payment from the Participant will
be required for Shares awarded pursuant to a Stock Bonus Award.
7.2
Terms of Stock Bonus Awards
. The Committee will determine the number of
Shares to be awarded to the Participant under a Stock Bonus Award and any restrictions thereon.
These restrictions may be based upon completion of a specified number of years of service with the
Company or upon satisfaction of performance goals based on Performance Factors during any
Performance Period as set out in advance in the Participants Stock Bonus Agreement. Prior to the
grant of any Stock Bonus Award the Committee shall: (a) determine the nature, length and starting
date of any Performance Period for the Stock Bonus Award; (b) select from among the Performance
Factors to be used to measure performance goals; and (c) determine the number of Shares that may be
awarded to the Participant. Performance Periods may overlap and a Participant may participate
simultaneously with respect to Stock Bonus Awards that are subject to different Performance Periods
and different performance goals and other criteria.
7.3
Form of Payment to Participant
. Payment may be made in the form of
cash, whole Shares, or a combination thereof, based on the Fair Market Value of the Shares earned
under a Stock Bonus Award on the date of payment.
7.4
Termination of Participation
. Except as may be set forth in the
Participants Award Agreement, vesting ceases on such Participants Termination Date (unless
determined otherwise by the Committee).
8.
STOCK APPRECIATION RIGHTS
.
8.1
Awards of SARs
. A Stock Appreciation Right (
SAR
) is an award to a
Participant that may be settled in cash, or Shares (which may consist of Restricted Stock), having
a value equal to (a) the difference between the Fair Market Value on the date of exercise over the
Exercise Price multiplied by (b) the number of Shares with respect to which the SAR is being
settled (subject to any maximum number of Shares that may be issuable as specified in an Award
Agreement). All SARs shall be made pursuant to an Award Agreement.
8.2
Terms of SARs
. The Committee will determine the terms of each SAR
including, without limitation: (a) the number of Shares subject to the SAR; (b) the Exercise Price
and the time or times during which the SAR may be settled; (c) the consideration to be distributed
on settlement of the SAR; and (d) the effect of the Participants Termination on each SAR. The
Exercise Price of the SAR will be determined by the Committee when the SAR is granted, and may be
less than Fair Market Value. A SAR may be awarded upon satisfaction of Performance Factors, if
any, during any Performance Period as are set out in advance in the Participants individual Award
Agreement. If the SAR is being earned upon the satisfaction of Performance Factors, then the
Committee will: (x) determine the nature, length and starting date of any Performance Period for
each SAR; and (y) select from among the Performance Factors to be used to measure the performance,
if any. Performance Periods may overlap and Participants may participate simultaneously with
respect to SARs that are subject to different Performance Factors and other criteria.
7
8.3
Exercise Period and Expiration Date
. A SAR will be exercisable within
the times or upon the occurrence of events determined by the Committee and set forth in the Award
Agreement governing such SAR. The SAR Agreement shall set forth the expiration date; provided that no SAR will be exercisable
after the expiration of ten (10) years from the date the SAR is
granted. The Committee may also provide for SARs to become exercisable at one
time or from time to time, periodically or otherwise (including, without limitation, upon the
attainment during a Performance Period of performance goals based on Performance Factors), in such
number of Shares or percentage of the Shares subject to the SAR as the Committee determines.
Except as may be set forth in the Participants Award Agreement, vesting ceases on such
Participants Termination Date (unless determined otherwise by the Committee). Notwithstanding the
foregoing, the rules of Section 5.6 also will apply to SARs.
8.4
Form of Settlement
. Upon exercise of a SAR, a Participant will be
entitled to receive payment from the Company in an amount determined by multiplying (i) the
difference between the Fair Market Value of a Share on the date of exercise over the Exercise
Price; times (ii) the number of Shares with respect to which the SAR is exercised. At the
discretion of the Committee, the payment from the Company for the SAR exercise may be in cash, in
Shares of equivalent value, or in some combination thereof.
9.
RESTRICTED STOCK UNITS
.
9.1
Awards of Restricted Stock Units
. A Restricted Stock Unit (
RSU
) is an
award to a Participant covering a number of Shares that may be settled in cash, or by issuance of
those Shares (which may consist of Restricted Stock). All RSUs shall be made pursuant to an Award
Agreement.
9.2
Terms of RSUs
. The Committee will determine the terms of an RSU
including, without limitation: (a) the number of Shares subject to the RSU; (b) the time or times
during which the RSU may be settled; and (c) the consideration to be distributed on settlement, and
the effect of the Participants Termination on each RSU. An RSU may be awarded upon satisfaction
of such Performance Factors (if any) during any Performance Period as are set out in advance in the
Participants Award Agreement. If the RSU is being earned upon satisfaction of Performance
Factors, then the Committee will: (x) determine the nature, length and starting date of any
Performance Period for the RSU; (y) select from among the Performance Factors to be used to measure
the performance, if any; and (z) determine the number of Shares deemed subject to the RSU.
Performance Periods may overlap and participants may participate simultaneously with respect to
RSUs that are subject to different Performance Periods and different performance goals and other
criteria.
9.3
Form and Timing of Settlement
. Payment of earned RSUs shall be made as
soon as practicable after the date(s) determined by the Committee and set forth in the Award
Agreement. The Committee, in its sole discretion, may settle earned RSUs in cash, Shares, or a
combination of both.
9.4
Termination of Participant
. Except as may be set forth in the
Participants Award Agreement, vesting ceases on such Participants Termination Date (unless
determined otherwise by the Committee).
10.
PERFORMANCE SHARES
.
10.1
Awards of Performance Shares
. A Performance Share Award is an award to
a Participant denominated in Shares that may be settled in cash, or by issuance of those Shares
(which may consist of Restricted Stock). Grants of Performance Shares shall be made pursuant to an
Award Agreement.
8
10.2
Terms of Performance Shares
. The Committee will determine, and each
Award Agreement shall set forth, the terms of each award of Performance Shares including, without
limitation: (a) the number of Shares deemed subject to such Award; (b) the Performance Factors and
Performance Period that shall determine the time and extent to which each award of Performance
Shares shall be settled; (c) the consideration to be distributed on settlement, and the effect of
the Participants Termination on each award of Performance Shares. In establishing Performance
Factors and the Performance Period the Committee will: (x) determine the nature, length and
starting date of any Performance Period; (y) select from among the Performance Factors to be used;
and (z) determine the number of Shares deemed subject to the award of Performance Shares. Prior to
settlement the Committee shall determine the extent to which Performance Shares have been earned.
Performance Periods may overlap and Participants may participate simultaneously with respect to
Performance Shares that are subject to different Performance Periods and different performance
goals and other criteria.
10.3
Value, Earning and Timing of Performance Shares
. Each Performance
Share will have an initial value equal to the Fair Market Value of a Share on the date of grant.
After the applicable Performance Period has ended, the holder of Performance Shares will be
entitled to receive a payout of the number of Performance Shares earned by the Participant over the
Performance Period, to be determined as a function of the extent to which the corresponding
Performance Factors or other vesting provisions have been achieved. The Committee, in its sole discretion, may pay earned Performance Shares in the form of
cash, in Shares (which have an aggregate Fair Market Value equal to the value of the earned
Performance Shares at the close of the applicable Performance Period) or in a combination thereof.
10.4
Termination of Participant
. Except as may be set forth in the
Participants Award Agreement, vesting ceases on such Participants Termination Date (unless
determined otherwise by the Committee).
11.
PAYMENT FOR SHARE PURCHASES
.
Payment
from a Participant for Shares purchased pursuant to this Plan may be made in cash or by
check or, where expressly approved for the Participant by the Committee and where permitted by law
(and to the extent not otherwise set forth in the applicable Award Agreement):
(a) by cancellation of indebtedness of the Company to the Participant;
(b) by surrender of shares of the Company held by the Participant that have a Fair Market
Value on the date of surrender equal to the aggregate exercise price of the Shares as to which said
Award will be exercised or settled;
(c) by waiver of compensation due or accrued to the Participant for services rendered or to be
rendered to the Company or a Parent or Subsidiary of the Company;
(d) by consideration received by the Company pursuant to a broker-assisted and/or same day
sale (or other) cashless exercise program implemented by the Company in connection with the Plan;
(e) by any combination of the foregoing; or
9
(f) by any other method of payment as is permitted by applicable law.
12.
GRANTS TO OUTSIDE DIRECTORS
.
12.1
Types of Awards
. Outside Directors are eligible to receive any type of
Award offered under this Plan except ISOs. Awards pursuant to this Section 12 may be automatically
made pursuant to policy adopted by the Board, or made from time to time as determined in the
discretion of the Board.
12.2
Eligibility
. Awards pursuant to this Section 12 shall be granted only
to Outside Directors. An Outside Director who is elected or re-elected as a member of the Board
will be eligible to receive an Award under this Section 12.
12.3
Vesting, Exercisability and Settlement
. Except as set forth in Section
21, Awards shall vest, become exercisable and be settled as determined by the Board. With respect
to Options and SARs, the exercise price granted to Outside Directors shall not be less than the
Fair Market Value of the Shares at the time that such Option or SAR is granted.
13.
WITHHOLDING TAXES
.
13.1
Withholding Generally
. Whenever Shares are to be issued in
satisfaction of Awards granted under this Plan, the Company may require the Participant to remit to
the Company an amount sufficient to satisfy applicable federal, state, local and international
withholding tax requirements prior to the delivery of Shares pursuant to exercise or settlement of
any Award. Whenever payments in satisfaction of Awards granted under this Plan are to be made in
cash, such payment will be net of an amount sufficient to satisfy applicable federal, state, local
and international withholding tax requirements.
13.2
Stock Withholding
. The Committee, in its sole discretion and pursuant
to such procedures as it may specify from time to time, may require
or permit a Participant to satisfy such
tax withholding obligation, in whole or in part by (without limitation) (i) paying cash, (ii)
electing to have the Company withhold otherwise deliverable cash or Shares having a Fair Market
Value equal to the minimum statutory amount required to be withheld, or (iii) delivering to the
Company already-owned Shares having a Fair Market Value equal to the minimum statutory amount
required to be withheld. The Fair Market Value of the Shares to be withheld or delivered will be
determined as of the date that the taxes are required to be withheld.
14.
TRANSFERABILITY
. Unless determined otherwise by the Committee, an Award
may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other
than by will or by the laws of descent or distribution. If the Committee makes an Award
transferable, such Award will contain such additional terms and conditions as the Committee deems
appropriate. All Awards shall be exercisable: (i) during the Participants lifetime only by (A)
the Participant, or (B) the Participants guardian or legal representative; and (ii) after the
Participants death, by the legal representative of the Participants heirs or legatees
15.
PRIVILEGES OF STOCK OWNERSHIP; RESTRICTIONS ON SHARES
.
15.1
Voting and Dividends
. No Participant will have any of the rights of a
shareholder with respect to any Shares until the Shares are issued to the Participant. After
Shares are issued to the Participant, the Participant will be a shareholder and have all the rights
of a shareholder with respect to such Shares, including the right to vote and receive all dividends
or other distributions made or
paid with respect to such Shares;
provided
, that if such Shares are Restricted Stock,
then any new,
10
additional or different securities the Participant may become entitled to receive
with respect to such Shares by virtue of a stock dividend, stock split or any other change in the
corporate or capital structure of the Company will be subject to the same restrictions as the
Restricted Stock;
provided
,
further
, that the Participant will have no right to
retain such stock dividends or stock distributions with respect to Shares that are repurchased at
the Participants Purchase Price or Exercise Price, as the case may be, pursuant to Section 15.2.
15.2
Restrictions on Shares
. At the discretion of the Committee, the
Company may reserve to itself and/or its assignee(s) a right to repurchase (a
Right of
Repurchase
) a portion of any or all Unvested Shares held by a Participant following such
Participants Termination at any time within ninety (90) days after the later of the Participants
Termination Date and the date the Participant purchases Shares under this Plan, for cash and/or
cancellation of purchase money indebtedness, at the Participants Purchase Price or Exercise Price,
as the case may be.
16.
CERTIFICATES
. All certificates for Shares or other securities delivered
under this Plan will be subject to such stock transfer orders, legends and other restrictions as
the Committee may deem necessary or advisable, including restrictions under any applicable federal,
state or foreign securities law, or any rules, regulations and other requirements of the SEC or any
stock exchange or automated quotation system upon which the Shares may be listed or quoted.
17.
ESCROW; PLEDGE OF SHARES
. To enforce any restrictions on a
Participants Shares, the Committee may require the Participant to deposit all certificates
representing Shares, together with stock powers or other instruments of transfer approved by the
Committee, appropriately endorsed in blank, with the Company or an agent designated by the Company
to hold in escrow until such restrictions have lapsed or terminated, and the Committee may cause a
legend or legends referencing such restrictions to be placed on the certificates. Any Participant
who is permitted to execute a promissory note as partial or full consideration for the purchase of
Shares under this Plan will be required to pledge and deposit with the Company all or part of the
Shares so purchased as collateral to secure the payment of the Participants obligation to the
Company under the promissory note;
provided
,
however
, that the Committee may
require or accept other or additional forms of collateral to secure the payment of such obligation
and, in any event, the Company will have full recourse against the Participant under the promissory
note notwithstanding any pledge of the Participants Shares or other collateral. In connection
with any pledge of the Shares, the Participant will be required to execute and deliver a written
pledge agreement in such form as the Committee will from time to time approve. The Shares
purchased with the promissory note may be released from the pledge on a pro rata basis as the
promissory note is paid.
18.
REPRICING; EXCHANGE AND BUYOUT OF AWARDS
. The Committee may reprice
Options or SARS without prior stockholder approval. The Committee may, at any
time or from time to time authorize the Company, in the case of an Option or SAR exchange, and with
the consent of the respective Participants (unless not required pursuant to Section 5.9 of the
Plan), to pay cash or issue new Awards in exchange for the surrender and cancellation of any, or
all, outstanding Awards. The Committee may reduce the Exercise Price of outstanding Options or
SARs without the consent of affected Participants by a written notice to them.
19.
SECURITIES LAW AND OTHER REGULATORY COMPLIANCE
. An Award will not be
effective unless such Award is in compliance with all applicable federal and state securities
laws, rules and regulations of any governmental body, and the requirements of any stock
exchange or
11
automated quotation system upon which the Shares may then be listed or quoted, as they
are in effect on the date of grant of the Award and also on the date of exercise or other issuance.
Notwithstanding any other provision in this Plan, the Company will have no obligation to issue or
deliver certificates for Shares under this Plan prior to: (a) obtaining any approvals from
governmental agencies that the Company determines are necessary or advisable; and/or (b) completion
of any registration or other qualification of such Shares under any state or federal law or ruling
of any governmental body that the Company determines to be necessary or advisable. The Company
will be under no obligation to register the Shares with the SEC or to effect compliance with the
registration, qualification or listing requirements of any state securities laws, stock exchange or
automated quotation system, and the Company will have no liability for any inability or failure to
do so.
20.
NO OBLIGATION TO EMPLOY
. Nothing in this Plan or any Award granted
under this Plan will confer or be deemed to confer on any Participant any right to continue in the
employ of, or to continue any other relationship with, the Company or any Parent or Subsidiary of
the Company or limit in any way the right of the Company or any Parent or Subsidiary of the Company
to terminate Participants employment or other relationship at any time.
21.
CORPORATE TRANSACTIONS
.
21.1
Assumption or Replacement of Awards by Successor
. In the event of a
Corporate Transaction any or all outstanding Awards may be assumed or replaced by the successor
corporation, which assumption or replacement shall be binding on all Participants. In the
alternative, the successor corporation may substitute equivalent Awards or provide substantially
similar consideration to Participants as was provided to stockholders (after taking into account
the existing provisions of the Awards). The successor corporation may also issue, in place of
outstanding Shares of the Company held by the Participant, substantially similar shares or other
property subject to repurchase restrictions no less favorable to the Participant. In the event
such successor or acquiring corporation (if any) refuses to assume, convert, replace or substitute
Awards, as provided above, pursuant to a Corporate Transaction, then notwithstanding any other
provision in this Plan to the contrary, such Awards will expire on such transaction at such time
and on such conditions as the Board will determine; the Board (or, the Committee, if so designated
by the Board) may, in its sole discretion, accelerate the vesting of such Awards in connection with
a Corporate Transaction. In addition, in the event such successor or acquiring corporation (if
any) refuses to assume, convert, replace or substitute Awards, as provided above, pursuant to a
Corporate Transaction, the Committee will notify the Participant in writing or electronically that
such Award will be exercisable for a period of time determined by the Committee in its sole
discretion, and such Award will terminate upon the expiration of such
period. Awards need not be treated similarly in a Corporate Transaction.
Notwithstanding anything to the contrary in this Section 21.1, the Committee, in its sole
discretion, may grant Awards that provide for acceleration upon a Corporate Transaction or in other
events in the specific Award Agreements.
21.2
Assumption of Awards by the Company
. The Company, from time to time,
also may substitute or assume outstanding awards granted by another company, whether in connection
with an acquisition of such other company or otherwise, by either; (a) granting an Award under this
Plan in substitution of such other companys award; or (b) assuming such award as if it had been
granted under this Plan if the terms of such assumed award could be applied to an Award granted
under this Plan. Such substitution or assumption will be permissible if the holder of the
substituted or assumed award would have been eligible to be granted an Award under this Plan if the
other company had applied the rules of this Plan to such grant. In the event the Company assumes
an award granted by another company, the
terms and conditions of such award will remain unchanged (
except
that the Purchase
Price or the Exercise
12
Price, as the case may be, and the number and nature of Shares issuable upon
exercise or settlement of any such Award will be adjusted appropriately pursuant to Section 424(a)
of the Code).
21.3
Outside Directors Awards
. Notwithstanding any provision to the
contrary herein, in the event of a Corporate Transaction, the vesting of all Awards granted to
Outside Directors shall accelerate and such Awards shall become exercisable (as applicable) in full
prior to the consummation of such event at such times and on such conditions as the Committee
determines.
22.
ADOPTION AND SHAREHOLDER APPROVAL
. This Plan shall be submitted for the
approval of the Companys shareholders, consistent with applicable laws, within twelve (12) months
before or after the date this Plan is adopted by the Board.
23.
TERM OF PLAN
. Unless earlier terminated as provided herein, this Plan
will become effective on the Effective Date and will terminate ten (10) years from the date this
Plan is adopted by the Board. This Plan and all Awards granted hereunder shall be governed by and construed in accordance with
the laws of the State of Delaware.
24.
AMENDMENT OR TERMINATION OF PLAN
. The Board may at any time terminate
or amend this Plan in any respect, including, without limitation, amendment of any form of Award
Agreement or instrument to be executed pursuant to this Plan;
provided
,
however
,
that the Board will not, without the approval of the shareholders of the Company, amend this Plan
in any manner that requires such shareholder approval;
provided further
, that a
Participants Award shall be governed by the version of this Plan then in effect at the time such
Award was granted.
25.
NONEXCLUSIVITY OF THE PLAN
. Neither the adoption of this Plan by the
Board, the submission of this Plan to the shareholders of the Company for approval, nor any
provision of this Plan will be construed as creating any limitations on the power of the Board to
adopt such additional compensation arrangements as it may deem desirable, including, without
limitation, the granting of stock awards and bonuses otherwise than under this Plan, and such
arrangements may be either generally applicable or applicable only in specific cases.
26.
INSIDER TRADING POLICY
. Each Participant who receives an Award shall
comply with any policy adopted by the Company from time to time covering transactions in the
Companys securities by Employees, officers and/or directors of the Company.
27.
DEFINITIONS
.
As used in this Plan, and except as elsewhere defined
herein, the following terms will have the following meanings:
Award
means any award under the Plan, including any Option, Restricted Stock, Stock Bonus,
Stock Appreciation Right, Restricted Stock Unit or award of Performance Shares.
Award Agreement
means, with respect to each Award, the written or electronic agreement
between the Company and the Participant setting forth the terms and conditions of the Award, which
shall be in substantially a form (which need not be the same for each Participant) that the
Committee has from time to time approved, and will comply with and be subject to the terms and
conditions of this Plan.
Board
means the Board of Directors of the Company.
Cause
means (a) the commission of an act of theft, embezzlement, fraud, dishonesty, (b) a
breach of fiduciary duty to the Company or a Parent or Subsidiary, or (c) a failure to materially
perform the customary duties of Employees employment.
13
Code
means the United States Internal Revenue Code of 1986, as amended, and the regulations
promulgated thereunder.
Committee
means the Compensation Committee of the Board or those persons to whom
administration of the Plan, or part of the Plan, has been delegated as permitted by law.
Company
means Glu Mobile Inc., or any successor corporation.
Consultant
means any person, including an advisor or independent contractor, engaged by the
Company or a Parent or Subsidiary to render services to such entity.
Corporate Transaction
means the occurrence of any of the following events: (i) any person
(as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the beneficial
owner (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the
Company representing fifty percent (50%) or more of the total voting power represented by the
Companys then-outstanding voting securities; (ii) the consummation of the sale or disposition by
the Company of all or substantially all of the Companys assets; or (iii) the consummation of a
merger or consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total
voting power represented by the voting securities of the Company or such surviving entity or its
parent outstanding immediately after such merger or consolidation.
Director
means a member of the Board.
Disability
means total and permanent disability as defined in Section 22(e)(3) of the Code,
provided, however, that except with respect to Awards granted as ISOs, the Committee in its
discretion may determine whether a total and permanent disability exists in accordance with
non-discriminatory and uniform standards adopted by the Committee from time to time, whether
temporary or permanent, partial or total, as determined by the Committee.
Effective Date
means the date of the underwritten initial public offering of the Companys
Common Stock pursuant to a registration statement is declared effective by the SEC.
Employee
means any person, including Officers and Directors, employed by the Company or any
Parent or Subsidiary of the Company. Neither service as a Director nor payment of a directors fee
by the Company will be sufficient to constitute employment by the Company.
Exchange Act
means the United States Securities Exchange Act of 1934, as amended.
Exercise Price
means the price at which a holder of an Option or SAR may purchase the Shares
issuable upon exercise of an Option or SAR.
Exchange Program
means a program pursuant to which outstanding Awards are surrendered,
cancelled or exchanged for cash, the same type of Award or a different Award (or combination
thereof).
Fair Market Value
means, as of any date, the value of a share of the Companys Common Stock
determined as follows:
(a) if such Common Stock is then quoted on the Nasdaq Global Select Market, the Nasdaq Global
Market or the Nasdaq Capital Market (collectively, the
Nasdaq Market
), its
14
closing price on the Nasdaq Market on the date of determination, or if there are no sales for
such date, then the last preceding business day on which there were sales, as reported in
The Wall
Street Journal
or such other source as the Board or the Committee deems reliable;
(b) if such Common Stock is publicly traded and is then listed on a national securities
exchange, its closing price on the date of determination on the principal national securities
exchange on which the Common Stock is listed or admitted to trading as reported in
The Wall Street
Journal
or such other source as the Board or the Committee deems reliable;
(c) if such Common Stock is publicly traded but is neither quoted on the Nasdaq Market nor
listed or admitted to trading on a national securities exchange, the average of the closing bid and
asked prices on the date of determination as reported in
The Wall Street Journal
or such other
source as the Board or the Committee deems reliable;
(d) in the case of an Option or SAR grant made on the Effective Date, the price per share at which
shares of the Companys Common Stock are initially offered for sale to the public by the Companys
underwriters in the initial public offering of the Companys Common Stock pursuant to a
registration statement filed with the SEC under the Securities Act; or
(e) if none of the foregoing is applicable, by the Board or the Committee in good faith.
Insider
means an officer or director of the Company or any other person whose transactions
in the Companys Common Stock are subject to Section 16 of the Exchange Act.
Option
means an award of an option to purchase Shares pursuant to Section 5.
Outside Director
means a Director who is not an Employee of the Company or any Parent or
Subsidiary.
Parent
means any corporation (other than the Company) in an unbroken chain of corporations
ending with the Company if each of such corporations other than the Company owns stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of stock in one of
the other corporations in such chain.
Participant
means an Employee, Consultant or Director (including Outside Directors) who
receives an Award under this Plan.
Performance Factors
means the factors selected by the Committee, which may include, but are
not limited to the, the following measures (whether or not in comparison to other peer companies)
to determine whether the performance goals established by the Committee and applicable to Awards
have been satisfied:
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Net revenue and/or net revenue growth;
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Earnings per share and/or earnings per share growth;
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Earnings before income taxes and amortization and/or earnings before income
taxes and amortization growth;
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Operating income and/or operating income growth;
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Net income and/or net income growth;
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Total stockholder return and/or total stockholder return growth;
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Return on equity;
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Operating cash flow return on income;
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Adjusted operating cash flow return on income;
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Economic value added;
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Individual business objectives; and
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Company specific operational metrics.
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Performance Period
means the period of service determined by the Committee, not to exceed
five (5) years, during which years of service or performance is to be measured for the Award.
Performance Share
means an Award granted pursuant to Section 10 of the Plan.
Plan
means this Glu Mobile Inc. 2007 Equity Incentive Plan.
Purchase Price
means the price to be paid for Shares acquired under the Plan, other than
Shares acquired upon exercise of an Option or SAR.
Restricted Stock Award
means an award of Shares pursuant to Section 6 of the Plan, or issued
pursuant to the early exercise of an Option.
Restricted Stock Unit
means an Award granted pursuant to Section 9 of the Plan.
SEC
means the United States Securities and Exchange Commission.
Securities Act
means the United States Securities Act of 1933, as amended.
Shares
means shares of the Companys Common Stock, as
adjusted pursuant to Sections 2 and 21, and any successor security.
Stock Appreciation Right
means an Award granted pursuant to Section 8 of the Plan.
Stock Bonus
means an Award granted pursuant to Section 7 of the Plan.
Subsidiary
means any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company if each of the corporations other than the last corporation
in the unbroken chain owns stock possessing fifty percent (50%) or more of the total combined
voting power of all classes of stock in one of the other corporations in such chain.
Termination
or
Terminated
means, for purposes of this Plan with respect to a Participant,
that the Participant has for any reason ceased to provide services as an employee, officer,
director, consultant, independent contractor or advisor to the Company or a Parent or Subsidiary of
the Company. An employee will not be deemed to have ceased to provide services in the case of (i)
sick leave, (ii)
16
military leave, or (iii) any other leave of absence approved by the Committee;
provided
, that such leave is for a period of not more than 90 days, unless reemployment
upon the expiration of such leave is guaranteed by contract or statute or unless provided otherwise
pursuant to formal policy adopted from time to time by the Company and issued and promulgated to
employees in writing. In the case of any employee on an approved leave of absence, the Committee
may make such provisions respecting suspension of vesting of the Award while on leave from the
employ of the Company or a Parent or Subsidiary of the Company as it may deem appropriate, except
that in no event may an Award be exercised after the expiration of the term set forth in the
applicable Award Agreement. The Committee will have sole discretion to determine whether a
Participant has ceased to provide services and the effective date on which the Participant ceased
to provide services (the
Termination Date
).
Unvested Shares
means Shares that have not yet vested or are subject to a right of
repurchase in favor of the Company (or any successor thereto).
17
GLU MOBILE INC.
2007 EQUITY INCENTIVE PLAN
NOTICE OF STOCK OPTION GRANT
You (the
Participant
) have been granted an option to purchase Common Stock of the Company,
subject to the terms and conditions of this Notice of Stock Option Grant (the
Notice
), the 2007
Equity Incentive Plan, as amended from time to time (the
Plan
) and the Stock Option Award
Agreement (the
Option Agreement
) attached hereto, as follows. The terms defined in the Plan
shall have the same meanings in this Notice.
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Grant Number
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Date of Grant
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Vesting Commencement Date
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Exercise Price per Share
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Total Number of Shares
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Total Exercise Price
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Type of Option
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Non-Qualified Stock Option
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Incentive Stock Option
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Expiration Date
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Post-Termination Exercise Period:
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Termination for Cause = None
Voluntary Termination = 3 Months
Termination without Cause = 3 Months
Disability = 12 Months
Death = 12 Months
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Vesting Schedule:
Subject to the limitations set forth in this Notice, the Plan and the Option Agreement, the
Option will vest and may be exercised, in whole or in part, in accordance with the following
schedule:
[INSERT VESTING SCHEDULE]
You acknowledge receipt of a copy of the Plan and the Option Agreement, and represent that you
are familiar with the terms and provisions thereof, and hereby accept the Option subject to all of
the terms and provisions hereof. You understand that your employment or consulting relationship,
or service with the Company is for an unspecified duration and can be terminated at any time (i.e.,
is at-will), and that
nothing in this Notice, the Stock Option Award Agreement or the Plan
changes the at-will nature of that relationship. You acknowledge that the vesting of shares
pursuant to this Notice is earned only by your continuing service as an Employee or Consultant of
the Company.
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PARTICIPANT:
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GLU MOBILE INC.
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Signature:
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By:
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Print Name:
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Its:
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Date:
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Date:
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GLU MOBILE INC.
STOCK OPTION AWARD AGREEMENT
2007 EQUITY INCENTIVE PLAN
Unless otherwise defined herein, the terms defined in the Companys 2007 Equity Incentive
Plan (the Plan) shall have the same defined meanings in this Award Agreement (the
Agreement).
Participant has been granted an option to purchase Shares (the Option), subject to the
terms and conditions of the Plan, the Notice of Stock Option Grant (Notice of Grant) and
this Agreement.
1.
Vesting Rights
. Subject to the applicable provisions of the Plan and this
Agreement, this Option may be exercised, in whole or in part, in accordance with the schedule set
forth in the Notice of Grant.
2.
Termination Period
.
(a)
General Rule
. Except as provided below, and subject to the Plan, this Option may
be exercised for 3 months after termination of Participants employment with the Company. In no
event shall this Option be exercised later than the Term/Expiration Date set forth in the Notice of
Grant.
(b)
Death; Disability
. Upon the termination of Participants employment with the
Company by reason of his or her Disability or death, or if a Participant dies within three months
of the Termination Date, this Option may be exercised for twelve months in the case of death, and
six months in the case of Disability, after the Termination Date, provided that in no event shall
this Option be exercised later than the Term/Expiration Date set forth in the Notice of Grant.
(c)
Cause
. Upon the termination of Participants employment by the Company for Cause,
the Option shall expire on such date of Participants Termination Date.
3.
Grant of Option
. The Participant named in the Notice of Grant has been granted an
Option for the number of Shares set forth in the Notice of Grant at the exercise price per Share
set forth in the Notice of Grant (the Exercise Price). In the event of a conflict between the
terms and conditions of the Plan and the terms and conditions of this Agreement, the terms and
conditions of the Plan shall prevail.
If designated in the Notice of Grant as an Incentive Stock Option (ISO), this Option is
intended to qualify as an Incentive Stock Option under Section 422 of the Code. However, if this
Option is intended to be an Incentive Stock Option, to the extent that it exceeds the $100,000 rule
of Code Section 422(d) it shall be treated as a Nonstatutory Stock Option (NSO).
4.
Exercise of Option
.
(a)
Right to Exercise
. This Option is exercisable during its term in accordance with
the Vesting Schedule set forth in the Notice of Grant and the applicable provisions of the Plan and
this Agreement. In the event of Participants death, Disability, Termination for Cause or other
Termination, the exercisability of the Option is governed by the applicable provisions of the Plan,
the Notice of Stock Option Grant and this Agreement.
(b)
Method of Exercise
. This Option is exercisable by delivery of an exercise notice
(the Exercise Notice), which shall state the election to exercise the Option, the number of
Shares in respect of which the Option is being exercised (the Exercised Shares), and such other
representations and agreements as may be required by the Company pursuant to the provisions of the
Plan. The Exercise Notice shall be delivered in person, by mail, via electronic mail or facsimile
or by other authorized method to the Secretary of the Company or other person designated by the
Company. The Exercise Notice shall be accompanied by payment of the aggregate Exercise Price as to
all Exercised Shares. This
Option shall be deemed to be exercised upon receipt by the Company of
such fully executed Exercise Notice accompanied by such aggregate Exercise Price.
(c) No Shares shall be issued pursuant to the exercise of this Option unless such issuance and
exercise complies with all relevant provisions of law and the requirements of any stock exchange or
quotation service upon which the Shares are then listed. Assuming such compliance, for income tax
purposes the Exercised Shares shall be considered transferred to the Participant on the date the
Option is exercised with respect to such Exercised Shares.
5.
Method of Payment
. Payment of the aggregate Exercise Price shall be by any of the
following, or a combination thereof, at the election of the Participant:
(a) cash; or
(b) check; or
(c) a broker-assisted or same day sale (as described in Section 11(d) of the Plan); or
(d) other method authorized by the Company.
6.
Non-Transferability of Option
. This Option may not be transferred in any manner
other than by will or by the laws of descent or distribution or court order and may be exercised
during the lifetime of Participant only by the Participant. The terms of the Plan and this
Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of the
Participant.
7.
Term of Option
. This Option may be exercised only within the term set out in the
Notice of Grant, and may be exercised during such term only in accordance with the Notice of Grant,
the Plan and the terms of this Agreement.
8.
U.S. Tax Consequences
. For Participants subject to U.S. income tax, some of the
federal tax consequences relating to this Option, as of the date of this Option, are set forth
below. All other Participants should consult a tax advisor for tax consequences relating to this
Option in their respective jurisdiction. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS
AND REGULATIONS ARE SUBJECT TO CHANGE. THE PARTICIPANT SHOULD CONSULT A TAX ADVISER BEFORE
EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
(a)
Exercising the Option
.
(i)
Nonstatutory Stock Option
. The Participant may incur regular federal income tax
liability upon exercise of a NSO. The Participant will be treated as having received compensation
income (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value
of the Exercised Shares on the date of exercise over their aggregate Exercise Price. If the
Participant is an Employee or a former Employee, the Company will be required to withhold from his
or her compensation or collect from Participant and pay to the applicable taxing authorities an amount
in cash equal to a percentage of this compensation income at the time of exercise, and may refuse
to honor the exercise and refuse to deliver Shares if such withholding amounts are not delivered at
the time of exercise.
(ii)
Incentive Stock Option
. If this Option qualifies as an ISO, the Participant will
have no regular federal income tax liability upon its exercise, although the excess, if any, of the
aggregate Fair Market Value of the Exercised Shares on the date of exercise over their aggregate
Exercise Price will be treated as an adjustment to alternative minimum taxable income for federal
tax purposes and may subject the Participant to alternative minimum tax in the year of exercise.
(b)
Disposition of Shares
.
(i)
NSO
. If the Participant holds NSO Shares for at least one year, any gain realized
on disposition of the Shares will be treated as long-term capital gain for federal income tax
purposes.
(ii)
ISO
. If the Participant holds ISO Shares for at least one year after exercise
and two years after the grant date, any gain realized on disposition of the Shares will be treated
as long-term capital gain for federal income tax purposes. If the Participant disposes of ISO
Shares within one year after exercise or two years after the grant date, any gain realized on such
disposition will be treated as compensation income (taxable at ordinary income rates) to the extent
of the excess, if any, of the lesser of (A) the difference between the Fair Market Value of the
Shares acquired on the date of exercise and the aggregate Exercise Price, or (B) the difference
between the sale price of such Shares and the aggregate Exercise Price.
(c)
Notice of Disqualifying Disposition of ISO Shares
. If the Participant sells or
otherwise disposes of any of the Shares acquired pursuant to an ISO on or before the later of (i)
two years after the grant date, or (ii) one year after the exercise date, the Participant shall
immediately notify the Company in writing of such disposition. The Participant agrees that he or
she may be subject to income tax withholding by the Company on the compensation income recognized
from such early disposition of ISO Shares by payment in cash or out of the current earnings paid to
the Participant.
(d)
Possible Effect of Section 409A of the Code
. Section 409A of the Code applies to
arrangements that provide for the deferral of compensation. Generally, a stock option granted with
an exercise price per share of not less than the fair market value (determined in a manner
consistent with Section 409A of the Code and the regulations and other guidance promulgated
thereunder) per share on the date of grant of the stock option and with no other feature providing
for the deferral of compensation will not be subject to Section 409A of the Code. However, if the
exercise price of the stock option is less than such fair market value or the stock option has
another feature for the deferral of compensation, then if the stock option is not administered
within the parameters established under Section 409A the optionholder will be subject to additional
taxes. Also, the amount deemed to be deferred compensation under Section 409A of the Code will be
subject to ordinary income and employment taxes (in this respect the IRS has not yet indicated how
it will calculate the amount of deferred compensation subject to tax and the timing and frequency
of taxation, but it seems likely that the income will be measured and taxes imposed at least on the
vesting dates of the stock option). If Section 409A of the Code does apply to this Option, then
special rules apply to the timing of making and effecting certain amendments of this Option with
respect to distribution of any deferred compensation.
9.
Entire Agreement; Governing Law
. The Plan is incorporated herein by reference.
The Plan, the Notice of Grant, and this Agreement constitute the entire agreement of the parties
with respect to
the subject matter hereof and supersede in their entirety all prior undertakings and agreements of
the Company and Participant with respect to the subject matter hereof, and may not be modified
adversely to the Participants interest except by means of a writing signed by the Company and
Participant. This agreement is governed by Delaware law except for that body of law pertaining to
conflict of laws.
10.
No Rights as Employee, Director or Consultant
. Nothing in this Agreement shall
affect in any manner whatsoever the right or power of the Company, or a Parent or Subsidiary of the
Company, to terminate Participant
s employment, for any reason, with or without cause.
By your signature and the signature of the Companys representative on the Notice of Grant,
you and the Company agree that this Option is granted under and governed by the terms and
conditions of the Plan, the Notice of Grant, and this Agreement. Participant has reviewed the
Plan, the Notice of Grant, and this Agreement in their entirety, has had an opportunity to obtain
the advice of counsel prior to executing the Notice of Grant, and fully understands all provisions
of the Plan, the Notice of Grant, and this Agreement. Participant hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the Committee upon any questions
relating to the Plan, the Notice of Grant, and the Agreement. Participant further agrees to notify
the Company upon any change in the residence address indicated on the Notice of Grant.
No.
GLU MOBILE INC.
2007 EQUITY INCENTIVE PLAN
STOCK OPTION EXERCISE AGREEMENT
This Stock Option Exercise Agreement (the
Exercise Agreement
) is made and entered into as of
,
(the
Effective Date
) by and between Glu Mobile Inc., a Delaware
corporation (the
Company
), and the purchaser named below (the
Purchaser
). Capitalized terms
not defined herein shall have the meanings ascribed to them in the Companys 2006 Equity Incentive
Plan (the
Plan
).
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Purchaser:
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Social Security Number:
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Address:
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Total Number of Shares:
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Exercise Price Per Share:
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Type of Stock Option
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(Check one):
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Incentive Stock Option
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Nonqualified Stock Option
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1.
EXERCISE OF OPTION
.
1.1
Exercise
.
Pursuant to exercise of that certain option (the
Option
) granted to
Purchaser under the Plan and subject to the terms and conditions of this Exercise Agreement,
Purchaser hereby purchases from the Company, and the Company hereby sells to Purchaser, the Total
Number of Shares set forth above (the
Shares
) of the Companys Common Stock, at the Exercise
Price Per Share set forth above (the
Exercise Price
). As used in this Exercise Agreement, the
term
Shares
refers to the Shares purchased under this Exercise Agreement and includes all
securities received (i) in replacement of the Shares, (ii) as a result of stock dividends or stock
splits with respect to the Shares, and (iii) all securities received in replacement of the Shares
in a merger, recapitalization, reorganization or similar corporate transaction.
1.2
Title to Shares
.
The exact spelling of the name(s) under which Purchaser will
take title to the Shares is:
Purchaser desires to take title to the Shares as follows:
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Individual, as separate property
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Husband and wife, as community property
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Joint Tenants
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Other; please specify:
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1.3
Payment
.
Purchaser hereby delivers payment of the Exercise Price in the manner
permitted in the Stock Option Agreement as follows (check and complete as appropriate):
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in cash (by check) in the amount of $
, receipt of which
is acknowledged by the Company;
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by delivery of
fully-paid, nonassessable and vested shares
of the Common Stock of the Company owned by Purchaser which have been
paid for within the meaning of SEC Rule 144, (if purchased by use of a
promissory note, such note has been fully paid with respect to such
vested shares), or obtained by Purchaser in the open public market, and
owned free and clear of all liens, claims, encumbrances or security
interests, valued at the current fair market value of $
per
share;
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through a broker-assisted or same day sale program, commitment
from the Purchaser or Authorized Transferee and an NASD Dealer meeting
the requirements set forth by the Company; or
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through a margin commitment from Purchaser or Authorized
Transferee and an NASD Dealer meeting the requirements of the Companys
margin procedures and in accordance with law.
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2.
DELIVERY
.
2.1
Deliveries by Purchaser
.
Purchaser hereby delivers to the Company (i) this
Exercise Agreement and (ii) the Exercise Price and payment or other provision for any applicable
tax obligations.
2.2
Deliveries by the Company
.
Upon its receipt of the Exercise Price, payment or
other provision for any applicable tax obligations and all the documents to be executed and
delivered by Purchaser to the Company under Section 2.1, the Company will issue a duly executed
stock certificate evidencing the Shares in the name of Purchaser.
3.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
.
Purchaser represents and warrants to
the Company that:
3.1
Agrees to Terms of the Plan
.
Purchaser has received a copy of the Plan and the
Stock Option Agreement, has read and understands the terms of the Plan, the Stock Option Agreement
and this Exercise Agreement, and agrees to be bound by their terms and conditions. Purchaser
acknowledges that there may be adverse tax consequences upon exercise of the Option or disposition
of the Shares, and that Purchaser should consult a tax adviser prior to such exercise or
disposition.
3.2
Access to Information
.
Purchaser has had access to all information regarding the
Company and its present and prospective business, assets, liabilities and financial condition that
Purchaser reasonably considers important in making the decision to purchase the Shares, and
Purchaser has had ample opportunity to ask questions of the Companys representatives concerning
such matters and this investment.
3.3
Understanding of Risks
.
Purchaser has received and reviewed the Form S-8
prospectus for the Plan and Shares and is fully aware of: (i) the highly speculative nature of the
investment in the Shares; (ii) the financial hazards involved; (iii) the qualifications and
backgrounds of the management of the Company; and (iv) the tax consequences of investment in the
Shares. Purchaser is capable of evaluating the merits and risks of this investment, has the
ability to protect Purchasers own interests in this transaction and is financially capable of
bearing a total loss of this investment.
4.
COMPLIANCE WITH SECURITIES LAWS
.
Purchaser understands and acknowledges that the
exercise of any rights to purchase any Shares is expressly conditioned upon compliance with the
Securities Act and all applicable state securities laws. Purchaser agrees to cooperate with the
Company to ensure compliance with such laws.
5.
RESTRICTED SECURITIES
.
5.1
No Transfer Unless Registered or Exempt
.
Purchaser understands that Purchaser may
not transfer any Shares except when such Shares are registered under the Securities Act or
qualified under applicable state securities laws or unless, in the opinion of counsel to the
Company, exemptions from such registration and qualification requirements are available. Purchaser
understands that only the Company may file a registration statement with the SEC and that the
Company is under no obligation to do so with respect to the Shares, and may withdraw any such
registration statement at any time after filing. Purchaser has also been advised that exemptions
from registration and qualification may not be available or may not permit Purchaser to transfer
all or any of the Shares in the amounts or at the times proposed by Purchaser.
5.2
SEC Rule 144
.
If Purchaser is an affiliate for purposes of Rule 144 promulgated
under the Securities Act, then in addition, Purchaser has been advised that Rule 144 requires that
the Shares be held for a minimum of one (1) year, and in certain cases two (2) years, after they
have been purchased
and paid for
(within the meaning of Rule 144). Purchaser understands
that Rule 144 may indefinitely restrict transfer of the Shares so long as Purchaser remains an
affiliate of the Company or if current public information about the Company (as defined in Rule
144) is not publicly available.
6.
RIGHTS AS A STOCKHOLDER
.
Subject to the terms and conditions of this Exercise
Agreement, Purchaser will have all of the rights of a stockholder of the Company with respect to
the Shares from and after the date that Shares are issued to Purchaser until such time as Purchaser
disposes of the Shares.
7.
RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS
.
7.1
Legends
.
Purchaser understands and agrees that the Company will place any legends
that may be required by state or U.S. Federal securities laws, the Companys Certificate of
Incorporation or Bylaws, any other agreement between Purchaser and the Company or, subject to the
assent of the Company, any agreement between Purchaser and any third party.
7.2
Stop-Transfer Instructions
.
Purchaser agrees that, to ensure compliance with any
restrictions imposed by this Exercise Agreement, the Company may issue appropriate stop-transfer
instructions to its transfer agent, if any, and if the Company transfers its own securities,
it may make appropriate notations to the same effect in its own records.
7.3
Refusal to Transfer
.
The Company will not be required (i) to transfer on its
books any Shares that have been sold or otherwise transferred in violation of any of the provisions
of this Exercise Agreement or (ii) to treat as owner of such Shares, or to accord the right to vote
or pay dividends to any purchaser or other transferee to whom such Shares have been so transferred.
8.
TAX CONSEQUENCES
.
PURCHASER UNDERSTANDS AND REPRESENTS: (i) THAT PURCHASER HAS
REVIEWED THE PROSPECTUS PREPARED FOR THE PLAN AND
CONSULTED PURCHASERS PERSONAL TAX ADVISER IN
CONNECTION WITH THE PURCHASE OR DISPOSITION OF THE SHARES AND (ii) THAT PURCHASER IS NOT RELYING ON
THE COMPANY FOR ANY TAX ADVICE. SET FORTH BELOW IS A BRIEF SUMMARY AS OF THE DATE THE PLAN WAS
ADOPTED BY THE BOARD OF SOME OF THE U.S. FEDERAL TAX CONSEQUENCES OF EXERCISE OF THE OPTION AND
DISPOSITION OF THE SHARES. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND
REGULATIONS ARE SUBJECT TO CHANGE. PURCHASER SHOULD CONSULT THE PROSPECTUS AND PURCHASERS
PERSONAL TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
8.1
Exercise of Incentive Stock Option
.
If the Option qualifies as an ISO, there will
be no regular U.S. Federal income tax liability upon the exercise of the Option, although the
excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise
Price will be treated as a tax preference item for U.S. Federal alternative minimum tax purposes
and may subject Purchaser to the alternative minimum tax in the year of exercise.
8.2
Exercise of Nonqualified Stock Option
.
If the Option does not qualify as an ISO,
there may be a regular U.S. Federal income tax liability upon the exercise of the Option.
Purchaser will be treated as having received compensation income (taxable at ordinary income tax
rates) equal to the excess, if any, of the Fair Market Value of the Shares on the date of exercise
over the Exercise Price. If Purchaser is or was an employee of the Company, the Company may be
required to withhold from Purchasers compensation or collect from Purchaser and pay to the
applicable taxing authorities an amount equal to a percentage of this compensation income at the
time of exercise.
8.3
Disposition of Shares
.
The following tax consequences may apply upon disposition
of the Shares.
(a)
Incentive Stock Options
. If the Shares are held for more than twelve (12) months
after the date of the transfer of the Shares pursuant to the exercise of an ISO and are disposed of
more than two (2) years after the Date of Grant, any gain realized on disposition of the Shares
will be treated as long term capital gain for federal income tax purposes. If Shares purchased
under an ISO are disposed of within the applicable one (1) year or two (2) year period, any gain
realized on such disposition will be treated as compensation income (taxable at ordinary income
rates) to the extent of the excess, if any, of the Fair Market Value of the Shares on the date of
exercise over the Exercise Price.
(b)
Nonqualified Stock Options
. If the Shares are held for more than twelve (12)
months after the date of the transfer of the Shares pursuant to the exercise of an NQSO, any gain
realized on disposition of the Shares will be treated as long-term capital gain.
(c)
Withholding
. The Company may be required to withhold from the Purchasers
compensation or collect from the Purchaser and pay to the applicable taxing authorities an amount
equal to a percentage of this compensation income.
9.
COMPLIANCE WITH LAWS AND REGULATIONS
.
The issuance and transfer of the Shares will
be subject to and conditioned upon compliance by the Company and Purchaser with all applicable
state and federal laws and regulations and with all applicable requirements of any stock exchange
or automated quotation system on which the Companys Common Stock may be listed or quoted at the
time of such issuance or transfer.
10.
SUCCESSORS AND ASSIGNS
.
The Company may assign any of its rights under this
Exercise Agreement. No other party to this Exercise Agreement may assign, whether voluntarily or
by operation of law, any of its rights and obligations under this Exercise Agreement, except with
the prior written consent of the Company. This Exercise Agreement shall be binding upon and inure
to the benefit of the successors and assigns of the Company. Subject to the restrictions on
transfer herein set forth, this
Exercise Agreement will be binding upon Purchaser and Purchasers heirs, executors,
administrators, legal representatives, successors and assigns.
11.
GOVERNING LAW
.
This Exercise Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to that body of laws
pertaining to conflict of laws.
12.
NOTICES
.
Any and all notices required or permitted to be given to a party
pursuant to the provisions of this Exercise Agreement will be in writing and will be effective and
deemed to provide such party sufficient notice under this Exercise Agreement on the earliest of the
following: (i) at the time of personal delivery, if delivery is in person; (ii) one (1) business
day after deposit with an express overnight courier for United States deliveries, or two (2)
business days after such deposit for deliveries outside of the United States, with proof of
delivery from the courier requested; or (iii) three (3) business days after deposit in the United
States mail by certified mail (return receipt requested) for United States deliveries. All notices
for delivery outside the United States will be sent by express courier. All notices not delivered
personally will be sent with postage and/or other charges prepaid and properly addressed to the
party to be notified at the address set forth below the signature lines of this Exercise Agreement,
or at such other address as such other party may designate by one of the indicated means of notice
herein to the other parties hereto. Notices to the Company will be marked Attention: Stock Plan
Administration.
13.
FURTHER ASSURANCES
.
The parties agree to execute such further documents and
instruments and to take such further actions as may be reasonably necessary to carry out the
purposes and intent of this Exercise Agreement.
14.
TITLES AND HEADINGS
.
The titles, captions and headings of this Exercise Agreement
are included for ease of reference only and will be disregarded in interpreting or construing this
Exercise Agreement. Unless otherwise specifically stated, all references herein to sections will
mean sections to this Exercise Agreement.
15.
ENTIRE AGREEMENT
.
The Plan, the Notice, the Stock Option Agreement and this
Exercise Agreement constitute the entire agreement and understanding of the parties with respect to
the subject matter of this Exercise Agreement, and supersede all prior understandings and
agreements, whether oral or written, between or among the parties hereto with respect to the
specific subject matter hereof.
16.
COUNTERPARTS
.
This Exercise Agreement may be executed in any number of
counterparts, each of which when so executed and delivered will be deemed an original, and all of
which together shall constitute one and the same agreement.
17.
SEVERABILITY
.
If any provision of this Exercise Agreement is determined by any
court or arbitrator of competent jurisdiction to be invalid, illegal or unenforceable in any
respect, such provision will be enforced to the maximum extent possible given the intent of the
parties hereto. If such clause or provision cannot be so enforced, such provision shall be
stricken from this Exercise Agreement and the remainder of this Exercise Agreement shall be
enforced as if such invalid, illegal or unenforceable clause or provision had (to the extent not
enforceable) never been contained in this Exercise Agreement. Notwithstanding the forgoing, if the
value of this Exercise Agreement based upon the substantial benefit of the bargain for any party is
materially impaired, which determination as made by the presiding court or arbitrator of competent
jurisdiction shall be binding, then both parties agree to substitute such provision(s) through good
faith negotiations.
IN WITNESS WHEREOF
, the Company has caused this Exercise Agreement to be executed in
triplicate by its duly authorized representative and Purchaser has executed this Exercise Agreement
as of the Effective Date, indicated above.
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GLU MOBILE INC.
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PURCHASER
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By:
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(Signature)
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(Please print name)
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(Please print name)
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(Please print title)
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Address:
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Address:
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Fax No.:
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Fax No.
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Phone No.:
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Phone No.:
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[Signature page to Glu Mobile Inc. Stock Option Exercise Agreement]
GLU MOBILE INC.
2007 EQUITY INCENTIVE PLAN
NOTICE OF RESTRICTED STOCK AWARD
GRANT NUMBER:
You have been granted an award of Restricted Shares of Common Stock of Glu Mobile Inc. (the
Company
) under the Companys 2007 Equity Incentive Plan (the
Plan
) on the following terms:
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1.
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Name of Grantee:
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2.
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Total Number of Restricted Shares Awarded:
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3.
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Fair Market Value per Restricted Share:
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$
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4.
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Total Fair Market Value of Award:
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$
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5.
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Purchase Price per Restricted Share:
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$
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6.
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Total Purchase Price for all Restricted Shares:
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$
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7.
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Date of Grant:
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8.
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Vesting Commencement Date
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9.
Vesting Schedule:
[
Subject to your continued service as an employee, director or consultant of the Company,
.]
By your signature and the signature of the Companys representative below, you and the Company
agree that the Award of Restricted Shares is governed by the terms and conditions of the Plan and
the Restricted Share Agreement (together with this notice the
Restricted Stock Purchase
Agreement
), which is attached hereto. If the Restricted Stock Purchase Agreement is not executed
by you within thirty (30) days of the Date of Grant above, then this grant shall be void.
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GLU MOBILE INC.
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RECIPIENT:
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By:
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Signature
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Its:
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Please Print Name
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1
GLU MOBILE INC.
2007 Equity Incentive Plan
RESTRICTED SHARE AGREEMENT
THIS
RESTRICTED SHARE AGREEMENT (this
Agreement
)
is made as of
, 20___ by
and between Glu Mobile Inc., a Delaware corporation (the Company), and
(Participant) pursuant to the Companys 2007 Equity Incentive
Plan (the Plan). To the extent any capitalized terms used in this Agreement are not defined, they
shall have the meaning ascribed to them in the Plan.
1.
Sale of Stock
. Subject to the terms and conditions of this Agreement, on
the Purchase Date (as defined below) the Company will issue and sell to Participant, and
Participant agrees to purchase from the Company the number of Shares shown on the Notice of
Restricted Stock Award at a purchase price of $
per Share. The per Share purchase price of
the Shares shall be not less than the par value of the Shares as of the date of the offer of such
Shares to the Participant. The term Shares refers to the purchased Shares and all securities
received in replacement of or in connection with the Shares pursuant to stock dividends or splits,
all securities received in replacement of the Shares in a recapitalization, merger, reorganization,
exchange or the like, and all new, substituted or additional securities or other properties to
which Participant is entitled by reason of Participants ownership of the Shares.
2.
Time and Place of Exercise
. The purchase and sale of the Shares under
this Agreement shall occur at the principal office of the Company simultaneously with the execution
of this Agreement by the parties, or on such other date as the Company and Participant shall agree
(the Purchase Date). On the Purchase Date, the Company will issue in Participants name a stock
certificate representing the Shares to be purchased by Participant against payment of the purchase
price therefor by Participant by (a) check made payable to the Company, (b) cancellation of
indebtedness of the Company to Participant, (c) Participants personal services that the Committee
has determined have already been rendered to the Company and have a value not less than aggregate
par value of the Shares to be issued Participant, or (d) a combination of the foregoing.
3.
Restrictions on Resale
. By signing this Agreement, Participant agrees
not to sell any Shares acquired pursuant to the Plan and this Agreement at a time when applicable
laws, regulations or Company or underwriter trading policies prohibit exercise or sale. This
restriction will apply as long as Participant is providing Service to the Company or a Subsidiary
of the Company.
3.1
Repurchase Right on Termination Other Than for Cause
. For the purposes
of this Agreement, a
Repurchase Event
shall mean an occurrence of one of:
(i)
termination of Participants service, whether voluntary or involuntary and with
or without cause;
(ii)
resignation, retirement or death of Participant; or
(iii)
any attempted transfer by Participant of the Shares, or any interest therein,
in violation of this Agreement.
1
Upon the occurrence of a Repurchase Event, the Company shall have the right (but not an obligation)
to purchase the Shares of Participant at a price equal to the Price (the
Repurchase Right
). The
Repurchase Right shall lapse in accordance with the vesting schedule set forth in the Notice of
Restricted Stock Award. For purposes of this Agreement,
Unvested Shares
means Stock pursuant to
which the Companys Repurchase Right has not lapsed.
3.2
Exercise of Repurchase Right
. Unless the Company provides written
notice to Participant within 90 days from the date of termination of Participants employment or
consulting relationship that the Company does not intend to exercise its Repurchase Right with
respect to some or all of the Unvested Shares, the Repurchase Right shall be deemed automatically
exercised by the Company as of the 90th day following such termination, provided that the Company
may notify Participant that it is exercising its Repurchase Right as of a date prior to such 90th
day. Unless Participant is otherwise notified by the Company pursuant to the preceding sentence
that the Company does not intend to exercise its Repurchase Right as to some or all of the Unvested
Shares, execution of this Agreement by Participant constitutes written notice to Participant of the
Companys intention to exercise its Repurchase Right with respect to all Unvested Shares to which
such Repurchase Right applies at the time of Termination of Participant. The Company, at its
choice, may satisfy its payment obligation to Participant with respect to exercise of the
Repurchase Right by either (A) delivering a check to Participant in the amount of the purchase
price for the Unvested Shares being repurchased, or (B) in the event Participant is indebted to the
Company, canceling an amount of such indebtedness equal to the purchase price for the Unvested
Shares being repurchased, or (C) by a combination of (A) and (B) so that the combined payment and
cancellation of indebtedness equals such purchase price. In the event of any deemed automatic
exercise of the Repurchase Right by canceling an amount of such indebtedness equal to the purchase
price for the Unvested Shares being repurchased, such cancellation of indebtedness shall be deemed
automatically to occur as of the 90th day following termination of Participants employment or
consulting relationship unless the Company otherwise satisfies its payment obligations. As a
result of any repurchase of Unvested Shares pursuant to the Repurchase Right, the Company shall
become the legal and beneficial owner of the Unvested Shares being repurchased and shall have all
rights and interest therein or related thereto, and the Company shall have the right to transfer to
its own name the number of Unvested Shares being repurchased by the Company, without further action
by Participant.
3.3
Acceptance of Restrictions
. Acceptance of the Shares shall constitute
Participants agreement to such restrictions and the legending of his or her certificates with
respect thereto. Notwithstanding such restrictions, however, so long as Participant is the holder
of the Shares, or any portion thereof, he or she shall be entitled to receive all dividends
declared on and to vote the Shares and to all other rights of a stockholder with respect thereto.
3.4
Non-Transferability of Unvested Shares
. In addition to any other
limitation on transfer created by applicable securities laws or any other agreement between the
Company and Participant, Participant may not transfer any Unvested Shares, or any interest therein,
unless consented to in writing by a duly authorized representative of the Company. Any purported
transfer is void and of no effect, and no purported transferee thereof will be recognized as a
holder of the Unvested Shares for any purpose whatsoever. Should such a transfer purport to occur,
the Company may refuse to carry out the transfer on its books, set aside the transfer, or exercise
any other legal or equitable remedy. In the event the Company consents to a transfer of Unvested
Shares, all transferees of Shares or any interest therein will receive and hold such Shares or
interest subject to the provisions of this Agreement, including, insofar as applicable, the
Repurchase Right. In the event of any purchase by the Company hereunder where the Shares or
interest are held by a transferee, the transferee shall be obligated, if requested by the Company,
to transfer the Shares or interest to the Participant for consideration equal to the amount to be
paid by the Company hereunder. In the event the Repurchase Right is deemed exercised by the
Company, the Company may deem any transferee to have transferred the Shares or interest to
Participant
2
prior to their purchase by the Company, and payment of the purchase price by the Company to
such transferee shall be deemed to satisfy Participants obligation to pay such transferee for such
Shares or interest, and also to satisfy the Companys obligation to pay Participant for such Shares
or interest.
3.5
Assignment
. The Repurchase Right may be assigned by the Company in
whole or in part to any persons or organization.
4.
Restrictive Legends and Stop Transfer Orders
.
4.1
Legends
. The certificate or certificates representing the Shares shall
bear the following legend (as well as any legends required by applicable state and federal
corporate and securities laws):
THE SHARE REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND
THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF
THE COMPANY.
4.2
Stop-Transfer Notices
. Participant agrees that, in order to ensure
compliance with the restrictions referred to herein, the Company may issue appropriate stop
transfer instructions to its transfer agent, if any, and that, if the Company transfers its own
securities, it may make appropriate notations to the same effect in its own records.
4.3
Refusal to Transfer
. The Company shall not be required (i) to transfer
on its books any Shares that have been sold or otherwise transferred in violation of any of the
provisions of this Agreement or (ii) to treat as the owner or to accord the right to vote or pay
dividends to any purchaser or other transferee to whom such Shares shall have been so transferred.
5.
No Rights as Employee, Director or Consultant
. Nothing in this Agreement
shall affect in any manner whatsoever the right or power of the Company, or a Parent or Subsidiary
of the Company, to terminate Participant
s employment, for any reason, with or without
cause.
6.
Miscellaneous
.
6.1
Governing Law
. This Agreement and all acts and transactions pursuant
hereto and the rights and obligations of the parties hereto shall be governed, construed and
interpreted in accordance with the laws of the State of California, without giving effect to
principles of conflicts of law.
6.2
The Plan and Other Agreements; Enforcement of Rights
. The text of the
Plan and the Notice of Restricted Stock Award to which this Agreement is attached are incorporated
into this Agreement by reference. This Agreement, the Plan and the Notice of Restricted Stock Award
to which this Agreement is attached constitute the entire agreement and understanding of the
parties relating to the subject matter herein and supersede all prior discussions between them. Any
prior agreements, commitments or negotiations concerning the purchase of the Restricted Shares
hereunder are superseded. No modification of or amendment to this Agreement, nor any waiver of any
rights under this Agreement, shall be effective unless in writing and signed by the parties to this
Agreement. The failure by either party to enforce any rights under this Agreement shall not be
construed as a waiver of any rights of such party.
6.3
Severability
. If one or more provisions of this Agreement are held to
be unenforceable under applicable law, the parties agree to renegotiate such provision in good
faith. In the
3
event that the parties cannot reach a mutually agreeable and enforceable replacement for such
provision, then (i)such provision shall be excluded from this Agreement, (ii) the balance of this
Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of this
Agreement shall be enforceable in accordance with its terms.
6.4
Construction
. This Agreement is the result of negotiations between and
has been reviewed by each of the parties hereto and their respective counsel, if any; accordingly,
this Agreement shall be deemed to be the product of all of the parties hereto, and no ambiguity
shall be construed in favor of or against any one of the parties hereto.
6.5
Notices
. Any notice to be given under the terms of the Plan shall be
addressed to the Company in care or its principal office, and any notice to be given to the
Participant shall be addressed to such Participant at the address maintained by the Company for
such person or at such other address as the Participant may specify in writing to the Company.
6.6
Counterparts
. This Agreement may be executed in two or more
counterparts, each of which shall he deemed an original and all of which together shall constitute
one instrument.
6.7
Successors and Assigns
. The rights and benefits of this Agreement shall
inure to the benefit of
.
, and be enforceable by, the Companys successors and assigns.
The rights and obligations of Participant under this Agreement may only be assigned with the prior
written consent of the Company.
6.8
U.S. Tax Consequences
. Upon vesting of Shares, Participant will include
in taxable income the difference between the fair market value of the vesting Shares, as determined
on the date of their vesting, and the price paid for the Shares. This will be treated as ordinary
income by Participant and will be subject to withholding by the Company when required by applicable
law. In the absence of an Election (defined below) the Company shall withhold a number of vesting
Shares with a fair market value (determined on the date of their vesting) equal to the amount the
Company is required to withhold for income and employment taxes. If Participant makes an Election,
then Participant must, prior to making the Election, pay in cash (or check) to the Company an
amount equal to the amount the Company is required to withhold for income and employment taxes.
7.
Section 83(b) Election
. Participant hereby acknowledges that he or she
has been informed that, with respect to the purchase of the Shares, an election may be filed by the
Participant with the Internal Revenue Service, within 30 days of the purchase of the Shares,
electing pursuant to Section 83(b) of the Code to be taxed currently on any difference between the
purchase price of the Shares and their Fair Market Value on the date of purchase (the
Election
).
Making the Election will result in recognition of taxable income to the Participant on the date of
purchase, measured by the excess, if any, of the Fair Market Value of the Shares over the purchase
price for the Shares. Absent such an Election, taxable income will be measured and recognized by
Participant at the time or times on which the Companys Repurchase Right lapses. Participant is
strongly encouraged to seek the advice of his or her own tax consultants in connection with the
purchase of the Shares and the advisability of filing of the Election. PARTICIPANT ACKNOWLEDGES
THAT IT IS SOLELY PARTICIPANTS RESPONSIBILITY, AND NOT THE COMPANYS RESPONSIBILITY, TO TIMELY
FILE THE
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ELECTION UNDER SECTION 83(b) OF THE CODE, EVEN IF PARTICIPANT REQUESTS THE COMPANY, OR ITS
REPRESENTATIVE, TO MAKE THIS FILING ON PARTICIPANTS BEHALF.
The parties have executed this Agreement as of the date first set forth above.
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GLU MOBILE INC.
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By:
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Its:
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RECIPIENT:
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Signature
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Please Print Name
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5
RECEIPT
Glu Mobile Inc. hereby acknowledges receipt of (check as applicable):
o
A check in the amount of $_______________
o
The cancellation of indebtedness in the amount of $_______________
given by
as consideration for Certificate No. -
for
shares of Common Stock of Glu Mobile Inc.
Dated: _____________________
RECEIPT AND CONSENT
The undersigned Participant hereby acknowledges receipt of a photocopy of Certificate No.-
for
shares of Common Stock of Glu Mobile Inc. (the
Company
)
The undersigned further acknowledges that the Secretary of the Company, or his or her
designee, is acting as escrow holder pursuant to the Restricted Shares Agreement that Participant
has previously entered into with the Company. As escrow holder, the Secretary of the Company, or
his or her designee, holds the original of the aforementioned certificate issued in the
undersigneds name. To facilitate any transfer of Shares to the Company pursuant to the Restricted
Shares Agreement, Participant has executed the attached Assignment Separate from Certificate.
Dated: _____________________, 20____
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Signature
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Please Print Name
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STOCK POWER AND ASSIGNMENT
SEPARATE FROM STOCK CERTIFICATE
FOR VALUE RECEIVED and pursuant to that certain Restricted Share Agreement dated as of
, ___,
[
COMPLETE AT THE TIME OF PURCHASE
]
(the
Agreement
), the undersigned
Participant hereby sells, assigns and transfers unto
,
shares
of the Common Stock $0.001, par value per share, of Glu Mobile Inc., a Delaware corporation (the
Company
), standing in the undersigneds name on the books of the Company represented by
Certificate No(s).
[
COMPLETE AT THE TIME OF PURCHASE
]
delivered herewith, and does hereby
irrevocably constitute and appoint the Secretary of the Company as the undersigneds
attorney-in-fact, with full power of substitution, to transfer said stock on the books of the
Company. THIS ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND ANY EXHIBITS THERETO.
Dated: _________________, ___
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PARTICIPANT
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(Signature)
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(Please Print Name)
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Instructions to Participant
:
Please do not fill in any blanks other than the signature
line. The purpose of this document is to enable the Company and/or its assignee(s) to acquire the
shares upon exercise of its Repurchase Right set forth in the Agreement without requiring
additional action by the Participant.
GLU MOBILE INC.
2007 EQUITY INCENTIVE PLAN
NOTICE OF STOCK APPRECIATION RIGHT AWARD
GRANT NUMBER:
The terms defined in the Companys 2007 Equity Incentive Plan (the
Plan
) shall have the same
meanings in this Notice of Stock Appreciation Right Award (
Notice of Grant
).
You (
Participant
) have been granted an award of Stock Appreciation Rights (
SARs
), subject to
the terms and conditions of the Plan and the attached Stock Appreciation Right Award Agreement
(hereinafter
SAR Agreement
) to the Plan (available in hard copy by request), as follows:
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Number of SARs:
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Maximum Number of Shares Issuable:
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Date of Grant:
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Fair Market Value of a Share on Date of Grant:
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First Vesting Date:
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[
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Expiration Date:
The date on which settlement of all SARs granted hereunder occurs, with earlier expiration upon the Termination Date
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[Vesting Schedule:
The SARs will vest as follows:
,
subject to your continued service as an employee, director or consultant of the Company.
]
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Participant understands that his or her employment or consulting relationship with the Company is
for an unspecified duration, can be terminated at any time (i.e., is at-will), and that nothing
in this Notice of Grant, the SAR Agreement or the Plan changes the at-will nature of that
relationship. Participant acknowledges that the vesting of the SARs pursuant to this Notice of
Grant is earned only by continuing service as an employee, director or consultant of the Company.
Participant also understands that this Notice of Grant is subject to the terms and conditions of
both the SAR Agreement and the Plan, both of which are incorporated herein by reference.
Participant has read both the SAR Agreement and the Plan.
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PARTICIPANT
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GLU MOBILE INC.
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Signature:
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By:
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Print Name:
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Its:
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1
GLU MOBILE INC.
STOCK APPRECIATION RIGHT AWARD AGREEMENT TO THE
GLU MOBILE INC. 2007 EQUITY INCENTIVE PLAN
Unless otherwise defined herein, the terms defined in the Companys 2007 Equity Incentive Plan (the
Plan
) shall have the same defined meanings in this Stock Appreciation Right Award Agreement (the
Agreement
).
You have been granted Stock Appreciation Rights (
SARs
) subject to the terms and conditions of the
Plan, the Notice of Stock Appreciation Rights Award (
Notice of Grant
) and this Agreement.
1.
Settlement
.
Settlement of SARs shall be made within 30 days following the
applicable date of vesting under the vesting schedule set forth in the Notice of Grant. Settlement
of SARs shall be in Shares, except no fractional shares will be issued in settlement of SARs. Any
amounts attributable to a fractional share will be settled in cash.
2.
No Stockholder Rights
.
Unless and until such time as Shares are issued in
settlement of SARs, Participant shall have no ownership of the Shares allocated to the SARs and
shall have no right to vote such Shares, subject to the terms, conditions and restrictions
described in the Plan and herein.
3.
Dividend Equivalents
.
Dividends, if any (whether in cash or Shares), shall
not be credited to Participant.
4.
No Transfer
.
The SARs and any interest therein shall not be sold, assigned,
transferred, pledged, hypothecated, or otherwise disposed of.
5.
Termination
.
If Participants continuous employment with the Company or any
of its subsidiaries shall terminate for any reason, all unvested SARs shall be forfeited to the
Company forthwith, and all rights of Participant to such SARs shall immediately terminate. Vested
SARs shall be treated in accordance with Section 5 of the plan regarding exercisability of vested
options. In case of any dispute as to whether Termination has occurred, the Committee shall have
sole discretion to determine whether such Termination has occurred and the effective date of such
Termination.
6.
Acknowledgement
.
The Company and Participant agree that the SARs are granted
under and governed by the Notice of Grant, this Agreement and by the provisions of the Plan
(incorporated herein by reference). Participant: (i) acknowledges receipt of a copy of the Plan
and the Plan prospectus, (ii) represents that Participant has carefully read and is familiar with
their provisions, and (iii) hereby accepts the SARs subject to all of the terms and conditions set
forth herein and those set forth in the Plan and the Notice of Grant.
7.
Tax Consequences
.
Participant acknowledges that there will be tax
consequences upon settlement of the SARs or disposition of the Shares, if any, received in
connection therewith, and Participant should consult a tax adviser prior to such settlement or
disposition. Applicable withholding taxes shall be satisfied by the Company by withholding the
applicable number of Shares otherwise deliverable upon settlement of the SAR in accordance with
rules and procedures established by the Committee. There is no tax event upon granting of an SAR.
Upon settlement of the SAR, Participant will include in income the fair market value of the Shares
subject to the Shares payable in accordance with settlement of the SAR. The included amount will
be treated as ordinary income by Participant and will be subject to withholding by the Company.
Upon disposition of the Shares, any subsequent increase or decrease in value will be treated as
short-term or long-term capital gain or loss, depending on whether the Shares are held greater than
one year from the date of settlement.
8.
Compliance with Laws and Regulations
.
The issuance of Shares will be subject
to and conditioned upon compliance by the Company and Participant with all applicable state and
federal laws and regulations and with all applicable requirements of any stock exchange or
automated quotation system on which the Companys Common Stock may be listed or quoted at the time
of such issuance or transfer.
1
9.
Successors and Assigns
.
The Company may assign any of its rights under this
Agreement. This Agreement shall be binding upon and inure to the benefit of the successors and
assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement
will be binding upon Participant and Participants heirs, executors, administrators, legal
representatives, successors and assigns.
10.
Governing Law; Severability
.
The Plan and Notice of Grant are incorporated
herein by reference. The Plan, the Notice of Grant and this Agreement constitute the entire
agreement of the parties with respect to the subject matter hereof and supersede in their entirety
all prior undertakings and agreements of the Company and Participant with respect to the subject
matter hereof. This Agreement is governed by Delaware law except for that body of law pertaining
to conflict of laws. If any provision of this Agreement is determined by a court of law to be
illegal or unenforceable, then such provision will be enforced to the maximum extent possible and
the other provisions will remain fully effective and enforceable.
11.
No Rights as Employee, Director or Consultant
.
Nothing in this Agreement shall affect
in any manner whatsoever the right or power of the Company, or a Parent or Subsidiary of the
Company, to terminate Purchaser
s employment, for any reason, with or without cause.
By your signature and the signature of the Companys representative on the Notice of Grant,
Participant and the Company agree that this SAR is granted under and governed by the terms and
conditions of the Plan, the Notice of Grant and this Agreement. Participant has reviewed the Plan,
the Notice of Grant and this Agreement in their entirety, has had an opportunity to obtain the
advice of counsel prior to executing this Agreement, and fully understands all provisions of the
Plan, the Notice of Grant and this Agreement. Participant hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Committee upon any questions relating
to the Plan, the Notice of Grant and this Agreement. Participant further agrees to notify the
Company upon any change in Participants residence address.
2
GLU MOBILE INC.
2007 EQUITY INCENTIVE PLAN
NOTICE OF RESTRICTED STOCK UNIT AWARD
GRANT NUMBER:
The terms defined in the Companys 2007 Equity Incentive Plan (the
Plan
) shall have the same
meanings in this Notice of Restricted Stock Unit Award (
Notice of Grant
).
You (
Participant
) have been granted an award of Restricted Stock Units (RSUs), subject to the
terms and conditions of the Plan and the attached Award Agreement (Restricted Stock Units)
(hereinafter RSU Agreement) to the Plan (available in hard copy by request), as follows:
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Number of RSUs:
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Date of Grant:
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First Vesting Date:
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[
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Expiration Date:
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The date on which settlement of all RSUs granted hereunder occurs, with
earlier expiration upon the Termination Date
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Vesting Schedule:
The RSUs will vest as follows:
[
Subject to your continued service
as an employee, director or consultant of the Company,
.
]
Participant understands that his or her employment or consulting relationship with the Company is
for an unspecified duration, can be terminated at any time (i.e., is at-will), and that nothing
in this Notice of Grant, the Award Agreement (Restricted Stock Units) or the Plan changes the at-will nature of that
relationship. Participant acknowledges that the vesting of the RSUs pursuant to this Notice of
Grant is earned only by continuing service as an employee, director or consultant of the Company.
Participant also understands that this Notice of Grant is subject to the terms and conditions of
both the Award Agreement (Restricted Stock Units) and the Plan, both of which are incorporated herein by reference.
Participant has read both the Award Agreement (Restricted Stock Units) and the Plan.
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PARTICIPANT
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GLU MOBILE INC.
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Signature:
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By:
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Print Name:
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Its:
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GLU MOBILE INC.
AWARD AGREEMENT (RESTRICTED STOCK UNITS) TO THE
GLU MOBILE INC. 2007 EQUITY INCENTIVE PLAN
Unless otherwise defined herein, the terms defined in the Companys 2007 Equity Incentive Plan (the
Plan
) shall have the same defined meanings in this Award Agreement (Restricted Stock Units) (the
Agreement
).
You have been granted Restricted Stock Units (RSUs) subject to the terms, restrictions and
conditions of the Plan, the Notice of Restricted Stock Unit Grant (Notice of Grant) and this
Agreement.
1.
Settlement
.
Settlement of RSUs shall be made within 30 days following the
applicable date of vesting under the vesting schedule set forth in the Notice of Grant. Settlement
of RSUs shall be in Shares.
2.
No Stockholder Rights
.
Unless and until such time as Shares are issued in
settlement of vested RSUs, Participant shall have no ownership of the Shares allocated to the RSUs
and shall have no right dividends or to vote such Shares.
3.
Dividend Equivalents
.
Dividends, if any (whether in cash or Shares), shall
not be credited to Participant.
4.
No Transfer
.
The RSUs and any interest therein shall not be sold, assigned,
transferred, pledged, hypothecated, or otherwise disposed of.
5.
Termination
.
If Participants service Terminates for any reason, all unvested
RSUs shall be forfeited to the Company forthwith, and all rights of Participant to such RSUs shall
immediately terminate. In case of any dispute as to whether Termination has occurred, the
Committee shall have sole discretion to determine whether such Termination has occurred and the
effective date of such Termination.
6.
Acknowledgement
.
The Company and Participant agree that the RSUs are granted
under and governed by the Notice of Grant, this Agreement and by the provisions of the Plan
(incorporated herein by reference). Participant: (i) acknowledges receipt of a copy of the Plan
and the Plan prospectus, (ii) represents that Participant has carefully read and is familiar with
their provisions, and (iii) hereby accepts the RSUs subject to all of the terms and conditions set
forth herein and those set forth in the Plan and the Notice of Grant.
7.
U.S. Tax Consequences
.
Participant acknowledges that there will be tax
consequences upon settlement of the RSUs or disposition of the Shares, if any, received in
connection therewith, and Participant should consult a tax adviser regarding Participants tax
obligations prior to such settlement or disposition. Upon vesting of the RSU, Participant will
include in income the fair market value of the Shares subject to the RSU. The included amount will
be treated as ordinary income by Participant and will be subject to withholding by the Company when
required by applicable law. Before any Shares subject to this Agreement are issued the Company
shall withhold a number of Shares with a fair market value (determined on the date the Shares are
issued) equal to the minimum amount the Company is required to withhold for income and employment taxes.
Upon disposition of the Shares, any subsequent increase or decrease in value will be treated as
short-term or long-term capital gain or loss, depending on whether the Shares are held for more
than one year from the date of settlement. Further, a RSU is considered a deferral of compensation
that is subject to Section 409A of the Code. Section 409A of the Code imposes special rules to the
timing of making and effecting certain amendments of this RSU with respect to distribution of any
deferred compensation. You should consult your personal tax advisor for more information on the
actual and potential tax consequences of this RSU.
8.
Compliance with Laws and Regulations
.
The issuance of Shares will be subject
to and conditioned upon compliance by the Company and Participant with all applicable state and
federal laws and regulations and
with all applicable requirements of any stock exchange or automated quotation system on which the
Companys Common Stock may be listed or quoted at the time of such issuance or transfer.
9.
Successors and Assigns
.
The Company may assign any of its rights under this
Agreement. This Agreement shall be binding upon and inure to the benefit of the successors and
assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement
will be binding upon Participant and Participants heirs, executors, administrators, legal
representatives, successors and assigns.
10.
Governing Law; Severability
.
The Plan and Notice of Grant are incorporated
herein by reference. The Plan, the Notice of Grant and this Agreement constitute the entire
agreement of the parties with respect to the subject matter hereof and supersede in their entirety
all prior undertakings and agreements of the Company and Participant with respect to the subject
matter hereof. This Agreement is governed by Delaware law except for that body of law pertaining
to conflict of laws. If any provision of this Agreement is determined by a court of law to be
illegal or unenforceable, then such provision will be enforced to the maximum extent possible and
the other provisions will remain fully effective and enforceable.
11.
No Rights as Employee, Director or Consultant
. Nothing in this Agreement shall affect
in any manner whatsoever the right or power of the Company, or a Parent or Subsidiary of the
Company, to terminate Participant
s employment, for any reason, with or without cause.
By your signature and the signature of the Companys representative on the Notice of Grant,
Participant and the Company agree that this RSU is granted under and governed by the terms and
conditions of the Plan, the Notice of Grant and this Agreement. Participant has reviewed the Plan,
the Notice of Grant and this Agreement in their entirety, has had an opportunity to obtain the
advice of counsel prior to executing this Agreement, and fully understands all provisions of the
Plan, the Notice of Grant and this Agreement. Participant hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Committee upon any questions relating
to the Plan, the Notice of Grant and this Agreement. Participant further agrees to notify the
Company upon any change in Participants residence address.
GLU MOBILE INC.
2007 EQUITY INCENTIVE PLAN
NOTICE OF STOCK BONUS AWARD
GRANT NUMBER:
The terms defined in the Companys 2007 Equity Incentive Plan (the Plan) shall have the same
meanings in this Notice of Stock Bonus Award (Notice of Grant).
You (
Participant
) have been granted an award of Shares, subject to the terms and conditions of
the Plan and the attached Stock Bonus Award Agreement to the Plan (available in hard copy by
request), as follows:
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Number of Shares:
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Date of Grant:
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First Vesting Date:
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[
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Expiration Date:
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The date on which all the Shares granted hereunder become vested, with
earlier expiration upon the Termination Date
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[Vesting Schedule:
The Shares will vest as follows: Subject to your continued
service as an employee, director or consultant of the Company, on
.
]
|
Participant understands that his or her employment or consulting relationship with the Company is
for an unspecified duration, can be terminated at any time (i.e., is at-will), and that nothing
in this Notice of Grant, the Stock Bonus Agreement or the Plan changes the at-will nature of that
relationship. Participant acknowledges that the vesting of the Stock Bonus Shares pursuant to this Notice of
Grant is earned only by continuing service as an employee, director or consultant of the Company.
Participant also understands that this Notice of Grant is subject to the terms and conditions of
both the Stock Bonus Agreement and the Plan, both of which are incorporated herein by reference.
Participant has read both the Stock Bonus Agreement and the Plan.
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PARTICIPANT
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GLU MOBILE INC.
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Signature:
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By:
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Print Name:
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Its:
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GLU MOBILE INC.
STOCK BONUS AGREEMENT TO THE
GLU MOBILE INC. 2007 EQUITY INCENTIVE PLAN
Unless otherwise defined herein, the terms defined in the Companys 2007 Equity Incentive Plan (the
"
Plan
) shall have the same defined meanings in this Stock Bonus Agreement (the
Agreement
).
You have been granted a Stock Bonus Award (Stock Bonus Award) subject to the terms, restrictions
and conditions of the Plan, the Notice of Stock Bonus Award (Notice of Grant) and this Agreement.
1.
Settlement
.
Stock Bonus Awards shall be settled in Shares and the Companys
transfer agent shall record ownership of such Shares in Participants name as soon as reasonably
practicable.
2.
Stockholder Rights
.
Participant shall have no right to dividends or to vote
such Shares other than as provided under an applicable section of the Plan and applicable law.
3.
Non-Transferable
.
Unvested Shares, and unvested Stock Bonus Awards, and any
interest in either shall not be sold, assigned, transferred, pledged, hypothecated, or otherwise
disposed of by Participant or any person whose interest derives from Participants interest.
Unvested Shares are Shares that have not yet vested pursuant to the terms of the vesting schedule
set forth in the Notice of Grant.
4.
Termination
.
If Participants continuous employment with the Company or any
of its subsidiaries shall terminate for any reason, all Unvested Shares shall be forfeited to the
Company forthwith, and all rights of Participant to such Unvested Shares shall immediately
terminate. In case of any dispute as to whether Termination has occurred, the Committee shall have
sole discretion to determine whether such Termination has occurred and the effective date of such
Termination.
5.
Acknowledgement
.
The Company and Participant agree that the Stock Bonus Award
is granted under and governed by the Notice of Grant, this Agreement and by the
provisions of the Plan (incorporated herein by reference). Participant: (i) acknowledges receipt
of a copy of the Plan and the Plan prospectus, (ii) represents that Participant has carefully read
and is familiar with their provisions, and (iii) hereby accepts the Stock Bonus Award subject to
all of the terms and conditions set forth herein and those set forth in the Plan, this Agreement
and the Notice of Grant.
6.
Tax Consequences
.
Participant acknowledges that there will be tax
consequences upon vesting of the Stock Bonus Awards or disposition of the Shares, if any, received
in connection therewith, and Participant should consult a tax adviser regarding Participants tax
obligations prior to such vesting or disposition. The included amount will be treated as
ordinary income by Participant and will be subject to withholding by the Company. Before any
shares subject to this Agreement are issued, the Participant must provide funds to the Company
equal to the amount of the Companys tax withholding obligations(s). Information on possible
arrangements can be obtained from the Company. Upon disposition of the Shares, any subsequent
increase or decrease in value will be treated as short-term or long-term capital gain or loss,
depending on whether the Shares are held for more than one year from the date of settlement.
7.
Compliance with Laws and Regulations
.
The issuance of Shares will be subject
to and conditioned upon compliance by the Company and Participant with all applicable state and
federal laws and regulations and with all applicable requirements of any stock exchange or
automated quotation system on which the Companys Common Stock may be listed or quoted at the time
of such issuance or transfer.
8.
Successors and Assigns
.
The Company may assign any of its rights under this
Agreement. This Agreement shall be binding upon and inure to the benefit of the successors and
assigns of the Company. Subject
to the restrictions on transfer set forth herein, this Agreement will be binding upon Participant
and Participants heirs, executors, administrators, legal representatives, successors and assigns.
9.
Governing Law; Severability
.
The Plan and Notice of Grant are incorporated
herein by reference. The Plan, the Notice of Grant and this Agreement constitute the entire
agreement of the parties with respect to the subject matter hereof and supersede in their entirety
all prior undertakings and agreements of the Company and Participant with respect to the subject
matter hereof. This Agreement is governed by Delaware law except for that body of law pertaining
to conflict of laws. If any provision of this Agreement is determined by a court of law to be
illegal or unenforceable, then such provision will be enforced to the maximum extent possible and
the other provisions will remain fully effective and enforceable.
10.
No Rights as Employee, Director or Consultant
.
Nothing in this Agreement shall affect
in any manner whatsoever the right or power of the Company, or a Parent or Subsidiary of the
Company, to terminate Purchaser
s employment, for any reason, with or without cause.
By your signature and the signature of the Companys representative on the Notice of Grant,
Participant and the Company agree that this Stock Bonus Award is granted under and governed by the
terms and conditions of the Plan, the Notice of Grant and this Agreement. Participant has reviewed
the Plan, the Notice of Grant and this Agreement in their entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Agreement, and fully understands all
provisions of the Plan, the Notice of Grant and this Agreement. Participant hereby agrees to
accept as binding, conclusive and final all decisions or interpretations of the Committee upon any
questions relating to the Plan, the Notice of Grant and this Agreement. Participant further agrees
to notify the Company upon any change in Participants residence address.
Exhibit 10.04
Glu Mobile Inc.
2007 Employee Stock Purchase Plan
Adopted
by the Board of Directors on January 25, 2007
1. Establishment of Plan
. Glu Mobile Inc. (the
Company
) proposes to grant
options for purchase of the Companys Common Stock to eligible employees of the Company and its
Participating Corporations (as hereinafter defined) pursuant to this Employee Stock Purchase Plan
(this
Plan
). For purposes of this Plan, Parent and Subsidiary shall have the same meanings
as parent corporation and subsidiary corporation in Sections 424(e) and 424(f), respectively,
of the Internal Revenue Code of 1986, as amended (the Code), and Corporate Group shall refer
collectively to the Company and all its Parents and Subsidiaries. Participating Corporations are
the Company and any Parents or Subsidiaries that the Board of Directors of the Company (the
Board
) designates from time to time as corporations that shall participate in this Plan. The
Company intends this Plan to qualify as an employee stock purchase plan under Section 423 of the
Code (including any amendments to or replacements of such Section), and this Plan shall be so
construed. Any term not expressly defined in this Plan but defined for purposes of Section 423 of
the Code shall have the same definition herein. A total of Two
Million(2,000,000) shares of the Companys Common Stock is reserved for issuance under this Plan. In
addition, on each January 1 for the first eight calendar years after the first Offering Date, the
aggregate number of shares of the Companys Common Stock reserved for issuance under the Plan shall
be increased automatically by the number of shares equal to one percent (1%) of the total number of
outstanding shares of the Company Common Stock on the immediately preceding December 31
(
rounded down to the nearest whole share
);
provided,
that the Board or the
Committee may in its sole discretion reduce the amount of the increase in any particular year; and,
provided further
, that the aggregate number of shares issued over the term of this Plan
shall not exceed Sixteen Million (16,000,000) shares of Common Stock. The number of shares reserved for issuance
under this Plan and the maximum number of shares that may be issued under this Plan shall be
subject to adjustments effected in accordance with Section 14 of this Plan.
2. Purpose
. The purpose of this Plan is to provide eligible employees of the Company and
Participating Corporations with a means of acquiring an equity interest in the Company through
payroll deductions, to enhance such employees sense of participation in the affairs of the Company
and Participating Corporations, and to provide an incentive for continued employment.
3. Administration
. This Plan shall be administered by the Compensation Committee of the Board
or by the Board (either referred to herein as the
Committee
). Subject to the provisions of this
Plan and the limitations of Section 423 of the Code or any successor provision in the Code, all
questions of interpretation or application of this Plan shall be determined by the Committee and
its decisions shall be final and binding upon all Participants. Members of the Committee shall
receive no compensation for their services in connection with the administration of this Plan,
other than standard fees as established from time to time by the Board for services rendered by
Board members serving on Board committees. All expenses incurred in connection with the
administration of this Plan shall be paid by the Company.
4. Eligibility
. Any employee of the Company or the Participating Corporations is eligible to
participate in an Offering Period (as hereinafter defined) under this Plan except the following:
(a) employees who are not employed by the Company or a Participating Corporation for at least
three (3) months prior to the beginning of such Offering Period or prior to such other time period
as specified by the Committee;
(b) employees who are customarily employed for twenty (20) hours or less per week;
- 1 -
(c) employees who are customarily employed for five (5) months or less in a calendar year;
(d) employees who, together with any other person whose stock would be attributed to such
employee pursuant to Section 424(d) of the Code, own stock or hold options to purchase stock
possessing five percent (5%) or more of the total combined voting power or value of all classes of
stock of the Company or any of its Participating Corporations or who, as a result of being granted
an option under this Plan with respect to such Offering Period, would own stock or hold options to
purchase stock possessing five percent (5%) or more of the total combined voting power or value of
all classes of stock of the Company or any of its Participating Corporations;
(e) employees who do not meet any other eligibility requirements that the Committee may
choose to impose (within the limits permitted by the Code); and
(f) individuals who provide services to the Company or any of its Participating Corporations
as independent contractors who are reclassified as common law employees for any reason
except
for
federal income and employment tax purposes.
5. Offering Dates
.
(a) The offering periods of this Plan (each, an
Offering Period
) may be of up to
twenty-four (24) months duration and shall commence and end at the times designated by the
Committee. Each Offering Period may consist of up to five (5) purchase periods (individually, a
Purchase Period
) during which payroll deductions of Participants are accumulated under this Plan.
(b) The initial Offering Period shall commence on the date on which the Registration
Statement covering the initial public offering of shares of the Companys Common Stock is declared
effective by the U.S. Securities and Exchange Commission (the
Effective Date
), and shall end with
the Purchase Date that occurs on or prior to the February 14 or August 14 that first occurs six
months or more after the Effective Date. The initial Offering Period shall consist of a single
Purchase Period. Thereafter, a six-month Offering Period shall commence on each February 15 and
August 15, with each such Offering Period also consisting of a single six-month Purchase Period.
(c) The first business day of each Offering Period is referred to as the
Offering Date
,
however, for the initial Offering Period this shall be the Effective Date. The last business day
of each Purchase Period is referred to as the
Purchase Date
. The Committee shall have the power
to change these terms as provided in Section 25 below.
6. Participation in this Plan
.
(a) Any employee who is an eligible employee determined in accordance with Section 4
immediately prior to the initial Offering Period will be automatically enrolled in the initial
Offering Period under this Plan. With respect to subsequent Offering Periods, any eligible
employee determined in accordance with Section 4 will be eligible to participate in this Plan,
subject to the requirement of Section 6(b) hereof and the other terms and provisions of this Plan.
Eligible employees who meet the eligibility requirements set forth in Section 4 and who are either
automatically enrolled in the initial offering period or who elect to participate in the this Plan
pursuant to Section 6(b) are referred to herein as a
Participant
or collectively as
Participants
.
(b) Notwithstanding the foregoing, (i) an eligible employee may elect to decrease the number
of shares of Common Stock that such employee would otherwise be permitted to purchase for the
initial Offering Period under the Plan and/or purchase shares of Common Stock for the initial
Offering Period through payroll deductions by delivering a subscription agreement to the Company
within thirty (30) days after the filing of an effective registration statement pursuant to Form
S-8 and (ii) the Committee may set a later time for filing the subscription agreement authorizing
payroll deductions for all eligible employees with respect to a given Offering Period. With
respect to Offering Periods after the
- 2 -
initial Offering Period, a Participant may elect to participate in this Plan by submitting a
subscription agreement prior to the commencement of the Offering Period (or such earlier date as
the Committee may determine) to which such agreement relates.
(c) Once an employee becomes a Participant in an Offering Period, then such Participant will
automatically participate in the Offering Period commencing immediately following the last day of
such prior Offering Period unless the Participant withdraws or is deemed to withdraw from this Plan
or terminates further participation in the Offering Period as set forth in Section 11 below. Such
Participant is not required to file any additional subscription agreement in order to continue
participation in this Plan.
7. Grant of Option on Enrollment
. Becoming a Participant with respect to an Offering Period
will constitute the grant (as of the Offering Date) by the Company to such Participant of an option
to purchase on the Purchase Date up to that number of shares of Common Stock of the Company
determined by a fraction, the numerator of which is the amount accumulated in such Participants
payroll deduction account during such Purchase Period and the denominator of which is the lower of
(i) eighty-five percent (85%) of the fair market value of a share of the Companys Common Stock on
the Offering Date (but in no event less than the par value of a share of the Companys Common
Stock), or (ii) eighty-five percent (85%) of the fair market value of a share of the Companys
Common Stock on the Purchase Date (but in no event less than the par value of a share of the
Companys Common Stock)
provided
,
however
, that for the Purchase Period within the initial
Offering Period the numerator shall be fifteen percent (15%) of the Participants compensation for
such Purchase Period and
provided
,
further
, that the number of shares of the
Companys Common Stock subject to any option granted pursuant to this Plan shall not exceed the
lesser of (x) the maximum number of shares set by the Committee pursuant to Section 10(b) below
with respect to the applicable Purchase Date, or (y) the maximum number of shares which may be
purchased pursuant to Section 10(a) below with respect to the applicable Purchase Date. The fair
market value of a share of the Companys Common Stock shall be determined as provided in Section 8
below.
8. Purchase Price
. The purchase price per share at which a share of Common Stock will be sold
in any Offering Period shall be eighty-five percent (85%) of the lesser of:
(a) The fair market value on the Offering Date; or
(b) The fair market value on the Purchase Date.
The term
fair market value
means, as of any date, the value of a share of the Companys
Common Stock determined as follows:
(i) if such Common Stock is then listed on a national securities exchange, its closing price
on the date of determination on the principal national securities exchange on which the Common
Stock is listed or admitted to trading as reported in
The Wall Street Journal
or such other source
as the Committee deems reliable; or
(ii) if such Common Stock is publicly traded but is not admitted to trading on a national
securities exchange, the average of the closing bid and asked prices on the date of determination
as reported in
The Wall Street Journal
or such other source as the Committee deems reliable; and
(iii) with respect to the initial Offering Period, fair market value on the Offering Date
shall be the price at which shares of Common Stock are offered to the public pursuant to the
Registration Statement covering the initial public offering of shares of the Companys Common
Stock.
9. Payment of Purchase Price; Payroll Deduction Changes; Share Issuances
.
(a) The purchase price of the shares is accumulated by regular payroll deductions made during
each Offering Period. The deductions are made as a percentage of the Participants compensation
- 3 -
in one percent (1%) increments not less than one percent (1%), nor greater than fifteen percent
(15%) or such lower limit set by the Committee. Compensation shall mean all W-2 cash compensation
categorized by the Company as base salary or regular hourly wages, and expressly excluding
commissions, overtime, shift premiums, bonuses and incentive compensation, plus draws against
commissions,
provided
,
however
, that for purposes of determining a Participants
compensation, any election by such Participant to reduce his or her regular cash remuneration under
Sections 125 or 401(k) of the Code shall be treated as if the Participant did not make such
election. Payroll deductions shall commence on the first payday following the last Purchase Date
(first payday following the effective date of filing with the U.S. Securities and Exchange
Commission a securities registration statement for the Plan with respect to the initial Offering
Period) and shall continue to the end of the Offering Period unless sooner altered or terminated as
provided in this Plan.
(b) A Participant may decrease the rate of payroll deductions during an Offering Period by
filing with the Company a new authorization for payroll deductions, with the new rate to become
effective for the next payroll period commencing after the Companys receipt of the authorization
and continuing for the remainder of the Offering Period unless changed as described below. Such
change in the rate of payroll deductions may be made at any time during an Offering Period, but not
more than one (1) decrease may be made effective during any Purchase Period. A Participant may
increase or decrease the rate of payroll deductions for any subsequent Offering Period by filing
with the Company a new authorization for payroll deductions prior to the beginning of such Offering
Period, or such other time period as specified by the Committee.
(c) A Participant may reduce his or her payroll deduction percentage to zero during an
Offering Period by filing with the Company a request for cessation of payroll deductions. Such
reduction shall be effective beginning with the next payroll period after the Companys receipt of
the request and no further payroll deductions will be made for the duration of the Offering Period.
Payroll deductions credited to the Participants account prior to the effective date of the
request shall be used to purchase shares of Common Stock of the Company in accordance with Section
(e) below. A reduction of the payroll deduction percentage to zero shall be treated as such
Participants withdrawal from such Offering Period, and the Plan, effective as of the day after the
next Purchase Date following the filing date of such request with the Company.
(d) All payroll deductions made for a Participant are credited to his or her account under
this Plan and are deposited with the general funds of the Company. No interest accrues on the
payroll deductions. All payroll deductions received or held by the Company may be used by the
Company for any corporate purpose, and the Company shall not be obligated to segregate such payroll
deductions.
(e) On each Purchase Date, so long as this Plan remains in effect and provided that the
Participant has not submitted a signed and completed withdrawal form before that date which
notifies the Company that the Participant wishes to withdraw from that Offering Period under this
Plan and have all payroll deductions accumulated in the account maintained on behalf of the
Participant as of that date returned to the Participant, the Company shall apply the funds then in
the Participants account to the purchase of whole shares of Common Stock reserved under the option
granted to such Participant with respect to the Offering Period to the extent that such option is
exercisable on the Purchase Date. The purchase price per share shall be as specified in Section 8
of this Plan. Any amount remaining in a Participants account on a Purchase Date which is less
than the amount necessary to purchase a full share of the Companys Common Stock shall be carried
forward, without interest, into the next Purchase Period or Offering Period, as the case may be.
In the event that this Plan has been oversubscribed, all funds not used to purchase shares on the
Purchase Date shall be returned to the Participant, without interest. No Common Stock shall be
purchased on a Purchase Date on behalf of any employee whose participation in this Plan has
terminated prior to such Purchase Date.
- 4 -
(f) As promptly as practicable after the Purchase Date, the Company shall issue shares for
the Participants benefit representing the shares purchased upon exercise of his or her option.
(g) During a Participants lifetime, his or her option to purchase shares hereunder is
exercisable only by him or her. The Participant will have no interest or voting right in shares
covered by his or her option until such option has been exercised.
10. Limitations on Shares to be Purchased
.
(a) No Participant shall be entitled to purchase stock under any Offering Period at a rate
which, when aggregated with such Participants rights to purchase stock, that are also outstanding
in the same calendar year(s) (whether under other Offering Periods or other employee stock purchase
plans of the Corporate Group), exceeds $25,000 in fair market value, determined as of the Offering
Date, (or such other limit as may be imposed by the Code) for each calendar year in which such
Offering Period is in effect (hereinafter the Maximum Share Amount). The Company shall
automatically suspend the payroll deductions of any Participant as necessary to enforce such limit
provided that when the Company automatically resumes such payroll deductions, the Company must
apply the rate in effect immediately prior to such suspension.
(b) The Committee may, in its sole discretion, set a lower maximum number of shares which may
be purchased by any Participant during any Offering Period than that determined under Section 10(a)
above, which shall then be the Maximum Share Amount for subsequent Offering Periods. If a new
Maximum Share Amount is set, then all Participants must be notified of such Maximum Share Amount
prior to the commencement of the next Offering Period for which it is to be effective. The Maximum
Share Amount shall continue to apply with respect to all succeeding Offering Periods unless revised
by the Committee as set forth above.
(c) If the number of shares to be purchased on a Purchase Date by all Participants exceeds
the number of shares then available for issuance under this Plan, then the Company will make a pro
rata allocation of the remaining shares in as uniform a manner as shall be reasonably practicable
and as the Committee shall determine to be equitable. In such event, the Company shall give
written notice of such reduction of the number of shares to be purchased under a Participants
option to each Participant affected.
(d) Any payroll deductions accumulated in a Participants account which are not used to
purchase stock due to the limitations in this Section 10, and not covered by Section 9(e), shall be
returned to the Participant as soon as practicable after the end of the applicable Purchase Period,
without interest.
11. Withdrawal
.
(a) Each Participant may withdraw from an Offering Period under this Plan by signing and
delivering to the Company a written notice to that effect on a form provided for such purpose by
the Company. Such withdrawal may be elected at any time prior to the end of an Offering Period, or
such other time period as specified by the Committee.
(b) Upon withdrawal from this Plan, the accumulated payroll deductions shall be returned to
the withdrawn Participant, without interest, and his or her interest in this Plan shall terminate.
In the event a Participant voluntarily elects to withdraw from this Plan, he or she may not resume
his or her participation in this Plan during the same Offering Period, but he or she may
participate in any Offering Period under this Plan which commences on a date subsequent to such
withdrawal by filing a new authorization for payroll deductions in the same manner as set forth in
Section 6 above for initial participation in this Plan.
12. Termination of Employment
. Termination of a Participants employment for any reason,
including retirement, death, disability, or the failure of a Participant to remain an eligible
employee of the Company or of a Participating Corporation, immediately terminates his or her
- 5 -
participation in this Plan. In such event, accumulated payroll deductions credited to the
Participants account will be returned to him or her or, in the case of his or her death, to his or
her legal representative, without interest. For purposes of this Section 12, an employee will not
be deemed to have terminated employment or failed to remain in the continuous employ of the Company
or of a Participating Corporation in the case of sick leave, military leave, or any other leave of
absence approved by the Company;
provided
that such leave is for a period of not more than
ninety (90) days or reemployment upon the expiration of such leave is guaranteed by contract or
statute.
13. Return of Payroll Deductions
. In the event a Participants interest in this Plan is
terminated by withdrawal, termination of employment or otherwise, or in the event this Plan is
terminated by the Board, the Company shall deliver to the Participant all accumulated payroll
deductions credited to such Participants account. No interest shall accrue on the payroll
deductions of a Participant in this Plan.
14. Capital Changes
. In the event that any dividend or other distribution (whether in the
form of cash, Common Stock, other securities, or other property), recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Common Stock or other securities of the Company, or other change in the
corporate structure of the Company affecting the Common Stock such that an adjustment is determined
by the Committee (in its sole discretion) to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available under the Plan,
then the Committee shall, in such manner as it may deem equitable, adjust the number and class of
Common Stock which may be delivered under the Plan, the purchase price per share and the number of
shares of Common Stock covered by each option under the Plan which has not yet been exercised, and
the numerical limits of Sections 1 and 10 shall be proportionately adjusted.
15. Nonassignability
. Neither payroll deductions credited to a Participants account nor any
rights with regard to the exercise of an option or to receive shares under this Plan may be
assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of
descent and distribution or as provided in Section 22 below) by the Participant. Any such attempt
at assignment, transfer, pledge or other disposition shall be void and without effect.
16. Reports
. Individual accounts will be maintained for each Participant in this Plan. Each
Participant shall receive promptly after the end of each Purchase Period a report of his or her
account setting forth the total payroll deductions accumulated, the number of shares purchased, the
per share price thereof and the remaining cash balance, if any, carried forward to the next
Purchase Period or Offering Period, as the case may be.
17. Notice of Disposition
. Each Participant shall notify the Company in writing if the
Participant disposes of any of the shares purchased in any Offering Period pursuant to this Plan if
such disposition occurs within two (2) years from the Offering Date or within one (1) year from the
Purchase Date on which such shares were purchased (the
Notice Period
). The Company may, at any
time during the Notice Period, place a legend or legends on any certificate representing shares
acquired pursuant to this Plan requesting the Companys transfer agent to notify the Company of any
transfer of the shares. The obligation of the Participant to provide such notice shall continue
notwithstanding the placement of any such legend on the certificates.
18. No Rights to Continued Employment
. Neither this Plan nor the grant of any option
hereunder shall confer any right on any employee to remain in the employ of the Company or any
Participating Corporation, or restrict the right of the Company or any Participating Corporation to
terminate such employees employment.
19. Equal Rights And Privileges
. All eligible employees shall have equal rights and
privileges with respect to this Plan so that this Plan qualifies as an employee stock purchase
plan within the meaning of Section 423 or any successor provision of the Code and the related
regulations. Any
- 6 -
provision of this Plan which is inconsistent with Section 423 or any successor provision of the
Code shall, without further act or amendment by the Company, the Committee or the Board, be
reformed to comply with the requirements of Section 423. This Section 19 shall take precedence
over all other provisions in this Plan.
20. Notices
. All notices or other communications by a Participant to the Company under or in
connection with this Plan shall be deemed to have been duly given when received in the form
specified by the Company at the location, or by the person, designated by the Company for the
receipt thereof.
21. Term; Stockholder Approval
. This Plan will become effective on the Effective Date. This
Plan shall be approved by the stockholders of the Company, in any manner permitted by applicable
corporate law, within twelve (12) months before or after the date this Plan is adopted by the
Board. No purchase of shares that are subject to such stockholder approval before becoming
available under this Plan shall occur prior to stockholder approval of such shares and the Board or
Committee may delay any Purchase Date and postpone the commencement of any Offering Period
subsequent to such Purchase Date as deemed necessary or desirable to obtain such approval (provided
that if a Purchase Date would occur more than twenty-four (24) months after commencement of the
Offering Period to which it relates, then such Purchase Date shall not occur and instead such
Offering Period shall terminate without the purchase of such shares and Participants in such
Offering Period shall be refunded their contributions without interest). This Plan shall continue
until the earlier to occur of (a) termination of this Plan by the Board (which termination may be
effected by the Board at any time pursuant to Section 25 below), (b) issuance of all of the shares
of Common Stock reserved for issuance under this Plan, or (c) the tenth anniversary of the first
Purchase Date under the Plan.
22. Designation of Beneficiary
.
(a) A Participant may file a written designation of a beneficiary who is to receive any
shares and cash, if any, from the Participants account under this Plan in the event of such
Participants death subsequent to the end of a Purchase Period but prior to delivery to him of such
shares and cash. In addition, a Participant may file a written designation of a beneficiary who is
to receive any cash from the Participants account under this Plan in the event of such
Participants death prior to a Purchase Date.
(b) Such designation of beneficiary may be changed by the Participant at any time by written
notice. In the event of the death of a Participant and in the absence of a beneficiary validly
designated under this Plan who is living at the time of such Participants death, the Company shall
deliver such shares or cash to the executor or administrator of the estate of the Participant, or
if no such executor or administrator has been appointed (to the knowledge of the Company), the
Company, in its discretion, may deliver such shares or cash to the spouse or to any one or more
dependents or relatives of the Participant, or if no spouse, dependent or relative is known to the
Company, then to such other person as the Company may designate.
23. Conditions Upon Issuance of Shares; Limitation on Sale of Shares
. Shares shall not be
issued with respect to an option unless the exercise of such option and the issuance and delivery
of such shares pursuant thereto shall comply with all applicable provisions of law, domestic or
foreign, including, without limitation, the Securities Act, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and the requirements of any stock
exchange or automated quotation system upon which the shares may then be listed, and shall be
further subject to the approval of counsel for the Company with respect to such compliance.
24. Applicable Law
. The Plan shall be governed by the substantive laws (excluding the
conflict of laws rules) of the State of Delaware.
25. Amendment or Termination
. The Committee, in its sole discretion, may amend, suspend, or
terminate the Plan, or any part thereof, at any time and for any reason. If the Plan is terminated,
the Committee, in its discretion, may elect to terminate all outstanding Offering Periods either
- 7 -
immediately or upon completion of the purchase of shares of Common Stock on the next Purchase Date
(which may be sooner than originally scheduled, if determined by the Committee in its discretion),
or may elect to permit Offering Periods to expire in accordance with their terms (and subject to
any adjustment pursuant to Section 14). If an Offering Period is terminated prior to its
previously-scheduled expiration, all amounts then credited to Participants accounts for such
Offering Period, which have not been used to purchase shares of the Companys Common Stock, shall
be returned to those Participants (without interest thereon, except as otherwise required under
local laws) as soon as administratively practicable. Further, the Committee will be entitled to
change the Offering Periods, limit the frequency and/or number of changes in the amount withheld
during an Offering Period, establish the exchange ratio applicable to amounts withheld in a
currency other than U.S. dollars, permit payroll withholding in excess of the amount designated by
a Participant in order to adjust for delays or mistakes in the administration of the Plan,
establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to
ensure that amounts applied toward the purchase of the Companys Common Stock for each Participant
properly correspond with amounts withheld from the Participants base salary or regular hourly
wages, and establish such other limitations or procedures as the Committee determines in its sole
discretion advisable which are consistent with the Plan. Such actions will not require stockholder
approval or the consent of any Participants. However, no amendment shall be made without approval
of the stockholders of the Company (obtained in accordance with Section 21 above) within twelve
(12) months of the adoption of such amendment (or earlier if required by Section 21) if such
amendment would: (a) increase the number of shares that may be issued under this Plan; or (b)
change the designation of the employees (or class of employees) eligible for participation in this
Plan.
26. Corporate Transactions
.
(a) In the event of a Corporate Transaction (as defined below), each outstanding right to
purchase Company Common Stock will be assumed or an equivalent option substituted by the successor
corporation or a parent or a subsidiary of the successor corporation. In the event that the
successor corporation refuses to assume or substitute for the purchase right, the Offering Period
with respect to which such purchase right relates will be shortened by setting a new Purchase Date
(the
New Purchase Date
and will end on the New Purchase Date. The New Purchase Date shall occur
on or prior to the consummation of the Corporate Transaction.
(b)
Corporate Transaction
means the occurrence of any of the following events: (i) any
person (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the
beneficial owner (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of
securities of the Company representing fifty percent (50%) or more of the total voting power
represented by the Companys then outstanding voting securities; or (ii) the consummation of the
sale or disposition by the Company of all or substantially all of the Companys assets; or (iii)
the consummation of a merger or consolidation of the Company with any other corporation, other than
a merger or consolidation which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity or its parent) at least fifty percent
(50%) of the total voting power represented by the voting securities of the Company or such
surviving entity or its parent outstanding immediately after such merger or consolidation.
- 8 -
Exhibit
10.28
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT
(this
Agreement
) dated as of the Effective Date between
SILICON VALLEY BANK
, a California corporation (
Bank
), and Glu Mobile Inc., a California
corporation (
Borrower
), provides the terms on which Bank shall lend to Borrower and Borrower
shall repay Bank. The parties agree as follows:
1. ACCOUNTING AND OTHER TERMS
Accounting terms not defined in this Agreement shall be construed following GAAP.
Calculations and determinations must be made following GAAP. Capitalized terms not otherwise
defined in this Agreement shall have the meanings set forth in Section 13. All other terms
contained in this Agreement, unless otherwise indicated, shall have the meaning provided by the
Code to the extent such terms are defined therein.
2. LOAN AND TERMS OF PAYMENT
2.1 Promise to Pay
. Borrower hereby unconditionally promises to pay Bank the outstanding
principal amount of all Credit Extensions and accrued and unpaid interest thereon as and when due
in accordance with this Agreement.
2.1.1
Revolving Advances
.
(a)
Availability
. Subject to the terms and conditions of this Agreement, Bank will
make Advances to Borrower up to an amount (
Net Borrowing Availability
) not to exceed the lesser
of the Revolving Line and the Borrowing Base.
(b)
Termination; Repayment
. The Revolving Line terminates on the Revolving Line
Maturity Date, when the principal amount of all Advances, the unpaid interest thereon, and all
other Obligations relating to the Revolving Line shall be immediately due and payable.
2.2 Overadvances
. If at any time or for any reason the total of all outstanding Advances and
all other monetary Obligations exceeds Net Borrowing Availability (an
Overadvance
), Borrower
shall immediately pay the amount of the excess to Bank, without notice or demand. Without limiting
Borrowers obligation to repay to Bank the amount of any Overadvance, Borrower agrees to pay Bank
interest on the outstanding amount of any Overadvance, on demand, at the Default Rate.
2.3 Payment of Interest on the Credit Extensions
.
(a)
Interest Rate
;
Advances
. Subject to Section 2.3(b), the amounts
outstanding under the Revolving Line shall accrue interest at a per annum rate equal to one (1)
percentage point above the Prime Rate, floating, which interest shall be payable monthly. If, at
any time, Net Cash is less than $3,500,000, the interest rate on the Revolving Line will increase
to the Prime Rate plus 2.0%, floating, as of the first day of the month following the reporting
date for the financial statements that show the Borrowers Net Cash has dropped below
$3,500,000. The interest rate on the Revolving Line will decrease to the Prime Rate plus 1.0%
floating, as of the first day of the month following the receipt of financial statements showing
the Borrowers Net Cash is once again above $3,500,000.
(b)
Default Rate
. Immediately upon the occurrence and during the continuance of an
Event of Default, the Obligations shall bear interest at a rate per annum which is five percentage
points above the rate effective immediately before the Event of Default (the
Default Rate
).
Payment or acceptance of the increased interest rate provided in this Section 2.3(b) is not a
permitted alternative to timely payment and shall not constitute a waiver of any Event of Default
or otherwise prejudice or limit any rights or remedies of Bank. For purposes of this Agreement, an
Event of Default shall be deemed to no longer continue upon Borrowers receipt of Banks written
confirmation (which may be via email) that Bank considers that it no longer is continuing.
(c)
Adjustment to Interest Rate
. Changes to the interest rate of any Credit Extension
based on changes to the Prime Rate shall be effective on the effective date of any change to the
Prime Rate and to the extent of any such change.
(d)
360-Day Year
. Interest shall be computed on the basis of a 360-day year for the
actual number of days elapsed.
(e)
Debit of Accounts
. Bank may debit any of Borrowers deposit accounts, including
the Designated Deposit Account, for principal and interest payments or any other amounts Borrower
owes Bank when due. These debits shall not constitute a set-off.
(f)
Payment; Interest Computation
. Interest is payable monthly on the last calendar
day of each month. In computing interest on the Obligations, all Payments received after 12:00
p.m. Pacific time on any day shall be deemed received on the next Business Day. Bank shall not,
however, be required to credit Borrowers account for the amount of any item of payment which is
unsatisfactory to Bank in its good faith business judgment, and Bank may charge Borrowers
Designated Deposit Account for the amount of any item of payment which is returned to Bank unpaid.
2.4 Fees
. Borrower shall pay to Bank:
(a)
Commitment Fee
. A commitment fee of .50% of the commitment per annum, payable on
the Effective Date and on the anniversary thereof, which fee is fully earned and non-refundable in
its entirety on the Effective Date;
(b)
Termination Fee
. Subject to the terms of Section 4.1, a termination fee;
(c)
Collateral Monitoring Fee
. During any period in which Net Cash is less than
$3,500,000, a monthly collateral monitoring fee of $1,000, payable in arrears on the last day of
each month (prorated for any partial month) and upon termination of this Agreement;
-2-
(d)
Liquidity Facility Fee
. At such time as Net Cash becomes less than $3,500,000, a
facility fee of $50,000, payable with delivery of the financial statements required by Section 6.2
below; and
(e)
Bank Expenses
. All Bank Expenses (including reasonable attorneys fees and
expenses plus expenses, for documentation and negotiation of this Agreement) incurred through and
after the Effective Date, when due.
3. CONDITIONS OF LOANS
3.1 Conditions Precedent to Initial Credit Extension
. Banks obligation to make the initial
Credit Extension is subject to the condition precedent that Bank shall have received, in form and
substance satisfactory to Bank, such documents, and completion of such other matters, as Bank may
reasonably deem necessary or appropriate, including, without limitation:
(a) Borrower shall have delivered duly executed original signatures to the Loan Documents to
which it is a party;
(b) Borrower shall have delivered duly executed original signatures to the Control
Agreement[s];
(c) Borrower shall have delivered its Operating Documents and a good standing certificate of
Borrower certified by the Secretary of State of the State of California as of a date no earlier
than thirty (30) days prior to the Effective Date;
(d) Borrower shall have delivered duly executed original signatures to the completed Borrowing
Resolutions for Borrower;
(e) Borrower shall have delivered the Intercreditor Agreement duly executed by Pinnacle
Ventures in favor of Bank;
(f) Bank shall have received certified copies, dated as of a recent date, of financing
statement searches, as Bank shall request, accompanied by written evidence (including any UCC
termination statements) that the Liens indicated in any such financing statements either constitute
Permitted Liens or have been or, in connection with the initial Advance, will be terminated or
released;
(g) Borrower shall have delivered the Perfection Certificate(s) executed by Borrower;
(h) Borrower shall have delivered the insurance policies and/or endorsements required pursuant
to Section 6.7 hereof evidence satisfactory to Bank that the insurance policies required by Section
6.
7
hereof are in full force and effect, together with appropriate evidence showing loss payable
and/or additional insured clauses or endorsements in favor of Bank; and
(i) Borrower shall have paid the fees and Bank Expenses then due as specified in Section 2.4
hereof.
-3-
3.2
Conditions Precedent to all Credit Extensions
. Banks obligation to make each Credit
Extension, including the initial Credit Extension, is subject to the following:
(a) timely receipt of an executed Payment/Advance Form;
(b) the representations and warranties in Section 5 shall be true in all material respects on
the date of the Payment/Advance Form and on the Funding Date of each Credit Extension; provided,
however, that such materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text thereof; and provided,
further that those representations and warranties expressly referring to a specific date shall be
true, accurate and complete in all material respects as of such date, and no Default or Event of
Default shall have occurred and be continuing or result from the Credit Extension. Each Credit
Extension is Borrowers representation and warranty on that date that the representations and
warranties in Section 5 remain true in all material respects; provided, however, that such
materiality qualifier shall not be applicable to any representations and warranties that already
are qualified or modified by materiality in the text thereof; and provided, further that those
representations and warranties expressly referring to a specific date shall be true, accurate and
complete in all material respects as of such date; and
(c) in Banks sole discretion, there has not been a Material Adverse Change
.
3.3
Covenant to Deliver
. Borrower agrees to deliver to Bank each item required to be
delivered to Bank under this Agreement as a condition to any Credit Extension. Borrower expressly
agrees that the extension of a Credit Extension prior to the receipt by Bank of any such item shall
not constitute a waiver by Bank of Borrowers obligation to deliver such item, and any such
extension in the absence of a required item shall be in Banks sole discretion.
3.4
Procedures for Borrowing
. Subject to the prior satisfaction of all other applicable
conditions to the making of an Advance set forth in this Agreement, to obtain an Advance, Borrower
shall notify Bank (which notice shall be irrevocable) by electronic mail, facsimile, or telephone
by 12:00 p.m. Pacific time on the Funding Date of the Advance. Together with such notification if
Net Cash is less than $3,500,000, Borrower must promptly deliver to Bank by electronic mail or
facsimile a completed Transaction Report executed by a Responsible Officer or his or her designee.
Bank shall credit Advances to the Designated Deposit Account. Bank may make Advances under this
Agreement based on instructions from a Responsible Officer or his or her designee or without
instructions if the Advances are necessary to meet Obligations which have become due. Bank may
rely on any telephone notice given by a person whom Bank believes is a Responsible Officer or
designee.
4. CREATION OF SECURITY INTEREST
4.1
Grant of Security Interest
. Borrower hereby grants Bank, to secure the payment and
performance in full of all of the Obligations, a continuing security interest in, and pledges to
Bank, the Collateral, wherever located, whether now owned or hereafter acquired or arising, and all
proceeds and products thereof. Borrower represents, warrants, and covenants that the security
interest granted herein is and shall at all times continue to be a first priority
-4-
perfected security interest in the Collateral (subject only to Permitted Liens that may have
superior priority to Banks Lien under this Agreement). If Borrower shall acquire a commercial
tort claim, Borrower shall promptly notify Bank in a writing signed by Borrower of the general
details thereof and grant to Bank in such writing a security interest therein and in the proceeds
thereof, all upon the terms of this Agreement, with such writing to be in form and substance
reasonably satisfactory to Bank.
This Agreement may be terminated prior to the Revolving Maturity Date by Borrower, effective
three (3) Business Days after written notice of termination is given to Bank or if Banks
obligation to fund Credit Extensions terminates pursuant to the terms of Section 2.1.1(b).
Notwithstanding any such termination, Banks lien and security interest in the Collateral shall
continue until Borrower fully satisfies its Obligations. If such termination is at Borrowers
election or at Banks election due to the occurrence and continuance of an Event of Default,
Borrower shall pay to Bank, in addition to the payment of any other expenses or fees then-owing, a
termination fee in an amount equal to one-half of one-percent (.50%) of the Revolving Line provided
that no termination fee shall be charged if the credit facility hereunder is replaced with a new
facility from another division of Silicon Valley Bank. Upon payment in full of the Obligations and
at such time as Banks obligation to make Credit Extensions has terminated, Bank shall release its
liens and security interests in the Collateral and all rights therein shall revert to Borrower.
4.2
Authorization to File Financing Statements
. Borrower hereby authorizes Bank to file
financing statements, without notice to Borrower, with all appropriate jurisdictions to perfect or
protect Banks interest or rights hereunder, including a notice that any disposition of the
Collateral, by either Borrower or any other Person, shall be deemed to violate the rights of Bank
under the Code.
5. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants as follows:
5.1
Due Organization and Authorization
. Borrower and each of its Subsidiaries are duly
existing and in good standing as Registered Organizations in their respective jurisdictions of
formation and are qualified and licensed to do business and are in good standing in any
jurisdiction in which the conduct of their business or their ownership of property requires that
they be qualified except where the failure to do so could not reasonably be expected to have a
material adverse effect on Borrowers business. In connection with this Agreement, Borrower has
delivered to Bank a completed certificate signed by Borrower, entitled Collateral Information
Certificate (the Perfection Certificate). Borrower represents and warrants to Bank that (a)
Borrowers exact legal name is that indicated on the Perfection Certificate and on the signature
page hereof; (b) Borrower is an organization of the type and is organized in the jurisdiction set
forth in the Perfection Certificate; (c) the Perfection Certificate accurately sets forth
Borrowers organizational identification number or accurately states that Borrower has none; (d)
the Perfection Certificate accurately sets forth Borrowers place of business, or, if more than
one, its chief executive office as well as Borrowers mailing address (if different than its chief
executive office); (e) Borrower (and each of its predecessors) has not, in the past five (5) years,
changed its jurisdiction of formation, organizational structure or type,
-5-
or any organizational number assigned by its jurisdiction; and (f) all other information set
forth on the Perfection Certificate pertaining to Borrower and each of its Subsidiaries is accurate
and complete. If Borrower is not now a Registered Organization but later becomes one, Borrower
shall promptly notify Bank of such occurrence and provide Bank with Borrowers organizational
identification number.
The execution, delivery and performance of the Loan Documents have been duly authorized, and
do not conflict with Borrowers organizational documents, nor constitute an event of default under
any material agreement by which Borrower is bound. Borrower is not in default under any agreement
to which it is a party or by which it is bound in which the default could reasonably be expected to
have a material adverse effect on Borrowers business.
5.2
Collateral
. Borrower has good title to the Collateral, free of Liens except Permitted
Liens. Borrower has no deposit account other than the deposit accounts with Bank.
The Collateral is not in the possession of any third party bailee (such as a warehouse).
Except as hereafter disclosed to Bank in writing by Borrower, none of the components of the
Collateral shall be maintained at locations other than as provided in the Perfection Certificate.
In the event that Borrower, after the date hereof, intends to store or otherwise deliver any
portion of the Collateral to a bailee, then Borrower will first receive the written consent of Bank
and such bailee must acknowledge in writing that the bailee is holding such Collateral for the
benefit of Bank.
All Inventory is in all material respects of good and marketable quality, free from material
defects.
Borrower and its Subsidiaries own, or possess the right to use, all of Intellectual Property
that is reasonably necessary for the operation of their respective businesses, without conflict
with the rights of any other Person, except for such Intellectual Property for which the failure to
own or possess the right to use could not reasonably be expected to result in a Material Adverse
Change. To the best of Borrowers knowledge, none of such Intellectual Property has been judged
invalid or unenforceable, in whole or in part, and no claim has been made that any part of such
Intellectual Property created or owned by Borrower violates the rights of any third party.
5.3
Accounts Receivable
.
(a) For each Account with respect to which Advances are requested, on the date each Advance is
requested and made, such Account shall meet the requirement for an Eligible Account set forth in
Section 13 below.
(b) All statements made and all unpaid balances appearing in all invoices, instruments and
other documents evidencing the Accounts are and shall be true and correct and all such invoices,
instruments and other documents, and all of Borrowers Books are genuine and in all respects what
they purport to be. All sales and other transactions underlying or giving rise to each Account
shall comply in all material respects with all applicable laws and governmental rules and
regulations. Borrower has no knowledge of any actual or imminent Insolvency Proceeding of any
Account Debtor whose accounts are an Eligible Account in any
-6-
Borrowing Base Certificate. To the best of Borrowers knowledge, all signatures and
endorsements on all documents, instruments, and agreements relating to all Accounts are genuine,
and all such documents, instruments and agreements are legally enforceable in accordance with their
terms.
5.4
Litigation
. There are no actions or proceedings pending or, to the knowledge of the
Responsible Officers, threatened in writing by or against Borrower or any of its Subsidiaries
involving more than $100,000.
5.5
No Material Deviation in Financial Statements
. All consolidated financial statements for
Borrower and any of its Subsidiaries delivered to Bank fairly present in all material respects
Borrowers consolidated financial condition and Borrowers consolidated results of operations.
There has not been any material deterioration in Borrowers consolidated financial condition since
the date of the most recent financial statements submitted to Bank.
5.6
Solvency
. Borrower is able to pay its debts (including trade debts) as they mature.
5.7 Regulatory Compliance
. Borrower is not an investment company or a company controlled
by an investment company under the Investment Company Act. Borrower is not engaged as one of its
important activities in extending credit for margin stock (under Regulations T and U of the Federal
Reserve Board of Governors). Borrower has complied in all material respects with the Federal Fair
Labor Standards Act. Borrower has not violated any laws, ordinances or rules, the violation of
which could reasonably be expected to have a material adverse effect on its business. None of
Borrowers or any of its Subsidiaries properties or assets has been used by Borrower or any
Subsidiary or, to the best of Borrowers knowledge, by previous Persons, in disposing, producing,
storing, treating, or transporting any hazardous substance other than legally. Borrower and each
of its Subsidiaries have obtained all consents, approvals and authorizations of, made all
declarations or filings with, and given all notices to, all government authorities that are
necessary to continue its business as currently conducted.
5.8 Subsidiaries; Investments
. Borrower does not own any stock, partnership interest or other
equity securities except for Permitted Investments.
5.9
Tax Returns and Payments; Pension Contributions
. Borrower has timely filed all required
tax returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes,
assessments, deposits and contributions owed by Borrower. Borrower may defer payment of any
contested taxes, provided that Borrower (a) in good faith contests its obligation to pay the taxes
by appropriate proceedings promptly and diligently instituted and conducted, (b) notifies Bank in
writing of the commencement of, and any material development in, the proceedings, and (c) posts
bonds or takes any other steps required to prevent the governmental authority levying such
contested taxes from obtaining a Lien upon any of the Collateral that is other than a Permitted
Lien. Borrower is unaware of any claims or adjustments proposed for any of Borrowers prior tax
years which could result in additional taxes becoming due and payable by Borrower. Borrower has
paid all amounts necessary to fund all present pension, profit sharing and deferred compensation
plans in accordance with
-7-
their terms, and Borrower has not withdrawn from participation in, and has not permitted
partial or complete termination of, or permitted the occurrence of any other event with respect to,
any such plan which could reasonably be expected to result in any liability of Borrower, including
any liability to the Pension Benefit Guaranty Corporation or its successors or any other
governmental agency.
5.10
Use of Proceeds
. Borrower shall use the proceeds of the Credit Extensions solely as
working capital and to fund its general business requirements and not for personal, family,
household or agricultural purposes.
5.11
Full Disclosure
. No written representation, warranty or other statement of Borrower in
any certificate or written statement given to Bank, as of the date such representations,
warranties, or other statements were made, taken together with all such written certificates and
written statements given to Bank, contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements contained in the certificates or statements
not misleading (it being recognized by Bank that the projections and forecasts provided by Borrower
in good faith and based upon reasonable assumptions are not viewed as facts and that actual results
during the period or periods covered by such projections and forecasts may differ from the
projected or forecasted results).
6. AFFIRMATIVE COVENANTS
Borrower shall do all of the following:
6.1
Government Compliance
. Maintain its and all its Subsidiaries legal existence and good
standing in their respective jurisdictions of formation and maintain qualification in each
jurisdiction in which the failure to so qualify would reasonably be expected to have a material
adverse effect on Borrowers business or operations. Borrower shall comply, and have each
Subsidiary comply, with all laws, ordinances and regulations to which it is subject, noncompliance
with which could have a material adverse effect on Borrowers business.
6.2
Financial Statements, Reports, Certificates
.
(a) Borrower shall provide Bank with the following:
(i) within thirty (30) days after the end of each month, (A) monthly accounts receivable
agings, aged by invoice date, (B) monthly accounts payable agings, aged by invoice date, and
outstanding or held check registers, if any, (C) monthly reconciliations of accounts receivable
agings (aged by invoice date), transaction reports, and general ledger, and (D) Borrowing Base
Certificate.
(ii) as soon as available, and in any event within thirty (30) days after the end of each
month, monthly unaudited consolidating financial statements;
(iii) within thirty (30) days after the end of each month a monthly Compliance Certificate
signed by a Responsible Officer, certifying that as of the end of such month, Borrower was in full
compliance with all of the terms and conditions of this Agreement, and setting forth calculations
showing compliance with the financial covenants set
-8-
forth in this Agreement and such other information as Bank shall reasonably request,
including, without limitation, for any Compliance Certificate delivered when a lockbox is required
under this Section 6.3(c) hereof, a statement that at the end of such month there were no held
checks;
(iv) within thirty (30) days after the end of each fiscal year of Borrower, (A) annual
operating budgets (including income statements, balance sheets and cash flow statements, by month)
for the upcoming fiscal year of Borrower, and (B) annual consolidating financial projections for
the following fiscal year (on a quarterly basis) as approved by Borrowers board of directors,
together with any related business forecasts used in the preparation of such annual financial
projections; and
(v) as soon as available, and in any event within 210 days following the end of Borrowers
fiscal year, annual financial statements certified by, and with an unqualified opinion of,
independent certified public accountants acceptable to Bank.
(b) In the event that Borrower becomes subject to the reporting requirements under the
Securities Exchange Act of 1934, as amended, within five (5) days after filing, all reports on Form
10-K, 10-Q and 8-K filed with the Securities and Exchange Commission or a link thereto on
Borrowers or another website on the Internet.
(c) Prompt written notice of (i) any material change in the composition of the Intellectual
Property, (ii) the registration of any Copyright, including any subsequent ownership right of
Borrower in or to any Copyright, Patent or Trademark not previously disclosed to Bank, or (iii)
Borrowers knowledge of an event that materially adversely affects the value of the Intellectual
Property.
(d) In the event Net Cash is less than $3,500,000, Borrower shall provide Bank weekly and with
each Advance request, a transaction report with respect to sales, credit memoranda and other
adjustments to the value of Accounts, on Banks standard form.
6.3
Accounts Receivable.
(a)
Schedules and Documents Relating to Accounts
.
Borrower shall deliver to Bank
transaction reports and schedules of collections, as provided in Section 6.2, on Banks standard
forms; provided, however, that Borrowers failure to execute and deliver the same shall not affect
or limit Banks Lien and other rights in all of Borrowers Accounts, nor shall Banks failure to
advance or lend against a specific Account affect or limit Banks Lien and other rights therein.
If requested by Bank, Borrower shall furnish Bank with copies (or, at Banks request, originals) of
all contracts, orders, invoices, and other similar documents, and all shipping instructions,
delivery receipts, bills of lading, and other evidence of delivery, for any goods the sale or
disposition of which gave rise to such Accounts. In addition, Borrower shall deliver to Bank, on
its request, the originals of all instruments, chattel paper, security agreements, guarantees and
other documents and property evidencing or securing any Accounts, in the same form as received,
with all necessary indorsements, and copies of all credit memos.
(b)
Disputes
. Borrower shall promptly notify Bank of each dispute or claim relating
to an Account if such dispute or claim is in excess of $50,000. Borrower may
-9-
forgive (completely or partially), compromise, or settle any Account for less than payment in
full, or agree to do any of the foregoing so long as (i) Borrower does so in good faith, in a
commercially reasonable manner, in the ordinary course of business, in arms-length transactions,
and reports the same to Bank in the regular reports provided to Bank; (ii) no Default or Event of
Default has occurred and is continuing; and (iii) after taking into account all such discounts,
settlements and forgiveness, the total outstanding Advances will not exceed the Net Borrowing
Availability.
(c)
Collection of Accounts
. Borrower shall have the right to collect all Accounts,
unless and until a Default or an Event of Default has occurred and is continuing. In the event
that Net Cash is less than $3,500,000, Borrower shall establish a lockbox account, or such other
blocked account as Bank may specify, pursuant to a blocked account agreement in such form as Bank
may specify in its good faith business judgment, into which all proceeds of Accounts shall be
deposited by Borrower. All payments and proceeds received by Bank shall be applied to the
Obligations pursuant to the terms of Section 9.4 hereof. Whether or not an Event of Default has
occurred and is continuing, if and to the extent that a lockbox is required under this Section
6.3(c), Borrower shall hold all payments on, and proceeds of, Accounts in trust for Bank, and
Borrower shall immediately deliver all such payments and proceeds to Bank in their original form,
duly endorsed.
(d)
Returns
.
Provided no Event of Default has occurred and is continuing, if any
Account Debtor returns any Inventory to Borrower, Borrower shall promptly (i) determine the reason
for such return, (ii) issue a credit memorandum to the Account Debtor in the appropriate amount,
and (iii) provide a copy of such credit memorandum to Bank, upon request from Bank. In the event
any attempted return occurs after the occurrence and during the continuance of any Event of
Default, Borrower shall hold the returned Inventory in trust for Bank, and immediately notify Bank
of the return of the Inventory.
(e)
Verification
.
Bank may, from time to time, verify directly with the respective
Account Debtors the validity, amount and other matters relating to the Accounts, either in the name
of Borrower or Bank or such other name as Bank may choose.
(f)
No Liability
.
Bank shall not be responsible or liable for any shortage or
discrepancy in, damage to, or loss or destruction of, any goods, the sale or other disposition of
which gives rise to an Account, or for any error, act, omission, or delay of any kind occurring in
the settlement, failure to settle, collection or failure to collect any Account, or for settling
any Account in good faith for less than the full amount thereof, nor shall Bank be deemed to be
responsible for any of Borrowers obligations under any contract or agreement giving rise to an
Account. Nothing herein shall, however, relieve Bank from liability for its own gross negligence
or willful misconduct.
6.4 Remittance of Proceeds
. Except as otherwise provided in Section 6.3(c), deliver, in kind,
all proceeds arising from the disposition of any Collateral to Bank in the original form in which
received by Borrower not later than the following Business Day after receipt by Borrower, to be
applied to the Obligations pursuant to the terms of Section 9.4 hereof; provided that, if no
Default or Event of Default has occurred and is continuing, Borrower shall not be obligated to
remit to Bank the proceeds of the sale of unneeded, worn out
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or obsolete Equipment disposed of by Borrower in good faith in an arms length transaction for
an aggregate purchase price of $50,000 or less (for all such transactions in any fiscal year).
Except for the proceeds identified in the immediately preceding sentence, Borrower agrees that it
will not commingle proceeds of Collateral with any of Borrowers other funds or property, but will
hold such proceeds separate and apart from such other funds and property and in an express trust
for Bank. Nothing in this Section limits the restrictions on disposition of Collateral set forth
elsewhere in this Agreement.
6.5 Taxes; Pensions
. Timely file all required tax returns and reports and timely pay all
foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower
except for deferred payment of any taxes contested pursuant to the terms of Section 5.9 hereof, and
pay all amounts necessary to fund all present pension, profit sharing and deferred compensation
plans in accordance with their terms.
6.6
Access to Collateral; Books and Records
. At reasonable times, on one (1) Business Days
notice (provided no notice is required if an Event of Default has occurred and is continuing),
Bank, or its agents, shall have the right to inspect the Collateral and the right to audit and copy
Borrowers Books. The foregoing inspections and audits shall be at Borrowers expense, and the
charge therefor shall be $750 per person per day (or such higher amount as shall represent Banks
then-current standard charge for the same), plus reasonable out-of-pocket expenses. In the event
Borrower and Bank schedule an audit more than ten (10) days in advance, and Borrower cancels or
seeks to reschedules the audit with less than ten (10) days written notice to Bank, then (without
limiting any of Banks rights or remedies), Borrower shall pay Bank a fee of $1,000 plus any
out-of-pocket expenses incurred by Bank to compensate Bank for the anticipated costs and expenses
of the cancellation or rescheduling.
6.7 Insurance
. Keep its business and the Collateral insured for risks and in amounts standard
for companies in Borrowers industry and location and as Bank may reasonably request. Insurance
policies shall be in a form, with companies, and in amounts that are satisfactory to Bank. All
property policies shall have a lenders loss payable endorsement showing Bank as an additional loss
payee and waive subrogation against Bank, and all liability policies shall show, or have
endorsements showing, Bank as an additional insured. All policies (or the loss payable and
additional insured endorsements) shall provide that the insurer must give Bank at least twenty (20)
days notice before canceling, amending, or declining to renew its policy. At Banks request,
Borrower shall deliver certified copies of policies and evidence of all premium payments. Proceeds
payable under any policy shall, at Banks option, be payable to Bank on account of the Obligations.
If Borrower fails to obtain insurance as required under this Section 6.7 or to pay any amount or
furnish any required proof of payment to third persons and Bank, Bank may make all or part of such
payment or obtain such insurance policies required in this Section 6.7, and take any action under
the policies Bank deems prudent.
6.8 Operating Accounts
.
(a) Maintain its primary deposit accounts and a securities account with Bank and Banks
Affiliates.
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(b) Provide Bank five (5) days prior written notice before establishing any Collateral Account
at or with any bank or financial institution other than Bank or its Affiliates. In addition, for
each Collateral Account that Borrower at any time maintains, Borrower shall cause the applicable
bank or financial institution (other than Bank) at or with which any Collateral Account is
maintained to execute and deliver a Control Agreement or other appropriate instrument with respect
to such Collateral Account to perfect Banks Lien in such Collateral Account in accordance with the
terms hereunder. The provisions of the previous sentence shall not apply to deposit accounts
exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for
the benefit of Borrowers employees and identified to Bank by Borrower as such.
6.9 Financial Covenants
.
Borrower shall maintain at all times, to be tested as of the last day of each month, unless
otherwise noted, on a consolidated basis with respect to Borrower and its Subsidiaries:
Tangible Net Worth
. A Tangible Net Worth of at least
$3,000,000
increasing by 50% of
issuances of equity raised after the Effective Date.
6.10
Protection and Registration of Intellectual Property Rights
. Borrower shall: (a)
protect, defend and maintain the validity and enforceability of its intellectual property; (b)
promptly advise Bank in writing of material infringements of its intellectual property; and (c) not
allow any intellectual property material to Borrowers business to be abandoned, forfeited or
dedicated to the public without Banks written consent. If Borrower decides to register any
copyrights or mask works in the United States Copyright Office, Borrower shall: (x) provide Bank
with at least fifteen (15) days prior written notice of its intent to register such copyrights or
mask works together with a copy of the application it intends to file with the United States
Copyright Office (excluding exhibits thereto); (y) execute an intellectual property security
agreement or such other documents as Bank may reasonably request to maintain the perfection and
priority of Banks security interest in the copyrights or mask works intended to be registered with
the United States Copyright Office; and (z) record such intellectual property security agreement
with the United States Copyright Office contemporaneously with filing the copyright or mask work
application(s) with the United States Copyright Office. Borrower shall promptly provide to Bank a
copy of the application(s) filed with the United States Copyright Office together with evidence of
the recording of the intellectual property security agreement necessary for Bank to maintain the
perfection and priority of its security interest in such copyrights or mask works. Borrower shall
provide written notice to Bank of any application filed by Borrower in the United States Patent and
Trademark Office for a patent or to register a trademark or service mark within 30 days after any
such filing.
6.11 Litigation Cooperation
. From the date hereof and continuing through the termination of
this Agreement, make available to Bank, without expense to Bank, Borrower and its officers,
employees and agents and Borrowers books and records, to the extent that Bank may deem them
reasonably necessary to prosecute or defend any third-party suit or proceeding instituted by or
against Bank with respect to any Collateral or relating to Borrower.
-12-
6.12 Further Assurances
. Borrower shall execute any further instruments and take further
action as Bank reasonably requests to perfect or continue Banks Lien in the Collateral or to
effect the purposes of this Agreement.
7. NEGATIVE COVENANTS
Borrower shall not do any of the following without Banks prior written consent:
7.1
Dispositions
. Convey, sell, lease, transfer or otherwise dispose of (collectively,
Transfer
), or permit any of its Subsidiaries to Transfer, all or any part of its business or
property, except for Transfers of (a) of Inventory in the ordinary course of business; (b) of
unneeded, worn-out or obsolete Equipment; and (c) in connection with Permitted Liens and Permitted
Investments
.
7.2 Changes in Business, Management, or Business Locations
. (a) Engage in or permit any of
its Subsidiaries to engage in any business other than the businesses currently engaged in by
Borrower and such Subsidiary, as applicable, or reasonably related thereto; (b) liquidate or
dissolve; or (c) (i) if the Key Person ceases to hold such office with Borrower and replacements
satisfactory to Bank are not made within 60 days after his departure from Borrower or (ii) enter
into any transaction or series of related transactions in which the stockholders of Borrower
immediately prior to the first such transaction own less than 50% of the voting stock of Borrower
immediately after giving effect to such transaction or related series of such transactions (other
than by the sale of Borrowers equity securities in a public offering or to venture capital
investors so long as Borrower identifies to Bank the venture capital investors prior to the closing
of the transaction. Borrower shall not, without at least thirty (30) days prior written notice to
Bank: (1) add any new offices or business locations, including warehouses (unless such new offices
or business locations contain less than $50,000 in Borrowers assets or property), (2) change its
jurisdiction of organization, (3) change its organizational structure or type, (4) change its legal
name, or (5) change any organizational number (if any) assigned by its jurisdiction of
organization.
7.3
Mergers or Acquisitions
. Merge or consolidate, or permit any of its Subsidiaries to merge
or consolidate, with any other Person, or acquire, or permit any of its Subsidiaries to acquire,
all or substantially all of the capital stock or property of another Person except where (a) total
consideration including cash and the value of any non-cash consideration, for all such transactions
does not in the aggregate exceed $5,000,000 in any fiscal year of Borrower; (b) no Event of Default
has occurred and is continuing or would exist after giving effect to the transactions; and (c)
Borrower is the surviving legal entity. A Subsidiary may merge or consolidate into another
Subsidiary or into Borrower.
7.4
Indebtedness
. Create, incur, assume, or be liable for any Indebtedness, or permit any
Subsidiary to do so, other than Permitted Indebtedness.
7.5
Encumbrance
. Create, incur, or allow any Lien on any of the Collateral or assign or
convey any right to receive income, including the sale of any Accounts, or permit any of its
Subsidiaries to do so, except for Permitted Liens, permit any Collateral not to be subject to the
first priority security interest granted herein,or enter into any agreement, document,
-13-
instrument or other arrangement (except with or in favor of Bank) with any Person which
directly or indirectly prohibits or has the effect of prohibiting Borrower or any Subsidiary from
assigning, mortgaging, pledging, granting a security interest in or upon, or encumbering any of
Borrowers or any Subsidiarys intellectual property, except as is otherwise permitted in Section
7.1 hereof and the definition of Permitted Lien herein
]
.
7.6
Maintenance of Collateral Accounts
. Maintain any Collateral Account except pursuant to
the terms of Section 6.8.(b) hereof.
7.7
Investments; Distributions
. (a) Directly or indirectly make any Investment other than
Permitted Investments, or permit any of its Subsidiaries to do so; or (b) pay any dividends or make
any distribution or payment or redeem, retire or purchase any capital stock provided that (i)
Borrower may convert any of its convertible securities into other securities pursuant to the terms
of such convertible securities or otherwise in exchange thereof, (ii) Borrower may pay dividends
solely in common stock; and (iii) Borrower may repurchase the stock of former employees or
consultants pursuant to stock repurchase agreements so long as an Event of Default does not exist
at the time of such repurchase and would not exist after giving effect to such repurchase, provided
such repurchase does not exceed in the aggregate of $250,000 per fiscal year.
7.8
Transactions with Affiliates
. Directly or indirectly enter into or permit to exist any
material transaction with any Affiliate of Borrower, except for transactions that are in the
ordinary course of Borrowers business, upon fair and reasonable terms that are no less favorable
to Borrower than would be obtained in an arms length transaction with a non-affiliated Person.
7.9
Subordinated Debt
. (a) Make or permit any payment on any Subordinated Debt, except under
the terms of the subordination, intercreditor, or other similar agreement to which such
Subordinated Debt is subject, or (b) amend any provision in any document relating to the
Subordinated Debt which would increase the amount thereof or adversely affect the subordination
thereof to Obligations owed to Bank.
7.10
Compliance
. Become an investment company or a company controlled by an investment
company, under the Investment Company Act of 1940 or undertake as one of its important activities
extending credit to purchase or carry margin stock (as defined in Regulation U of the Board of
Governors of the Federal Reserve System), or use the proceeds of any Credit Extension for that
purpose; fail to meet the minimum funding requirements of ERISA, permit a Reportable Event or
Prohibited Transaction, as defined in ERISA, to occur; fail to comply with the Federal Fair Labor
Standards Act or violate any other law or regulation, if the violation could reasonably be expected
to have a material adverse effect on Borrowers business, or permit any of its Subsidiaries to do
so; withdraw or permit any Subsidiary to withdraw from participation in, permit partial or complete
termination of, or permit the occurrence of any other event with respect to, any present pension,
profit sharing and deferred compensation plan which could reasonably be expected to result in any
liability of Borrower, including any liability to the Pension Benefit Guaranty Corporation or its
successors or any other governmental agency.
-14-
8. EVENTS OF DEFAULT
Any one of the following shall constitute an event of default (an
Event of Default
) under
this Agreement:
8.1
Payment Default
. Borrower fails to (a) make any payment of principal or interest on any
Credit Extension on its due date, or (b) pay any other Obligations within three (3) Business Days
after such Obligations are due and payable. During the cure period, the failure to cure the
payment default is not an Event of Default (but no Credit Extension will be made during the cure
period);
8.2
Covenant Default
.
(a) Borrower fails or neglects to perform any obligation in Sections 6.2, 6.8, 6.9, or 6.12,
or violates any covenant in Section 7; or
(b) Borrower fails or neglects to perform, keep, or observe any other term, provision,
condition, covenant or agreement contained in this Agreement, any Loan Documents, and as to any
default (other than those specified in Section 8 below) under such other term, provision,
condition, covenant or agreement that can be cured, has failed to cure the default within ten (10)
days after the occurrence thereof; provided, however, that if the default cannot by its nature be
cured within the ten (10) day period or cannot after diligent attempts by Borrower be cured within
such ten (10) day period, and such default is likely to be cured within a reasonable time, then
Borrower shall have an additional period (which shall not in any case exceed thirty (30) days) to
attempt to cure such default, and within such reasonable time period the failure to cure the
default shall not be deemed an Event of Default (but no Credit Extensions shall be made during such
cure period). Grace periods provided under this section shall not apply, among other things, to
financial covenants or any other covenants set forth in subsection (a) above;
8.3 Material Adverse Change
. A Material Adverse Change occurs;
8.4 Attachment
. (a) Any material portion of Borrowers assets is attached, seized, levied on,
or comes into possession of a trustee or receiver and the attachment, seizure or levy is not
removed in ten (10) days; (b) the service of process upon Borrower seeking to attach, by trustee or
similar process, any funds of Borrower on deposit with Bank, or any entity under control of Bank
(including a subsidiary); (c) Borrower is enjoined, restrained, or prevented by court order from
conducting a material part of its business; (d) a judgment or other claim in excess of $100,000
becomes a Lien on any of Borrowers assets; or (e) a notice of lien, levy, or assessment is filed
against any of Borrowers assets by any government agency and not paid within ten (10) days after
Borrower receives notice. These are not Events of Default if stayed or if a bond is posted pending
contest by Borrower (but no Credit Extensions shall be made during the cure period);
8.5 Insolvency
. Borrower is unable to pay its debts (including trade debts) as they become
due or otherwise becomes insolvent; (b) Borrower begins an Insolvency Proceeding; or (c) an
Insolvency Proceeding is begun against Borrower and not dismissed or stayed within
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sixty (60) days (but no Credit Extensions shall be made while of any of the conditions
described in clause (a) exist and/or until any Insolvency Proceeding is dismissed);
8.6 Other Agreements
. There is a default in any agreement to which Borrower or any Guarantor
is a party with a third party or parties resulting in a right by such third party or parties,
whether or not exercised, to accelerate the maturity of any Indebtedness in an amount in excess of
$200,000 or that could have a material adverse effect on Borrowers business:
provided,
however
, that the Event of Default under this Section 8.6 caused by the occurrence of a default
under such other agreement shall be cured or waived for purposes of this Agreement upon Bank
receiving written notice from the party asserting such default of such cure or waiver of the
default under such other agreement, if at the time of such cure or waiver under such other
agreement (a) Bank has not declared an Event of Default under this Agreement and/or exercised any
rights with respect thereto; (b) any such cure or waiver does not result in an Event of Default
under any other provision of this Agreement or any Loan Document; and (c) in connection with any
such cure or waiver under such other agreement, the terms of any agreement with such third party
are not modified or amended in any manner which could in the good faith judgment of Bank be
materially less advantageous to Borrower;
8.7 Judgments
. A judgment or judgments for the payment of money in an amount, individually or
in the aggregate, of at least $200,000 (not covered by independent third-party insurance) shall be
rendered against Borrower and shall remain unsatisfied and unstayed for a period of ten (10) days
after the entry thereof (provided that no Credit Extensions will be made prior to the satisfaction
or stay of such judgment); or
8.8 Misrepresentations
. Borrower or any Person acting for Borrower makes any representation,
warranty, or other statement now or later in this Agreement, any Loan Document or in any writing
delivered to Bank or to induce Bank to enter this Agreement or any Loan Document, and such
representation, warranty, or other statement is incorrect in any material respect when made;
9. BANKS RIGHTS AND REMEDIES
9.1 Rights and Remedies
. While an Event of Default occurs and continues Bank may, without
notice or demand, do any or all of the following:
(a) declare all Obligations immediately due and payable (but if an Event of Default described
in Section 8.5 occurs all Obligations are immediately due and payable without any action by Bank);
(b) stop advancing money or extending credit for Borrowers benefit under this Agreement or
under any other agreement between Borrower and Bank;
(c) settle or adjust disputes and claims directly with Account Debtors for amounts on terms
and in any order that Bank considers advisable, notify any Person owing Borrower money of Banks
security interest in such funds, and verify the amount of such account;
-16-
(d) make any payments and do any acts it considers necessary or reasonable to protect the
Collateral and/or its security interest in the Collateral. Borrower shall assemble the Collateral
if Bank requests and make it available as Bank designates. Bank may enter premises where the
Collateral is located, take and maintain possession of any part of the Collateral, and pay,
purchase, contest, or compromise any Lien which appears to be prior or superior to its security
interest and pay all expenses incurred. Borrower grants Bank a license to enter and occupy any of
its premises, without charge, to exercise any of Banks rights or remedies;
(e) apply to the Obligations any (i) balances and deposits of Borrower it holds, or (ii) any
amount held by Bank owing to or for the credit or the account of Borrower;
(f) ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for
sale, and sell the Collateral. Bank is hereby granted a non-exclusive, royalty-free license or
other right to use, without charge, Borrowers labels, patents, copyrights, mask works, rights of
use of any name, trade secrets, trade names, trademarks, service marks, and advertising matter, or
any similar property as it pertains to the Collateral, in completing production of, advertising for
sale, and selling any Collateral and, in connection with Banks exercise of its rights under this
Section, Borrowers rights under all licenses and all franchise agreements inure to Banks benefit;
(g) place a hold on any account maintained with Bank and/or deliver a notice of exclusive
control, any entitlement order, or other directions or instructions pursuant to any Control
Agreement or similar agreements providing control of any Collateral;
(h) demand and receive possession of Borrowers Books; and
(i) exercise all rights and remedies available to Bank under the Loan Documents or at law or
equity, including all remedies provided under the Code (including disposal of the Collateral
pursuant to the terms thereof).
9.2 Power of Attorney
. Borrower hereby irrevocably appoints Bank as its lawful
attorney-in-fact, exercisable upon the occurrence and during the continuance of an Event of
Default, to: (a) endorse Borrowers name on any checks or other forms of payment or security; (b)
sign Borrowers name on any invoice or bill of lading for any Account or drafts against Account
Debtors; (c) settle and adjust disputes and claims about the Accounts directly with Account
Debtors, for amounts and on terms Bank determines reasonable; (d) make, settle, and adjust all
claims under Borrowers insurance policies; (e) pay, contest or settle any Lien, charge,
encumbrance, security interest, and adverse claim in or to the Collateral, or any judgment based
thereon, or otherwise take any action to terminate or discharge the same; and (f) transfer the
Collateral into the name of Bank or a third party as the Code permits. Borrower hereby appoints
Bank as its lawful attorney-in-fact to sign Borrowers name on any documents necessary to perfect
or continue the perfection of any security interest regardless of whether an Event of Default has
occurred until all Obligations have been paid in full and Bank is under no further obligation to
make Credit Extensions hereunder. Banks foregoing appointment as Borrowers attorney in fact, and
all of Banks rights and powers, coupled with an interest, are
-17-
irrevocable until all Obligations have been fully paid and Banks obligation to provide Credit
Extensions terminates.
9.3 Protective Payments
. If Borrower fails to obtain the insurance called for by Section 6.7
or fails to pay any premium thereon or fails to pay any other amount which Borrower is obligated to
pay under this Agreement or any other Loan Document, Bank may obtain such insurance or make such
payment, and all amounts so paid by Bank are Bank Expenses and immediately due and payable, bearing
interest at the then highest applicable rate, and secured by the Collateral. Bank will make
reasonable efforts to provide Borrower with notice of Bank obtaining such insurance at the time it
is obtained or within a reasonable time thereafter. No payments by Bank are deemed an agreement to
make similar payments in the future or Banks waiver of any Event of Default.
9.4 Application of Payments and Proceeds
.
(a) Unless an Event of Default has occurred and is continuing, and so long as the Borrowers
Net Cash is below $3,500,000, Bank shall apply payments, or proceeds realized as the result of any
collection of Accounts, first, to the principal of the Advances; second, to Bank Expenses,
including without limitation, the reasonable costs, expenses, liabilities, obligations and
attorneys fees incurred by Bank in the exercise of its rights under this Agreement; third, to the
interest due upon any of the Obligations; fourth, to any other Obligations, applicable fees and
other charges in such order as Bank shall determine in its sole discretion, and finally, to the
Designated Deposit Account.
(b) Unless an Event of Default has occurred and is continuing, and if the Borrowers Net Cash
is above $3,500,000, payments, or proceeds realized as the result of any collection of Accounts,
shall be deposited in the Designated Deposit Account and repayment of principal of the Advances
shall be made at such times as Borrower may direct.
(c) If an Event of Default has occurred and is continuing, Bank may apply any funds in its
possession, whether from Borrower account balances, payments, proceeds realized as the result of
any collection of Accounts or other disposition of the Collateral, or otherwise, to the Obligations
in such order as Bank shall determine in its sole discretion. Any surplus shall be paid to
Borrower by credit to the Designated Deposit Account or to other Persons legally entitled thereto;
Borrower shall remain liable to Bank for any deficiency. If Bank, in its good faith business
judgment, directly or indirectly enters into a deferred payment or other credit transaction with
any purchaser at any sale of Collateral, Bank shall have the option, exercisable at any time, of
either reducing the Obligations by the principal amount of the purchase price or deferring the
reduction of the Obligations until the actual receipt by Bank of cash therefor.
9.5 Banks Liability for Collateral
. So long as Bank complies with reasonable banking
practices regarding the safekeeping of the Collateral in the possession or under the control of
Bank, Bank shall not be liable or responsible for: (a) the safekeeping of the Collateral; (b) any
loss or damage to the Collateral; (c) any diminution in the value of the Collateral; or (d) any act
or default of any carrier, warehouseman, bailee, or other Person. Borrower bears all risk of loss,
damage or destruction of the Collateral.
-18-
9.6 No Waiver; Remedies Cumulative
. Banks failure, at any time or times, to require strict
performance by Borrower of any provision of this Agreement or any other Loan Document shall not
waive, affect, or diminish any right of Bank thereafter to demand strict performance and compliance
herewith or therewith. No waiver hereunder shall be effective unless signed by Bank and then is
only effective for the specific instance and purpose for which it is given. Banks rights and
remedies under this Agreement and the other Loan Documents are cumulative. Bank has all rights and
remedies provided under the Code, by law, or in equity. Banks exercise of one right or remedy is
not an election, and Banks waiver of any Event of Default is not a continuing waiver. Banks
delay in exercising any remedy is not a waiver, election, or acquiescence.
9.7 Demand Waiver
. Borrower waives demand, notice of default or dishonor, notice of payment
and nonpayment, notice of any default, nonpayment at maturity, release, compromise, settlement,
extension, or renewal of accounts, documents, instruments, chattel paper, and guarantees held by
Bank on which Borrower is liable.
10. NOTICES
All notices, consents, requests, approvals, demands, or other communication (collectively,
Communication
), other than Advance requests made pursuant to Section 3.4, by any party to this
Agreement or any other Loan Document must be in writing and be delivered or sent by facsimile at
the addresses or facsimile numbers listed below. Bank or Borrower may change its notice address by
giving the other party written notice thereof. Each such Communication shall be deemed to have
been validly served, given, or delivered: (a) upon the earlier of actual receipt and three (3)
Business Days after deposit in the U.S. mail, registered or certified mail, return receipt
requested, with proper postage prepaid; (b) upon transmission, when sent by facsimile transmission
(with such facsimile promptly confirmed by delivery of a copy by personal delivery or United States
mail as otherwise provided in this Section 10); (c) one (1) Business Day after deposit with a
reputable overnight courier with all charges prepaid; or (d) when delivered, if hand-delivered by
messenger, all of which shall be addressed to the party to be notified and sent to the address or
facsimile number indicated below. Advance requests made pursuant to Section 3.4 must be in writing
and may be in the form of electronic mail, delivered to Bank by Borrower at the e-mail address of
Bank provided below and shall be deemed to have been validly served, given, or delivered when sent
(with such electronic mail promptly confirmed by delivery of a copy by personal delivery or United
States mail as otherwise provided in this Section 10). Bank or Borrower may change its address,
facsimile number, or electronic mail address by giving the other party written notice thereof in
accordance with the terms of this Section 10.
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If to
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Glu Mobile Inc.
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Borrower:
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1800 Gateway Dr, Second Floor
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San Mateo, CA 94404
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(650) 571-1550
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Attn: Eric Ludwig, VP Finance
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Fax: (650) 571-5698
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Email:
eric.ludwig@glumobile.com
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If to Bank:
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Silicon Valley Bank
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185 Berry Street, Suite 3000
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San Francisco, CA 94107
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Attn: Tim Walsh
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Fax: (415) 856-0810
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Email: twalsh@svb.com
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11. CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER
California law governs the Loan Documents without regard to principles of conflicts of law.
Borrower and Bank each submit to the exclusive jurisdiction of the State and Federal courts in
Santa Clara County, California; provided, however, that nothing in this Agreement shall be deemed
to operate to preclude Bank from bringing suit or taking other legal action in any other
jurisdiction to realize on the Collateral or any other security for the Obligations, or to enforce
a judgment or other court order in favor of Bank. Borrower expressly submits and consents in
advance to such jurisdiction in any action or suit commenced in any such court, and Borrower hereby
waives any objection that it may have based upon lack of personal jurisdiction, improper venue, or
forum non conveniens and hereby consents to the granting of such legal or equitable relief as is
deemed appropriate by such court. Borrower hereby waives personal service of the summons,
complaints, and other process issued in such action or suit and agrees that service of such
summons, complaints, and other process may be made by registered or certified mail addressed to
Borrower at the address set forth in Section 10 of this Agreement and that service so made shall be
deemed completed upon the earlier to occur of Borrowers actual receipt thereof or three (3) days
after deposit in the U.S. mails, proper postage prepaid.
BORROWERS AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING
OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING
CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH
PARTIES TO ENTER INTO THIS AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.
WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES AGREEMENT TO WAIVE THEIR RESPECTIVE RIGHT TO A
TRIAL BY JURY, if the above waiver of the right to a trial by jury is not enforceable, the parties
hereto agree that any and all disputes or controversies of any nature between them arising at any
time shall be decided by a reference to a private judge, mutually selected by the parties (or, if
they cannot agree, by the Presiding Judge of the Santa Clara County, California Superior Court)
appointed in accordance with California Code of Civil Procedure Section 638 (or pursuant to
comparable provisions of federal law if the dispute falls within the exclusive jurisdiction of the
federal courts), sitting without a jury, in Santa Clara County, California; and the parties hereby
submit to the
-20-
jurisdiction of such court. The reference proceedings shall be conducted pursuant to and in
accordance with the provisions of California Code of Civil Procedure §§ 638 through 645.1,
inclusive. The private judge shall have the power, among others, to grant provisional relief,
including without limitation, entering temporary restraining orders, issuing preliminary and
permanent injunctions and appointing receivers. All such proceedings shall be closed to the public
and confidential and all records relating thereto shall be permanently sealed. If during the
course of any dispute, a party desires to seek provisional relief, but a judge has not been
appointed at that point pursuant to the judicial reference procedures, then such party may apply to
the Santa Clara County, California Superior Court for such relief. The proceeding before the
private judge shall be conducted in the same manner as it would be before a court under the rules
of evidence applicable to judicial proceedings. The parties shall be entitled to discovery which
shall be conducted in the same manner as it would be before a court under the rules of discovery
applicable to judicial proceedings. The private judge shall oversee discovery and may enforce all
discovery rules and order applicable to judicial proceedings in the same manner as a trial court
judge. The parties agree that the selected or appointed private judge shall have the power to
decide all issues in the action or proceeding, whether of fact or of law, and shall report a
statement of decision thereon pursuant to the California Code of Civil Procedure § 644(a). Nothing
in this paragraph shall limit the right of any party at any time to exercise self-help remedies,
foreclose against collateral, or obtain provisional remedies. The private judge shall also
determine all issues relating to the applicability, interpretation, and enforceability of this
paragraph.
12. GENERAL PROVISIONS
12.1
Successors and Assigns
. This Agreement binds and is for the benefit of the successors
and permitted assigns of each party. Borrower may not assign this Agreement or any rights or
obligations under it without Banks prior written consent (which may be granted or withheld in
Banks discretion). Bank has the right, without the consent of or notice to Borrower, to sell,
transfer, negotiate, or grant participation in all or any part of, or any interest in, Banks
obligations, rights, and benefits under this Agreement and the other Loan Documents.
12.2 Indemnification
. Borrower agrees to indemnify, defend and hold Bank and its directors,
officers, employees, agents, attorneys, or any other Person affiliated with or representing Bank
harmless against: (a) all obligations, demands, claims, and liabilities (collectively, Claims)
asserted by any other party in connection with the transactions contemplated by the Loan Documents;
and (b) all losses or Bank Expenses incurred, or paid by Bank from, following, or arising from
transactions between Bank and Borrower (including reasonable attorneys fees and expenses), except
for Claims and/or losses directly caused by Banks gross negligence or willful misconduct.
12.3 Intentionally Omitted
.
12.4 Time of Essence
. Time is of the essence for the performance of all Obligations in this
Agreement.
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12.5 Severability of Provisions
. Each provision of this Agreement is severable from every
other provision in determining the enforceability of any provision.
12.6 Amendments in Writing; Integration
. All amendments to this Agreement must be in writing
signed by both Bank and Borrower. This Agreement and the Loan Documents represent the entire
agreement about this subject matter and supersede prior negotiations or agreements. All prior
agreements, understandings, representations, warranties, and negotiations between the parties about
the subject matter of this Agreement and the Loan Documents merge into this Agreement and the Loan
Documents.
12.7 Counterparts
. This Agreement may be executed in any number of counterparts and by
different parties on separate counterparts, each of which, when executed and delivered, are an
original, and all taken together, constitute one Agreement.
12.8 Survival
. All covenants, representations and warranties made in this Agreement continue
in full force until this Agreement has terminated pursuant to its terms and all Obligations (other
than inchoate indemnity obligations and any other obligations which, by their terms, are to survive
the termination of this Agreement) have been satisfied. The obligation of Borrower in Section 12.2
to indemnify Bank shall survive until the statute of limitations with respect to such claim or
cause of action shall have run.
12.9 Confidentiality
. In handling any confidential information, Bank shall exercise the same
degree of care that it exercises for its own proprietary information, but disclosure of information
may be made: (a) to Banks Subsidiaries or Affiliates; (b) to prospective transferees or purchasers
of any interest in the Credit Extensions (provided, however, Bank shall use commercially reasonable
efforts to obtain such prospective transferees or purchasers agreement to the terms of this
provision); (c) as required by law, regulation, subpoena, or other order; (d) to Banks regulators
or as otherwise required in connection with Banks examination or audit; and (e) as Bank considers
appropriate in exercising remedies under this Agreement. Confidential information does not include
information that either: (i) is in the public domain or in Banks possession when disclosed to
Bank, or becomes part of the public domain after disclosure to Bank; or (ii) is disclosed to Bank
by a third party, if Bank does not know that the third party is prohibited from disclosing the
information.
12.10 Attorneys Fees, Costs and Expenses
. In any action or proceeding between Borrower and
Bank arising out of or relating to the Loan Documents, the prevailing party shall be entitled to
recover its reasonable attorneys fees and other costs and expenses incurred, in addition to any
other relief to which it may be entitled.
13. DEFINITIONS
13.1
Definitions
. As used in this Agreement, the following terms have the following meanings:
Account
is any account as defined in the Code with such additions to such term as may
hereafter be made, and includes, without limitation, all accounts receivable and other sums owing
to Borrower.
-22-
Account Debtor
is any account debtor as defined in the Code with such additions to such
term as may hereafter be made.
Advance
or
Advances
means an advance (or advances) under the Revolving Line.
Affiliate
of any Person is a Person that owns or controls directly or indirectly the Person,
any Person that controls or is controlled by or is under common control with the Person, and each
of that Persons senior executive officers, directors, partners and, for any Person that is a
limited liability company, that Persons managers and members.
Agreement
is defined in the preamble hereof.
Bank
is defined in the preamble hereof.
Bank Expenses
are all audit fees and expenses, costs, and expenses (including reasonable
attorneys fees and expenses) for preparing, negotiating, administering, defending and enforcing
the Loan Documents (including, without limitation, those incurred in connection with appeals or
Insolvency Proceedings) or otherwise incurred with respect to Borrower.
Bankruptcy-Related Defaults
is defined in Section 9.1.
Borrower
is defined in the preamble hereof.
Borrowers Books
are all Borrowers books and records including ledgers, federal and state
tax returns, records regarding Borrowers assets or liabilities, the Collateral, business
operations or financial condition, and all computer programs or storage or any equipment containing
such information.
Borrowing Base
is
80
% of standard Eligible Accounts receivable as determined by Bank from
Borrowers most recent Borrowing Base Certificate; provided, however, that Bank may decrease the
foregoing percentages in its good faith business judgment based on events, conditions,
contingencies, or risks which, as determined by Bank, may adversely affect Collateral.
Borrowing Base Certificate
is that certain certificate in the form attached hereto as
Exhibit C
.
Borrowing Resolutions
are, with respect to any Person, those resolutions substantially in
the form attached hereto as Exhibit F.
Business Day
is any day that is not a Saturday, Sunday or a day on which Bank is closed.
Cash Equivalents
means (a) marketable direct obligations issued or unconditionally
guaranteed by the United States or any agency or any State thereof having maturities of not more
than one (1) year from the date of acquisition; (b) commercial paper
-23-
maturing no more than one (1) year after its creation and having the highest rating from
either Standard & Poors Ratings Group or Moodys Investors Service, Inc., (c) Banks certificates
of deposit issued maturing no more than one (1) year after issue; and (d) money market funds at
least ninety-five percent (95%) of the assets of which constitute Cash Equivalents of the kinds
described in clauses (a) through (c) of this definition.
Code
is the Uniform Commercial Code, as the same may, from time to time, be enacted and in
effect in the State of California; provided, that, to the extent that the Code is used to define
any term herein or in any Loan Document and such term is defined differently in different Articles
or Divisions of the Code, the definition of such term contained in Article or Division 9 shall
govern; provided further, that in the event that, by reason of mandatory provisions of law, any or
all of the attachment, perfection, or priority of, or remedies with respect to, Banks Lien on any
Collateral is governed by the Uniform Commercial Code in effect in a jurisdiction other than the
State of California, the term
Code
shall mean the Uniform Commercial Code as enacted and in
effect in such other jurisdiction solely for purposes on the provisions thereof relating to such
attachment, perfection, priority, or remedies and for purposes of definitions relating to such
provisions.
Collateral
is any and all properties, rights and assets of Borrower described on
Exhibit
A
.
Collateral Account
is any Deposit Account, Securities Account, or Commodity Account.
Commodity Account
is any commodity account as defined in the Code with such additions to
such term as may hereafter be made.
Communication
is defined in Section 10.
Compliance Certificate
is that certain certificate in the form attached hereto as
Exhibit D
.
Contingent Obligation
is, for any Person, any direct or indirect liability, contingent or
not, of that Person for (a) any indebtedness, lease, dividend, letter of credit or other obligation
of another such as an obligation directly or indirectly guaranteed, endorsed, co-made, discounted
or sold with recourse by that Person, or for which that Person is directly or indirectly liable;
(b) any obligations for undrawn letters of credit for the account of that Person; and (c) all
obligations from any interest rate, currency or commodity swap agreement, interest rate cap or
collar agreement, or other agreement or arrangement designated to protect a Person against
fluctuation in interest rates, currency exchange rates or commodity prices; but Contingent
Obligation does not include endorsements in the ordinary course of business. The amount of a
Contingent Obligation is the stated or determined amount of the primary obligation for which the
Contingent Obligation is made or, if not determinable, the maximum reasonably anticipated liability
for it determined by the Person in good faith; but the amount may not exceed the maximum of the
obligations under any guarantee or other support arrangement.
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Control Agreement
is any control agreement entered into among the depository institution at
which Borrower maintains a Deposit Account or the securities intermediary or commodity intermediary
at which Borrower maintains a Securities Account or a Commodity account, Borrower, and Bank
pursuant to which Bank obtains control (within the meaning of the Code) over such Deposit Account,
Securities Account, or Commodity Account.
Copyright
means any of the following now owned or hereafter acquired or created (as a work
for hire for the benefit of Borrower) by Borrower or in which Borrower now holds or hereafter
acquires or receives any right or interest, in whole or in part: (a) any copyright, whether
registered or unregistered, held pursuant to the laws of the United States or of any other country
or foreign jurisdiction, (b) registration, application or recording in the United States Copyright
Office or in any similar office or agency of the United States or any other country or foreign
jurisdiction, (c) any continuation, renewal or extension thereof, and (d) any registration to be
issued in any pending application, and shall include any right or interest in and to work
protectable by any of the foregoing which are presently or in the future owned, created or
authorized (as a work for hire for the benefit of Borrower) or acquired by Borrower, in whole or in
part.
Default
means any event which with notice or passage of time or both, would constitute an
Event of Default.
Default Rate
is defined in Section 2.3(b).
Deferred Revenue
is all amounts received or invoiced in advance of performance under
contracts and not yet recognized as revenue.
Deposit Account
is any deposit account as defined in the Code with such additions to such
term as may hereafter be made.
Designated Deposit Account
is Borrowers deposit account, account number 3300421466,
maintained with Bank.
Dollars
,
dollars
and
$
each mean lawful money of the United States.
Effective Date
is the date Bank executes this Agreement and as indicated on the signature
page hereof.
Eligible Accounts
are Accounts which arise in the ordinary course of Borrowers business
that meet all Borrowers representations and warranties in Section 5.3. Bank reserves the right at
any time and from time to time after the Effective Date, to adjust any of the criteria set forth
below and to establish new criteria in its good faith business judgment. Unless Bank agrees
otherwise in writing, Eligible Accounts shall not include:
(a) Accounts that the Account Debtor has not paid within ninety (90) days of invoice date;
(b) Accounts owing from an Account Debtor, fifty percent (50%) or more of whose Accounts have
not been paid within ninety (90) days of invoice date;
-25-
(c) Credit balances over ninety (90) days from invoice date;
(d) Accounts owing from an Account Debtor, including Affiliates, whose total obligations to
Borrower exceed twenty-five (25%) of all Accounts to the extent such amounts owed by such Account
Debtor exceed twenty-five percent (25%) of Accounts of such Debtor that would otherwise be Eligible
Accounts, unless Bank approves in writing;
(e) Accounts owing from an Account Debtor which does not have its principal place of business
in the United States, except for Eligible Foreign Accounts.
(f) Accounts owing from an Account Debtor which is a federal, state or local government entity
or any department, agency, or instrumentality thereof except for Accounts of the United States if
Borrower has assigned its payment rights to Bank and the assignment has been acknowledged under the
Federal Assignment of Claims Act of 1940, as amended;
(g) Accounts owing from an Account Debtor to the extent that Borrower is indebted or obligated
in any manner to the Account Debtor (as creditor, lessor, supplier or otherwise sometimes called
contra accounts, accounts payable, customer deposits or credit accounts), with the exception of
customary credits, adjustments and/or discounts given to an Account Debtor by Borrower in the
ordinary course of its business;
(h) Accounts for demonstration or promotional equipment, or in which goods are consigned, or
sold on a sale guaranteed, sale or return, sale on approval, bill and hold, or other terms
if Account Debtors payment may be conditional;
(i) Accounts for which the Account Debtor is Borrowers Affiliate, officer, employee, or
agent;
(j) Accounts in which the Account Debtor disputes liability or makes any claim (but only up to
the disputed or claimed amount), or if the Account Debtor is subject to an Insolvency Proceeding,
or becomes insolvent, or goes out of business;
(k) Accounts owing from an Account Debtor with respect to which Borrower has received Deferred
Revenue (but only to the extent of such Deferred Revenue);
(l) Accounts for which Bank in its good faith business judgment determines collection to be
doubtful; and
(m) other Accounts Bank deems ineligible in the exercise of its good faith business judgment.
Eligible Foreign Accounts
are accounts owing from an Account Debtor with its principal place
of business outside the United States, owed to Borrower, not in excess of $500,000 in the
aggregate.
-26-
Equipment
is all equipment as defined in the Code with such additions to such term as may
hereafter be made, and includes without limitation all machinery, fixtures, goods, vehicles
(including motor vehicles and trailers), and any interest in any of the foregoing.
ERISA
is the Employment Retirement Income Security Act of 1974, and its regulations.
Event of Default
is defined in Section 8.
Foreign Currency
means lawful money of a country other than the United States.
Funding Date
is any date on which a Credit Extension is made to or on account of Borrower
which shall be a Business Day.
GAAP
is generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other Person as may be approved by a significant segment of the
accounting profession, which are applicable to the circumstances as of the date of determination.
General Intangibles
is all general intangibles as defined in the Code in effect on the
date hereof with such additions to such term as may hereafter be made, and includes without
limitation, all copyright rights, copyright applications, copyright registrations and like
protections in each work of authorship and derivative work, whether published or unpublished, any
patents, trademarks, service marks and, to the extent permitted under applicable law, any
applications therefor, whether registered or not, any trade secret rights, including any rights to
unpatented inventions, payment intangibles, royalties, contract rights, goodwill, franchise
agreements, purchase orders, customer lists, route lists, telephone numbers, domain names, claims,
income and other tax refunds, security and other deposits, options to purchase or sell real or
personal property, rights in all litigation presently or hereafter pending (whether in contract,
tort or otherwise), insurance policies (including without limitation key man, property damage, and
business interruption insurance), payments of insurance and rights to payment of any kind.
Guarantor
is any present or future guarantor of the Obligations.
Indebtedness
is (a) indebtedness for borrowed money or the deferred price of property or
services, such as reimbursement and other obligations for surety bonds and letters of credit, (b)
obligations evidenced by notes, bonds, debentures or similar instruments, (c) capital lease
obligations, and (d) Contingent Obligations.
Insolvency Proceeding
is any proceeding by or against any Person under the United States
Bankruptcy Code, or any other bankruptcy or insolvency law, including assignments for the benefit
of creditors, compositions, extensions generally with its creditors, or proceedings seeking
reorganization, arrangement, or other relief.
-27-
Investment
is any beneficial ownership interest in any Person (including stock, partnership
interest or other securities), and any loan, advance or capital contribution to any Person.
Intellectual Property
means any intellectual property, in any medium, of any kind or nature
whatsoever, now or hereafter owned or acquired or received by Borrower or in which Borrower now
holds or hereafter acquires or receives any right or interest, and shall include, in any event, any
Copyright, Trademark, Patent, trade secret, customer list, Internet domain name (including any
right related to the registration thereof), proprietary or confidential information, mask work,
source, object or other programming code, invention (whether or not patented or patentable),
technical information, procedure, design, knowledge, know-how, software, data base, data, skill,
expertise, recipe, experience, process, model, drawing, material or record, all claims for damages
by way of past, present and future infringement of any of the rights included above and all
licenses or other rights to use any property or rights of a type described above.
IP Agreement
is that certain Intellectual Property Security Agreement executed and delivered
by Borrower to Bank dated as of February 2, 2007.
Key Person
is the Borrowers Chief Executive Officer, who is, as of the Effective Date, Greg
Ballard.
Lien
is a mortgage, lien, deed of trust, charge, pledge, security interest or other
encumbrance.
Loan Documents
are, collectively, this Agreement, the Perfection Certificate, the IP
Agreement, any note, or notes or guaranties executed by Borrower or any Guarantor, and any other
present or future agreement between Borrower any Guarantor and/or for the benefit of Bank in
connection with this Agreement, all as amended, restated, or otherwise modified.
Material Adverse Change
is (a) a material impairment in the perfection or priority of Banks
Lien in the Collateral or in the value of such Collateral; (b) a material adverse change in the
business, operations, or condition (financial or otherwise) of Borrower; or (c) a material
impairment of the prospect of repayment of any portion of the Obligations.
Net Cash
means Borrowers cash at Bank less amounts outstanding under the Revolving Line.
Net Income
means, as calculated on a consolidated basis for Borrower and its Subsidiaries
for any period as at any date of determination, the net profit (or loss), after provision for
taxes, of Borrower and its Subsidiaries for such period taken as a single accounting period.
Obligations
are Borrowers obligation to pay when due any debts, principal, interest, Bank
Expenses and other amounts Borrower owes Bank now or later, whether under this Agreement, the Loan
Documents, or otherwise, including, without limitation, all obligations relating to letters of
credit, cash management services, and foreign exchange
-28-
contracts, if any, and including interest accruing after Insolvency Proceedings begin and
debts, liabilities, or obligations of Borrower assigned to Bank.
Operating Documents
are, for any Person, such Persons formation documents, as certified
with the Secretary of State of such Persons state of formation on a date that is no earlier than
30 days prior to the Effective Date, and, (a) if such Person is a corporation, its bylaws in
current form, (b) if such Person is a limited liability company, its limited liability company
agreement (or similar agreement), and (c) if such Person is a partnership, its partnership
agreement (or similar agreement), each of the foregoing with all current amendments or
modifications thereto.
Patent
means any of the following now hereafter owned or acquired or received by Borrower or
in which Borrower now holds or hereafter acquires or receives any right or interest: (a) letters
patent and right corresponding thereto, of the United States or any other country or other foreign
jurisdiction, any registration and recording thereof, and any application for letters patent, and
rights corresponding thereto, of the United States or any other country or other foreign
jurisdiction, including, without limitation, registrations, recordings and applications in the
United States Patent and Trademark Office or in any similar office or agency of the United States,
any State thereof or any other country or other foreign jurisdiction; (b) any reissue,
continuation, continuation-in-part or extension thereof; (c) any petty patent, divisional, and
patent of addition; and (d) any patent to issue in any such application.
Payment/Advance Form
is that certain form attached hereto as
Exhibit B
.
Perfection Certificate
is defined in Section 5.1.
Permitted Indebtedness
is:
(a) Borrowers Indebtedness to Bank under this Agreement and the other Loan Documents;
(b) Indebtedness existing on the Effective Date and shown on the Perfection Certificate;
(c) Subordinated Debt;
(d) unsecured Indebtedness to trade creditors and with respect to surety bonds and similar
obligations incurred in the ordinary course of business;
(e) Indebtedness incurred as a result of endorsing negotiable instruments received in the
ordinary course of business;
(f) Indebtedness in an aggregate principal amount not to exceed $1,000,000 secured by
Permitted Liens;
(g) Indebtedness of Borrower to any Subsidiary and Contingent Obligations of any Subsidiary
with respect to obligations of Borrower (provided that the primary obligations are not prohibited
hereby), and Indebtedness of any Subsidiary to Borrower
-29-
or any other Subsidiary and Contingent Obligations of any Subsidiary with respect to
obligations of any other Subsidiary (provided that the primary obligations are not prohibited
hereby);
(h) Borrower guaranties of Subsidiaries obligations under real property leases;
(i) other Indebtedness not otherwise permitted by Section 7.4 not exceeding $50,000 in the
aggregate outstanding at any time; and
(j) extensions, refinancings, modifications, amendments and restatements of any items of
Permitted Indebtedness (a) through (h) above, provided that the principal amount thereof is not
increased or the terms thereof are not modified to impose more burdensome terms upon Borrower or
its Subsidiary, as the case may be.
Permitted Investments
are:
(a) Investments shown on the Perfection Certificate and existing on the Effective Date;
(b) (i) Cash Equivalents, and (ii) any Investments permitted by Borrowers investment policy,
as amended from time to time, provided that such investment policy (and any such amendment thereto)
has been approved by Bank;
(c) Investments consisting of the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of Borrower;
(d) Investments consisting of deposit accounts in which Bank has a perfected security
interest;
(e) Investments accepted in connection with Transfers permitted by Section 7.1;
(f) Investments of Subsidiaries in or to other Subsidiaries or Borrower and Investments by
Borrower in Subsidiaries not to exceed $2,000,000 in the aggregate in any fiscal year;
(g) Investments consisting of (i) travel advances and employee relocation loans and other
employee loans and advances in the ordinary course of business, and (ii) loans to employees,
officers or directors relating to the purchase of equity securities of Borrower or its Subsidiaries
pursuant to employee stock purchase plans or agreements approved by Borrowers Board of Directors;
(h) Investments (including debt obligations) received in connection with the bankruptcy or
reorganization of customers or suppliers and in settlement of delinquent obligations of, and other
disputes with, customers or suppliers arising in the ordinary course of business;
-30-
(i) Investments consisting of notes receivable of, or prepaid royalties and other credit
extensions, to customers and suppliers who are not Affiliates, in the ordinary course of business;
provided that this paragraph (i) shall not apply to Investments of Borrower in any Subsidiary; and
(k) other Investments not otherwise permitted by Section 7.7 not exceeding $1,000,000 in the
aggregate outstanding at any time.
Permitted Liens
are:
(a) Liens existing on the Effective Date and shown on the Perfection Certificate or arising
under this Agreement and the other Loan Documents;
(b) Liens for taxes, fees, assessments or other government charges or levies, either not
delinquent or being contested in good faith and for which Borrower maintains adequate reserves on
its Books,
if
they have no priority over any of Banks Liens;
(c) purchase money Liens (i) on Equipment acquired or held by Borrower incurred for financing
the acquisition of the Equipment securing no more than $1,000,000 in the aggregate amount
outstanding, or (ii) existing on Equipment when acquired,
if
the Lien is confined to the
property and improvements and the proceeds of the Equipment;
(d) statutory Liens securing claims or demands of materialmen, mechanics, carriers,
warehousemen, landlords and other Persons imposed without action of such parties, provided, they
have no priority over any of Banks Lien and the aggregate amount of such Liens does not at any
time exceed $350,000;
(e) Liens to secure payment of workers compensation, employment insurance, old-age pensions,
social security and other like obligations incurred in the ordinary course of business, provided,
they have no priority over any of Banks Liens and the aggregate amount of the Indebtedness secured
by such Liens does not at any time exceed $350,000;
(f) Liens incurred in the extension, renewal or refinancing of the indebtedness secured by
Liens described in (a) through (c),
but
any extension, renewal or replacement Lien must be
limited to the property encumbered by the existing Lien and the principal amount of the
indebtedness may not increase;
(g) leases or subleases of real property granted in the ordinary course of business, and
leases, subleases, non-exclusive licenses or sublicenses of property (other than real property or
intellectual property) granted in the ordinary course of Borrowers business,
if
the
leases, subleases, licenses and sublicenses do not prohibit granting Bank a security interest;
(h) non-exclusive license of intellectual property granted to third parties in the ordinary
course of business and licenses of intellectual property that could not result in a legal transfer
of title of the licensed property that may be exclusive in respects other than territory and that
may be exclusive as to territory only as to discreet geographical areas outside of the United
States;
-31-
(i) Liens arising from judgments, decrees or attachments in circumstances not constituting an
Event of Default under Section 8.4 or 8.7;
(j) Liens in favor of other financial institutions arising in connection with Borrowers
deposit and/or securities accounts held at such institutions, provided that Bank has a perfected
security interest in the amounts held in such deposit and/or securities accounts;
(k) deposits with landlords to secure real property lease obligations; and
(l) other Liens not described above arising in the ordinary course of business and not having
or not reasonably likely to have a material adverse effect on Borrower and its Subsidiaries taken
as a whole and not having any priority over the Lien in favor of Bank.
Person
is any individual, sole proprietorship, partnership, limited liability company, joint
venture, company, trust, unincorporated organization, association, corporation, institution, public
benefit corporation, firm, joint stock company, estate, entity or government agency.
Prime Rate
is Banks most recently announced prime rate, even if it is not Banks lowest
rate.
Registered Organization
is any registered organization as defined in the Code with such
additions to such term as may hereafter be made
Responsible Officer
is any of the Chief Executive Officer, President, Chief Financial
Officer and Controller of Borrower.
Revolving Line
is an Advance or Advances in an aggregate amount of up to $8,000,000
outstanding at any time.
Revolving Line Maturity Date
February 1, 2009.
Securities Account
is any securities account as defined in the Code with such additions to
such term as may hereafter be made.
Subordinated Debt
is indebtedness incurred by Borrower subordinated to all of Borrowers now
or hereafter indebtedness to Bank (pursuant to a subordination, intercreditor, or other similar
agreement in form and substance satisfactory to Bank entered into between Bank and the other
creditor), on terms acceptable to Bank.
Subsidiary
means, with respect to any Person, any Person of which more than 50% of the
voting stock or other equity interests is owned or controlled, directly or indirectly, by such
Person or one or more Affiliates of such Person.
Tangible Net Worth
is, on any date, the consolidated total assets of Borrower and its
Subsidiaries
minus
(a) any amounts attributable to (i) goodwill, (ii) intangible items
-32-
including unamortized debt discount and expense, patents, trade and service marks and names,
copyrights and research and development expenses except prepaid expenses, (iii) notes, accounts
receivable and other obligations owing to Borrower from its officers or other Affiliates, and (iv)
reserves not already deducted from assets,
minus
(b) Total Liabilities.
Total Liabilities
is on any day, obligations that should, under GAAP, be classified as
liabilities on Borrowers consolidated balance sheet, including all Indebtedness, and current
portion of Subordinated Debt permitted by Bank to be paid by Borrower, but excluding (a) all other
Subordinated Debt, (b) redeemable preferred stock to the extent classified as a liability under
GAAP, and (c) liabilities arising from revaluation of warrants due to the application of FAS 150-5.
Trademark
means any of the following now or hereafter owned or acquired or received by
Borrower or in which Borrower now holds or hereafter acquires or receives any right or interest:
(a) any trademark, trade name, corporate name, business name, trade style, service mark, logo,
other source or business identifier, print or label on which any of the foregoing have appeared or
appear, design or other general intangibles of like nature, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and any applications in connection therewith,
including registration, recording and application in the United States Patent and Trademark Office
or in any similar office or agency of the United States, any State thereof or any other country or
other foreign jurisdiction and (b) any reissue, extension or renewal of any of the foregoing.
Transfer
is defined in Section 7.1.
[
Signature page follows.
]
-33-
IN WITNESS WHEREOF
, the parties hereto have caused this Agreement to be executed as of the
Effective Date.
BORROWER:
GLU MOBILE INC.
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By:
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/s/ Albert Pimentel
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Name:
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Albert Pimentel
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Title:
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EVP and CFO
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BANK:
SILICON VALLEY BANK
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By:
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/s/ Tim Walsh
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Name:
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Tim Walsh
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Title:
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Senior Relationship Mgr
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Effective Date: February 14, 2007
[Signature page to Loan and Security Agreement]
EXHIBIT A
The Collateral consists of all of Borrowers right, title and interest in and to the following
personal property:
All goods, Accounts (including health-care receivables), Equipment, Inventory, contract rights
or rights to payment of money, leases, license agreements, franchise agreements, General
Intangibles, commercial tort claims, documents, instruments (including any promissory notes),
chattel paper (whether tangible or electronic), cash, deposit accounts, fixtures, letters of credit
rights (whether or not the letter of credit is evidenced by a writing), securities, and all other
investment property, supporting obligations, and financial assets, whether now owned or hereafter
acquired, wherever located; and
all Borrowers Books relating to the foregoing, and any and all claims, rights and interests
in any of the above and all substitutions for, additions, attachments, accessories, accessions and
improvements to and replacements, products, proceeds and insurance proceeds of any or all of the
foregoing.
1
EXHIBIT B
Loan Payment/Advance Request Form
Deadline for same day processing is Noon P
.S.T.
*
LOAN PAYMENT:
Glu Mobile Inc.
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From Account #
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To Account #
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(Deposit Account #)
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(Loan Account #)
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Principal $
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and/or Interest $
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Authorized Signature:
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Phone Number:
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Print Name/Title:
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Loan Advance:
Complete
Outgoing Wire Request
section below if all or a portion of the funds from this loan
advance are for an outgoing wire.
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From Account #
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To Account #
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(Loan Account #)
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(Deposit Account #)
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All Borrowers representations and warranties in the Loan and Security Agreement are true, correct
and complete in all material respects on the date of the request for an advance; provided, however,
that such materiality qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof; and provided, further that
those representations and warranties expressly referring to a specific date shall be true, accurate
and complete in all material respects as of such date:
Outgoing Wire Request:
Complete only if all or a portion of funds from the loan advance above is to be wired.
Deadline for same day processing is noon, P.S.T.
Amount of Wire: $
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Beneficiary Bank Transit (ABA) #:
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Beneficiary Bank Code (Swift, Sort, Chip,
etc.):
(For International Wire Only)
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1
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*
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Unless otherwise provided for an Advance
bearing interest at LIBOR.
|
By signing below, I (we) acknowledge and agree that my (our) funds transfer request shall be
processed in accordance with and subject to the terms and conditions set forth in the agreements(s)
covering funds transfer service(s), which agreements(s) were previously received and executed by me
(us).
Authorized Signature:
2
nd
Signature (if required):
2
EXHIBIT C
BORROWING BASE CERTIFICATE
Borrower: Glu Mobile Inc.
Lender: Silicon Valley Bank
Commitment Amount: $8,000,000
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ACCOUNTS RECEIVABLE
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Accounts Receivable Book Value as of
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$
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Additions (please explain on reverse)
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$
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TOTAL ACCOUNTS RECEIVABLE
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$
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ACCOUNTS RECEIVABLE DEDUCTIONS (without duplication)
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Amounts over 90 days due
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$
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Balance of 50% over 90 day accounts
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$
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Credit balances over 90 days
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$
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Concentration Limits
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$
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Foreign Accounts (other than Eligible Foreign Accounts)
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$
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Governmental Accounts
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$
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Contra Accounts
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$
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Promotion or Demo Accounts
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$
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Intercompany/Employee Accounts
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$
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Disputed Accounts
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$
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Deferred Revenue
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$
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Other (please explain on reverse)
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$
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TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS
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$
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Eligible Accounts (#3 minus #16)
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$
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ELIGIBLE AMOUNT OF ACCOUNTS ( ___% of #17)
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$
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BALANCES
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Maximum Loan Amount
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$
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Total Funds Available [Lesser of #21 or (#18 plus #20)]
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$
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Present balance owing on Line of Credit
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$
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Outstanding under Sublimits
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$
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RESERVE POSITION (#22 minus #23 and #24)
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$
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The undersigned represents and warrants that this is true, complete and correct, and that the
information in this Borrowing Base Certificate complies with the representations and warranties in
the Loan and Security Agreement between the undersigned and Silicon Valley Bank.
1
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BANK USE ONLY
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Received by:
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AUTHORIZED SIGNER
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Date:
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COMMENTS:
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Verified:
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By:
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AUTHORIZED SIGNER
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AUTHORIZED SIGNER
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Date:
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Date:
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2
EXECUTION COPY
EXHIBIT D
COMPLIANCE CERTIFICATE
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TO: SILICON VALLEY BANK
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Date: ______________________________
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FROM: Glu Mobile Inc.
The undersigned authorized officer of Glu Mobile Inc. (Borrower) certifies that under the
terms and conditions of the Loan and Security Agreement between Borrower and Bank (the
Agreement), (1) Borrower is in complete compliance for the period ending ___with all
required covenants except as noted below, (2) there are no Events of Default, (3) all
representations and warranties in the Agreement are true and correct in all material respects on
this date except as noted below; provided, however, that such materiality qualifier shall not be
applicable to any representations and warranties that already are qualified or modified by
materiality in the text thereof; and provided, further that those representations and warranties
expressly referring to a specific date shall be true, accurate and complete in all material
respects as of such date, (4) Borrower, and each of its Subsidiaries, has timely filed all required
tax returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes,
assessments, deposits and contributions owed by Borrower except as otherwise permitted pursuant to
the terms of Section 5.9 of the Agreement, and (5) no Liens have been levied or claims made against
Borrower or any of its Subsidiaries relating to unpaid employee payroll or benefits of which
Borrower has not previously provided written notification to Bank. Attached are the required
documents supporting the certification. The undersigned certifies that these are prepared in
accordance with generally GAAP consistently applied from one period to the next except as explained
in an accompanying letter or footnotes. The undersigned acknowledges that no borrowings may be
requested at any time or date of determination that Borrower is not in compliance with any of the
terms of the Agreement, and that compliance is determined not just at the date this certificate is
delivered. Capitalized terms used but not otherwise defined herein shall have the meanings given
them in the Agreement.
Please indicate compliance status by circling Yes/No under Complies column.
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Reporting Covenant
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Required
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Complies
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Monthly financial statements with
Compliance Certificate (Consolidating Financials)
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Monthly
within 30 days
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Yes No
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Annual financial statement (CPA
Audited) + CC
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FYE within 210 days
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Yes No
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10-Q, 10-K and 8-K
|
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Within 5 days after
filing with SEC
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Yes No
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Borrowing Base Certificate, A/R & A/P Agings
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Monthly within 30 days
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Yes No
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Operating Budgets and Forecasts
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30 days prior to FYE
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Yes No
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The following Intellectual Property was registered after the Effective Date (if no registrations, state None)
____________________________________________________________________________________________
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Financial Covenant
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Required
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Actual
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Complies
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Maintain on a
Monthly
Basis:
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Minimum Tangible Net Worth
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$3,000,000
increasing by 50%
of new equity
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$___
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Yes
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No
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1
The following financial covenant analysis and information set forth in Schedule 1
attached hereto are true and accurate as of the date of this Certificate.
The following are the exceptions with respect to the certification above: (If no exceptions
exist, state No exceptions to note.)
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Glu Mobile Inc.
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BANK USE ONLY
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Received by:
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authorized signer
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Date:
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Verified:
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By:
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authorized signer
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Name:
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Date:
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Title:
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Compliance Status: Yes No
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2
EXECUTION COPY
Schedule 1 to Compliance Certificate
Financial Covenants of Borrower
Dated:____________________
VII.
Tangible Net Worth
(Section 6.9)
Required: $3,000,000 plus 50% of new equity
Actual:
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A.
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Tangible Assets
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$
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B.
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Liabilities
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$
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C.
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Proceeds of New Equity since Effective Date ($___) x .50
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$
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D.
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Line A less Line B plus Line C.
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$
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Is line D equal to or greater than $3,000,000 plus Line C?
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___ No, not in compliance
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___ Yes, in compliance
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3
EXECUTION COPY
Exhibit E
Transaction Report
[EXCEL spreadsheet to be provided separately from lending officer.]
1
Exhibit 10.29
***** CONFIDENTIAL TREATMENT REQUESTED
Wireless Internet Service Agreement
This
Wireless Internet Service
Agreement
(Agreement) is effective as of March 28, 2003
(Effective Date), between Sprint Spectrum L.P., a Delaware limited partnership doing business
as Sprint PCS (Sprint) and Sorrent Inc., a California corporation (Sorrent). The parties
desire to provide Sorrent Services as part of the Sprint Services.
1. DEFINITIONS
3G Handset
means a Handset that is compliant with the CDMA 2000 standard as implemented
by Sprint, or any successor standard as implemented by Sprint.
Handset
means the digital electronic equipment meeting the requirements of and authorized by
Sprint for Users to access any of the various Sprint Services.
Sorrent Data
means all information collected or developed by Sorrent regarding its customers
who are Users or derived specifically from a Users use of the Sorrent Services or otherwise
provided directly to Sorrent by Users.
Sorrent Services
means the set of features, functionality, data, graphics, sounds, text and
other information, material or other content in electronic form provided by Sorrent to Users
via transmission by Sprint, including any Enhancements, Premium Services, and Other Services.
Sprint Affiliate
means: (a) any entity in which Sprint holds at least a 20% equity interest;
(b) any entity controlling, controlled by or under common control with Sprint, directly or
indirectly by or through one or more intermediaries; (c) any entity that is authorized to sell
wireless communications products or services utilizing the Sprint Wireless Network under the
Sprint brand name or any other brand name(s) subsequently primarily used by Sprint to market
its wireless communications products or services; or (d) any entity to which Sprint is required
by law or contract to provide wireless communications products or services involving the
Sorrent Services.
Sprint Data
means all information collected or developed by Sprint regarding its customers
who are Users under this Agreement or derived specifically from a Users use of the Sprint
Services or the Sprint Wireless Network, including the Mobile Identification Number (MIN)
issued by Sprint to a User, the Electronic Serial Number (ESN) associated with a Handset, the
Network Access Identifier (NAI), any location-based information, and any customer information
described in the FCC definition of Customer Proprietary Network Information as set forth in
47 USC 222(h)(l).
Sprint Services
means the wireless data services provided by Sprint, on behalf of itself or
the Sprint Affiliates or both, utilizing radio frequencies assigned by regulatory agencies.
Sprint Wireless Network
means any and all telecommunications systems built, owned or operated
by Sprint or any of the Sprint Affiliates.
User
means any individual who uses any of the Sprint Services.
2. SERVICES
2.1 Scope of Services.
This Agreement is for the provision of Sorrent Services to Users
with Handsets via transmission by Sprint across the Sprint Wireless Network. Sorrent may make
changes, modifications, updates and enhancements (each an Enhancement) to the Sorrent Services
if: (a) the Enhancement complies with all requirements in this Agreement; and (b) the Sorrent
Services continue to include the Minimum Applications described below. The Sorrent Services for
3G Handsets will be provided in J2ME programming language. The Sorrent Services will also
include, at a minimum, the following applications (Minimum Applications):
For 3G Handsets:
DuraTrax Mobile RC
Wild 8-Ball
Additional titles TBD
2.2 Placement.
Sprint will place a link to the Sorrent Services within an appropriate portion of
the Sprint Services during the Initial Term of this Agreement. Actual placement of this link will
be in Sprints sole discretion and may differ between 3G Handsets and non-3Q Handsets. The link
may be moved or repositioned at any time in Sprints sole discretion, and may be otherwise moved
or removed by Users as part of any personalization functionality. In addition to placement of the
link as set forth above, Sorrent grants Sprint the right, in accordance with the terms of this
Agreement, to include the Sorrent Services on other services provided, or
Glu
Mobile Inc. S-1
|
|
|
*****
|
|
The omitted portions of this exhibit have been filed with the Securities and Exchange
Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the
Securities Act of 1933.
|
SPRINT SPECTRUM L.P. CONFIDENTIAL INFORMATION
Page 1
supported, by Sprint under the Sprint brand name or under a third party brand name,
including services provided by Sprint, Sprint Affiliates, or other third parties (e.g. Sprints
private label customers) that are authorized by Sprint to sell digital wireless communication
services.
2.3
Technical Requirements.
Sorrent must register on Sprints ADP (Application Developers
Program) website for account registration purposes. Sorrent will give Sprint the opportunity, and
allow Sprint adequate lead-time, to test, verify and approve any Enhancements to the Sorrent
Services prior to their launch. Sprint will provide technical documentation, via Sprints ADP
website, to support the design of the Sorrent Services, and Sorrent will adhere to the technical
documentation.
2.4 User Support.
Sprint reserves the right to establish terms with Users for use of the Sprint
Services, which may include terms for the use of Premium Services. Sprint will be responsible for
all User support relating to the Sprint Services and the Sprint Wireless Network. Sorrent will be
responsible for all User support issues relating to Sorrent Services. Sorrent will appropriately
refer all User questions and inquiries regarding Sprint or the Sprint Services to Sprints Customer
Solutions unit. The parties will reasonably cooperate with each other to provide necessary User
support services. Sorrents toll free phone number, email address, or Internet URL (that links
directly to a help desk location) for User referrals is as follows: support@sorrent.com.
2.5 User Complaints.
Sprint has a regulatory obligation to track and respond to certain User
complaints. Sorrent agrees to cooperate with Sprint to resolve these
complaints. Sprint reserves
the right to suspend Sorrents ability to provide any Sorrent Services for which Sorrent charges
Users directly (as opposed to the Premium Services if: (a) for any two out of three consecutive
months, the number of complaints Sprint receives regarding charges
for Premium Services exceeds ***** % of all the complaints Sprint receives related to charges for all services with billing on behalf of
functionality provided by Sprint; or (b) Sprint reasonably believes unauthorized charges for
Premium Services are being presented to it by Sorrent. Sprint will allow Sorrent to resume
providing Premium Services if Sprint determines that the problems underlying the complaints or
unauthorized charges have been resolved. In addition, the parties will comply with any other
existing or future regulatory obligations that apply to this Agreement or the relationship between
the parties.
2.6 Representatives.
Each party will designate a representative who will serve as that partys
single point of contact with the other party for purposes of supervising and managing performance
of the respective parties obligations under this Agreement (the Representative). All technical,
marketing or other business issues will be communicated to the other partys Representative, and
each partys Representative will be authorized to respond on its behalf with respect to those
issues. The Representatives will hold conference calls on a mutually agreeable basis, and may
contact each other on an as-needed basis.
2.7 Content Standards.
Materials that are included in the Sorrent Services will not: (a)
facilitate or promote illegal activity, or contain content that is illegal; (b) contain content
that is defamatory, obscene, distasteful, racially or ethnically offensive, harassing, or that is
discriminatory based upon race, gender, color, creed, age, sexual orientation, or disability; (c)
contain sexually suggestive or explicit content; (d) infringe upon or violate any right of any
third party; or (e) disparage, defame, or discredit Sprint or any Sprint Affiliate, or contain
content that is derogatory, detrimental, or reflects unfavorably on the name or business reputation
of Sprint or any Sprint Affiliate. Subsections (a) through (e) above are collectively referred to
as the Content Standards. If at any time Sprint determines in its sole discretion that Sorrent
has violated any of the Content Standards, Sprint may temporarily suspend the Sorrent Services.
Sprint will notify Sorrent of the suspension in writing or via e-mail and Sorrent must cure the
violation within 3 business days (the Cure Period) after this notification by removing the
portion of the Sorrent Services that violates the Content Standards. If Sorrent reasonably
disputes Sprints determination of a Content Standards violation, the parties will confer in good
faith and attempt to resolve the dispute during the Cure Period, but in all cases Sprint will make
the final determination. Sprint may continue the suspension of the Sorrent Services during the
Cure Period. If Sorrent fails to cure the Content Standards violation within the Cure Period,
Sprint may, without further notice, immediately terminate this Agreement.
Sorrent will promptly notify Sprint if it: (a) receives a complaint from a User that involves any
of the prohibitions in the Content Standards; or (b) otherwise becomes aware of an alleged Content
Standards violation. Sprint also reserves the right to review materials before they are included as
part of the Sorrent Services to determine if they violate the Content Standards. If during this
review Sprint determines in its sole discretion that any materials violate any of the Content
Standards, Sprint will notify Sorrent and Sorrent will remove the violating materials before the
Sorrent Services will be transmitted to Users. Sorrent will not, and will not assist any third
party to, make fraudulent charges for Sorrent Services, mislead Users concerning Sorrent Services,
or misrepresent the nature of Sorrent Services to Users. Sprint reserves the right to suspend
Sorrent Services if Sprint determines, in its sole discretion, that any Sorrent Services are
fraudulent, misleading to Users, or being misrepresented to Users.
2.8 No Advertising.
Sorrent will not display any advertising in the Sorrent Services without prior
written consent from Sprint, which may be withheld in Sprints sole discretion. For the purposes
of this Agreement, the parties agree that advertising does not include unsolicited Sorrent
Services sponsorship or endorsement by an individual or company (e.g., Fox Sports Football or
***** The omitted portions of this exhibit have been filed with the Securities and Exchange
Commission pursuant to a request for confidential treatment under Rule 406 promulgated under
the Securities Act of 1933.
SPRINT SPECTRUM L.P. CONFIDENTIAL INFORMATION
Page 2
Duratrax
Mobile RC), or within Sorrent Services branding (e.g., the Fox Sports logo on the
basketball court in Fox Sports Basketball) provided by Sorrent to an individual or company, but
only if Sorrent has not received any revenue related to the sponsorship, endorsement or branding.
2.9 Temporary Suspension of Sorrent Services.
Sprint may temporarily suspend the Sorrent Services
for up to 10 days as Sprint deems reasonably necessary in the normal management and operation of
the Sprint Wireless Network. If Sprint temporarily suspends under this Section 2.9, it will insert
a card notifying Users of the Sorrent Services that the Sorrent Services are temporarily
unavailable. This card will be removed when the suspension ends.
3. PAYMENT AND FEES
3.1. No Charge for Services.
The Sorrent Services, including all Enhancements, are provided
to Sprint at no charge. Each party will be individually responsible for any expenses it incurs in
developing, producing, maintaining, and transmitting its respective services.
3.2. Premium Services.
Sprint will offer a billing on behalf of functionality to Sorrent that will
allow Sprint to invoice Users for the use of certain Sprint-approved services provided by Sorrent
to Users (Premium Services). Sprint is not obligated to include all applications proposed by
Sorrent as part of the Premium Services. In addition, upon 90 days prior written notice to Sorrent,
Sprint reserves the right in its sole discretion to cease providing Premium Services to Users.
A. General.
Premium Services will only be available for data-capable 3G Handsets. In addition,
Premium Services will not be provided for any electronic commerce or other non-content
applications or transactions (e.g. the purchase of a tangible product). To qualify to provide
Premium Services, Sorrent must provide all of the information required on Exhibit A. All Premium
Services will initially be hosted by Sprint at Sprints expense (i.e. the actual content must be
hosted, not just linked). But upon 30 days prior written notice, Sprint may require Sorrent to
assume responsibility for its own hosting, in which case all hosting obligations and related
expenses will be Sorrents responsibility. Sprint reserves the right, in its sole discretion,
to not allow certain Users to receive Premium Services and to set limits on the overall amount
certain Users can spend on Premium Services. Premium Services may not be available on all 3G
Handsets.
B. Pricing for Premium Services.
Through Sprint, Sorrent will charge Users an event-based
charge (e.g. per play or download) or a monthly recurring charge (MRC), when available from
Sprint, for Premium Services. Sorrent will determine the pricing structure (e.g. event-based or
MRC) and pricing levels for Premium Services, however, Sorrent will
not charge more than $ ***** per
event-based transaction or MRC. No changes to the pricing for Premium Services will be allowed
from the time Premium Services are initially made commercially available to Users by Sorrent
until Sprint has implemented the functionality to allow pricing changes (Sprint currently
estimates this will occur during the first quarter of 2003, but this date is subject to change
by Sprint without notice). If Sorrent subsequently wants to change the pricing for Premium
Services, it must provide Sprint with at least 30 days prior written notice of the requested
change. The pricing for Premium Services cannot be changed more frequently than once every 30
days. Users of Premium Services will be presented with an advice of charge requiring them to
accept the applicable charge, consistent with this Section 3.2. B., for the transaction. Only
Sprint is permitted to present this advice of charge. Sorrent grants Sprint the right to use
Sorrents name and logo on User invoices in conjunction with detailing any applicable Premium
Services charges. In addition, Sorrent will not receive any revenue for Premium Services that
are used by Sprint for testing, trial, or promotional purposes (including demonstration accounts
for Sprint employees or agents, Sprint stores or other retail locations, and content
developers).
C. Premium Services Revenue Sharing.
Sorrent will receive ***** % of the Billed Revenue for
Premium Services (net of Adjustments that are attributable to Sorrent). Sprint will receive
***** % of the Billed Revenue for Premium Services. Billed Revenue is defined as the charges,
consistent with Section 3.2. B. above, that Sprint invoices to Users (excluding any applicable
transaction taxes) for the use of Premium Services. An Adjustment is defined as a reduction to
a charge for Premium Services reasonably made by Sprint at a Users request. For example, if in
a given quarter Billed Revenue is $10,000, and during that quarter there are $1,000 in
Adjustments attributable to Sorrent, then Sorrent would receive $ *****
as its share of Premium
Services revenue for that quarter (***** % x (10,000 1,000)). Only Sprint is authorized to make
Adjustments to Premium Services charges.
D. Uncollectable Revenue; Changes to Premium Services Revenue Sharing.
Sprint will be
responsible for up to *****
% of Uncollectable Revenue. Uncollectable Revenue is defined as total
Billed Revenue that is uncollected and past due, and includes bad debts, fraudulent charges,
short payments by Users, and other payment shortfalls and delinquencies. For the first six
months following March 1, 2003 (the Initial Six Months), and each successive six month period,
Sprint will determine if total Uncollectable Revenue exceeds *****
% of total Billed Revenue during
the applicable six month period. If total Uncollectable Revenue
exceeds *****
%, Sprint will adjust
the parties Premium Services revenue share percentages, set forth in Section 3.2. C.
***** The omitted portions of this exhibit have been filed with the Securities and Exchange
Commission pursuant to a request for confidential treatment under Rule 406 promulgated under
the Securities Act of 1933.
SPRINT SPECTRUM L.P. CONFIDENTIAL INFORMATION
Page 3
above, to account for the applicable increase in total Uncollectable Revenue. For example,
if Sprint determines that total Uncollectable Revenue for the Initial
Six Months is ***** %, then
Sprint will increase its Premium Services revenue share percentage by ***** % to ***** % and decrease
Sorrents revenue share percentage from *****
% to *****
%. If the revenue share percentages are revised
by Sprint, the new percentages will take effect beginning 5 days after Sprint advises Sorrent of
the new percentages. Each six month review and any adjustments to each partys revenue share due
to Uncollectable Revenue will be based upon the original *****
%/ *****
% split as set forth in Section
3.2. C. above.
E. Premium Services Revenue Sharing Limitations.
Sprints revenue share percentage for Premium
Services will never be less than *****% regardless of the results of any six month review. In
addition, if Sprint adjusts Sorrents revenue share percentage
below *****%, Sorrent may cease
providing Premium Services by providing Sprint with 20 days prior written notice. Sprint also
reserves the right to stop providing Premium Services upon 10 days prior notice if Sprint
determines that for any given month Uncollectable Revenue has exceeded *****
% of Billed Revenue.
F. Payment Procedures.
Sprint will send any applicable payments for Premium Services to Sorrent
within 30 days of the end of each quarter via electronic funds transfer. Sprint will also
provide a summary remittance statement of Premium Services activity on a quarterly basis, within
30 days of the end of each quarter via e-mail to the Sorrent contact designated on Exhibit A. If
Premium Services are suspended or terminated for any reason: (a) charges for Premium Services
that Users have ordered, and will be invoiced for, but will not receive (e.g. MRCs) due to the
suspension or termination will be deducted, on a pro-rata basis, from Billed Revenue when
calculating payments to Sorrent; and (b) any payments for Premium Services due to Sorrent for
affected quarter(s) will not be paid by Sprint until the earlier of the quarter after the
suspension is lifted or the Agreement is terminated. Sorrent will not earn any interest on
Premium Services revenues collected by Sprint from Users. Sorrent is not entitled to any
Premium Services revenue resulting from fraudulent charges that are induced by Sorrent, or a
third party acting on behalf of or with the assistance of Sorrent. In addition, Sprint will not
transmit any payments for Premium Services to Sorrent until Sorrent has generated at least $500
in cumulative revenue for Premium Services. If this $500 threshold is not satisfied, any
applicable payments for Premium Services will be sent to Sorrent after the end of the Term.
Sprint is responsible for remitting all applicable transaction taxes related to the sale of
Premium Services to Users. Upon request, Sprint will provide Sorrent with a resale tax exemption
certificate.
3.3 Other Services.
Sorrent may provide and charge Users directly for services that do not utilize
billing on behalf of functionality (Other Services). Sorrent will be responsible for all aspects
of providing Other Services (e.g. invoicing and processing credit card transactions).
3.4. Other Services Revenue Sharing.
Sprint will receive a portion of the transaction revenue
generated from the Sorrent Services. Except as noted above for Premium Services, Sorrent is
responsible for collecting and remitting all transaction taxes imposed upon the sale of its goods
or services, including Other Services, electronic commerce transactions, and advertising (if
allowed by Sprint). Transaction revenue subject to revenue sharing between the parties, aside from
the Premium Services revenue sharing detailed above, includes that derived from:
|
(a)
|
|
Other Services;
|
|
|
(b)
|
|
electronic commerce transactions; and
|
|
|
(c)
|
|
advertising, including the fair market value of any advertising consideration
Sorrent receives as part of a non-case transaction (e.g. advertising inventory exchange
between Sorrent and a third party).
|
Each partys respective share of revenue, after deducting any transaction taxes, will be as
follows:
|
|
|
|
|
Revenue Source
|
|
Sprint %
|
|
Sorrent %
|
Other Services
|
|
*****
% of the gross revenue
|
|
*****
% of the gross revenue
|
|
|
|
|
|
Electronic commerce transactions
|
|
*****
% of the net revenue,
which is calculated as the gross
sales amount, less cost of goods,
returns, discounts and
freight
|
|
*****
% of the net revenue
|
|
|
|
|
|
Advertising (if allowed by Sprint)
|
|
*****
% of the gross revenue
|
|
*****
% of the gross revenue
|
***** The omitted portions of this exhibit have been filed with the Securities and Exchange
Commission pursuant to a request for confidential treatment under Rule 406 promulgated under
the Securities Act of 1933.
SPRINT SPECTRUM L.P. CONFIDENTIAL INFORMATION
Page 4
Advertising revenues will be allocated among all wireless operators, aggregators,
distributors and other customers of Sorrent who offer such online Advertising, and Sprint shall
receive *****% of its pro-rata share of the advertising revenues. Sprints pro-rate share will be
based on the proportion of revenues generated by Sprints sales of the Sorrent Premium Services
that contain the advertising compared to total sales of the Sorrent Premium Services that contain
such Advertising. For example, if Sorrent receives $10,000 for advertising placed in a Premium
Service game that sells a total of 100,000 units, then the per-game advertising revenue is $*****.
If Sprints sales of that Premium Service game are 25,000 units, then Sprints share of the
advertising revenues will be calculated as ($*****)*(25,000)*(*****%) = $*****.
3.5 Invoicing and Payment Procedures.
Any amounts payable by Sorrent to Sprint are due to Sprint
on a quarterly basis within 30 days after the end of each calendar quarter. Payments must be
remitted to the following Sprint address:
Sprint
Dept CH 10615
Palatine, IL 60055-0615
In addition, on a quarterly basis Sorrent will, within 30 days after the end of each quarter,
provide a report to Sprint at the above address that details the information listed below:
|
(a)
|
|
Total gross Other Service revenue (by category, if applicable).
|
|
|
(b)
|
|
Total gross electronic commerce revenue (by category, if applicable).
|
|
|
(c)
|
|
Total gross advertising revenue, if applicable, including the fair market value
of any advertising consideration Sorrent receives as part of a non-cash transaction (by
category, if applicable).
|
4. TERM AND TERMINATION
4.1 Term.
The initial term of this Agreement begins on the Effective Date and ends after 1 year
(the Initial Term). After the expiration of the Initial Term, this Agreement will be
automatically extended on a month-to-month basis until terminated by either party with at least 30
days prior written notice (each monthly period a Renewal Term). The Initial Term and any Renewal
Term are collectively referred to as the Term.
4.2 Termination for Convenience.
Either party may terminate this Agreement for any reason,
without liability related to that termination, by providing at least 90 days prior written notice
to the other party.
4.3 Termination for Breach.
Either party may terminate this Agreement if the other party breaches
any material term of this Agreement and the breach is not cured within 20 days after written notice
of the breach is provided to the defaulting party by the non- defaulting party. Unless otherwise
provided in the notice, or unless the breach has been cured, the termination is effective 20 days
after the date of the notice.
5. CONFIDENTIAL INFORMATION
5.1 General.
Each party acknowledges that while performing its obligations under this Agreement
it may have access to Confidential Information of the other party. Confidential Information
means any information concerning a partys trade secrets, products, planned products, services or
planned services, suppliers, customers, prospective customers, data, financial information,
computer software, processes, methods, knowledge, inventions, ideas, marketing, promotions,
discoveries, current or planned activities, research, development, or other information relating
to a partys business activities or operations or those of its customers or suppliers. This
Agreement creates a confidential relationship between the parties. Both parties will keep the terms
of this Agreement and all Confidential Information confidential and, except as authorized by the
other party in writing, the receiving party will only use, and make copies of, Confidential
Information to perform the Services or its obligations as required under this Agreement. Upon
termination of this Agreement, or upon the disclosing partys request, the receiving party will
return or destroy all documents and other materials in the receiving partys control that contain
or relate to Confidential Information. Upon request by the disclosing party, the receiving party
will provide written certification to the disclosing party that it has returned or destroyed all
Confidential Information, including any duplicate copies. Both parties will inform their
personnel who will have access to Confidential Information of their obligations of confidentiality,
and will require their personnel to comply with the terms of this Agreement. If reasonably
requested by either party, the other party will have those personnel sign a non-disclosure
agreement at least as restrictive as this Section. Both parties agree to disclose Confidential
Information only to its personnel, including its affiliates, subcontractors and agents, who have a
legitimate business need to know Confidential Information in order to perform that partys
obligations under this Agreement.
5.2 Exceptions; Injunctive Relief.
Confidential Information does not include information that
the receiving party can demonstrate by written documentation: (a) is rightfully known to the
receiving party prior to negotiations leading to this Agreement; (b) is independently developed by
the receiving party without any reliance on Confidential Information; (c) is part of the public
domain; or (d) is lawfully obtained by the receiving party from a third party not under an
obligation of confidentiality. If any Confidential Information is required to be disclosed by law
or legal process, the receiving party will use reasonable efforts to cooperate
***** The omitted portions of this exhibit have been filed with the Securities and Exchange
Commission pursuant to a request for confidential treatment under Rule 406 promulgated under
the Securities Act of 1933.
SPRINT SPECTRUM L.P. CONFIDENTIAL INFORMATION
Page 5
with the disclosing party to limit the disclosure. Both parties acknowledge that disclosure of
Confidential Information by the receiving party may cause irreparable injury to the disclosing
party, its customers and other suppliers, that is inadequately compensable in monetary damages. In
addition to any other remedies in law or equity, the disclosing party may seek injunctive relief
for the breach or threatened breach of this Section.
5.3 Publicity.
Neither party will make any news release, public announcement, reference to
this Agreement, its value, or its terms and conditions, or in any manner advertise or publish the
fact of this Agreement. Nothing in this Agreement is intended to imply that either party will
agree to any publicity, and either party may, in its sole discretion, withhold its consent to any
publicity.
6. GRANT OF LICENSES AND RIGHTS
6.1 License Grant.
Sorrent grants Sprint and Sprint Affiliates a non-exclusive,
non-transferable (with no right to sub-license except as provided in this Agreement) license to
reproduce, display, perform, distribute, and transmit the Sorrent Services, in any current or
future mark-up language or format, as necessary to enable Users to access and utilize the Sorrent
Services on the Handset. Sprint is allowed to modify the technical format of the Sorrent Services
as necessary to ensure that they can be displayed on a 3G Handset (e.g. the conversion of HDML or
WML language to XHTML language), but Sprint will not alter the material included in the Sorrent
Services. Sorrent acknowledges that Users have a perpetual, royalty-free license to continue to
use and access applications (e.g. games) after they have been downloaded from Sorrent, unless the
application was expressly sold as a limited duration application. Sprint may use the Sorrent
Services or any transferred Sorrent Data to monitor Sorrents performance and compliance with the
terms of this Agreement, for quality assurance purposes, and for Sprints internal marketing
research purposes.
6.2 Use of Marks.
Any use by Sprint of Sorrents trademarks, trade names, and service marks (the
Sorrent Marks), other than use of those Sorrent Marks included as part of the Sorrent Services,
requires Sorrents prior written approval. Any use by Sorrent of Sprints trademarks, trade names,
and service marks (the Sprint Marks) requires Sprints prior written approval. Each partys use
of the other partys Marks is also subject to any applicable brand guidelines provided by the other
party.
6.3 Marketing Materials
. Sprint may wish to include Sorrents name, logos, or a description of
Sorrent Services in certain marketing materials including collateral sent to Users, retail
displays, or other advertising and promotional activities. These uses of Sorrents name, logos, or
description will require Sorrents prior written approval.
Description of Sorrent Services (1 brief paragraph) for marketing and promotional use: Sorrent
develops and publishes single-player and real-time, head-to-head and multi-player games for
wireless and Internet-capable devices. The company has also developed a number of proprietary
technologies, including its patent-pending Mobile Persona, a persistent digital character that
evolves as the player plays each Sorrent game, and is available to the player on all network-based
Sorrent games, including games in different genres.
7. OWNERSHIP AND USE OF DATA
7.1 Sorrent Ownership.
Each party acknowledges and agrees that Sorrent owns the Sorrent Marks,
Sorrent Data, and Sorrent Services (excluding third party content and services incorporated in the
Sorrent Services), and except for any license rights granted under this Agreement, nothing in this
Agreement confers on Sprint any rights in the foregoing.
7.2 Sprint Ownership.
Each party acknowledges and agrees that Sprint owns the Sprint Marks, Sprint
Data, the Sprint Wireless Network, and the Sprint Services (excluding third party content and
services incorporated in the Sprint Services), and except for any license rights granted under this
Agreement, nothing in this Agreement confers on Sorrent any rights in the foregoing.
7.3 Rights and Limitations.
All Sprint Data is Confidential Information and is the exclusive
property of Sprint. Sorrent will not, except as otherwise stated in this Agreement, store, copy,
analyze, monitor, or otherwise use any Sprint Data. All Sorrent Data is Confidential Information
and is the exclusive property of Sorrent. Sprint will not, except as otherwise stated in this
Agreement, store, copy, analyze, monitor, or otherwise use any Sorrent Data. Nothing in this
Agreement prevents or limits: (a) Sorrent from communicating directly with Users of Sorrent
Services; or (b) Sprint or Sprint Affiliates from communicating directly with Users.
7.4 Solicitation; Disclosure.
Sorrent will not use the Sorrent Services for the transmission of
spam or any other distribution of unsolicited information, including telemarketing, unless the
User expressly consents via the Handset. Sorrent will not use any information obtained from the
activities contemplated under this Agreement to target advertisements or marketing to Users based
on the Users use of Sprint Services unless a User requests or expressly consents to such
communications. In addition, Sorrent will not take any action, including data mining or any
similarly disruptive practice, that interferes with the development, operation, maintenance or
content of Sprints websites, servers or other related equipment. Neither party will disclose the
other partys information or data provided to it under this Agreement to any third party in a
manner that identifies the User as an end user of a Sorrent product or service or of the Sprint
Services, except as may be required by law or legal process.
SPRINT SPECTRUM L.P. CONFIDENTIAL INFORMATION
Page 6
8. WARRANTIES AND DISCLAIMERS
8.1 Warranties.
Sorrent represents and warrants that all hardware, software and networks used by
Sorrent to fulfill its obligations under this Agreement will: (a) to the extent its hardware,
software or networks depend on a date processing function, perform and process date arithmetic and
date/time data in a consistent and accurate manner and in a manner that is unambiguous as to
century; and (b) to the extent its hardware, software or networks are used in combination with
other software, hardware or networks, they will properly interoperate with the other software,
hardware or networks, including the exchange of date/time data. If Sorrents hardware, software,
or network is not compliant with this warranty, Sorrent will, at its expense, promptly correct or
modify the hardware, software, or network so that it is compliant. Sorrent also represents and
warrants that: (a) it will not introduce into Sprints hardware, software, or network any software
virus, worm, back door, Trojan Horse, or similar harmful code; (b) the Sorrent Services do not
infringe any intellectual property right or violate any trade secret right or other right of any
third party; and (c) it will comply with all applicable laws and regulations in performing this
Agreement.
8.2 Disclaimers. Except as expressly set forth in this Agreement, each partys services,
information, content and other materials are provided on an as is, as available basis. Except
for the express warranties made in this Agreement: (1) neither party makes any warranty that its
service will be uninterrupted, secure, or error free, or that defects in either partys service
will be corrected; and (2) each party specifically disclaims any representations or warranties,
express or implied, regarding any materials provided under this Agreement, including any implied
warranty of merchantability, fitness for a particular purpose, non-infringement or any implied
warranties arising from course of dealing or performance. The parties acknowledge that use of any
data or information obtained by Users through either partys service is at Users own discretion
and risk, and that Users will be solely responsible for any damage resulting from use of that
service. Each party agrees to include a disclaimer in substantially similar form to the previous
sentence in their respective Users agreements or terms and conditions of use for their respective
services.
9. INDEMNIFICATION AND LIMITATION OF LIABILITY
9.1 Indemnification by Sprint
. Sprint will indemnify and defend Sorrent, Sorrent
affiliates, and their respective directors, officers, agents, and employees (each, a Sorrent
Indemnitee) from and against all claims, damages, losses, liabilities, costs, expenses, and
reasonable attorneys fees (collectively Damages) arising out of a claim by a third party against
a Sorrent Indemnitee: (a) to the extent resulting from or alleged to have resulted from any act or
omission of Sprint under or related to this Agreement; or (b) alleging that the Sprint Marks or
Sprint Services, excluding any third party content contained in the Sprint Services, infringe any
intellectual property right or violate any trade secret right or other right of any third party.
9.2 Indemnification by Sorrent.
Sorrent will indemnify and defend Sprint, Sprint Affiliates, and
their respective directors, officers, agents, employees and customers (each, a Sprint Indemnitee)
from and against all Damages arising out of a claim by a third party against a Sprint Indemnitee:
(a) to the extent resulting from or alleged to have resulted from any act or omission of Sorrent
under or related to this Agreement; or (b) alleging that the Sorrent Marks or the Sorrent Services
infringe any intellectual property right or violate any trade secret right or other right of any
third party.
9.3 Indemnification Procedures.
Promptly, upon becoming aware of any matter that is subject to the
provisions of this Section 9. (a Claim), the party seeking indemnification (the Indemnified
Party) must give notice of the Claim to the other party (the Indemnifying Party), accompanied by
a copy of any written documentation regarding the Claim received by the Indemnified Party. The
Indemnifying Party will have the right, at its option, to settle or defend, at its own expense and
with its own counsel, the Claim. The Indemnified Party will have the right, at its option, to
participate in the settlement or defense of the Claim, with its own counsel and at its own expense,
but the Indemnifying Party will have the right to control the settlement or defense. The
Indemnifying Party will not enter into any settlement that imposes any liability or obligation on
the Indemnified Party, or contains any acknowledgement of wrongdoing by the Indemnified Party,
without the Indemnified Partys prior written consent. The parties will cooperate in the
settlement or defense and give each other access to all relevant information. If an Indemnified
Partys ability to provide a service is enjoined due to a claim covered by the indemnity
obligations in this Section, the Indemnifying Party will, at its option and expense, and in
addition to any other remedies that the Indemnified Party may have, either: a) procure for the
Indemnified Party and the Users the continued right to use the service; b) replace the infringing
material with non-infringing material that will not adversely affect the operation or quality of
the service; c) modify the infringing material so that it is non-infringing and will not adversely
affect the operation or quality of the service; or d) only if none of the above options are
possible after commercially reasonable attempts by the Indemnifying Party to complete them, either
party may terminate this Agreement.
9.4 Limitation of Liability. Except for a partys breach of the provisions of Section 5.
(Confidential Information) or for claims for which a party has an obligation of indemnity under
this Agreement,
SPRINT SPECTRUM L.P. CONFIDENTIAL INFORMATION
Page 7
neither party will be liable to the other for any consequential, punitive or indirect
damages for any cause of action, whether in contract, tort or otherwise. Consequential, and
indirect damages include, but are not limited to, lost profits, lost revenue, and loss of business
opportunity, whether or not the applicable party was aware of or should have been aware of the
possibility of these damages.
10. SECURITY
Each party will maintain the security and integrity of its service, including implementing
procedures to prevent third parties from transmitting unsolicited data or messages to Users.
Sorrent will notify Sprint as soon as possible if it knows or has reason to know that any
unsolicited data or messages are being sent to Users of the Sorrent Services, or if an unusual or
abnormal flow, number, or type of message is being sent to Users. If a User is being sent
unsolicited data or messages, or Sorrent notifies Sprint that Users may be being sent unsolicited
data or messages, each party will use commercially reasonable efforts to promptly prevent
continuing transmission of unsolicited data or messages to Users. As
necessary, Sprint will
provide a connection to its gateway via a 128-bit secure socket level connection. As necessary,
Sorrent will provide a secure connection to the Internet to allow access to Sorrent Services by
Sprint and Users.
11. RECORD KEEPING AND AUDITS
Each party will maintain sufficient records as reasonably required to verify the accuracy of
payments to the other party for a period of at least 1 year after the completion of the applicable
transaction. No more than once per year, each party (as applicable, the Auditing Party) has the
right to have its external auditors audit, copy and inspect the other partys (the Audited
Party) financial records on the Audited Partys premises at reasonable times during the Term of
this Agreement, and for the 1-year period thereafter, to verify the correctness of amounts paid
under this Agreement. The Auditing Party will provide the Audited Party with at least 10 business
days prior written notice of an audit. The Audited Party will make the information reasonably
required to conduct the audit available on a timely basis and assist the Auditing Party and its
external auditors as reasonably necessary. The Audited Party may require that any external auditor
sign a non-disclosure agreement, prior to performing an audit, that is acceptable to Sprint and
Sorrent. In the event of an underpayment or overpayment of more than 10%, the Audited Party will
reimburse the Auditing Party for reasonable costs of the audit, and the underpayment or
overpayment, as applicable, will be due and payable within ten days.
12. TESTING AND SERVICE RELIABILITY
12.1 Acceptance Testing.
Upon receipt of the initial feature set of the Sorrent Services prior to
launch of the Sorrent Services, or any subsequent Enhancements to the Sorrent Services (for
purposes of this Section, each a Deliverable), both parties will test the Deliverable for
compliance with the specifications in the detailed design document provided to Sprint by Sorrent in
accordance with Sprints launch checklist (Acceptance Testing). If a dispute arises regarding
testing criteria, Sprint will make the final determination. Acceptance of any Deliverable will
occur upon the earlier of either: (a) Sorrents receipt of a notice from Sprint stating that the
Deliverable has met the Acceptance Criteria; or (b) 60 days, or other mutually agreeable tune
period, after the date of delivery, unless notice of non-acceptance (including specific reasons for
non-acceptance) is provided to Sorrent within the 60-day period. Sorrent will use commercially
reasonable efforts to correct any non-conformance in a timely manner. The parties will provide
each other with commercially reasonable assistance as necessary to correct any non-conformance,
including information necessary to recreate the error or non-conformity identified. The parties
will work together in good faith to complete Acceptance Testing according to any applicable
development schedule. Upon successful completion of Acceptance Testing the parties will notify each
other of final acceptance.
12.2 Service Reliability.
The parties will make commercially reasonable efforts to ensure that
their respective services related to this Agreement are free from material defects, and are
available 24 hours a day, 7 days a week to Users. Sorrent agrees to maintain the Sorrent Services
according to the applicable restoral expectations set forth in the table below. For unplanned
events, Sprint will assign a trouble severity code based on Sprints assessment of trouble at the
point of trouble identification. Sprint will make adjustments to the trouble severity code based
on event activities. Operational reviews between Sprint Technical Services and Sorrent will be
conducted as needed. The following trouble severity table will be reviewed periodically by Sprint
and Sorrent, and may be modified by mutual written agreement of the parties.
|
|
|
|
|
Trouble
|
|
|
|
|
Severity
|
|
|
|
Restoral
|
Code
|
|
Description
|
|
Expectation
|
Sev1
|
|
Sev 1 Error
means a
catastrophic error in an application
which causes a complete (100%) loss
of service for any subset of Users
and for which a workaround has not
been made available and which
causes: (a) an important component
of the Sorrent Services to be
unusable, a system or product
malfunction due to deficiency or
non-usability, and has frequent or
major User impact or there is a
frequent failure of an important
service; or (b) data loss or
corruption. Example: 10/8 outage
Users receiving bad http status
errors when attempting to connect to
the Sorrents site.
|
|
*****
|
|
|
|
|
|
Sev2
|
|
Sev 2 Error
means a
non-catastrophic error in an
application that causes greater than
50% degradation of performance and
that: (a) constitutes a major
failure for an important product
feature
|
|
*****
|
***** The omitted portions of this exhibit have been filed with the Securities and Exchange
Commission pursuant to a request for confidential treatment under Rule 406 promulgated under
the Securities Act of 1933.
|
SPRINT SPECTRUM L.P. CONFIDENTIAL INFORMATION
|
|
Page 8
|
|
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|
|
|
Trouble
|
|
|
|
|
Severity
|
|
|
|
Restoral
|
Code
|
|
Description
|
|
Expectation
|
|
|
which causes
significant inconvenience
to Users, system or
product malfunction due to
deficiency or
non-usability; or (b)
produces results
materially different from
those described in the
documentation for a major
product feature, but which
such error does not rise
to the level of a Sev 1
Error. Example: Users
receiving compile error
message when attempting to
read a news item.
|
|
|
|
|
|
|
|
Sev3
|
|
Sev3 Error
means a
non-catastrophic error in
an application that: (a)
has an impact on
operational support or
administrative tools /availability
to service or
provision node but not
considered to impact call
processing; and (b) causes
less than 50% degradation
of performance
|
|
*****
|
|
|
|
|
|
Sev4
|
|
Sev4 Error
means an
error in an application
that: (a) has minimal
current impact on the
User; and (b) causes a
malfunction of a
non-essential product
feature.
|
|
TBD (Joint
Agreement)
|
12.3
|
|
Points of Contact and Escalations.
If Sprint experiences technical problems receiving or
transmitting the Sorrent Services, Sprint may contact Sorrents technical service group.
Escalations will occur if applicable restoral expectations are not met. Sorrent will provide
for 24x7x365 support availability. For Sev1 Errors, Sorrent will provide continual support
until the event is resolved. Sorrent and Sprints IT department will exchange ticket numbers
for tracking an event beginning with the initial report of trouble. Sorrent will interface as
necessary with any third party hardware and software vendors selected by it and included as
part of the Sorrent Services. During unplanned events, Sorrent will interact with these third
party vendors for service restoral activities; Sprint will only be required to interact with
Sorrent. Sprint and Sorrent escalation contacts and numbers are as follows:
|
Sorrent Contact Information (Accessible 24 hours a day / 7 days a week)
|
|
|
|
|
|
|
|
|
|
|
Contact Name &
|
|
|
|
|
|
|
|
|
Title
|
|
Phone
|
|
Mobile or Pager
|
|
E-mail
|
1
st
Point of
Contact
|
|
*****
Technical
Director
|
|
650-571-1550
X*****
|
|
*****
|
|
*****
|
|
|
|
|
|
|
|
|
|
1
st
Escalation.
|
|
*****
CTO
|
|
650-571-1550
X*****
|
|
*****
|
|
*****
|
|
|
|
|
|
|
|
|
|
2
nd
Escalation
|
|
*****
Network
Engineer
|
|
650-571-1550
X*****
|
|
*****
|
|
*****
|
Sprint Contact Information (Accessible 24 hours a day / 7 days a week)
|
|
|
|
|
|
|
|
|
|
|
Contact Name &
|
|
|
|
|
|
|
|
|
Title
|
|
Phone
|
|
Mobile or Pager
|
|
E-mail
|
1
st
Point of
Contact
|
|
NOCC Support
|
|
*****
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
st
Escalation
|
|
Content Provider &
3
rd
Party
Operations
(C3PO)
|
|
|
|
*****
|
|
|
|
|
|
|
|
|
|
|
|
2
nd
Escalation
|
|
Content Provider &
3rd Party
Operations (C3PO)
|
|
|
|
*****
|
|
|
|
|
|
|
|
|
|
|
|
3
rd
Escalation
|
|
SME, 3
rd
Party
Content Providers
(C3PO)
|
|
*****
|
|
|
|
|
12.4 Operating Changes.
If Sprint allows Sorrent to participate in certain advanced
services (e.g. instant messaging, location based services), Sorrent will comply with Sprints
Wireless Application Manager (WAM) standards, including any applicable application programming
interfaces (APIs). Sorrent will coordinate with Sprint for the installation of new versions,
releases, and fixes
***** The omitted portions of this exhibit have been filed with the Securities and Exchange
Commission pursuant to a request for confidential treatment under Rule 406 promulgated under
the Securities Act of 1933.
|
SPRINT SPECTRUM L.P. CONFIDENTIAL INFORMATION
|
|
Page 9
|
to the operating system and system software, as well as the installation of any new
hardware. Sorrent will provide at least 72 hours prior notice of these changes to Sprint.
13. DISPUTE RESOLUTION
13.1 Waiver of Jury Trial. Each party waives its right to a jury trial in any court action
arising between the parties, whether under this Agreement or otherwise related to this Agreement,
and whether made by claim, counterclaim, third party claim or otherwise. The agreement of each
party to waive its right to a jury trial will be binding on its successors and assigns.
13.2 Governing Law. This Agreement and the rights and obligations of the parties are governed by
the substantive and procedural laws of the state of Kansas, without regard to any conflict of laws
principles. This Agreement will not be governed or interpreted in any way by referring to any law
based on the Uniform Computer Information Transactions Act (UCITA), even if that law is adopted in
Kansas.
13.3 Forum Selection; Attorneys Fees.
Except to the extent necessary for either party to
enforce indemnity or defense obligations under this Agreement, any court proceeding brought by
either party must be brought, as appropriate, in Kansas District Court located in Johnson County
Kansas, or in the United States District Court for the District of Kansas in Kansas City, Kansas.
Each party agrees to personal jurisdiction in either court. The prevailing party in any formal
dispute will be entitled to reasonable attorneys fees and costs (including reasonable expert fees
and costs), unless the prevailing party rejected a written settlement offer that exceeds the
prevailing partys recovery. The parties agree to continue performance during the pendency of any
dispute, unless this Agreement is terminated under Section 4.3.
14. GENERAL
14.1 Notices.
Unless otherwise agreed, notices provided under this Agreement must be in writing
and delivered by certified mail (return receipt requested), hand delivery, or by a reputable
overnight carrier service. Notices to Sprint must be sent to the following addresses: (a) Sprint
PCS Wireless Data Services, Attn: Director, Consumer Marketing, Mailstop KSOPHI0402, 6130 Sprint
Parkway, Overland Park, Kansas 66251; and (b) Sprint Law Department, Attn: General Attorney -
Procurement, Mailstop KSOPHN0312, 6450 Sprint Parkway, Overland Park, Kansas 66251. Notices to
Sorrent must be sent to the address shown in the signature block of this Agreement for Sorrent.
Notices will be considered given on the day the notice is received.
14.2 Assignment.
Sprint may assign any of its rights or obligations or this Agreement to any Sprint
Affiliate without the consent of Sorrent. Sorrent may assign any of its rights or obligations or
this Agreement to any entity that acquires substantially all of Sorrents assets related to the
subject matter of this Agreement without the consent of Sprint, provided that such entity is not a
direct competitor of Sprint. Otherwise, neither party may assign any of its rights or obligations
or this Agreement without the prior written consent of the other party.
14.3 Waiver; Severability; Remedies.
The waiver of a breach of any term of this Agreement will not
constitute the waiver of any other breach of the same or any other term. To be enforceable, a
waiver must be in writing signed by an authorized representative of the waiving party. If any
provision of this Agreement is held to be unenforceable, the remaining provisions will remain in
effect and the parties will negotiate in good faith a substantively comparable enforceable
provision to replace the unenforceable provision. All rights and remedies of the parties, in law
or equity, are cumulative and may be exercised concurrently or separately. The exercise of one
remedy will not be an election of that remedy to the exclusion of other remedies.
14.4 Independent Contractor; Non-Exclusive Relationship; Survival.
Sorrent and Sorrent
personnel are independent contractors for all purposes and at all times. This Agreement does not
create an exclusive relationship between the parties except to the extent specifically provided for
in this Agreement. Nothing in this Agreement will be deemed to be a restriction on either partys
ability to freely compete or to enter into partnering relationships with other entities. Numbered
provisions 4.2, 6., 8., 10., 12., 14., and 15.4 will survive the termination or expiration of this
Agreement, in addition to any other provisions that by their content are intended to survive the
performance, termination, or expiration of this Agreement.
14.5
Miscellaneous.
This Agreements benefits do not extend to any third party, including Sprint
customers or Users, unless expressly stated in this Agreement. The headings in this Agreement are
for convenience only and will not affect the meaning or interpretation of this Agreement. Because
the parties actively negotiated this Agreement, it will not be construed against either party due
to authorship. This Agreement, together with any exhibits, sets forth the entire understanding of
the parties as to the subject matter of this Agreement and supersedes all prior agreements,
discussions, and correspondence pertaining to the subject matter of this Agreement. Any provision
contained on a partys web site, preprinted on any order, invoice, statement, or other document
issued by either party, or
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SPRINT SPECTRUM L.P. CONFIDENTIAL INFORMATION
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Page 10
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contained in any shrinkwrap or clickwrap agreement will have no force or effect if that
provision conflicts with the terms of this Agreement. This Agreement may not be amended or
modified except in writing signed by an authorized representative of each party. If there is an
inconsistency between the terms of this Agreement and those of any other oral or written agreement
between the parties, the terms of this Agreement will control.
15. INCENTIVE-BASED GAMES
15.1 Right to Reject Enhancements and Review Game Rules.
Incentive-based Game means any game of
chance or game of skill as defined under applicable law, including, without limitation, contests
and sweepstakes. Sorrent will advise Sprint PCS in writing (pursuant to section 14.1) of any new
Incentive-based Game that Sorrent proposes to add to the Sorrent Services, or of any modification
to a then-existing Incentive-based Game (each a Gaming Change). Sprint PCS may reject a proposed
Gaming Change if Sprint PCS, in its sole discretion, determines that the Gaming Change could: (i)
subject Sprint PCS to any laws related to the regulation of gaming with adverse consequences; or
(ii) be interpreted as Sprint PCS sponsoring, offering, promoting, soliciting or otherwise
advancing gaming in violation of applicable law. In addition, Sprint PCS has the right to review
all rules and eligibility requirements for each Incentive-based Game and Gaming Change. The
parties will attempt in good faith to mutually agree on these rules and eligibility requirements.
But if the parties cannot agree on the rules or eligibility requirements, Sprint PCS may prohibit
the Incentive-based Game or Gaming Change from being included on the Sprint PCS Services.
15.2 No Sponsorship; Sorrent Actions; Notification of Legal Developments.
Sorrent is the sole
sponsor of all Incentive-based Games that may be included in the Sorrent Services. None of the
activities contemplated in this Agreement are intended to be construed as Sprint PCS sponsoring,
offering, promoting, soliciting or otherwise advancing the Incentive-based Games sponsored by
Sorrent. Sorrent will not to take, negligently, knowingly or intentionally, any action that
could: (i) subject Sprint PCS to any laws related to the regulation of gaming with adverse
consequences; or (ii) be interpreted as Sprint PCS sponsoring, offering, promoting, soliciting or
otherwise advancing gaming in violation of applicable laws. Sorrent will promptly notify Sprint PCS
in writing if Sorrent becomes aware of any factual, judicial, regulatory or legislative development
that could: (i) subject Sprint PCS to any laws related to the regulation of gaming; or (ii) be
interpreted as Sprint PCS sponsoring, offering, promoting, soliciting or otherwise advancing gaming
in violation of applicable laws.
15.3
Right to Terminate; Indemnification.
Sprint PCS may, at any time and without liability,
terminate this Agreement with 10 days prior written notice to Sorrent, if Sprint PCS determines, in
its sole discretion, that performance of any of its obligations under this Agreement has or could:
(i) subject Sprint PCS to any laws related to the regulation of gaming with adverse consequences;
or (ii) be interpreted as Sprint PCS sponsoring, offering, promoting, soliciting or otherwise
advancing gaming in violation of applicable laws. Sorrent, at its own expense, will indemnify and
defend the Sprint PCS Indemnitees (as defined above) from and against all Damages arising out of a
claim against a Sprint PCS Indemnitee related to Sorrents failure to comply with the requirements
of this Section 15 (Incentive Based Games).
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SPRINT SPECTRUM L.P. CONFIDENTIAL INFORMATION
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Page 11
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15.4 Compliance with Laws.
Sorrent warrants that throughout the Term: (i) all Sorrent
Services containing Incentive-based Games, whether or not provided under a Sorrent brand name,
will strictly comply with all applicable United States federal, state and local laws,
regulations and ordinances, including, registration and bond posting requirements, rules and
other disclosure requirements; and (ii) Sorrent will either (A) permit only legal residents of
the United States to claim prizes or otherwise become winners of its Incentive-based Games or
(B) disable non-United States-based Users from being able to register for Incentive-based Games.
In addition, Sorrent will, at its expense, provide a free alternative means of entry for all
Incentive-based Games in which prizes are awarded, excluding games which the parties mutually
agree are games of skill, including, without limitation, an internet site that can be accessed
by anyone and that does not have any conditions to play. For example, to play the
Incentive-based Game in which prizes are awarded on an internet site, the player will not be
required to: (i) subscribe to a wireless telecommunications service; or (ii) be a member of a
club or other organization that requires the payment of fees or other consideration. If (i) the
parties are unable to mutually agree that a game is a game of skill and (ii) Sorrent does not
plan to offer an alternative means of entry to the game, Sorrent agrees that the game will not
be offered via the Sprint Wireless Network.
SIGNED:
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Sprint Spectrum L.P.
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Sorrent, Inc.
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Signature:
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/s/ Jeff Hallock
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Signature:
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/s/ Paul Zuzelo
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Print Name:
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JEFF HALLOCK
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Print Name:
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Paul Zuzelo
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Title:
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SR. DIRECTOR
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Title:
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Exec. V.P. operations & CFO
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Date:
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3/31/03
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Date:
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March 28, 2003
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Address:
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1810 Gateway Dr. Suite 200 San Mateo CA 94404
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SPRINT SPECTRUM L.P. CONFIDENTIAL INFORMATION
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Page 12
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Exhibit A
Premium Services Information
1. Address
Sorrents Address: Sorrent Inc., 1810 Gateway Drive, Suite 200, San Mateo, CA 94404
Remittance Address (if different from above):
2. Sorrents Primary Contact for Settlements
Name (Required): Paul Zuzelo
Title (Optional): Exec. V.P.Operations & CFO
Work Phone Number (Required): 650-571-1550 x*****
Mobile Phone Number (Optional):
Fax Number (Optional): 650-571-5698
Email Address (Required): *****
3. Sorrents Secondary Contact for Settlements
Name (Required): *****
Title (Optional):
Work Phone Number (Required): 650-571-1550 x*****
Mobile Phone Number (Optional):
Fax Number (Optional): 650-571-5698
Email Address (Required): *****
4. IRS Information
Sorrent name as it appears on U.S. federal tax return (if different from name specified in
the first paragraph of the Agreement): Sorrent address as it appears on U.S. federal tax return (if
different from first address specified in Section 1 of this Exhibit A):
Employer Identification Number (EIN): 91-2143667
Social Security Number (for sole proprietorships or individuals only):
Mark the applicable line that describes the tax structure of Sorrents business:
___ Sole Proprietorship
___ Partnership
XX Corporation
For corporations and other exempt entities, mark the applicable reason for Form 1099 reporting
exemption (this does not apply to partnerships, sole proprietorships, or individuals):
XX Entity is a corporation
___ Exempt from tax under Section 501 (a) or other Internal Revenue Code exemption
___ Entity is a federal, state or local government agency or instrumentality
___
Nonresident alien individual or foreign corporation, partnership, estate or trust.
***** The omitted portions of this exhibit have been filed with the Securities and Exchange
Commission pursuant to a request for confidential treatment under Rule 406 promulgated under
the Securities Act of 1933.
SPRINT SPECTRUM L.P. CONFIDENTIAL INFORMATION
Page 13
FIRST AMENDMENT TO
WIRELESS INTERNET SERVICE AGREEMENT
BETWEEN
SPRINT SPECTRUM L.P.
AND
GLU MOBILE, INC.
This First Amendment (the First Amendment) to the Wireless Internet Service Agreement (the
Agreement) between Sprint Spectrum L.P. (Sprint) and Glu Mobile, Inc. (Glu) is made and
entered into by the parties as of January 1, 2006 (the First Amendment Effective Date). All
capitalized terms not otherwise defined herein will have the meanings ascribed to them in the
Agreement.
BACKGROUND
A.
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Sprint and Sorrent, Inc. entered into the Agreement on March 28, 2003.
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B.
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Sorrent, Inc. changed its name to Glu Mobile Inc effective as of June 2, 2005.
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C.
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The parties desire to amend the Agreement as set forth in this First Amendment.
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SUBSTANTIVE PROVISIONS
1.0
|
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The parties agree to add the following definitions to Section 1, Definitions:
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1.1
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* * * * *
means to * * * * *.
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1.2
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* * * * *
means * * * * * .
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Page 1 of 3
Confidential Information
Sprint and Glu First Amendment Execution Copy
2.0
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The parties agree to enter into this First Amendment, with terms as follows:
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2.1
|
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The term of this Amendment shall be twenty-six (26) weeks, beginning on the First
Amendment Effective Date and ending twenty-six (26) weeks after the First Amendment
Effective Date (the Term of the First Amendment).
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2.2
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Glu shall pay Sprint $***** no later than *****, for which Sprint shall
invoice Glu. Sprint will utilize this fund to establish a Co-op Marketing Fund, the
intent of which is to benefit both Glu and Sprint Examples of uses for the Co-op Marketing
Fund may include the development of alternative distribution channels, marketing research,
and the purchase of Early Handsets, Upon reasonable request by Glu, Sprint shall supply
adequate verification of the use of such Co-op Marketing Funds in direct support of Glu
and Sprint.
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2.3
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Glu agrees to spend $***** in advertising to promote the Sprint brand in
conjunction with Glu mobile game advertising and/or marketing during the Term of the First
Amendment. Glu will work with Sprint to determine the best, most creative and effective
way to use these funds.
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2.4
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Sprint agrees to *****
during the Term of the First Amendment.*****
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2.5
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***** during the Term of the First Amendment. *****
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2.6
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Sprint shall ***** during the Term of the First Amendment.
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3.0
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This First Amendment may be signed in counterparts, by facsimile or otherwise, each of which
will be deemed an original and all of which together will constitute one and the same
document.
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4.0
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Except as specifically changed in this First Amendment, all terms and conditions of the
Agreement remain unchanged. This First Amendment sets forth the entire understanding of the
parties as to the subject matter of this First Amendment and supersedes all prior agreements,
discussions, and correspondence pertaining to the subject matter of
this First Amendment. In
the event of an express conflict between the terms and conditions of this First Amendment and
the terms and conditions of the Agreement, the terms and conditions of this First Amendment
will control.
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***** The omitted portions of this exhibit have been filed with the Securities and Exchange
Commission pursuant to a request for confidential treatment under Rule 406 promulgated under
the Securities Act of 1933.
[Signature Page Follows]
Page 2 of 3
Confidential Information
Sprint and Glu First Amendment Execution Copy
SIGNED:
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Sprint Spectrum L.P.
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Glu Mobile Inc.
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/s/
Thad Langford
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/s/ Paul Zuzelo
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(signature)
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(signature)
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Thad Langford
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Paul Zuzelo
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Print Name
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Print Name
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3/20/2006
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3/17/06
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Date
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Date
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Page 3 of 3
Confidential Information
Sprint and Glu First Amendment Execution Copy
SECOND AMENDMENT TO
WIRE-LESS INTERNET SERVICE AGREEMENT
BETWEEN
SPRINT SPECTRUM L.P.
AND
GLU MOBILE INC.
This Second Amendment (the Second Amendment) to the Wireless Internet Service Agreement (the
Agreement) between Sprint Spectrum L.P. (Sprint) and Glu Mobile Inc. (Glu) is made and
entered into by the parties as of August 28, 2006 (the Second Amendment Effective Date). All
capitalized terms not otherwise defined herein will have the meanings ascribed to them in the
Agreement.
BACKGROUND
A.
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Sprint and Sorrent Inc. entered into the Agreement on March 28, 2003.
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B.
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Sorrent Inc. changed its name to Glu Mobile Inc. effective as of June
2,
2005.
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C.
|
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Sprint and Glu entered into a First Amendment to the Agreement on January 1, 2006 and the
parties desire to further amend the Agreement as set forth in this Second Amendment.
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SUBSTANTIVE FROVISIONS
1.0
|
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The parties agree to add the following definitions to Section 1, Definitions;
|
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1.1
|
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Adjustment
means a refund or reduction to a charge for Premium Services
reasonably made by Biller at a Users request based on performance or other issues
arising from the Premium Services. Only Biller is authorized to make Adjustments to
Premium Services charges.
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1.2
|
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Billed Revenue
is defined as the charges,
consistent with Section 3.2 B, that
Biller invoices to Users (excluding any applicable transaction taxes) for the use of
Premium Services net of all Adjustments.
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1.3
|
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Biller
means Sprint, or as applicable, its billing agent, the Sprint
Affiliates or Sprints private label customers who may invoice Users for the use of
Premium Services.
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1.4
|
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Enhancement
means any change, modification, update or enhancement to the Glu
Mobile Services.
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1.5
|
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Game
means a software program utilizing Java programming language that is a
game.
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Page 1 of 3
Confidential Information
Sprint and Glu Second Amendment Execution Copy
|
1.6
|
|
Java Application
means a software program utilizing Java programming language that is not a game.
|
The parties agree to enter into this Second Amendment, with terms as follows:
2.0
|
|
Section 2.1 of the Agreement shall be deleted entirely and replaced by the following:
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This Agreement is for the provision of Glu Mobile Services to Users with Handsets via
transmission by Sprint across the Sprint Wireless Network. Glu Mobile may make Enhancements
if: (a) the Enhancement complies with all requirements in this Agreement; and (b) the Glu
Mobile Services continue to include the minimum applications described below. The Glu
Mobile Services for Handsets will be provided in formats as may be required by Sprint as
specified in the Sprint style guide or as may be developed by Glu Mobile and approved by
Sprint during the Term. The Glu Mobile Services will include, at a minimum, the following
applications:
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Games to include Dura Trax Mobile RC, Wild 8 Ball and additional titles TBD
|
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World Series of Poker Player Advisor Java Application (WSOP Java Application),
|
3.0
|
|
Section 3.2 C of the Agreement shall be deleted entirely and replaced with the following:
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Except as otherwise provided In this Section 3.2 C, Glu Mobile will receive *****% of the
Billed Revenue for all Premium Services, including without limitation Games (net of
Adjustments that are attributable to Glu Mobile), and Sprint will receive *****% of the Billed
Revenue for all Premium Services, including without limitation Games. For the WSOP Java
Application, Glu Mobile will receive *****% of the Billed Revenue (net of Adjustments that are
attributable to Glu Mobile) and Sprint will receive *****% of the Billed Revenue.
Notwithstanding the above, on or following the date which is six (6) months from the date of
the commercial launch of the WSOP Java Application, (i) the parties may jointly review Glu
Mobiles marketing activity for the six (6) months beginning on the date of the commercial
launch of the WSOP Java Application, and Glu Mobiles proposed marketing activity for the
next six (6) months, for the WSOP Java Application and should Sprint reasonably determine in
good faith that such marketing activity and success is significantly below the parties
joint expectations at the commercial launch of the WSOP Java Application, then Sprint shall
notify Glu Mobile of such determination. Should Sprint so notify Glu Mobile, beginning from
the date of receipt by Glu Mobile of such notice, and continuing through the end of the Term
of the Agreement, Glu Mobile will receive *****% of the Billed Revenue (net of Adjustments that
are attributable to Glu Mobile) and Sprint will receive *****% of the Billed Revenue for the
WSOP Java Application. However, if Glu Mobiles revenue share is adjusted to *****% of Billed
Revenue, upon request from Glu Mobile, Sprint shall immediately remove the WSOP Java
Application and cease all sales of the WSOP Java Application.
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***** The omitted portions of this exhibit have been filed with the Securities and Exchange
Commission pursuant to a request for confidential treatment under Rule 406 promulgated under
the Securities Act of 1933.
Page 2 of 3
Confidential Information
Sprint and Glu Second Amendment Execution Copy
\
4.0
|
|
Notwithstanding anything to the contrary contained in Section 4.1 of the Agreement, Glu
Mobile and Sprint hereby agree to extend and renew the Agreement for the period through and
including August 28, 2007 (a Renewal Term within the meaning of the Agreement).
Thereafter, this Agreement will automatically extend on a monthly basis until terminated by
either party with at least 30 days prior written notice.
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5.0
|
|
This Second Amendment may be signed in counterparts, by facsimile or otherwise, each of which
will be deemed an original and all of which together will constitute one and the same
document.
|
|
6.0
|
|
Except as specifically changed in this Second Amendment, all terms and conditions of the
Agreement remain unchanged. This Second Amendment sets forth the entire understanding of the
parties as to the subject matter of this Second Amendment and supersedes all prior
agreements, discussions, and correspondence pertaining to the subject matter of this Second
Amendment. In the event of an express conflict between the terms and conditions of this
Second Amendment and the terms and conditions of the Agreement, the terms and conditions of
this Second Amendment will control.
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SIGNED:
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Sprint Spectrum L.P.
|
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|
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Glu Mobile Inc.
|
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|
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/s/ Paul S. Reddick
|
|
|
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/s/ Albert A. Pimentel
|
|
|
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|
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(signature)
|
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|
|
(signature)
|
|
|
|
|
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Paul S. Reddick
|
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|
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Albert A. Pimentel
|
|
|
|
|
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Print Name
|
|
|
|
Print Name
|
|
|
|
|
|
September 21, 2006
|
|
|
|
August 28, 2006
|
|
|
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Date
|
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Date
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Page 3 of 3
Confidential Information
Sprint and Glu Second Amendment Execution Copy
THIRD AMENDMENT TO
WIRELESS INTERNET SERVICE AGREEMENT
BETWEEN
SPRINT SPECTRUM L.P.
AND
GLU MOBILE INC.
This Third Amendment (the Third Amendment) to the Wireless Internet Service Agreement (as
amended, the Agreement) between Sprint Spectrum L.P. (Sprint) and Glu Mobile, Inc. (Glu) is
made and entered into by the parties as of November 30, 2006 (the Third Amendment Effective
Date). All capitalized terms not otherwise defined herein will have the meanings ascribed to them
in the Agreement.
BACKGROUND
A. Sprint and Sorrent, Inc. entered into the Agreement on March 28, 2003.
B. Sorrent, Inc. changed its name to Glu Mobile Inc. effective as of June 2, 2005.
C. Sprint and Glu entered into a First Amendment to the Agreement on January 1, 2006 and a Second
Amendment to the Agreement on August 28, 2006, and the parties desire to further amend the
Agreement as set forth in this Third Amendment.
SUBSTANTIVE PROVISIONS
1.0
|
|
The parties agree to enter into this Third Amendment, with terms as follows:
|
|
1.1
|
|
The term of this Amendment shall be twenty-six (26) weeks, beginning on July 1,
2006 and ending December 31, 2006 (the Term of the Third Amendment).
|
|
|
1.2
|
|
Glu shall pay Sprint $***** no later than *****, for which
Sprint shall invoice Glu. Sprint will utilize this fund for co-op marketing purposes
which may include marketing, marketing research, hardware development, contactor
support and the purchase of Early Handsets from device manufacturers.
|
|
|
1.3
|
|
Sprint agrees to ***** during the Term of the Third
Amendment. *****.
|
***** The omitted portions of this exhibit have been filed with the Securities and Exchange
Commission pursuant to a request for confidential treatment under Rule 406 promulgated under
the Securities Act of 1933.
Page 1 of 2
Confidential Information
Sprint and Glu Third Amendment Execution Copy
|
1.4
|
|
Sprint will make reasonable efforts to ***** during the Term of the Third
Amendment.*****.
|
|
|
1.5
|
|
Sprint shall make reasonable efforts to ***** during the Term of the Third
Amendment.
|
2.0
|
|
This Third Amendment may be signed in counterparts, by facsimile or otherwise, each of which
will be deemed an original and all of which together will constitute one and the same
document.
|
|
3.0
|
|
Except as specifically changed in this Third Amendment, all terms and conditions of the
Agreement remain unchanged. This Third Amendment sets forth the entire understanding of the
parties as to the subject matter of this Third Amendment and supersedes all prior agreements,
discussions, and correspondence pertaining to the subject matter of this Third Amendment. In
the event of an express conflict between the terms and conditions of this Third Amendment and
the terms and conditions of the Agreement, the terms and conditions of this Third Amendment
will control.
|
SIGNED:
|
|
|
|
|
Sprint Spectrum L.P.
|
|
|
|
Glu Mobile Inc.
|
|
|
|
|
|
/s/ Paul S. Reddick
|
|
|
|
/s/ Albert A. Pimentel
|
|
|
|
|
|
(signature)
|
|
|
|
(signature)
|
|
|
|
|
|
Paul S. Reddick
|
|
|
|
Albert A. Pimentel
|
|
|
|
|
|
Print Name
|
|
|
|
Print Name
|
|
|
|
|
|
12/8/06
|
|
|
|
12/05/06
|
|
|
|
|
|
Date
|
|
|
|
Date
|
***** The omitted portions of this exhibit have been filed with the Securities and Exchange
Commission pursuant to a request for confidential treatment under Rule 406 promulgated under
the Securities Act of 1933.
Page 2 of 2
Confidential Information
Sprint and Glu Third Amendment Execution Copy
Exhibit 10.30
***** CONFIDENTIAL TREATMENT REQUIRED
Digital Item License and Distribution Agreement
DIGITAL ITEM LICENSE AND DISTRIBUTION AGREEMENT
This Digital Item License and Distribution Agreement (with its Exhibits, the Agreement), is made
and entered into as of August 15,2004 (the Commencement Date) by and between Nextel Operations,
Inc., a Delaware corporation, with offices at 2001 Edmund Halley Drive, Reston, Virginia 20191 (Nextel), on behalf of itself and its Affiliates, as defined below, and Sorrent, Inc., a California
corporation, with offices at 1810 Gateway Drive, Suite 200, San Mateo, CA 94404 (Company). Nextel
and Company may be referred to individually as a Party and collectively as the Parties.
WHEREAS,
Nextel, together with various subsidiaries and affiliated companies, owns and/or
operates systems to provide wireless telecommunications (the Systems), and provides
access to such Systems to its customers (Nextel User) over handsets and other devices
(Devices);
WHEREAS,
Company has developed and/or has the right to license or sublicense specific
Digital Items (as defined in Section 1) to be made available to Nextel Users.
WHEREAS,
Nextel desires to license certain Digital Items from Company on a non-exclusive
basis for distribution to Nextel Users through various Distribution Channels (as defined
in Section 1), and Company desires to grant such a license to Nextel;
WHEREAS,
once certified by Nextel as a Trusted Publisher (as defined in Section 1), Company
may bypass certain testing requirements and self-publish to certain Distribution Channels;
NOW THEREFORE,
for good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties agree as follows:
1. DEFINITIONS.
In addition to as defined herein:
a.
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Affiliate of a Party shall mean any entity that controls, is controlled by, or is
under common control with, such Party. For the purposes of clarification, Nextels
Affiliates shall have the right to make available the Digital Items via Devices and
distribution channels in the same manner as Nextel is permitted to do so hereunder,
subject, in each such instance, to the terms of this Agreement, including the payment
obligations set forth in Exhibit E-1 and/or E-2, as applicable.
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b.
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Boost Mobile shall mean Boost Mobile, LLC, a Delaware limited liability
corporation that is an Affiliate of Nextel.
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c.
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Boost Mobile Trusted Publisher shall mean the certification that may be given to
Company by Boost Mobile upon satisfaction of the requirements contained in Section 6
enabling Company to bypass certain testing requirements and self-publish to certain
Distribution Channels.
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d.
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Boost User shall mean a customer of the Systems through Boost Mobile-branded Devices.
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e.
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Change shall include, but shall not be limited to: (i) Any alteration of the manner
in which a Digital Item operates with the Systems or Devices; (ii) any change to the call
flow or the amount of data transferred to and from Systems by a Digital Item, including the
time associated with such data transfer; (iii) any material change or upgrade of a Digital
Item or the features or functionalities thereof; or (iv) any new release, version bug fixes
or software patches to a Digital Item.
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f.
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Demonstration Version shall mean the version of a Digital Item that has limited
functionality, requiring subscription or further licensing to be fully functional, and may
be made available at no charge to Nextel Users. Demonstration Versions may be Local or
Network Aware. A Demonstration Version may be enabled as a Full Version upon subscriber
being billed for the Full Version.
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Glu
Mobile Inc. S-1
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*****
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The omitted portions of this exhibit have been filed with the Securities and Exchange
Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the
Securities Act of 1933.
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Nextel Confidential
Not for Distribution
1
Digital Item License and Distribution Agreement
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g.
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Derivative Device Group shall mean, for the purpose of the Payments to be made
pursuant to Exhibit E, Devices which are indistinguishable from each other from an
operational standpoint (i.e. i730, i733 and 1736, Devices), as identified by Nextel.
Derivative Device Groups are subsets of Device Groups.
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h.
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Device Group shall mean handsets or devices that have the same or similar virtual
machine (VM), screen color, screen resolution and processor, as further described in the
Trusted Publisher Guide.
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i.
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Digital Items shall include, but shall not be limited to, ring tones, ring
tunes, wallpapers, screen savers, games, audio files, MP3 files, video clips and streaming
video files.
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j.
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Distribution Channel shall mean the channels or methods for distribution of
the Digital Items, including but not limited to those listed in Exhibit D.
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k.
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Full Version shall mean the version of a Digital Item which is fully functional.
Full Versions include Local and Network Aware Digital Items.
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I.
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Local Digital Item shall mean a Digital Item that has no client/server
communication capabilities from within the MIDIet (J2ME application).
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m.
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Network Aware Digital Item shall mean a Digital Item that can perform
client/server communication whether or not an integral feature/functionality. Includes all
protocols, including HTTP and various types of messaging from within the MIDIet (J2ME
application).
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n.
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Nextel User shall have the meaning set forth in the first whereas clause in this
Agreement and shall include Boost Users except as otherwise provided in Exhibits D-1, E-1,
and l-1.
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o.
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Preload shall mean the embedment or pre-installation of Digital Items on Devices.
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p.
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Trusted Publisher shall mean the certification that may be given to Company by Nextel
upon satisfaction of the requirements contained in Section 6, enabling Company to bypass certain
testing requirements and self-publish to certain Distribution Channels.
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q.
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User Data shall mean any information about an existing or Prospective Nextel User
that Company obtains in any manner pursuant to this Agreement. Without limiting the
foregoing, User Data shall include any information that relates to (i) a Nextel Users
identity, account information, billing or credit information; (ii) Nextel Users usage of
Nextels services, the Systems or the Digital Items and all information derived from such
usage (including but not limited to page views, numbers of page views, and purchase
information); (iii) information about the geographic location of Devices or Nextel Users
(Location Information); and (iv) any information that Company obtains once a visitor to
Companys website clicks on a link that directs that visitor to any website of Nextel or
any Affiliate of Nextel (Prospective Nextel User).
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2. LICENSE GRANT.
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a.
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License. Company grants to Nextel and its Affiliates, during the Term, a
nonexclusive, worldwide, royalty-free, fully paid-up right and license (with the right to
sublicense) to:
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i)
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Use, copy, store, test and evaluate the Digital Items;
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ii)
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Modify and create derivative works from the Digital Items solely to support billing
for and distribution of such Digital Items;
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iii)
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Publicly display, perform, market, advertise, promote and demonstrate the Digital
Items;
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iv)
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Distribute the Digital Items, copies thereof and/or modified or derivative
works thereof to and through the Distribution Channels; and
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v)
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Provide a right to use the Digital
Items, copies thereof and/or modified or derivative works thereof to one or more
Nextel Users to and through the Distribution Channels.
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Nextel Confidential
Not for Distribution
2
Digital Item License and Distribution Agreement
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b.
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Acknowledgement. Company acknowledges and agrees that:
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i)
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Nextel (or its agents or Affiliates) may present to Nextel Users (to whom a Digital
Item is distributed) an end user license agreement between Company and such Nextel User (to
which Nextel shall not be a party and to which Company shall be bound), which may
contain provisions concerning: Restricting use of the Digital Item to the Nextel Users
own use solely in connection with the Devices; prohibiting reverse engineering of the
Digital Item; indicating copyright in the Digital Item; and requiring the Nextel User
to cease using the Digital Item if the Nextel User fails to comply with the terms and
conditions of such license agreement.
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ii)
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Nextel Users to whom a Digital Item is licensed and/or distributed may use
the Digital Item on a worldwide basis for the term indicated in the license to the
Nextel User, and such Nextel Users shall have the right to continue to use the Digital
Item notwithstanding any termination or expiration of this Agreement.
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iii)
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If the Digital Item license contains a perpetual right to refresh the
Digital Item (Refresh Digital Item), Nextel shall have the right to continue to
license and/or distribute such Refresh Digital Item to such Nextel Users,
notwithstanding any termination or expiration of this Agreement.
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3.
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DESCRIPTION OF DIGITAL ITEMS.
The Digital Items and their features and functionalities are
described in Exhibit A-1 and/or Exhibit A-2 (and such other consecutively numbered Exhibit As
as may be added to this Agreement from time to time upon the mutual agreement of the Parties),
or shall subsequently be described in a form substantially similar to and containing
substantially the same information as listed in Exhibit A-1 and/or Exhibit A-2, such form to
be received by Company following submission of a Digital Item to Nextel. Upon Nextels
request, and without limitation of the warranties provided by Company under this Agreement,
Company shall supply evidence of intellectual property rights to Digital Items and/or identify
all parties who own or hold licenses to intellectual property associated with the Digital Item
and any other information necessary to respond to any third party intellectual property
infringement claims.
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4. AUTHORIZATION/ CHANGES.
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a.
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Authorization. On and after but not before the availability, through a Distribution
Channel, of a Digital Item to Nextel Users, Company, Nextel and its Affiliates are hereby
authorized to market or present such Digital Item as being compatible with the Systems
and/or the Devices in accordance with the terms and conditions of this Agreement.
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i)
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This Agreement does not authorize Company to market and/or present any
other application or digital item (or Change thereto) as compatible with the Systems
and/or Devices other than those that meet the terms and conditions of this Agreement
(Unauthorized Digital Item), even if such Unauthorized Digital Item purports to be
compatible or usable with Nextel products or services.
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ii)
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In the event Nextel or an Affiliate of Nextel has knowledge of Company
marketing and/or presenting an Unauthorized Digital Item, or Nextel or an Affiliate of
Nextel determines that a Digital Item is causing or is likely to cause disruption or
interference with the Systems, Nextel and such Affiliate has the right, in its sole
discretion, not to be unreasonably exercised, to immediately: (1) Disable access to the
Unauthorized Digital Item or Digital Item without notice; (2) remove the Unauthorized
Digital Item or Digital Item from a Distribution Channel without notice; (3) revoke
certification as a Trusted Publisher (and/or Boost Mobile Trusted
Publisher) without notice; and/or (4) terminate this Agreement upon written notice.
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b.
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Changes. Company shall provide to Nextel, Nextels Affiliates and Nextel Users, at no
charge, Changes to a Digital Item as become necessary, as arise out of issues identified by
Nextel during
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Nextel Confidential
Not for Distribution
3
Digital Item License and Distribution Agreement
acceptance testing, or as are necessary to meet Companys obligations under this
Agreement. Such Changes shall be tested in accordance with Exhibit B.
5.
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SUBMISSION AND TESTING.
Company shall follow the procedures for submission and testing of
Digital Items as contained in Exhibit B. Unless otherwise stated herein, Nextel and its
Affiliates shall have no obligation to accept, review, test or distribute any Digital Item.
Local Digital Items shall not have hidden or non-disclosed network aware functionality.
Company shall include a help section for every Digital Item, which shall include
instructions as well as Company customer care contact information (e.g., email address).
Digital Items shall also include an about section (or equivalent) that includes version (if
applicable) and copyright information.
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6. TRUSTED PUBLISHER AND BOOST MOBILE TRUSTED PUBLISHER.
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a.
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General. Upon satisfaction of the requirements concerning Trusted Publisher
certification contained in Exhibit C-1, and written notice from Nextel, in Nextels sole
discretion, of such certification, Company may be considered a Trusted Publisher, able to
bypass certain testing requirements of Exhibit B and distribute the Digital Items by
self-publishing to certain Distribution Channels pursuant to Exhibit D. Trusted Publisher
procedures are further described in the Trusted Publisher Guide (which shall be made
available to Company). Upon satisfaction of the requirements concerning Boost Mobile
Trusted Publisher certification contained in Exhibit C-2, and written notice from Boost
Mobile, in their sole discretion, of such certification, Company may be considered a Boost
Mobile Trusted Publisher, able to bypass certain testing requirements of Exhibit B and
distribute the Digital Items by self-publishing to certain Distribution Channels pursuant
to Exhibit D. Boost Mobile Trusted Publisher procedures are further described in the Boost
Mobile Trusted Publisher Guide (which shall be made available to Company).
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b.
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Nextel shall have sole discretion over whether to certify Company as a Trusted
Publisher, and such certification shall follow the procedures outlined in the Trusted
Publisher Guide. Certification of Company as a Trusted Publisher shall only be effective
upon written notification from Nextel. Nextel may revoke certification of a Company as a
Trusted Publisher at any time in its sole discretion, not to be unreasonably exercised,
without notice. If certification as a Trusted Publisher is revoked, Company shall not be
entitled to bypass certain testing and self-publish until such time Nextel reinstates
Companys Trusted Publisher status, in its sole discretion, or the Agreement terminates or
expires, whichever is sooner.
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c.
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Boost Mobile shall have sole discretion over whether to certify Company as a Boost
Mobile Trusted Publisher, and such certification shall follow the procedures outlined in
the Boost Mobile Trusted Publisher Guide. Certification of Company as a Boost Mobile
Trusted Publisher shall only be effective upon written notification from Boost Mobile.
Boost Mobile may revoke certification of a Company as a Boost Mobile Trusted Publisher at
any time in its sole discretion, not to be unreasonably exercised, without notice. If
certification as a Boost Mobile Trusted Publisher is revoked, Company shall not be
entitled to bypass certain testing and self-publish until such time as Boost Mobile
reinstates Companys Boost Mobile Trusted Publisher status, in its sole discretion, or the
Agreement terminates or expires, whichever is sooner.
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7. ORDERING AND BILLING.
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a.
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Ordering. Except in the case of Preloaded Digital Items, the Digital Items shall be
ordered by Nextel Users via the Distribution Channels. Company acknowledges that Nextel
Users and may incur data charges to download and/or use a Digital Item must be provisioned
with a Nextel data rate plan or a Boost Mobile data rate plan.
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b.
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Billing. Nextel, an Affiliate of Nextel, and/or a third party service provider(s) for
Nextel or an Affiliate of Nextel shall bill Nextel Users for the Digital Items. Where
Company is involved in the process of billing Nextel Users for Digital Items, Company will
abide by all rules and requirements for billing
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Nextel Confidential
Not for Distribution
4
Digital Item License and Distribution Agreement
Nextel Users for the Digital Items, including but not limited to those requiring
presentation of all necessary notices and proper recording and posting of transactions.
8.
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DISTRIBUTION.
Distribution of the Digital Items to and through the Distribution Channels
shall occur as set forth in Exhibit D-1 and/or Exhibit D-2, as applicable. As further
described in Exhibit D-1 or Exhibit D-2, except for the distribution of Preload Digital Items,
which shall occur only upon the mutual agreement of the Parties, distribution of a Digital
Item to a particular Distribution Channel shall be at the sole discretion of Nextel or an
Affiliate of Nextel. Upon such distribution, Nextel or such Affiliate may notify Company of
the particular Distribution Channel. At any time in its sole discretion, not to be
unreasonably exercised, without notice, Nextel may disable or remove any Digital Item from any
Distribution Channel. Nextel may exercise its sole discretion for reasons including but not
limited to the following: Violation of the terms of this Agreement or of the Trusted Publisher
Guide; marketing of an Unauthorized Digital Item; disruption or interference with the Systems;
alleged or actual infringement of intellectual property rights of a third party; violation of
the SLAs or the Content Standards; underperformance of a Digital Item from a sales
perspective; or excessive care complaints regarding a Digital Item.
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9.
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PAYMENTS AND PRICING.
The Payments shall be made as set forth in Exhibit E. In no event shall
a Local Digital Item have a retail price below $***** (Minimum Local Digital Item Retail
Price). Otherwise, regarding pricing greater than the Minimum Local Digital Item Retail
Price, Company may suggest a retail price for a Digital Item and Nextel and its Affiliates may
accept such suggested retail price, however, Nextel and its Affiliates will retain complete
and sole discretion regarding the pricing of the Digital Items and their products and
services. Each Party shall be responsible for its own costs and expenses in performing its
obligations under this Agreement, and neither Party shall be entitled to reimbursement for
such costs or expenses from the other Party.
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10.
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CO-MARKETING.
Each Party shall perform its co-marketing obligations as set forth in Exhibit
F. Company agrees to treat Nextel and Boost Mobile as prominently as other similarly situated
carriers, wireless service providers or device manufacturers if a relationship with another
carrier, wireless service provider or device manufacturers is established.
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11. ADVERTISING.
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a.
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Company shall not, without Nextels prior written consent, cause or permit any
advertising to be served to or displayed on any Device of any Nextel User, and shall
ensure that no advertising is served to or displayed on any Device of any Nextel User.
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b.
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Splash Screen. Notwithstanding the foregoing, Company may serve an initial page while
the Digital Item is activated (Splash Screen) only (i) if in accordance with the
then-current guidelines provided by Nextel to Company; and (ii) after Company has received
prior written consent from Nextel for such Splash Screen. However, prior written consent
shall not be required where (iii) written consent has already been obtained for a
substantially similar Splash Screen; and (iv) such substantially similar Splash Screen
contains only the name of the Digital Item, Companys name and/or the name of the
developer or owner/original licensor of the Digital Item.
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12. SERVICE LEVEL AGREEMENTS AND CONTENT STANDARDS.
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a.
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Customer Care SLA. Company shall provide at its sole expense customer care to all
Nextel Users to whom a Digital Item is licensed as set forth in Exhibit G-1.
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b.
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Availability/ Hosting SLA. The Parties shall comply with the obligations concerning
operational issues as set forth in Exhibit G-2, and, where Company has hosting obligations
regarding a Network Aware Digital Item, Company shall comply with the hosting obligations
set forth in therein.
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c.
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Content Standards. Company shall comply with the content standards set forth in
Exhibit G-3 (Content Standards), or as may otherwise be provided by Nextel from time
to time.
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***** The omitted portions of this exhibit have been filed with the Securities and Exchange
Commission pursuant to a request for confidential treatment under Rule 406 promulgated under
the Securities Act of 1933.
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Nextel Confidential Not for Distribution
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5
Digital Item License and Distribution Agreement
13.
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POINTS OF CONTACT.
Company shall assign and maintain at all times during the Term the points
of contact set forth in Exhibit H attached hereto, which shall act as either the primary
liaison between Company and Nextel or the contact for the purpose of receipt of process.
Company shall notify Nextel of any changes to such points of contact in writing at least seven
(7) days prior to such change becoming effective.
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14.
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REPORTING.
The Parties shall provide reports as set
forth in Exhibit I-1 and/or
Exhibit I-2, as applicable.
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15. PRIVACY POLICIES AND USER DATA.
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a.
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User Data. All User Data is and will remain the exclusive property of Nextel or its
Affiliates except that data which Company obtains independently of this Agreement or its
relationship with Nextel. Company agrees that it shall collect, access, use, maintain,
disclose or share User Data only to the extent necessary to deliver its services or fulfill
its obligations under this Agreement. If Nextel Users become customers of Company
independent of the activities contemplated under this Agreement, nothing in this Agreement
shall restrict Companys use of information it obtains through such separate activities.
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b.
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Purging of Information. Unless preservation is required by law, Company shall
permanently purge communication content that is generated by Nextel Users by use of the
Digital Items (including but not limited to chat room discussion), such communications
content obtained and stored by Company, when no longer necessary for the Nextel Users
purposes.
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c.
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Privacy Laws. Companys collection, access, use, security, and disclosure of User Data
shall comply with all applicable laws, rules and regulations, including without limitation
the requirements of 47 U.S.C. § 222 and the Federal Communication Commissions implementing
Customer Proprietary Network Information rules and regulations (the CPNI Rules), as may
be amended from time to time. Company shall at all times perform its obligations hereunder
in such a manner as not to cause Nextel to be in material violation of any applicable laws
or regulations.
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d.
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Security. Company shall employ administrative, physical, and technical safeguards that
prevent the unauthorized collection, access, use, and disclosure of User Data (Security).
With respect to User Data, Company shall (i) provide at least as much Security as it does
for its most highly sensitive and secret information, but in no event less than the highest
standards of best industry practice for information security, as they may change from time
to time (the Security Standard); (ii) encrypt, for
transport and storage,
all
User Data
in a manner that meets or exceeds the Security Standard; (iii) train its employees, agents,
and contractors who have a need to access and use User Data for the purposes enumerated
herein (each an Authorized Employee) on privacy, security, and confidentiality
obligations hereunder; (iv) ensure that only Authorized Employees may access User Data, on
a need-to-know basis, and only if such Authorized Employees are bound in writing by
confidentiality obligations that are no less stringent than those contained in this
Agreement; and (v) logically or physically separate User Data from other data, without
commingling any data that is not necessary for the fulfillment of Companys obligations
under this Agreement. During the term of each Authorized Employees employment by Company,
Company shall at all times ensure that such Authorized Employee strictly abides by his/her
obligations hereunder and, after the termination of his/her employment, Company shall use
at least the same level of effort to enforce the Security obligations of such Authorized
Employee as Company uses to enforce such obligations with respect to its own similarly
confidential information, provided that Company shall not use less than reasonable efforts
in such enforcement.
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e.
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Customer Contact. Company may only contact a Nextel User to deliver the services or
products contemplated under this Agreement. Notwithstanding any other provision in this
Agreement, Company shall not use User Data to contact a Nextel User through a Nextel
handset in any manner (including but not limited to voice or text messaging) unless the
Nextel User gives prior opt-in
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Nextel Confidential Not for Distribution
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6
Digital Item License and Distribution Agreement
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consent to receive such communications. For purposes of clarification, Company is
authorized to utilize text messages or short messaging service (SMS) to contact Nextel
Users via the Nextel handset only if (1) such contact is required as part of providing a
Digital Item to a Nextel User (e.g.. interactive games); (2) the message transmitted by
Company does not include any advertisement, solicitation or commercial promotion; and (3)
Company obtains Users informed opt-in consent before Company transmits such message. Such
opt-in consent shall only be valid for contact directly related to the specific Digital
Item to which Company was able to obtain opt-in consent. Company shall obtain additional
opt-in consents before contacting a Nextel User in connection with any other Digital Item.
To obtain such consent, Company shall provide a clear and non-misleading notice to Nextel
Users regarding (i) additional charges that Users may incur relating to such contact from
Company, and (ii) procedures for Users to withdraw their opt-in consent at any time without
charge (e.g., via a toll-free telephone call). Company shall make such rescission effective
within twenty-four (24) hours of the Users rescission. Company further agrees that it
shall implement a system by which the status of such User consent can be clearly
established and communicated to Authorized Employees prior to the transmission of such
messages, and Company shall maintain records of such User consent for a minimum of two (2)
years from the date of any such activity.
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f.
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Company Direct Marketing. Except through a Device, Company may contact a Nextel User
to market its own products and services provided it first obtains a Nextel Users Prior
Consent, and only to deliver the services or products contemplated under this Agreement.
Prior Consent shall mean an affirmative act by a Nextel User to agree, either
electronically or in writing, to receive Companys own marketing material (Marketing
Material) in response to a clear and conspicuous solicitation (Solicitation) that
explains in plain English the purpose and scope of the Solicitation, and the method by
which Company will communicate with the Nextel Usersuch method to exclude wireless
messaging of any kind. Company shall store any Solicitation and Prior Consent for a period
of three (3) years. Company shall not include in any Solicitation or Marketing Material
any reference to Nextel or its products and services. Company shall enable each Nextel
User to rescind Prior Consent at any time, without charge (via a toll-free telephone call
and e-mail) and Company shall make such rescission effective within twenty-four (24) hours
of the rescission.
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g.
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Location-Based Services. Notwithstanding any other provision of this Agreement,
Company shall not collect, access, use or disclose any User Data (including Location
Information) to provide any location-based services or Location Information to anyone, and
Nextel shall not be obligated to perform under this Agreement, unless the location based
service in question integrates fully with Nextels location notice and consent regime to
Nextels complete satisfaction (Notice and Consent regime). Company shall delete
Location Information immediately, when it is no longer necessary for Nextel Users
purposes. Without limiting the foregoing, Company shall ensure that each Nextel User may
rescind Consent at any time, without charge (e.g., via a toll-free telephone call)
pursuant to a rescission method approved in writing by Nextel (Rescission), and Company
shall make such Rescission effective within twenty-four (24) hours of a Nextel Users
Rescission. Company must maintain records of any Notice, Consent, and Rescission for as
long as a Nextel User subscribes to Companys services or application, plus an additional
two (3) years. Company shall not make any statement about the accuracy of Location
Information, unless Nextel approves such statement in writing.
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h.
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Disclosure and Return. Except in response to a valid court order or otherwise to
the extent legally required in response to a request from a law enforcement agency, in no
event shall Company disclose any User Data to any third party. Company must notify Nextel
prior to, or as soon as practicable following, the disclosure of User Data pursuant to a
valid governmental or law enforcement request. Nextel reserves the right to seek a
protective order or to take other appropriate action to prevent or limit such disclosure.
Company agrees to cooperate with Nextels efforts to obtain a protective order or other
reasonable assurance that confidential treatment will be afforded the User Data in
question. Company agrees to return, or at Nextels election, to destroy (and certify in
writing such destruction) all User Data upon the termination or expiration of this
Agreement or earlier if requested to do so in writing by Nextel.
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Nextel Confidential Not for Distribution
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7
Digital Item License and Distribution Agreement
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i.
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Compliance with Surveillance Orders. Company shall ensure that it: (i) enables Nextel
to comply in a timely manner with any legal process, such as a subpoena (Legal Process)
that is served on Nextel or an Affiliate of Nextel and which involves a request or order
of any kind by any government, government agency, or any court as a result of any such
government request(s) of User Data, e.g., content communicated via or stored via Companys
service or application, as well as associated information such as routing or identifying
information (Surveillance Information); and (ii) complies with any Legal Process that is
served on Company and which involves a request or order for Surveillance Information.
Accordingly, Company shall maintain a contact, available 24 hours per day, 7 days per week
(24x7) for responding to Legal Process. Companys 24x7 contact information is listed in
Exhibit H; Company shall update Nextel of any change in its 24x7 contact information by
informing the Nextel contact listed in Exhibit H prior to any such change. Company shall
fully comply with any statutory or regulatory requirement, applicable to Nextel or an
affiliate of Nextel by virtue of this Agreement, which governs the surveillance of
communications (including without limitation the Communications Assistance for Law
Enforcement Act (CALEA), the Electronic Communications Privacy Act (ECPA), and 18
U.S.C. § 2518); and Company shall cooperate with Nextel to ensure Nextels compliance with
such requirements. Notwithstanding anything to the contrary in this Agreement, Nextel may
terminate this Agreement immediately if in its sole discretion it determines that it
cannot meet any of its surveillance requirements due to Company.
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j.
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Miscellaneous. Company shall immediately notify Nextel of any activity, including
but not limited to marketing activity, that may result in the violation of the Privacy
Laws, and any breach of Security. Company shall make all reasonable efforts to assist
Nextel in relation to the investigation and remedy of any such violation or breach, and
any claim, allegation, action, suit, proceeding or litigation related thereto. Company
acknowledges and agrees that a breach of any obligation set forth in this Section 15 may
result in irreparable harm for which monetary damages may not provide a sufficient remedy
and, as a result, Nextel may seek both monetary damages and equitable relief. Neither
Section 25 of this Agreement nor the NDAs referenced therein shall govern the obligations
and rights that relate to User Data; rather, this Section 15 and the balance of this
Agreement (with the exception of Section 25 and the NDAs referenced therein) shall govern
the obligations and rights that relate to User Data.
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16. TERM OF AGREEMENT.
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a.
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The initial term of this Agreement shall commence August 15, 2004 and end twelve (12)
months later (the Initial Term). This Agreement shall automatically renew for additional
twelve (12) month periods (each twelve (12) month period is referred to as an Extension
Term) unless one Party provides written notice to the other Party at least sixty (60) days
prior to the expiration of the Initial Term or an Extension Term that it does not want to
renew the Agreement, provided that each Party also shall have the option to terminate this
Agreement in part (i.e. to cause it to be deemed amended as provided in Section 17d(i) or
(ii) below) as of such automatic renewal by providing written notice to the other Party at
least sixty (60) days prior to the expiration of the Initial Term or an Extension Term that
it desires the definition of Nextel User to be modified as specified in Section 17d(i) or
Section 17d(ii), as the case may be, in which case the Agreement shall be deemed amended as
provided in such Section as of the date of the automatic renewal following such notice.
Each Extension Term, together with the Initial Term, is referred to as the Term.
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b.
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Acknowledgement. The Parties acknowledge and agree that the Digital Item License and
Distribution Agreement executed by Company on or about June 14, 2004, as amended by
Amendment No. 1 executed by Company on or about August 3, 2004 (the Former Agreement) is
terminated as of August 14, 2004, and that this Agreement shall replace the Former
Agreement as of the Commencement Date. On and after the Commencement Date, the Agreement
shall govern and Digital Items that were licensed under the Former Agreement and the
relationship of the Parties regarding the subject matter noted herein.
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17. TERMINATION.
In addition to as otherwise stated herein:
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Nextel Confidential Not for Distribution
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Digital Item License and Distribution Agreement
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a.
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Either Party may terminate this Agreement immediately upon written notice if the
other Party: (i) Except for the reasons giving cause for immediate termination as set
forth below, fails to cure a breach of its obligations hereunder within fifteen (15) days
of the delivery of written notice thereof; or (ii) ceases to do business in the normal
course; becomes or is declared insolvent or bankrupt; is the subject of any proceeding
related to its liquidation or insolvency (whether voluntary or involuntary) which is not
dismissed within ninety (90) days of its filing; makes an assignment for the benefit of
its creditors; or elects to or otherwise dissolves.
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b.
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Nextel may terminate this Agreement immediately upon written notice to Company if
Company: (i) Is not certified as a Trusted Publisher by Nextel within six (6) months of
the Commencement Date of the Agreement (if Company had begun the process for Trusted
Publisher certification); (ii) is or has been the subject of a change in control
transaction where more than fifty percent (50%) of Companys voting securities are
transferred or Company sells or transfers all or substantially all of its assets; (iii)
fails to comply with its obligations with respect to confidentiality and/or user data and
privacy as set forth in the Agreement; (iv) utilizes any Nextel intellectual property
without Nextels prior written consent or in an unauthorized manner; or (v) infringes or
is alleged to infringe on the intellectual property rights of any third party.
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c.
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Company may terminate this Agreement immediately upon written notice to Nextel if
Nextel: (i) fails to comply with its obligations with respect to confidentiality and/or
user data and privacy as set forth in the Agreement; (ii) utilizes any Company
intellectual property without Companys prior written consent or in an unauthorized
manner, or (iii) if Company is or has been the subject of a change in control transaction
where more than fifty percent (50%) of the Companys voting securities are transferred or
Company sells or transfers all or substantially all of its assets.
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d.
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If a Party is entitled to terminate this Agreement pursuant to Sections 17(a), (b) or
(c) above, then such party also shall be entitled to terminate this Agreement in part by
notifying the other Party to this Agreement in writing of the following:
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i)
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To Limit Scope to Exclude Boost Users: That it desires the definition of
Nextel User to be modified to eliminate Boost Users from such definition, in which
event commencing as of the 60th day following such written notice (or such later date
specified in such notice), (a) this Agreement shall be deemed amended by inserting
not immediately before include Boost Users in the definition of Nextel User in
Section 1.m; (b) Company shall cease the use of Boost Mobile Trademarks immediately
following such change in the definition of Nextel Users and eliminate any mention of
a relationship between Boost Mobile and Company in sales, marketing and/or other
materials, including electronic media; (c) Companys license to use, reproduce,
distribute and display the Boost Mobile Trademarks shall automatically terminate; (d)
the provisions in the Agreement relating to Boost Mobile Trusted Publisher shall be
deemed deleted from the Agreement; (e) and Boost Mobile shall be deleted from
Section 10; (f) Exhibits A-2, C-2, D-2, E-2, and I-2 shall no longer be applicable
during the remaining Term except to the extent applicable as a result of a Partys
exercise of the rights provided under Section 18(c); (g) Boost Mobile shall no longer
be a Party to the Agreement for purposes of the remaining Term after the end of any
applicable Sell-Off Period under Section 18(c). Notwithstanding such change in the
definition of Nextel User, Nextel and its Affiliates shall continue to have, with
respect to Boost Users, the rights provided in Section 2 for the same periods of time
that they would have had under Section 18(c) of this Agreement if the Agreement had
expired or terminated on the effective date of such change in definition, and (h) and
to Boost Mobile shall be deleted from Section 4 of Exhibit F.
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ii)
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To Limit Scope to Boost Users Only: That it desires the definition of Nextel
Users to be modified to eliminate persons other than Boost Users from the definition
pursuant to the partial termination rights granted in Section 17(d), in which event
commencing as of the 60th day following such written notice (or such later date
specified in such notice) (a) this Agreement shall be deemed amended by deleting from
such definition and shall include Boost Users and
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Nextel Confidential Not for Distribution
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9
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Digital Item License and Distribution Agreement
inserting in its place the following: except that it shall only include Boost Users
and not include any non-Boost Users; (b) Company shall cease the use of Nextel
Trademarks immediately following such change in the definition of Nextel Users, and
eliminate any mention of a relationship between Nextel and Company in sales, marketing
and/or other materials, including electronic media, except to the extent related to
Boost Mobile or Boost Mobile products and services; (c) Companys license to use,
reproduce, distribute and display the Nextel Trademarks shall automatically terminate;
(d) the provisions in the Agreement relating to Trusted Publisher shall be deemed
deleted from the Agreement; and (e) Nextel and shall be deleted from Section 10; (f)
Exhibits A-1, C-1, D-1, E-1, and I-1 shall no longer be applicable during the remaining
Term except to the extent applicable as a result of a Partys exercise of the rights
provided under Section 18(c). Notwithstanding such a change in the definition of
Nextel User, Nextel and its Affiliates shall continue to have, with respect to Nextel
Users who are not Boost Users, the rights provided in Section 2 for the same periods of
time that they would have had under Section 18(c) of this Agreement if the Agreement
had expired or terminated on the effective date of such change in definition.
18.
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RIGHTS AND OBLIGATIONS UPON TERMINATION OR EXPIRATION.
Upon the termination or expiration
of this Agreement:
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a.
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Company shall immediately (i) eliminate any mention of a relationship between Nextel
and Company in all sales, marketing and/or other literature or other materials, including
electronic media; (ii) cease the use of any Nextel Trademarks or Boost Mobile Trademarks
(each as defined in Section 19); and (iii) return to Nextel, destroy or permanently erase
without retaining copies thereof, all Nextel Information (as defined in Section 25).
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b.
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Nextel shall, within thirty (30) days of such termination or expiration: (i)
eliminate any mention of a relationship between Nextel and Company in all sales, marketing
and/or other literature or other materials, including electronic media; (ii) cease the use
of any Company Trademarks (as defined in Section 19); and (iii) return to Company, destroy
or permanently erase without retaining copies thereof, all Company Information (as defined
in Section 25).
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c.
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Sell-Off Periods. Except for Preloaded Digital Items and Refresh Digital Items, for a
period of ***** calendar days following the effective date of termination or
expiration, Nextel and its Affiliates shall continue to have the rights contained in
Section 2 (Regular Sell-Off Period). In the case of Preloaded Digital Items, for a
period of ***** calendar days following the effective date of termination or
expiration, Nextel and its Affiliates shall continue to have the rights contained in
Section 2 herein solely for the purpose of sublicensing and distributing the Digital Items
for Preload (Preload Digital Item Sell-Off Period). Company acknowledges that Devices
upon which Digital Items were Preloaded during the Preload Digital Item Sell-Off Period
may subsequently be distributed to Nextel Users following the conclusion of the Preload
Digital Item Sell-Off Period.
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d.
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Sections 15, 18, 21-25, 27, 28-29 and any other Sections which by their nature refer
to obligations of a Party applicable beyond the Term shall survive this Agreement. Both
Parties shall continue to perform their obligations under this Agreement during any notice
period prior to the actual termination of this Agreement.
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19.
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TRADEMARKS.
Each Party hereby grants to the other Party a non-exclusive, nontransferable,
royalty- free license to use, reproduce, distribute and display the trademarks, service marks
and logos of the other Party, and of third parties to which such Party has sufficient rights,
such trademarks, service marks and logos set forth in Exhibit J (the Trademark(s)), except
that if any trademarks, services marks or logos on such Exhibit J are designated as Boost
Mobile trademarks, then Boost Mobile grants to Company a non-exclusive, nontransferable,
royalty-free license to use, reproduce, distribute and display such trademarks, service marks
and logos. Such license shall be effective during the Term and solely in connection with the
performance of a Partys obligations under this Agreement, provided that (except with regard
to Nextels use of Companys Trademarks in marketing and promoting the availability of the
Digital Items, which shall be subject to Nextels reasonable discretion in the
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***** The omitted portions of this exhibit have been filed with the Securities and Exchange
Commission pursuant to a request for confidential treatment under Rule 406 promulgated under
the Securities Act of 1933.
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Nextel Confidential Not for Distribution
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10
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Digital Item License and Distribution Agreement
determination of placement and size), each use of a Trademark shall be approved by the
Trademark owner in writing and in advance of such use. Except as provided in this Section 19,
neither Party shall have any rights to use the Trademarks or trade names of the other Party of
its Affiliate, and neither Party shall acquire any right to any goodwill, trademark, service
mark, copyright, or other form of intellectual property of the other Party or its Affiliate.
Each Party agrees (a) that each and all use(s) of the other Partys (including the Trademarks
of such other Partys Affiliates) Trademarks will not alter such Trademarks in any way; and (b)
to use the Trademarks of the other Party (or such other Partys Affiliates) such that each such
Trademark creates a separate and distinct impression from any other trademark that may be used
by such Party. Each Party agrees that all uses of the other Partys Trademarks, including the
goodwill and reputation associated therewith, will inure to the benefit of the other Party.
Each Party may, but is not obligated to provide additional trademarks to the other Party for
use in connection with this Agreement. In addition, each Party shall have the right to amend
such Trademarks in its sole discretion.
20. TAXES.
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a.
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The Parties shall comply with all federal, state, and local tax laws applicable to
transactions occurring under this Agreement. Company shall provide Nextel with a completed
Form W-9, W-8 or 8233, as appropriate, for federal income tax reporting purposes.
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b.
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All goods and services purchased by Nextel or its Affiliates under this Agreement are
being purchased for resale to Nextel Users and/or potential Nextel Users in the ordinary
course of Nextels or such Affiliates business. Company recognizes and shall extend all
applicable resale exemptions.
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c.
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The Parties will cooperate as to the extent reasonable and practicable to minimize or
avoid, whenever legally permissible, any applicable taxes relating to the transactions
between the Parties under this Agreement or the transactions between a Party and a Nextel
User.
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21. REPRESENTATIONS, WARRANTIES AND COVENANTS.
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a.
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Nextel hereby represents, warrants and covenants that Nextel has the full power and
authority to enter into and perform its obligations under this Agreement (including to
grant the rights and licenses provided for herein), without any restrictions that would
impair its ability to perform its obligations under this Agreement, except that such
representation, warranty and covenant is made by Boost Mobile with respect to the license
grant made by Boost Mobile hereunder.
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b.
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Company hereby represents, warrants and covenants to Nextel and its parents,
subsidiaries and Affiliates that: (i) Company has the full power and authority to enter
into and perform its obligations under this Agreement, without any restrictions that would
impair its ability to perform its obligations under this Agreement; (ii) Companys
activities in connection with this Agreement do not and will not constitute a default or
breach of any agreement or order of any court or governmental agency by which Company is
bound and Company has not and will not enter into any agreement that is inconsistent with
its obligations under this Agreement; (iii) Company has all rights, titles, licenses,
intellectual property, permissions and approvals necessary in connection with its
performance under this Agreement to grant the rights granted hereunder; (iv) neither the
Digital Items nor their use, distribution, sale or license do or will infringe, violate or
misappropriate any patent, copyright, trademark, trade secret rights, rights of privacy,
rights of publicity or any other property or proprietary rights of any third party; (v)
the Digital Items and their use, distribution, sale and license does and shall continue to
comply with all applicable foreign, federal, state, and local laws, rules and regulations,
including but not limited to those relating to privacy and consumer protection; (vi)
Company will not breach any privacy or consumer protection right in carrying out its
obligations under this Agreement; (vii) the Digital Items do not and will not contain any
viruses, worms, Trojan horses, time bombs, keys or other software routines that may allow
access to or negatively impact the operation of any Digital Item, the Systems and/or the
products and services of Nextel or an Affiliate of Nextel, including, but not limited to
Devices, or damage interfere with, intercept, or
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Nextel Confidential Not for Distribution
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Digital Item License and Distribution Agreement
expropriate any Nextel System data or any User Data; (viii) Company shall comply with the
Content Standards; and (ix) the Digital Items will be free from any material defects and
will perform in accordance with their specifications.
22.
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DISCLAIMER.
EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN THIS AGREEMENT, THE FOREGOING
WARRANTIES ARE THE ONLY WARRANTIES GIVEN BY EITHER PARTY AND ALL OTHER WARRANTIES, WHETHER
EXPRESS OR IMPLIED BY STATUTE OR OTHERWISE, ARE SPECIFICALLY EXCLUDED BY THE PARTIES,
INCLUDING WITHOUT LIMITATION, IMPLIED WARRANTIES OF MERCHANTIBILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
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23.
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LIMITATION OF LIABILITY.
EXCEPT FOR (I) A PARTYS BREACH OF SECTION 15 AND/OR OTHER PRIVACY
OR CONSUMER PROTECTION OBLIGATIONS; (II) A PARTYS INDEMNIFICATION OBLIGATIONS UNDER SECTION
24; OR (III) A PARTYS BREACH OF ITS CONFIDENTIALITY OBLIGATIONS UNDER SECTION 25, NEITHER
PARTY SHALL BE LIABLE FOR SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES OF
ANY KIND, INCLUDING WITHOUT LIMITATION, LOST PROFITS, WHETHER OR NOT ANY SUCH DAMAGES ARE
WITHIN A PARTYS CONTROL OR DUE TO NEGLIGENCE OR OTHER FAULT ON THE PART OF SUCH PARTY, ITS
AGENTS, AFFILIATES, EMPLOYEES OR OTHER REPRESENTATIVES. EXCEPT FOR (I) A PARTYS BREACH OF
SECTION 15 AND/OR OTHER PRIVACY OR CONSUMER PROTECTION OBLIGATIONS; (II) A PARTYS
INDEMNIFICATION OBLIGATIONS UNDER SECTION 24; OR (III) A PARTYS BREACH OF ITS OBLIGATIONS OF
CONFIDENTIALITY UNDER SECTION 25, IN NO EVENT SHALL EITHER PARTYS TOTAL LIABILITY UNDER THIS
AGREEMENT EXCEED $*****.
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24. INDEMNIFICATION.
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a.
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Nextel shall indemnify, defend and hold harmless Company, its subsidiaries and
Affiliates, and its and their respective officers, directors, employees, agents,
successors and assigns (each an Indemnified Party) from and against any claims,
judgments, losses, damages, liabilities, costs and expenses (including, but not limited
to, reasonable attorneys fees and legal expenses) of any kind (collectively Losses)
arising out of or related to: (i) any breach or claimed breach of Section 21; (ii) any
third party claim or action brought against an Indemnified Party alleging that the
portions of the Systems owned and controlled by Nextel infringe, misappropriate or violate
in any manner, any patent, copyright, trademark, trade secret or any other intellectual
property or proprietary right of a third party; and (iii) any breach of Section 15 of this
Agreement. The foregoing indemnity will be in addition to, and not in lieu of, all other
legal rights and remedies that Company may have.
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b.
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Company shall indemnify, defend and hold harmless Nextel, its parents, subsidiaries
and Affiliates, and its and their respective officers, directors, employees, agents,
successors and assigns (each an Indemnified Party) from and against any claims,
judgments, losses, damages, liabilities, costs and expenses (including, but not limited
to, reasonable attorneys fees and legal expenses) of any kind (collectively Losses)
arising out of or related to any use, distribution, sale or license of any Digital Item,
including but not limited to Losses arising out of or related to: (i) any breach or
claimed breach of Section 21; (ii) damage to the Systems, Devices or Nextels products and
services, or any portion thereof, as a result of or arising out of the use of any of the
Digital Items; (iii) warranty or Nextel User support services performed by Nextel for the
Digital Items, Systems, Devices or any other products or services damaged or impaired as a
result of or arising out of the use of the Digital Items; (iv) the recall of defective
Digital Items; (v) any third party claim or action brought against an Indemnified Party
alleging that any Digital Item or any portion thereof (a) infringes, misappropriates or
violates in any manner, any patent, copyright, trademark, trade secret, right of privacy,
right of publicity or any other intellectual property or proprietary right of a third
party; or (b) contains material or information that is fraudulent, deceptive, misleading,
obscene, defamatory, libelous, slanderous, or unlawfully harassing or injurious, or is in
violation of personal or property rights, regulation or law, or other common law or
statutory rights; and (vi) any breach of Section 15 of this Agreement. The foregoing
indemnity will be in addition to, and not in lieu of, all other legal rights and remedies
that Nextel may have.
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***** The omitted portions of this exhibit have been filed with the Securities and Exchange
Commission pursuant to a request for confidential treatment under Rule 406 promulgated under
the Securities Act of 1933.
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Nextel Confidential Not for Distribution
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Digital Item License and Distribution Agreement
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c.
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With respect to any Losses to which Section 24(a) or (b) apply, the Indemnified
Party shall promptly notify the other Party (Indemnifying Party), and the Indemnified
Party shall permit the Indemnifying Party to assume and control the defense with counsel
reasonably acceptable to the Indemnified Party. The Indemnified Party shall have the right
to employ separate counsel (at the expense of the Indemnified Party) and participate in
the defense. The Indemnifying Party may not settle under this Section 24 on the
Indemnified Partys behalf without first obtaining the Indemnified Partys written
permission, not to be unreasonably withheld. In the event the Parties agree to settle
under this Section 24, the Indemnifying Party agrees not to publicize the settlement
without first obtaining the Indemnified Partys written permission. This indemnity shall
continue in effect even after, and notwithstanding, this Agreements expiration or
termination.
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25.
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NON-DISCLOSURE AGREEMENT.
The Parties acknowledge the existence of a mutual Non-Disclosure
Agreement (NDA or Confidentiality Agreement) dated May 15, 2004, which NDA shall remain in
full force and effect during the Term. All aspects of this Agreement shall be subject to the
terms and conditions of the NDA. The terms and conditions of this Agreement and all Exhibits
hereto shall be considered Information as such term is defined in the NDA. Further, the
Parties hereby agree that the Purpose (as defined in the NDA) for which Information may be
used pursuant to the NDA shall be deemed to include each Partys performance of its
obligations under this Agreement. Notwithstanding the foregoing, Nextel may disclose the terms
and conditions of this Agreement pursuant to Section 26 herein.
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26.
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NEXTEL PARTNERS, *****, *****, BOOST MOBILE.
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a.
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Company understands and agrees that Nextel Partners (as
defined below), *****, and/or ***** may need to enter into a
separate agreement with Company, and any separate agreement between Company and Nextel
Partners, *****, or ***** shall be at prices and on terms and conditions in the
aggregate no less favorable than those in effect between Company and Nextel. Company
agrees not to sue or take any other action against Nextel for a breach by Nextel Partners,
*****, or ***** of any agreement between Company and Nextel
Partners, *****, or
*****, but rather to proceed directly against Nextel
Partners, *****, or *****. Nextel Partners means Nextel Partners, Inc., a Delaware corporation in which
Nextel Communications, Inc. (NCI) indirectly holds a minority ownership interest and
which deploys a network compatible with NCIs network.
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b.
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The Parties agree that users of the Systems through Boost Mobile, ***** and
***** and its and their Affiliates may be able to access, license, download
and/or use the Digital Items through the Distribution Channels. Such access, licensing,
download and/or use shall be subject to Section 9 herein.
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c.
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Notwithstanding any other provision contained in this Agreement (or the NDA), Nextel
may disclose the existence, contents and/or terms of this Agreement and provide a copy of
this Agreement to Boost, Nextel Partners, ***** and/or ***** and their Affiliates,
direct or indirect, without Companys prior written consent.
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27.
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RECORDS AND INSPECTION RIGHTS.
Both Parties shall keep and maintain proper records and books
of account relating to the obligations contained in this Agreement, including but not limited
to those contained in Section 15 and those regarding the Payments and/or billing of Nextel
Users hereunder. Each Party may inspect such records of the other, but not more than twice in
any twelve (12) month period. Any such inspection (an Audit) will be conducted after
reasonable notice and during regular business hours at the offices of the Party to be audited
in a manner that does not unreasonably interfere with the business activities of the Party to
be audited. With regard to an Audit regarding the obligations contained in Section 15 of this
Agreement, without limiting any other rights or remedies of Nextel under this Agreement or at
law, upon notice from Nextel regarding a breach of this Agreement, Company shall promptly
develop a corrective action plan in cooperation with Nextel, such plan to be subject to
Nextels approval, and shall promptly thereafter implement such plan. With regard
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Nextel Confidential Not for Distribution
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13
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***** The omitted portions of this exhibit have been filed with the Securities and Exchange
Commission pursuant to a request for confidential treatment under Rule 406 promulgated under
the Securities Act of 1933.
Digital Item License and Distribution Agreement
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to the Payment obligations contained in this Agreement, the audited Party shall immediately pay
the auditing Party the amount of any underpayment revealed by an Audit, and in addition, if the
Audit discloses an underpayment in excess of 10% during the period covered by the Audit, the
audited Party will pay for the entire cost of the Audit.
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28.
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INSURANCE.
At all times during the Term, each Party shall maintain a general liability
insurance policy or policies adequate in amount to insure such Party against all liability
associated with this Agreement, including potential liability pursuant to the indemnification
obligations contained herein, but in no event shall such insurance coverage be less than Three
Million and No/100 Dollars ($3,000,000.00) (Minimum Insurance Coverage). The coverage
amounts set forth herein may be met by a combination of underlying and umbrella policies so
long as, in combination, the limits equal or exceed those stated. Company will not be deemed
to be in breach of this provision provided that it maintains the Minimum Insurance Coverage.
Additionally, both Parties shall maintain workers compensation insurance in statutorily
required amounts. For the avoidance of doubt, nothing in this Section is intended to limit the
liability of either Party.
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29.
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MISCELLANEOUS.
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a.
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Independent Contractors/ Non-Exclusivity/ Performance. Nextel and Operator are
independent contracting parties, and nothing in this Agreement shall be construed as
creating an employer- employee relationship, a partnership, a franchise, or a joint
venture between the Parties. The relationship provided for in this Agreement is
non-exclusive with respect to either Party. Unless otherwise stated herein, Company may
not delegate or assign performance under this Agreement.
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b.
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Section 365(n). All rights and licenses granted under or pursuant to this Agreement
by Company are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the
United States Bankruptcy Code (the Code), licenses to rights to intellectual property
as defined in the Code. The Parties agree that Nextel and its Affiliates, as licensee of
such rights under this Agreement, shall retain and may fully exercise all of their rights
and elections under the Code. The Parties further agree that, in the event of the
commencement of bankruptcy proceeding by or against Company under the Code, Nextel and its
Affiliates shall be entitled to retain all of their rights under this Agreement.
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c.
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Governing Law. This Agreement will be governed by and construed in accordance with
the laws of the Commonwealth of Virginia and Company consents to the jurisdiction and
venue of the courts sitting in Fairfax County, Virginia. Company waives all defenses of
lack of personal jurisdiction and forum nonconveniens. Process may be served on either
Party in the manner authorized by applicable law or court rule.
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d.
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Assignment. This Agreement shall not be assignable by Company without the prior
written consent of Nextel, such consent not to be unreasonably withheld. This Agreement
shall be freely assignable by Nextel and Boost Mobile.
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e.
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Entire Agreement/ Interpretation and Construction/ Waiver. This Agreement constitutes
the entire agreement and understanding between the Parties. No waiver, amendment or
modification of any provision of this Agreement shall be valid unless in writing and
signed by the Parties. The captions contained herein are for the convenience of the
Parties and shall not be construed to amend or modify any of the provisions in the
Agreement. If for any reason a court of competent jurisdiction finds any provision of this
Agreement, or portion thereof, to be unenforceable, that provision of the Agreement will
be enforced to the maximum extent permissible so as to affect the intent of the Parties,
and the remainder of this Agreement will continue in full force and effect. This Agreement
has been negotiated by the Parties and their respective counsel and will be interpreted
fairly in accordance with its terms and without any strict construction in favor of or
against either Party. In the event of a conflict between this Agreement and its Exhibits,
the Agreement shall govern. The failure of a Party to object to, or to take affirmative
action with respect to, any conduct of the other which is in violation of the terms of
this Agreement shall not be construed as a waiver of the
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Nextel Confidential Not for Distribution
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Digital Item License and Distribution Agreement
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violation or breach or of any future violation, breach, or wrongful conduct. Any waiver, in
whole or in part, of any provision hereof shall not be construed as a waiver of any other
provision hereof, or as a future waiver of any subsequent breach by Company.
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f.
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Headings/ Binding Effect/ Counterparts. The headings of the Sections of this
Agreement are for convenience and shall not be used to interpret this Agreement. This
Agreement shall bind and inure to the benefit of the Parties and their respective heirs,
legal representatives, successors and permitted assigns. This Agreement may be executed in
multiple counterparts, each of which shall be deemed an original and which together shall
be deemed the same Agreement.
|
|
|
g.
|
|
Notices. Unless otherwise provided for in this Agreement, all notices and other
communications provided for or permitted under the Agreement shall be in writing and shall
be made by hand delivery, telex, telecopier, or reliable overnight courier addressed as
follows:
|
|
|
|
|
|
|
|
If to Company to:
|
|
If to Nextel to:
|
|
|
Sorrent Inc.
|
|
Nextel Operations, Inc.
|
|
|
1810 Gateway Dr., Suite 200
|
|
2001 Edmund Halley Drive
|
|
|
San Mateo, CA 94404
|
|
Reston, VA 20191
|
|
|
Attn: Paul Zuzelo
|
|
Attn: *****
|
|
|
Title: Exec. V.P. Operations & CFO
|
|
Title: VP, Business Development
|
|
|
Fax Number: 650-571-5698
|
|
Fax: *****
|
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|
|
|
With a copy to:
|
|
With a copy to:
|
|
|
Mark Stevens
|
|
|
|
|
Fenwick & West LLP
|
|
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|
|
801 California St.
|
|
|
|
|
Mountain View, CA 94041
|
|
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|
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FAX: 650-938-5200
|
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Nextel Operations, Inc.
|
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|
|
|
2001 Edmund Halley Drive
|
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|
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Reston, VA 20191-3436
|
|
|
|
|
Attention: Vice President and Assistant General
|
|
|
|
|
Counsel Commercial
|
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|
|
|
Fax: 703-433-4034
|
|
|
|
All such notices and communications shall be deemed to have been duly given when delivered
by hand, if personally delivered; when answered back, if telexed; when receipt is
acknowledged, if telecopied, or the next business day if by overnight courier.
|
IN WITNESS WHEREOF,
each Party has caused this Agreement to be executed by its duly authorized
representative.
|
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|
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SORRENT, INC.
|
|
NEXTEL OPERATIONS, ING.
|
|
|
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By: (signature)
|
|
/s/ Ray Schaaf
|
|
By: (signature)
|
|
/s/ Timothy Donne
|
|
|
|
|
|
|
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Name:
|
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Ray Schaaf
|
|
Name:
|
|
Timothy Donne
|
Title:
|
|
President of Publishing
|
|
Title:
|
|
Vice President
|
Date:
|
|
9/14/04
|
|
Date:
|
|
9/21/04
|
|
|
|
|
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|
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BOOST MOBILE, LLC hereby agrees to be
bound by the provisions of Sections 6(c)
,
19(a)
and 21(a) of the Agreement
|
|
|
|
|
***** The omitted portions of this exhibit have been filed with the Securities and Exchange
Commission pursuant to a request for confidential treatment under Rule 406 promulgated under
the Securities Act of 1933.
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Nextel Confidential Not for Distribution
|
|
15
|
Digital Item License and Distribution Agreement
|
|
|
|
|
By:
|
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/s/ Don Girskis
|
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|
Name:
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Don Girskis
|
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Title:
|
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Authorized Signor
|
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Date:
|
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9/24/2004
|
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|
Nextel Confidential Not for Distribution
|
|
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|
16
|
Digital Item License and Distribution Agreement
Exhibit A-1
DESCRIPTION OF DIGITAL ITEMS FOR NEXTEL USERS
1.
|
|
Preloaded Digital Items:
|
|
a.
|
|
Fox Sports Football
|
|
|
b.
|
|
Full Version Local Digital Item
|
|
|
c.
|
|
Digital Item Description / Features / Functionalities:
|
|
|
|
|
Youve played football on a console, PC, handheld, and even on a football field, but youve
never seen football action like this before. Introducing FOX Sports On-Field Live Football,
featuring in-the-helmet views that put you on the field! Pick from a playbook of offensive
sets or apply the pressure with defensive schemes and on-the-fly double coverage.
|
|
i.
|
|
3D Slam Ping Pong
This is a Java application allowing users to play a game of ping pong.
|
(1) Local Digital Item
(2) Description:
Grab your paddle and start swinging! With 3D Slam Ping Pong, you have to be quick
to stay in the game. Shots come fast and right at you. Choose from several wild modes so the
gameplay is always fresh: Quickie, Rally, and Deuce. With high-speed rallies, battle your
opposition in a first-to-eleven match. Victory comes if you can master the SLAM and put some
topspin on your returns. Then, place your name in the ALL-TIME-BEST connected leader board.
Sweatband is highly recommended.
ii. DuraTrax Mobile RC
This is a Java application allowing users to play a game
where you race remote-controlled cars.
(1) Local Digital Item
(2) Description:
Part RC racing, part demolition derby; DuraTrax Mobile RC is the thrill ride of
mobile gaming. Pick from three authentic DuraTrax RC cars, custom designed with the same features
as their real counterparts. Then, test your racing skills on 3 difficulty levels and 3 different
tracks. Watch out for smoking engines, oil slicks and spinouts. Jostle for position but make it to
the finish in one piece. Collision causing casualties include flying debris, pile-ups and dramatic
explosions. If you overcome all obstacles and still beat the pack, youll be entered in the
All-Time Best leader board.
iii. Ren & Stimpy Pinball
This is a Java application allowing users to play a game of
pinball, based on the animated Ren & Stimpy characters.
(1) Local Digital Item
(2) Description:
Play the best pinballer on mobile. Slam the ball up to a second level and activate
a whole new set of flippers and Ren & Stimpy obstacles. Keep the ball alive as long as you can and
earn an extra ball as you become a pinball wizard. Activate the mini-game Slot Machine, then
rnatch-up Ren & Stimpy images. Oddities include a Booger Time that can turn the ball green and a
Toast Time where images turn into Toast and double in value. Pump up the volume with crude sounds
from the animated series.
b. Gamer:
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|
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|
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|
Nextel Confidential Not for Distribution
|
|
|
|
|
|
|
|
17
|
Digital Item License and Distribution Agreement
i. ALIENS: Unleashed
This is a Java application allowing users to play a game based on the ALIENS movies.
(1) Local Digital Item
(2) Description:
The classic movie is now on mobile. You are a United Star System Colonial Marine
recruit selected to become the best of the best if you
can make it through elite boot camp. You
are stationed on New Quantico, a secret training facility on a newly inhabited planet. While
practicing against synthetic Aliens, the unthinkable occurs: the synths malfunction. And then, your
real training begins! Follow the gripping storyline as your character explores increasingly hostile
locations in search of the threat. A tip system will help you unlock new areas and hopefully keep
you alive.
ii. Ataris Driver 3
this is a Java application allowing users to play the mobile version
of Ataris best-selling Driver 3 game.
(1) Local Digital Item
(2) Description:
The top-selling console classic comes to mobile! Play as Tanner, undercover cop
and action hero, and bring down a car theft ring on the city streets of Miami, Istanbul and Nice.
DRIV3R is packed with driving and out-of-car missions that keep the action fresh and exciting,
including chases, timed racing, combat and much more! DRIV3Rs explosive action and incredible
depth will keep your pulse racing in high gear!
iii. Baldurs Gate
This is a Java application allowing users to play a mobile version of
a best-selling Dungeons & Dragons game.
(1) Local Digital Item
(2) Description:
The award-winning RPG series comes to your mobile phone! Baldurs Gate set the
standard on the personal computer, capturing Game of the Year and RPG of the Year awards in the
same year. Now the same great game play and incredible depth youd expect from Dungeons & Dragons
can go with you wherever you are. Explore the mountainous dungeons of the Forgotten Realms where
treasures are aplenty, magic & monsters abound and fantastic adventure awaits.
c. Sports:
i. Batter Up! by FOX Sports
This is a Java application allowing users to play a hit and pitch baseball game.
(1) Local Digital Item
(2) Description:
Grab your bat and rise from Minors to Major to All-Star. Face off against one of
four feared pitching adversaries, all with different pitching styles. Select your batter based on
his Power and Accuracy. Then, step up to the plate and swing for the fences. Timing and the power
meter will affect your performance. See the picture-in-picture homerun pay-off, including cracked
windows, fans in the bleachers and exploding scoreboards. Then, add your name to the connected ALL
TIME BEST leaderboard.
ii. FOX Sports Boxing
This is a Java application allowing users to play a boxing game.
(1) Local Digital Item
(2) Description:
Fight your way to become the undisputed champion of the world or get knocked out
in round one. FOX SportsTM Boxing throws you into the mobile ring to prove your skills against
tough and crafty contenders.
-
|
|
1st person views of your opponents. Befuddle the opposition with a variety of punches.
|
|
-
|
|
Climb the ranks with 3 levels. Choose between Amateur, Pro and Championship.
|
|
|
|
|
|
|
Nextel Confidential Not for Distribution
|
|
|
|
|
|
|
|
18
|
Digital Item License and Distribution Agreement
-
|
|
Select a defensive scheme. Pick your defensive strategy in between each round.
|
|
-
|
|
The faces of battle. As you pound your adversaries to a pulp, theyll take on bruising and cuts.
|
iii.
FOX Sports Football 04
This is a Java application allowing users to play a football
game.
(1) Local Digital Item
(2) Description:
Footballs back and so is FOX Sports Football 04 gridiron intensity on your
mobile. All of the best gameplay of the original: in-the-helmet views of the field, offense and
defense play, bullet passes, on-the-fly defensive schemes, and touchdown animations. Now with new
graphics, an enhanced run engine and a connected high score leaderboard. Score touchdowns and be
the All Time Best!
iv. FOX Sports Hockey
This is a Java application allowing users to play a hockey game.
(1) Local Digital Item
(2) Description:
Hit the ice with FOX Sports Hockey 04 and feel the chill of mobile competition.
Start with a button-mashing face-off to snatch the puck. Look for open forwards and try your slap
shot in a 1 -on-1 match-up on goal. Come with a physical thumb, because mobile hockey is a full
contact sports equipped with boxing-style fighting and stick-poking checks. Show All-Star form by
activating Power-Ups that create a one-time shot on-goal. Rise to stardom and get your score posted
on the ALL TIME BEST leaderboard. With sounds like sirens, foghorns and organ music, you may forget
its only a phone.
v. FOX Sports Racing
This is a Java application allowing users to play a Nascar-like racing game.
(1) Local Digital Item
(2) Description:
Crave the purr of a V-8 engine, the smell of methanol and the asphalt spray of
digging rear tires? Then, grip FOX SPORTSTM RACING: the mobile racer custom designed for the stock
car fan. Check out game features such as:
-
|
|
Five unique tracks and locations, all varying in difficulty,
|
|
-
|
|
1st person or 3rd persons views.
|
|
-
|
|
Cracked windshields, spark-flying collisions and off-track flips.
|
|
-
|
|
Drafting to slingshot past opponents.
|
|
-
|
|
Pitting to refuel and repair.
|
|
-
|
|
Flame-resistant racing suit is up to you.
|
vi. FOX Sports Soccer
This is a Java application allowing users to play a soccer game.
(1) Local Digital Item
(2) Description:
Get into the worlds most celebrated pastime with FOX Sports Soccer
04-competition thru the athletes eyes. Weave past dogged defenders to find an open teammate and
complete two consecutive precision passes. Then, face off against the goalie for a one-on-one
match-up. Exclusive features include: Changeable formation to keep defenders guessing. Special
Power-Ups to activate an aerial bicycle kick and energized header. Three difficulty levels. An ALL
TIME BEST networked leaderboard. Its no wonder that soccer unites the world in sport.
vii. FOX Sports Track & Field
This is a Java application allowing users to play a track &
field game.
(1) Local Digital Item
(2) Description:
Youre a world-class athlete competing in four Track & Field events: 110 Yard
Hurdle, Javelin Toss, Long Jump and Hammer Throw. You have three tries to go for the Gold in each
event and collect a High Score for the entire track meet. Improve as you play and check out the
Amateur and Pro
|
|
|
|
|
|
Nextel Confidential Not for Distribution
|
|
|
|
|
|
|
|
19
|
Digital Item License and Distribution Agreement
Modes. Or, challenge up to ten friends in the Tournament Mode. Be crowned a four-sport champion
during your daily downtime.
viii. Shark Hunt
This is a Java application allowing users to play a fishing game.
(1) Local Digital Item
(2) Description:
Sail some the worlds most beautiful coastlines from Sydney, Australia to South
Africa to San Francisco. You are a master fisherman in pursuit of the most feared and desired
sharks: the Blue Shark, Mako Shark, Hammerhead Shark, Tiger Shark, and Great White. Pick your bait
and let the game begin. As you chum the water, you tempt your prey but be careful what you wish
for, because you may lose your boat if you hook the prehistoric Sabertooth! Surprises include the
stunning mermaid and other objects from the ocean floor.
ix. Yao
Ming Basketball 04
This is a Java application allowing users to play a basketball
game.
(1) Local Digital Item
(2) Description:
Ever wonder what its like to be Yao Ming? Nows your chance with Yao Ming
Basketball 04 sponsored by FOX SportsTM.
-
|
|
2-on-2 mobile hoop match-up. Play either as Yao or against Yao.
|
|
-
|
|
Great moves. Shoot the 3-point shot or pass into the post for board-shattering jams. Catch Yao in
the air for his signature
up-and-under
move.
|
|
-
|
|
Make-it-take-it rules. If you score, go again. If you miss or exceed the time limit, youre on
defense. Get hot and pile up the points.
|
|
-
|
|
Be the ALL-TIME-BEST. Compare your skills against others players. Check out the in-game
leaderboard for the top scores.
|
|
a.
|
|
General description and suggested categories of Digital Items to be published:
Digital Items regarding:
|
|
i)
|
|
Casual gaming
|
|
|
ii)
|
|
Gamer level games
|
|
|
iii)
|
|
Sports
|
|
|
|
|
|
|
Nextel Confidential Not for Distribution
|
|
|
|
|
|
|
|
20
|
Digital Item License and Distribution Agreement
Exhibit A-2
DESCRIPTION OF DIGITAL ITEMS FOR BOOST MOBILE USERS
1.
|
|
Preloaded Digital Items:
|
|
a.
|
|
Yao Ming Basketball: A time delimited demonstration version Local Digital Item game.
|
|
|
b.
|
|
Driv3r: a demonstration version Local Digital Item game.
|
|
|
b.
|
|
Fox Sports Football: Full Version Local Digital Item, which has the following features
and functionalities: Youve played football on a console, PC, handheld, and even on a football
field, but youve never seen football action like this before. Introducing FOX Sports
On-Field Live Football, featuring in-the-helmet views that put you on the field! Pick from
a playbook of offensive sets or apply the pressure with defensive schemes and on-the-fly
double coverage.
|
2.
|
|
Other Digital Items: Shall be the same as Nextel Digital Items as listed in A-1.
|
3.
|
|
Boost Trusted Publisher.
|
|
a.
|
|
General description and suggested categories of Boost Mobile Digital Items to be
published: Boost Mobile Digital Items regarding:
|
|
i)
|
|
Casual gaming
|
|
|
ii)
|
|
Gamer level games
|
|
|
iii)
|
|
Sports
|
|
|
|
|
|
|
Nextel Confidential Not for Distribution
|
|
|
|
|
|
|
|
21
|
Digital Item License and Distribution Agreement
Exhibit B
TESTING
|
a.
|
|
Concept Submission
. Prior to commencement of testing, Company may submit
concepts for Digital Items to Nextel for Nextel to review in Nextels sole discretion
|
|
|
b.
|
|
Company acknowledges and agrees that the Digital Item testing and approval process is
not a guarantee or assurance that the Digital Item(s) are compatible, or if compatible,
will continue to be compatible with, Nextels Systems, Devices or any of its product or
service offerings. If Nextel or an Affiliate of Nextel approves a Digital Item, such
approval shall not be construed as an endorsement of such Digital Item or a commitment on
the part of Nextel or such Affiliate that there will not be a similar application or
digital item developed and/or deployed on the Systems at any time in the future.
|
|
|
c.
|
|
Test Accounts. Where applicable, Company shall provide, maintain and make available
to Nextel during the Term at no cost to Nextel five (5) accounts of the then most current
version of each Digital Item for use by Nextel or an Affiliate of nextel to test the
Digital Item, which test accounts shall operate and access the Digital Item in the same
manner as an active account for a Nextel User. Nextel agrees that Nextel and any Affiliate
of Nextel shall use these accounts solely for the purpose of testing.
|
|
a.
|
|
Preloads and Preload Changes Initial and Final Acceptance Testing
. All
Preload Digital Items (and Changes thereto) must undergo both initial and final
acceptance testing as follows:
|
|
i)
|
|
Initial Acceptance
. Following submission to Nextel, Nextel or an
Affiliate of Nextel may perform initial acceptance testing to determine whether the
Preload Digital Item is interoperable with both the Systems and the Devices. Company
acknowledges that any Digital Item selected for Preload on a new Device may need
several iterations of testing as new Device software versions are finalized. Such
initial acceptance testing, including whether Initial Acceptance (as defined below) is
achieved, shall be at Nextels or such Affiliates sole discretion. Upon completion of
initial acceptance testing, Nextel or such Affiliate shall notify Company in writing
of either:
|
|
(1)
|
|
Initial acceptance of the Preload Digital Item(s) (Initial Acceptance); or
|
|
|
(2)
|
|
Any problems or issues with the Preload Digital Item(s). Should the
Preload Digital Item not receive Initial Acceptance and Nextel notes problems or
issues therewith, Company shall recommence the above-procedures regarding initial
acceptance testing.
|
|
ii)
|
|
Final Acceptance
. Nextel or an Affiliate of Nextel may perform final acceptance
testing to determine whether the Preload Digital Item is interoperable with both the
Systems and the Devices. Such Final Acceptance testing, including whether Final
Acceptance (as defined below) is achieved, shall be at Nextels or such Affiliates
sole discretion. Upon completion of final acceptance testing, Nextel or such Affiliate
shall notify Company in writing of either:
|
|
(1)
|
|
Final acceptance of the Preload Digital Item(s) (Final Acceptance); or
|
|
|
(2)
|
|
Any problems or issues with the Preload Digital Item(s). Should the
Preload Digital Item(s) not receive Final Acceptance and Nextel or an Affiliate
notes problems or issues therewith, Company shall recommence the above-procedures
regarding final acceptance testing.
|
|
|
|
|
|
|
Nextel Confidential Not for Distribution
|
|
|
|
|
|
|
|
22
|
Digital Item License and Distribution Agreement
|
b.
|
|
ALL OTHER Digital Items Final Acceptance Testing
. All other Digital Items
must undergo final acceptance testing as follows:
|
|
i)
|
|
Final Acceptance
. Nextel or an Affiliate of Nextel may
perform final acceptance testing to determine whether the Digital Item is
interoperable with both the Systems and the Devices. Such Final Acceptance
testing, including whether Final Acceptance (as defined below) is achieved, shall
be at Nextels or such Affiliates sole discretion. Upon completion of final
acceptance testing, Nextel or such Afiliate shall notify Company in writing of
either:
|
|
(1)
|
|
Final acceptance of the Digital Item(s) (Final Acceptance); or
|
|
|
(2)
|
|
Any problems or issues with the Digital Item(s). Should the
Digital Item(s) not receive Final Acceptance and Nextel or an Affiliate notes
problems or issues therewith, Company shall recommence the above-procedures
regarding final acceptance testing.
|
|
ii)
|
|
Changes
. Additionally, with regard to testing of Changes,
Company shall provide sufficient information about the Change to allow testing,
including details of all new feature functionality and/or changes associated
therewith. Company shall compile and maintain a list of changes to the Digital
Item, test scripts and an open problem list of key critical issues and shall make
such information available to Nextel at Nextels request prior to and as part of
testing. Company shall ensure that all Changes are compatible with all current
and previous versions (at least two prior versions) of each Digital Item.
|
|
c.
|
|
Preload Network Aware Digital Items
. All Preloaded and Network Aware Digital
Items shall be submitted to Nextel for testing pursuant to the terms of Sections 1 and 2
of this Exhibit B, regardless of whether Company is certified as a Trusted Publisher.
|
|
|
d.
|
|
Trusted Publisher and Boost Mobile Trusted Publisher Testing
.
|
|
i)
|
|
Pre-Certification. Prior to being certified as a Trusted Publisher or a Boost
Mobile Trusted Publisher, Company shall follow the procedures outlined in Sections 1
and 2 of this Exhibit B.
|
|
|
ii)
|
|
Upon Certification as a Trusted Publisher. Upon certification as a Trusted
Publisher or a Boost Mobile Trusted Publisher, except for Preload and Network Aware
Digital Items, such Trusted Publisher or a Boost Mobile Trusted Publisher may bypass
the testing requirements of Section 2(b) of this Exhibit B, and may self-test (as a
prerequisite to self-publishing to the Distribution Channels) as described in the
Trusted Publisher Guidelines or a Boost Mobile Trusted Publisher Guidelines,
respectively.
|
|
|
|
|
|
|
Nextel Confidential Not for Distribution
|
|
|
|
|
|
|
|
23
|
Digital Item License and Distribution Agreement
Exhibit C-1
NEXTEL PUBLISHING
1.
|
|
Certification as a Trusted Publisher
. Trusted Publisher certification is at
Nextels sole discretion. As more completely described in the Trusted Publisher Guide, in
order to be certified as a Trusted Publisher by Nextel, Company shall:
|
|
a.
|
|
Submit a minimum of three (3) Digital Item titles to Nextel for testing, one (1)
of which shall be a Network Aware Digital Item. Each Digital Item title shall function
on at least two (2) Nextel color Device Groups, where applicable, resulting in a total
of six (6) Digital Items, and;
|
|
|
b)
|
|
All six (6) Digital Item titles must:
|
|
i)
|
|
Be accepted, in writing, by Nextel in Nextels sole discretion; and
|
|
|
ii)
|
|
Successfully pass Nextels testing process described in Exhibit B and the
Trusted Publisher Guide.
|
|
(1)
|
|
If all six (6) Digital Items are accepted, in writing, by Nextel, and
pass Nextel acceptance testing, the Company may be certified as a Trusted
Publisher and shall be notified by Nextel in writing thereof.
|
2.
|
|
Maintenance of Certification
. As more completely described in the Trusted Publisher
Guidelines, in order to maintain certification as a Trusted Publisher, Company shall:
|
|
a.
|
|
Successfully post or have posted at least twenty (20) Digital Items per
calendar year to a Distribution Channel.
|
|
|
b.
|
|
Testing and Quality. Trusted Publishers shall self-test all Digital Items pursuant to
the Trusted Publisher Guide. Additionally, all Digital Items posted on a Distribution
Channel may be subject to periodic and random testing by Nextel. Any Digital Item that
fails such periodic and random testing, as determined by Nextel in its sole discretion,
may immediately be disabled or removed from a Distribution Channel without notice. Nextel
may exercise its sole discretion and revoke Trusted Publisher certification for reasons
including but not limited to three (3) Digital Items failing such periodic and random
testing within any three (3) month period.
|
|
|
c.
|
|
Maintenance of Digital Items.
|
|
i)
|
|
A Trusted Publisher shall ensure that the Digital Item information
posted on a Distribution Channel is accurate.
|
|
|
ii)
|
|
Trusted Publishers shall provide new versions of existing Digital Items
within thirty (30) days after commercial launch of a new Device.
|
|
|
|
|
|
|
Nextel Confidential Not for Distribution
|
|
|
|
|
|
|
|
24
|
Digital Item License and Distribution Agreement
Exhibit C-2
BOOST MOBILE PUBLISHING
1.
|
|
Certification as a Boost Mobile Trusted Publisher
. Boost Mobile Trusted Publisher
certification is at the sole discretion of Boost Mobile. As more completely described in the
Boost Mobile Trusted Publisher Guide, in order to be certified as a Boost Mobile Trusted
Publisher by Boost Mobile, Company shall:
|
|
a.
|
|
Submit a minimum of three (3) Digital Item titles to Nextel or its Affiliate for
testing, one (1) of which shall be a Network Aware Digital Item. Each Digital Item title
shall function on at least two (2) Nextel color Device Groups, where applicable, resulting
in a total of six (6) Digital Items, and;
|
|
|
c)
|
|
All six (6) Digital Item titles must:
|
|
i)
|
|
Be accepted, in writing, by Nextel or an Affiliate of Nextel in
Nextels or such Affiliates sole discretion; and
|
|
|
ii)
|
|
Successfully pass Nextels testing process described in Exhibit B and the
Boost Mobile Trusted Publisher Guide.
|
|
(1)
|
|
If all six (6) Digital Items are accepted, in writing, by Nextel or
an Affiliate of Nextel, and pass Nextel acceptance testing, the Company may be
certified as a Boost Mobile Trusted Publisher and shall be notified by Boost
Mobile in writing thereof.
|
2.
|
|
Maintenance of Certification
. As more completely described in the Boost Mobile
Trusted Publisher Guidelines, in order to maintain certification as a Boost Mobile
Trusted Publisher, Company shall:
|
|
a.
|
|
Successfully post or have posted at least twelve (12) Digital Items per
calendar year to a Distribution Channel.
|
|
|
b.
|
|
Testing and Quality. Boost Mobile Trusted Publishers shall self-test all Digital
Items pursuant to the Boost Mobile Trusted Publisher Guide. Additionally, all Digital
Items posted on a Distribution Channel may be subject to periodic and random testing by
Nextel. Any Digital Item that fails such periodic and random testing, as determined by
Nextel in its sole discretion, may immediately be disabled or removed from a Distribution
Channel without notice. Boost Mobile may exercise its sole discretion and revoke Trusted
Publisher certification for reasons including but not limited to three (3) Digital Items
failing such periodic and random testing within any three (3) month period.
|
|
|
c.
|
|
Maintenance of Digital Items.
|
|
iii)
|
|
A Boost Mobile Trusted Publisher shall ensure that the Digital Item
information posted on a Distribution Channel is accurate.
|
|
|
iv)
|
|
Boost Mobile Trusted Publishers shall provide new versions of existing
Digital Items within thirty (30) days after commercial launch of a new Device.
|
|
|
|
|
|
|
Nextel Confidential Not for Distribution
|
|
|
|
|
|
|
|
25
|
Digital Item License and Distribution Agreement
Exhibit D-1
DISTRIBUTION TO NEXTEL USERS
For the purposes of Exhibit D-1 Nextel Users shall not include Boost Users.
Except for distribution of Preload Digital Items, which shall occur only upon the mutual agreement
of the Parties, Nextel shall determine in its sole discretion the Distribution Channels through
which the Digital Items may be made available, and, upon mutual agreement to Preload a Digital Item
(as described below), the specific Devices upon which a Digital Item may be Preloaded. Upon such
distribution, Nextel may notify Company of the particular Distribution Channel. Such Distribution
Channels may include the following:
1.
|
|
Preload Digital Item Distribution Channels
.
|
|
|
|
Nextel may only Preload a Digital Item onto Devices upon the mutual agreement of the Parties.
|
|
2.
|
|
Wireless Web Site Distribution Channels
.
|
|
|
|
Nextel may make Companys Digital Items available for distribution to Nextel Users via
wireless web sites owned, controlled or authorized by Nextel or any of its Affiliates.
Placement of Digital Items on such wireless web sites shall be determined by Nextel or any
such Affiliate in its sole discretion.
|
|
3.
|
|
Web Site Distribution Channels
.
|
|
|
|
Nextel may make Companys Digital Items available for distribution to Nextel Users via web
sites owned, controlled or authorized by Nextel or any of its Affiliates. Placement of Digital
Items on such web sites shall be determined by Nextel or any such Affiliate in its sole
discretion.
|
|
4.
|
|
Trusted Publisher Distribution
.
|
|
|
|
Trusted Publishers may be able to self-publish to certain Distribution Channels as approved by
Nextel and as further described in the Trusted Publisher Guide.
|
|
|
|
|
|
|
Nextel Confidential Not for Distribution
|
|
|
|
|
|
|
|
26
|
Digital Item License and Distribution Agreement
Exhibit D-2
DISTRIBUTION TO BOOST USERS
For the purpose of Exhibit D-2, Nextel Users shall mean Boost Users only.
Except for distribution of Preload Digital Items, which shall occur only upon the mutual agreement
of the Parties, Nextel shall determine in its sole discretion the Distribution Channels through
which the Digital Items may be made available, and, upon mutual agreement to Preload a Digital Item
(as described below), the specific Devices upon which a Digital Item may be Preloaded. Upon such
distribution, Nextel may notify Company of the particular Distribution Channel. Such Distribution
Channels may include the following:
1.
|
|
Preload Digital Item Distribution Channels
.
|
|
|
|
Nextel or an Affiliate may only Preload a Digital Item onto Devices upon the mutual agreement
of the Parties.
|
|
2.
|
|
Wireless Web Site Distribution Channels
.
|
|
|
|
Nextel or an Affiliate may make Companys Digital Items available for distribution to Nextel
Users via wireless web sites owned, controlled or authorized by Nextel of any of its
Affiliates. Placement of Digital Items on such wireless web sites shall be determined by Nextel
or any such Affiliate in its sole discretion.
|
|
3.
|
|
Web Site Distribution Channels
.
|
|
|
|
Nextel or an Affiliate may make Companys Digital Items available for distribution to Nextel
Users via web sites owned, controlled or authorized by Nextel or any of its Affiliates.
Placement of Digital Items on such web sites shall be determined by Nextel or any such
Affiliate in its sole discretion.
|
|
5.
|
|
Boost Mobile Trusted Publisher Distribution
.
|
|
|
|
Boost Mobile Trusted Publishers may be able to self-publish to certain Distribution
Channels as approved by Boost Mobile and as further described in the Boost Mobile Trusted
Publisher Guide.
|
|
|
|
|
|
|
Nextel Confidential Not for Distribution
|
|
|
|
|
|
|
|
27
|
Digital Item License and Distribution Agreement
Exhibit E-1
PAYMENTS NEXTEL
For the purposes of Exhibit E-1, Nextel Users shall not include Boost Users
1.
|
|
Preloaded Digital Items.
Regarding the Preload of a Digital Item, prior to any
subscription, licensing, and/or download of such Digital Item, the following shall apply:
|
|
a.
|
|
Demonstration Version Digital Items. Company shall not receive any payments for
Preload of a Demonstration Version Digital Item. A Demonstration Version Digital Item may
be a Local or Network Aware Digital Item.
|
|
|
b.
|
|
Full Version Digital Items.
The Parties shall mutually agree on payment
terms regarding any Full Version Local or Network Aware Digital Item prior to Preload.
|
2.
|
|
Subsequent Subscription, Licensing and/or Download of a Previously Preloaded Digital
Item.
Regarding subsequent subscription, licensing and/or download of a previously
Preloaded Digital Item to a Device, such Device being within a Derivative Device Group where
at least one Device of such Derivative Device Group was previously Preloaded with such Digital
Item, where Nextel bills the Nextel User for such Digital Item, the following shall apply:
|
|
a.
|
|
Full Version Digital Items. Nextel will pay to Company ***** percent (*****%)
(Payment Percent 1) of the sums actually collected from Nextel Users for use of such
Digital Item (Payment 1).
|
3.
|
|
Non-Preloaded Digital Items.
Regarding subscription, licensing and/or download of a
Digital Item to a Device, such Device NOT being within a Derivative Device Group where at
least one Device of such Derivative Device Group was previously Preloaded with such Digital
Item, where Nextel bills the Nextel User for such Digital Item, the following shall apply:
|
|
a.
|
|
Digital Items. Nextel will pay to Company ***** percent (*****%) (Payment Percent
2) of the sums actually collected from such Nextel User for use of such Digital Item
(Payment 2).
|
|
a.
|
|
Payment Percent 1 and Payment Percent 2 are, collectively, the Payment Percents.
Payment 1 and Payment 2 are, collectively, the Payments.
|
|
|
b.
|
|
The Payments will be made based on sums actually collected from Nextel Users and
shall be subject to adjustments or charge backs due to bad debt, credits, refunds,
cancellations and other adjustments and charge backs to reflect fees actually received by
Nextel. The sums subject to the Payment Percents shall not include access, airtime,
wireless data transport, shipping fees, taxes or any other charges payable by Nextel Users
to Nextel.
|
|
|
c.
|
|
Bundling. In the event that Company consents to allowing Nextel to offer other
digital items, services and/or products in conjunction with a Digital Item as a bundled
service, and those bundled services are offered at a discounted price, Company shall
receive the Payment calculated from a price, which for the purpose of calculation is the
price for the Digital Item at the time minus the discount, which discount is the overall
discount of the bundle equally spread across each component of the bundle. Thus, if one
Digital Item is priced at $10.00 and a customer purchases another application with a
stand-alone price of $5.00, Nextel may price the bundled services (Digital Item and the $5
stand-alone application) at $13.50 (a 10% discount on the bundle). For purposes of
calculating the Payment, the price of each service billed to the Nextel User would be
reduced by the rate of discount for the bundle as a whole (10% discount). Hence, the
allocation for the individual components of the bundle would be $9.00 for the Digital Item
($10.00 minus 10%) and $4.50 for the other stand-alone application ($5.00 minus 10%).
Nextel agrees to obtain consent of Company prior to bundling any Digital Items.
|
***** The omitted portions of this exhibit have been filed with the Securities and Exchange
Commission pursuant to a request for confidential treatment under Rule 406 promulgated under
the Securities Act of 1933.
|
|
|
|
Nextel Confidential Not for Distribution
|
|
|
|
|
|
28
|
Digital Item License and Distribution Agreement
|
a.
|
|
The Payments shall be due and payable within forty-five (45) days following the end
of each calendar month.
|
|
|
b.
|
|
Nextel shall remit all Payments to:
|
|
|
|
|
Sorrent, Inc.
|
|
|
|
1810 Gateway Dr., Suite 200
|
|
|
|
San Mateo, CA 94404
|
|
|
|
Attn: Paul Zuzelo
|
|
|
|
Title: Exec. V.P. Operations & CFO
|
|
|
|
Fax Number: 650-571-5698
|
|
|
|
|
Nextel Confidential Not for Distribution
|
|
|
|
|
|
29
|
Digital Item License and Distribution Agreement
Exhibit E-2
PAYMENTS BOOST MOBILE
1.
|
|
Preloaded Digital Items.
|
|
a.
|
|
Following Preload of a Digital Item, but prior to any subsequent
subscription, licensing and/or download of such Digital Item, the following shall
apply:
|
|
i)
|
|
Demonstration Version Digital Items.
Company shall not receive
any payments for Preload of a Demonstration Version Digital Item on a Device. A
Demonstration Version Digital Item may be a Local or Network Aware Digital Item.
|
|
|
ii)
|
|
Full Version Digital Items.
For the Fox Sports On-Court Live
Digital Item, as defined in Exhibit A-2, which shall be Preloaded on the i830 Device,
Company shall receive ***** dollars ($*****) (Preload Payment 1),
payable *****. After the first ***** thousand (*****) i830 Devices
Preloaded with the Fox Sports On-Court Live Digital Item, Nextel will pay to
Company $***** per i830 Device (Preload Payment 2), payable per calendar quarter, in
quantities that shall be determined by the total number of i830 Devices manufactured
during each full production run of the i830 Device in a calendar quarter.
|
|
a.
|
|
For each Digital Item, irrespective of whether the Digital Item was initially
Preloaded, upon subscription, licensing and/or download of such Digital Item by a Boost
User, where Nextel bills such Boost User for such Digital Item, Nextel will pay to
Company ***** percent (*****%) (Digital Item Payment Percent 1) of the sums actually
collected from such Boost User for licensing and/or use of such Digital Item (Digital
Item Payment 1).
|
|
a.
|
|
Preload Payment 1, Preload Payment 2, and Digital Item Payment 1 are,
collectively, the Payments.
|
|
|
b.
|
|
Digital Item Payment 1 shall be made based on sums actually collected from Boost
Users and shall be subject to adjustments or charge backs due to credits, refunds,
cancellations and other adjustments and charge backs to reflect fees actually received by
Nextel. The sums subject to the Digital Item Payment Percent 1 shall not include access,
airtime, wireless data transport, shipping fees, taxes or any other charges payable by
Boost Users to Nextel.
|
|
|
c.
|
|
Bundling. In the event that Company consents to allowing Nextel to offer other
digital items, services and/or products in conjunction with a Digital Item as a bundled
service, and those bundled services are offered at a discounted price, Company shall
receive the Payment calculated from a price, which for the purpose of calculation is the
price for the Digital Item at the time minus the discount, which discount is the overall
discount of the bundle equally spread across each component of the bundle. Thus, if one
Digital Item is priced at $10.00 and a customer purchases another application with a
stand-alone price of $5.00, Nextel may price the bundled services (Digital Item and the $5
stand-alone application) at $13.50 (a 10% discount on the bundle). For purposes of
calculating the Payment, the price of each service billed to the Boost User would be
reduced by the rate of discount for the bundle as a whole (10% discount). Hence, the
allocation for the individual components of the bundle would be $9.00 for the Digital Item
($10.00 minus 10%) and $4.50 for the other stand-alone application ($5.00 minus 10%).
Nextel agrees to obtain consent of Company prior to bundling any Digital Items.
|
***** The omitted portions of this exhibit have been filed with the Securities and Exchange
Commission pursuant to a request for confidential treatment under Rule 406 promulgated under
the Securities Act of 1933.
|
|
|
|
Nextel Confidential Not for Distribution
|
|
|
|
|
|
30
|
Digital Item License and Distribution Agreement
|
a.
|
|
The Payments shall be due and payable within forty-five (45) days following the end
of each calendar month.
|
|
|
b.
|
|
Nextel shall remit all Payments to:
|
|
|
|
|
Sorrent Inc.
|
|
|
|
1810 Gateway Dr., Suite 200
|
|
|
|
San Mateo, CA 94404
|
|
|
|
Attn: Paul Zuzelo
Title: Exec. V.P. Operations & CFO
|
|
|
|
Fax Number: 650-571-5698
|
|
|
|
|
Nextel Confidential Not for Distribution
|
|
|
|
|
|
31
|
Digital Item License and Distribution Agreement
Exhibit F
CO-MARKETING
1.
|
|
Press releases. The Parties may not issue a press release disclosing the existence of the
relationship or the availability of the Digital Item(s) on the Systems without prior written
consent from the other Party after that Partys review and approval of the form and content
of any publicity release or other press announcement; provided, however, that the foregoing
will not restrict either Party from making press releases about their respective products and
services that do not include a reference to the other Party.
|
|
2.
|
|
Nextel listed on Companys web site. Company shall, within ten (10) days of the
availability of a Digital Item via a Distribution Channel, or, if a Trusted Publisher or a
Boost Mobile Trusted Publisher, within ten(10) days of Trusted Publisher or a Boost Mobile
Trusted Publisher certification, reasonably feature Nextel and/or Boost Mobile, in Nextels sole discretion, on Companys web site. Information to
be included in such posting shall include, but is not limited to: Nextel logo (and/or Boost
Mobile logo, as determined by Nextel in its sole discretion, and information (to be supplied by
Nextel) regarding how to use the Distribution Channels and/or download a Digital Item, which
may include the URL of the applicable Distribution Channel. Listing of Nextel on Companys web
site is contingent upon Nextels prior written approval of such listing.
|
|
3.
|
|
Promotion.
|
|
a.
|
|
General. Nextel and its Affiliates may advertise and market the Distribution
Channel(s) from which the Digital Item(s) will be distributed and/or advertise and market
the Digital Item(s) by other means as Nextel and its Affiliates determine in their sole
discretion, and will create appropriate links to enable Nextel Users of the Devices to
download the Digital Item(s).
|
|
|
b.
|
|
Company authorizes Nextel and its Affiliates to refer, in Nextels online, print or
other advertising and promotional materials, to the fact that Companys Digital Item(s)
are accessible through Nextel and/or certain Affiliates and that Nextel and/or such
Affiliates are a distributor of Companys Digital Item(s), provided that any such
materials use Companys Trademarks only as permitted in Section 19 of the Agreement.
|
|
|
c.
|
|
Company shall use commercially reasonable efforts to market and promote the Digital
Item(s), and Nextel (or its Affiliates, as determined by Nextel in its sole discretion)
shall use commercially reasonable efforts to market and promote the Devices, provided that
Nextel may determine to market and promote the Devices to all or just a portion of Nextel
Users, such as only to Boost Users or only to Nextel Users that are not Boost Users.
However, neither Party will conduct any Direct Co-Marketing Campaign (a direct marketing
campaign that features the identities, products, and/or services of both Parties in one
promotion) without the other Partys written approval of both form and content. The Party
conducting any Direct Co-Marketing Campaign shall coordinate with the other Party to
promptly communicate any opt-out requests (i.e., requests by contacted individuals not to
be contacted). Company shall comply with all laws and the Direct Marketing Associations
requirements in conducting any Direct Co-Marketing Campaign.
|
|
|
d.
|
|
Each Party, in its sole discretion, may offer the other Party and its Affiliates
opportunities to jointly demonstrate, market and promote the Digital Item(s) at trade or
other shows, seminars and/or wireless or electronic industry events.
|
|
|
e.
|
|
Nextel may, in its sole discretion, provide Company with opportunities to participate
in select co-marketing activities that may or may not be available to any other companies.
These activities will be negotiated on an as-needed basis throughout the Term.
|
|
|
|
|
|
Nextel Confidential Not for Distribution
|
|
|
|
|
|
|
|
32
|
|
Digital Item License and Distribution Agreement
4.
|
|
Customer comments. Company acknowledges that Nextel may, in its sole discretion, post or
cause to be posted comments or opinions of Nextel Users on Nextels web site and/or allow
Nextel Users to electronically submit and/or post their comments or opinions related the
Digital Items on Nextels website for public informational purposes and/or use by potential
Nextel Users.
|
|
5.
|
|
Promotional Licenses. Company shall provide to Nextel and to Boost Mobile at no cost one
hundred (100) licenses for each version (Local and Network Aware) of each Digital Item posted
on a Distribution Channel for Nextel to allocate and use in its own discretion.
|
|
a.
|
|
In the event a Network Aware Digital Item is available on a Distribution Channel, and
upon agreement of the Parties, Company shall (i) create and make available to Nextel (or any
Affiliate of Nextel designated by Nextel) at no cost a demonstration version of the Network
Aware Digital Item which (1) shall be a Local Digital Item and (2) shall show all features and
functionalities of such Network Aware Digital Item, and (ii) provide an unlimited number of
licenses for such demonstration version to Nextel and any such Affiliate at no cost.
|
|
|
|
|
Nextel Confidential Not for Distribution
|
|
|
|
|
|
33
|
Digital Item License and Distribution Agreement
Exhibit G-1
CUSTOMER CARE SERVICE LEVEL AGREEMENT
1.
|
|
Customer Care Process.
|
|
a.
|
|
Company. Company shall provide customer care for the Digital Item(s) to all Nextel
Users. Company shall provide and maintain at a minimum the customer care contacts listed
in Section 1(c) for Nextel Users experiencing problems with a Digital Item, and shall
respond to such customer inquiries in person during the hours which are set forth below.
If Company determines that the problem is due to a Digital Item issue, Company shall take
action to resolve such issue. If Company determines the problem is due to a Nextel Users
error, a Company customer service representative shall walk the Nextel User through the necessary steps to use the Digital
Items. If Company has eliminated the possibility of a problem with the Digital Items(s) or
a Nextel Users error, and determines the problem might be due to a Device or the Systems,
Company may refer the Nextel User to Nextel and may provide the Nextel User with Nextels
customer care number.
|
|
|
b.
|
|
Nextel. Nextel shall provide either directly or through a third party customer care
for Devices and the Systems. Nextel shall provide and maintain a toll-free telephone
number for Nextel Users experiencing problems, which shall be answered in person during
the applicable hours which are set forth below. In the case of Devices that are
distributed only to Boost Users, the applicable hours for receiving answers in person
shall be those set forth for Boost Customer Care below. If Nextel or an Affiliate of
Nextel determines that the problem is due to a Device or Systems issue, Nextel or such
Affiliate shall take action to resolve such issue. If Nextel or an Affiliate of Nextel
determines the problem is due to a Nextel Users error, a Nextel customer service
representative shall walk the Nextel User through the necessary steps to use the Device
and/or Systems. If Nextel has ruled out the possibility of a problem with a Devices or
the Systems and determines the problem might be due to an Digital Item error, Nextel may
refer the Nextel User to Company and may provide the Nextel User with Companys customer
care number or email.
|
|
|
c.
|
|
Nextel, Boost and Company Customer Care Contact Information.
|
|
|
|
|
|
|
|
Contact Information
|
|
|
Department
|
|
for Customers to Use
|
|
Hours of Operation
|
Nextel Customer Care
|
|
1-800-639-6111
|
|
Business Hours: Monday Friday, 7:00 AM 10:00 PM; Saturday, 8:00 AM 5:00 PM
|
Boost Customer Care
|
|
888-BOOST-4U or 888-266-7848
|
|
Business Hours: Monday Friday, 7:00 AM 9:00 PM;
|
Company Customer Care
|
|
Enter phone number: +1 650 571 1550
Email Address:support@sorrent.com
|
|
Business Hours: Monday Friday, 9:00 AM 5:00 PM Pacific
|
|
|
|
Each Party shall notify the other Party of any changes to its respective
customer care contact information (including, in the case of Nextel, any change to
Boost customer Care contact information) ten (10) business days before such change
becomes effective.
|
|
|
d.
|
|
Discontinuation of Support of Digital Item by Company. In the event that Company at
any time intends to discontinue support for any Digital Item, Company shall provide
Nextel with at least sixty (60) days prior written notice and, if the Digital Item is
distributed to Boost Users, to Boost Mobile at: Boost Mobile, LLC, 51 Discovery, Suite
250, Irvine, CA 92618 to the Boost Point of Contact in Exhibit H..
|
|
|
e.
|
|
Nextel acknowledges and agrees that Company may perform such customer care
obligations through the developer of the Digital Item provided Company has an agreement
with such developer
|
|
|
|
|
Nextel Confidential Not for Distribution
|
|
|
|
|
|
34
|
Digital Item License and Distribution Agreement
|
|
|
containing obligations, including but not limited to those regarding privacy and consumer
protection, that are equal to or greater than those contained in this Agreement. Company
shall ensure that such developer complies with all obligations of Company contained in this
Agreement. In the event of any non-compliance thereof Nextel reserves the right to treat
any breaches by developers as breaches by Company.
|
|
|
|
|
Nextel Confidential Not for Distribution
|
|
|
|
|
|
35
|
Digital Item License and Distribution Agreement
Exhibit G-2
AVAILABILITY/ HOSTING SERVICE LEVEL AGREEMENT
1.
|
|
Operational Issues. In case operational issues arise which require the assistance of the
other Party to
be resolved, each Party may contact the other Party to and each Party commits to a joint issue
resolution. Both Parties shall provide and maintain a phone number, which phone number is set
forth in
the table below, and which shall be answered by technical skilled personnel during the business
hours
which are set forth in the table below. In the event that the Companys Operations Center does
not
operate 24 hours each day, 7 days a week, Company shall link the phone number provided below to
a
pager and shall return Nextels and its Nextels Affiliates call(s) no later than *****
after the time
the pager message was left by Nextel during all hours outside of the business hours as set
forth below
for Company. The contact information below for operational issues is intended solely for
communication between Nextel or its Affiliates and Company and shall not be provided to third
parties.
Each Party shall notify the other Party of any changes to the operations contact information
provided in
the operations contact table below ten (10) business days before such change becomes effective.
|
|
2.
|
|
Network Aware Digital Items: Availability
.
|
|
a.
|
|
Each Network Aware Digital Item shall be available to applicable Nextel Users a
minimum of *****%
of the time during any 24 hour period, 7 day period, and 30 day period. Calculation of this
availability shall exclude Maintenance/Planned Outages but shall include any outages which
exceed the Maintenance Window, Unplanned Outages and Emergency Maintenance (as defined
below). Upon Nextels request, Company shall provide Nextel with a report showing Digital
Item
availability.
|
|
|
b.
|
|
Upon a violation of the above standards of availability and/or any violation of this
Exhibit G-2, in
addition to any other applicable remedies, Nextel may, in its sole discretion, without
notice,
immediately disable access to any effected Digital Item, remove any effected Digital Item
from a
Distribution Channel, revoke certification of Company as a Trusted Publisher or a Boost
Mobile
Trusted Publisher, or terminate this Agreement.
|
3.
|
|
Network Aware Application: Hosting
. In the event Company is responsible for hosting a
Network Aware
Digital Item or any portion thereof, Company shall comply with the following:
|
|
a.
|
|
Maintenance/ Outages
.
|
|
i)
|
|
Maintenance/Planned Outages
. Company shall perform any work which requires the
unavailability of the Digital Item or key functionalities of the Digital Item
(Maintenance/Planned Outage) on Friday or Saturday evenings between 11:00 PM and 5:00
AM local time (Maintenance Window).
|
|
(1)
|
|
In the event the time required to perform such work will unexpectedly exceed the
Maintenance Window Company shall notify the NDSS at the telephone number set forth
below forty-five (45) minutes before the end of the Maintenance Window, and such
unavailability shall be considered an Unplanned or Emergency Outage for the purposes
of Section 2 of this Exhibit G-2.
|
|
ii)
|
|
Unplanned Outages
. Company shall notify the NDSS at the telephone
number set forth below of any material Digital Item impairment (including but not
limited to Digital Item or key functionalities of the Digital Item not available or
malfunctioning) (Unplanned Outage) within thirty (30) minutes after such Unplanned
Outage commences. Company shall provide a short description of the impairment causing
the Unplanned Outage (e.g. service affected, extent of impairment) and a status for
resolution.
|
|
|
iii)
|
|
Emergency Maintenance
. In the event Company needs to perform work
which is required to correct any potentially service impacting conditions or prevent
Unplanned Outages, and such
|
***** The omitted portions of this exhibit have been filed with the Securities and Exchange
Commission pursuant to a request for confidential treatment under Rule 406 promulgated under
the Securities Act of 1933.
|
|
|
|
|
|
Nextel Confidential Not for Distribution
|
|
|
|
|
|
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36
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Digital Item License and Distribution Agreement
|
|
|
work needs to be performed outside of the Maintenance Window (Emergency Maintenance),
Company shall notify the NDSS at the telephone number set forth below of such Emergency
Maintenance forty-five (45) minutes prior to the start of the Emergency Maintenance.
Company shall provide an estimated timeframe for resolution and a status of such
Emergency Maintenance every two (2) hours until resolved.
|
|
b.
|
|
Nextel and Company Operations Center Contact Information
.
|
|
|
|
|
|
|
|
Phone Numbers for Nextel and
|
|
|
Department
|
|
Company
to Use
|
|
Hours of Operation
|
Nextel Data Solution Support
(NDSS)
|
|
Phone number: 1- 866-539-8924
|
|
M F 5am to 8pm MST; S -S
6am to 3pm MST After hours
support: Email
www.NextelDSS@nextel.com
|
|
|
|
|
|
Company Operations Center
|
|
Phone number: +1 650 571 1550
|
|
Business Hours: M - F 9am
to 5pm PST After hours: Please
call *****. This
number is linked to v-mail and
paging facilities Company
commits to *****
response.
|
|
i)
|
|
If data volume during the busiest hour (that hour with the most volume of
data traffic on the Nextel data network) of a
twenty-four
(24) hour day is greater
than 64 kilobits per second (Kbps), Company
SHOULD
provide a dedicated network link
(Internet Connection) between the site where the Network Aware Digital Item(s)
resides and the nearest Nextel network point of presence.
|
|
|
ii)
|
|
If data volume during the busiest hour (that hour with the most volume of
data traffic on the Nextel data network) of a
twenty-four
(24) hour day is greater
than 128 kilobits per second (Kbps), Company
SHALL
provide an Internet Connection
between the site where the Network Aware Digital Item(s) resides and the nearest
Nextel network point of presence.
|
|
d.
|
|
Bandwidth Provider
. Company shall provide such Internet Connections by
utilizing a bandwidth
provider prior to commencement of an Internet Connection. Such Internet Connection shall be
configured as not to conflict with the protocols and operating parameters specified by
Nextel or an
Affiliate of Nextel. Company shall bear all costs of implementing the Internet Connection,
including
but not limited to, obtaining the connection and maintenance of the connection.
|
|
|
e.
|
|
Third Party Servers
. Company agrees that portions of Network Aware Digital
Items hosted by
Company may not be hosted on any server or other hosting device not owned and controlled by
Company (Third Party Server), except in accordance with the following:
|
|
i.
|
|
Company shall promptly provide Nextel (and Boost Mobile, if any such
Network Aware Digital Items are distributed to Boost Users and not other Nextel Users,
as provided in Section 1.d of Exhibit G-1) with written notice of such proposal, which
written notice shall include at a minimum the name and address of the person or entity
that owns and controls the Third Party Server (Host), the name of a contact person
for the Host and the proposed date of the transfer of each portion of such Network
Aware Digital Item. No portion of a Network Aware Digital Item shall be hosted on a
Third Party Server without the prior written consent of Nextel. Such consent shall not
be unreasonably withheld; however, in no case shall any Host be a competitor of Nextel
or any Affiliate of Nextel;
|
|
|
ii.
|
|
Company shall not install any portion of a Network Aware Digital Item on any
Third Party Server or disclose any documentation related to a Network Aware Digital
Item to any proposed Host
|
***** The omitted portions of this exhibit have been filed with the Securities and Exchange
Commission pursuant to a request for confidential treatment under Rule 406 promulgated under
the Securities Act of 1933.
|
|
|
|
|
|
Nextel Confidential Not for Distribution
|
|
|
|
|
|
|
|
37
|
Digital Item License and Distribution Agreement
|
|
|
until the proposed Host and Company have executed a hosting agreement under which Host
has agreed to be bound by terms and conditions that are consistent with and no less
restrictive than the terms and conditions of this Agreement as if the Host were Company
hereunder, including but not limited to the confidentiality obligations contained in
Section 25 of the Agreement. Company will enforce and police compliance of Host with
the terms of any such hosting agreement; and Company shall impose the same standards of
service upon Host as set forth in this Agreement.
|
|
|
|
|
|
|
Nextel Confidential Not for Distribution
|
|
|
|
|
|
|
|
38
|
Digital Item License and Distribution Agreement
Exhibit G-3
CONTENT STANDARDS
1.
|
|
Company is responsible for ensuring that the Digital Items do not:
|
|
a.
|
|
disparage, defame, or discredit the Nextel name, or intentionally derogate
or work to the
detriment of the good name or business reputation of Nextel;
|
|
|
b.
|
|
promote a competitor of Nextel;
|
|
|
c.
|
|
provide a platform that would enable end users to register for stand-alone e-mail
or messaging
services, or provide the ability to enter a URL or create a portal to services or
applications not
provided by Operator;
|
|
|
d.
|
|
defame any person or entity, or contain any unlawful, obscene, harassing, or
racially or ethnically
offensive elements;
|
|
|
e.
|
|
facilitate or promote discrimination based upon race, gender, color, creed, age,
sexual orientation,
or disability; or
|
|
|
f.
|
|
Promote, enable or facilitate gambling or provide access to gambling services.
|
2.
|
|
Company is responsible for ensuring that the main focus of the Digital Items does not:
|
|
a.
|
|
promote illegal activity;
|
|
|
b.
|
|
depict sexually explicit images; or
|
|
|
c.
|
|
contain content promoting tobacco, or alcohol.
|
|
|
|
|
|
|
Nextel Confidential Not for Distribution
|
|
|
|
|
|
|
|
39
|
Digital Item License and Distribution Agreement
Exhibit H
MAIN POINT OF CONTACT
The main point of contact for Company is:
|
|
|
Name
|
|
*****
|
Title
|
|
Eastern Region Sales Direction, Sorrent
|
Phone number
|
|
*****
|
Mobile number
|
|
*****
|
Email address
|
|
*****
|
Address
|
|
*****
|
Fax number
|
|
|
Pager
|
|
|
The main point of contact for Nextel is:
|
|
|
Name
|
|
*****
|
Title
|
|
Sr. Product Manager
|
Phone number
|
|
|
Mobile number
|
|
*****
|
Email address
|
|
*****
|
Address
|
|
2003 Edmund Halley Drive, Reston, VA 20191
|
Fax number
|
|
*****
|
Pager
|
|
N/A
|
The main point of contact for Boost Mobile is:
|
|
|
Name
|
|
*****
|
Title
|
|
Sr. Product Manager
|
Phone number
|
|
*****
|
Mobile number
|
|
*****
|
Email address
|
|
*****
|
Address
|
|
2001 Edmund Halley Drive, Reston, VA 20191
|
Fax number
|
|
*****
|
Pager
|
|
N/a
|
Company contact for receipt of legal process is:
|
|
|
Name:
|
|
Paul Zuzelo
|
Address:
|
|
1810 Gateway Dr., Suite 200
|
|
|
San Mateo, CA 94404
|
Email:
|
|
pzuzelo@sorrent.com
|
Office #:
|
|
+ 1 650 571-1550 (BUSINESS HOURS)
|
|
|
***** AFTER HOURS
|
Fax#:
|
|
+ 1 650 571 5698
|
Mobile #:
|
|
|
Central Office #:
|
|
+ 1 650 571 1550
|
In addition to the POC above, Company shall contact the following person at Nextel regarding any
***** The omitted portions of this exhibit have been filed with the Securities and Exchange
Commission pursuant to a request for confidential treatment under Rule 406 promulgated under
the Securities Act of 1933.
|
|
|
|
|
|
Nextel Confidential Not for Distribution
|
|
|
|
|
|
|
|
40
|
Digital Item License and Distribution Agreement
change in the above 24-7 contact:
|
|
|
|
|
|
|
Address:
|
|
Nextel Communications
|
|
|
|
|
Security and Fraud Department
|
|
|
|
|
2001 Edmund Halley, Drive
|
|
|
|
|
Reston, Virginia 20194
|
|
|
|
|
|
|
|
Telephone:
|
|
*****
|
|
|
|
|
*****
|
|
|
|
|
*****
|
|
|
|
|
*****
|
|
|
|
|
*****
|
|
|
|
|
|
|
|
Fax:
|
|
*****
|
***** The omitted portions of this exhibit have been filed with the Securities and Exchange
Commission pursuant to a request for confidential treatment under Rule 406 promulgated under
the Securities Act of 1933.
|
|
|
|
|
|
Nextel Confidential Not for Distribution
|
|
|
|
|
|
|
|
41
|
Digital Item License and Distribution Agreement
Exhibit I-1
REPORTING NEXTEL USERS
For the purposes of Exhibit I-1, Nextel Users shall not include Boost Users.
|
a.
|
|
Roadmap. Within ten (10) business days of the end of each calendar quarter, Company
shall
provide to Nextel the title, description, target submission and availability dates of the
Digital Items
Company intends to make available on the Distribution Channels used by Nextel or an
Affiliate
pursuant to Exhibit D-1 during the upcoming three (3) months.
|
|
|
b.
|
|
Care reports. Within ten (10) business days after the end of each calendar month,
Company shall
submit to Nextel a report in electronic format containing the following information
regarding such
just-completed calendar month:
|
|
i)
|
|
Number of Nextel User support calls fielded by Companys support representatives by
day.
|
|
|
ii)
|
|
Accounting of the 10 most common Nextel User issues and number of daily
calls received for each issue.
|
|
a.
|
|
Final Payment Report. Within thirty (30) calendar days of the end of each calendar
month, Nextel shall submit to Company a report in electronic format containing the
following information regarding such just-completed calendar quarter:
|
|
i)
|
|
Number of Digital Item licensed/ distributed
|
|
|
ii)
|
|
Total sales of Digital Items in U.S. dollars, less any adjustments.
|
|
c.
|
|
Nextel may provide access to online reporting information for the Distribution
Channels where
Company may have access to the following reports and queries. It is understood that online
sales reporting is provided for informational purposes only and shall not reflect actual
payments
due to Company:
|
|
i)
|
|
sales and orders by Digital Item title by day of week.
|
|
|
ii)
|
|
sales and orders by Digital Item title by hour of day (15 minute increments).
|
|
|
iii)
|
|
top 10 Items by sales.
|
|
|
iv)
|
|
top 10 Items by orders.
|
|
|
v)
|
|
sales and orders by Device.
|
|
|
vi)
|
|
sales and orders by category.
|
|
|
vii)
|
|
sales and order by promotion.
|
|
|
|
|
|
|
Nextel Confidential Not for Distribution
|
|
|
42
Digital Item License and Distribution Agreement
Exhibit I-2
REPORTING BOOST USERS
|
c.
|
|
Roadmap. Within ten (10) business days of the end of each calendar quarter, Company
shall
provide to Boost Mobile the title, description, target submission and availability dates of
the Digital
Items Company intends to make available on the Distribution Channels used by Nextel or an
Affiliate pursuant to Exhibit D-2 during the upcoming three (3) months.
|
|
|
d.
|
|
Care reports. Within ten (10) business days after the end of each calendar month,
Company shall
submit to Boost Mobile a report in electronic format containing the following information
regarding
such just-completed calendar month:
|
|
i)
|
|
Number of Boost User support calls fielded by Companys support representatives by
day.
|
|
|
ii)
|
|
Accounting of the 10 most common Boost User issues and number of daily
calls received for each issue.
|
|
a.
|
|
Final Payment Report. Within thirty (30) calendar days of the end of each calendar
month, Nextel shall submit to Company a report in electronic format containing the
following information regarding such just-completed calendar quarter:
|
|
iii)
|
|
Number of Digital Item licensed/ distributed to Boost Users
|
|
|
iv)
|
|
Total sales of Digital Items in U.S. dollars, less any adjustments.
|
|
c.
|
|
Nextel and/or any Nextel Affiliate may provide access to online reporting
information regarding Boost Users for the Distribution Channels where Company may have
access to the following reports and queries. It is understood that online sales reporting
is provided for informational purposes only and shall not reflect actual payments due to
Company:
|
|
vii)
|
|
sales and orders by Digital Item title by day of week.
|
|
|
viii)
|
|
sales and orders by Digital Item title by hour of day (15 minute increments).
|
|
|
ix)
|
|
top 10 Items by sales.
|
|
|
x)
|
|
top 10 Items by orders.
|
|
|
xi)
|
|
sales and orders by Device.
|
|
|
xii)
|
|
sales and orders by category.
|
|
|
vii)
|
|
sales and order by promotion.
|
|
|
|
|
|
|
Nextel Confidential Not for Distribution
|
|
|
43
Digital Item License and Distribution Agreement
Exhibit J
TRADEMARKS
1. Nextel Trademarks
|
a.
|
|
Nextel
®
|
|
|
b.
|
|
Nextel logo only as follows:
|
|
c.
|
|
Nextel Compatible Product logo only as follows:
|
2.
|
|
Boost Mobile Trademarks
|
|
a.
|
|
Boost Mobile
|
|
|
b.
|
|
Boost Mobile logos provided below, plus those other graphic logos (if any) as
provided to Company
for the purposes of this Agreement:
|
|
|
|
|
|
|
Nextel Confidential Not for Distribution
|
|
|
44
Digital Item License and Distribution Agreement
|
|
|
|
|
|
Nextel Confidential Not for Distribution
|
|
|
45
AMENDMENT No. 1
DIGITAL ITEM LICENSE AND DISTRIBUTION AGREEMENT
This Amendment No. 1 (Amendment No. 1) is made effective as of this 11
th
day of May,
2005 (the Amendment No. 1 Effective Date) and is attached to and forms a part of the Digital
Item License and Distribution Agreement by and between Nextel Operations, Inc. (Nextel) and
Sorrent, Inc. (Company), dated as of August 15, 2004 (Agreement). Unless otherwise defined in
this Amendment No. 1, capitalized terms shall have the meaning set forth in the Agreement.
This Amendment No. 1 is entered into by and between Company and Nextel for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, to amend the Agreement
as set forth herein. To the extent that any provision of this Amendment No. 1 conflicts with any
provision of the Agreement, the applicable provision of the Agreement shall be deemed to be
superseded by this Amendment No. 1, and the provision of this Amendment No. 1 shall be deemed to
govern. Except as amended by this Amendment No. 1, the Agreement shall continue in full force and
effect.
NOW, THEREFORE, the Parties hereby agree as follows:
I.
|
|
Exhibit A-2, Section 1 of the Agreement is amended
by renaming the current second Section 1.b
Section 1.c and by adding Sections 1.d and 1.e after such Section 1.c of Exhibit A-2 which
such
Sections 1.d and 1.e shall read as follows:
|
|
d.
|
|
5-Card Draw Poker is a Full Version Local Digital Item which has the following
features
and functionality (5-Card Draw Poker): A card game that enables Nextel Users to play
poker games including 5-card draw and experience the thrill of a big win or the crush
of
losing your shirt with 5-card Draw Poker from Sorrent. Sit face-to-face with 3
ruthless
opponents, bluffing, raising and calling-just like at a real poker table.
|
|
|
e.
|
|
Fox Sports Boxing is a Full Version Local Digital Item which has the following
features
and functionality (Fox Sports Boxing): A boxing game that enables Nextel Users to box
opponents and puts them in the mobile ring. 1st person views of your opponents let you
fight your way to become the champ! Multiple punches; 3 levels of difficulty; opponents
show bruising and cuts.
|
II.
|
|
Exhibit E-2, Section 1.a(ii) of the Agreement is amended
by renaming the current Section 1.a(ii)
Section 1.a(ii)(A) and by adding Sections 1.a(ii)(B) and 1.a(ii)(C) after such Section
1.a(ii)(A) of
Exhibit E-2 which such Sections 1.a(ii)(B) and 1.a(ii)(C) shall read as follows:
|
|
(B)
|
|
For the 5-Card Draw Poker Digital Item, as defined in Exhibit A-2,
which shall be preloaded on Devices, Company shall receive a one-time lump sum
payment in the amount of ***** dollars ($*****) (Preload
Payment 3), payable ***** provided that Nextel has issued to Company
in writing Initial Acceptance and Final Acceptance of the 5-Card Draw Poker
Digital Item. For purposes of clarification, no Preload Payment 3 shall be due
from or payable by Nextel if Nextel has not issued such Initial Acceptance and
Final Acceptance in writing, however, if Nextel Preloads the 5-Card Draw Poker
Digital Item on Devices, then such Preload Payment 3 shall be due and payable
on the later of ***** or the date of such Preload. In addition,
Company shall issue and Nextel shall receive an invoice for the Preload Payment
3 no later than forty-five (45) days before such Preload Payment 3 is due and
payable. If, in its sole discretion, Nextel Preloads the 5-Card Draw Poker Digital Item on Devices, after the first
one hundred ***** (*****) Devices Preloaded with the 5-
|
***** The omitted portions of this exhibit have been filed with the Securities and Exchange
Commission pursuant to a request for confidential treatment under Rule 406 promulgated under
the Securities Act of 1933.
Nextel Privileged and Confidential
|
|
|
Card Draw Poker Digital Item (for which no payment shall be due from or made
by Nextel), Nextel will pay to Company ***** ($*****) per Device Preloaded
with 5-Card Draw Poker (Preload Payment 4), payable per calendar quarter.
|
|
|
(C)
|
|
For
the Fox Sports Boxing Digital Item, as defined in Exhibit A-2, which shall be
preloaded on Devices, Company shall receive a one-time lump sum payment in the
amount of ***** dollars ($*****) (Preload Payment 5),
payable ***** provided that Nextel has issued to Company in writing
Initial Acceptance and Final Acceptance of the Fox Sports Boxing Digital Item. For
purposes of clarification, no Preload Payment 5 shall be due from or payable by
Nextel if Nextel has not issued such Initial Acceptance and Final Acceptance in
writing, however, if Nextel Preloads the Fox Sports Boxing Digital Item on Devices,
then such Preload Payment 5 shall be due and payable on the later of ***** or the date of such Preload. In addition, Company shall issue and Nextel shall
receive an invoice for the Preload Payment 5 no later than forty-five (45) days
before such Preload Payment 5 is due and payable. If, in its sole discretion,
Nextel Preloads the Fox Sports Boxing Digital Item on Devices, after the first
***** (*****) Devices Preloaded with the Fox Sports Boxing Digital Item
(for which no payment shall be due from or made by Nextel), Nextel will pay to
Company ***** ($*****) per Device Preloaded with Fox Sports Boxing
Digital Item (Preload Payment 6), payable per calendar quarter.
|
III. Exhibit E-2, Section 3.a of the Agreement is amended by deleting it in its entirety and
replacing it with the following:
|
a.
|
|
Preload Payment 1, Preload Payment 2, Preload Payment 3, Preload
Payment 4, Preload Payment 5, Preload Payment 6 and Digital Item
Payment 1 are, collectively, the Payments.
|
IV.
|
|
Exhibit E-2, Section 4.a of the Agreement is amended by deleting it in its entirety and
replacing it with the following:
|
|
a.
|
|
Except for Payments payable per calendar quarter, Payments shall be due and
payable within forty-five (45) days following the end of each calendar
month. Payments that are payable per calendar quarter shall be due and
payable within forty-five (45) days following the end of each calendar
quarter.
|
IN WITNESS WHEREOF, Company and Nextel have caused this Amendment No. 1 to be signed and
delivered by their duly authorized representatives, all as of the Amendment No. 1 Effective Date.
|
|
|
|
|
|
|
SORRENT, INC.
|
|
NEXTEL OPERATIONS,
INC.
|
|
|
|
|
|
|
|
By:
|
|
/s/ Paul Zuzelo
|
|
By:
|
|
/s/ Don Girskis
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name: Paul Zuzelo
|
|
Name: Don Girskis
|
|
|
|
|
|
|
|
Title: CAO
|
|
Title: Authorized Signatory
|
|
|
|
|
|
|
|
Date: May 13, 2005
|
|
Date: 6/8/2005
|
***** The omitted portions of this exhibit have been filed with the Securities and Exchange
Commission pursuant to a request for confidential treatment under Rule 406 promulgated under
the Securities Act of 1933.
Nextel
Privileged and Confidential
AMENDMENT No. 2
DIGITAL ITEM LICENSE AND DISTRIBUTION AGREEMENT
This Amendment No. 2 (Amendment No. 2) is made effective as of this 7
th
day of
September, 2005 (the Amendment No. 2 Effective Date) and is attached to and forms a part of
the Digital Item License and Distribution Agreement by and between Nextel Operations, Inc.
(Nextel) and Glu Mobile Inc. (formerly Sorrent, Inc.) (Company), dated as of August 15
,
2004
and as amended (Agreement). Unless otherwise defined in this Amendment No. 2, capitalized
terms shall have the meaning set forth in the Agreement.
This Amendment No. 2 is entered into by and between Company and Nextel for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, to amend the Agreement
as
set forth herein. To the extent that any provision of this Amendment No. 2 conflicts with any
provision of
the Agreement, the applicable provision of the Agreement shall be deemed to be superseded by this
Amendment No. 2, and the provision of this Amendment No. 2 shall be deemed to govern.
Except as amended by this Amendment No. 2, the Agreement shall continue in full force and
effect.
NOW, THEREFORE, the Parties hereby agree as follows:
I.
|
|
Exhibit A-2, Section 1 of the Agreement is amended by adding Section l.f after
Section l.e of
Exhibit A-2 which such Section l.f shall read as follows:
|
|
f.
|
|
Zuma is a Full Version Local Digital Item which has the following features and
functionality
(Zuma): From the makers of some of the most popular online games of all-time, PopCap
Games, Zuma lets you control the stone frog idol of the ancient Zuma in this thrilling
action puzzler. Fire balls to make sets of three or more, but dont let them reach the
golden skull... or youre history! Travel to new realms in Adventure Mode or test your
skills in Gauntlet Mode. Either way, youll find it hard to put down this simple, yet
highly addictive action puzzle game.
|
|
II.
|
|
Exhibit E-2, Section l.a(ii) of the Agreement is amended by adding Section
l.a(ii)(D) after
Section l.a(ii)(C) of Exhibit E-2 which such Section l.a(ii)(D) shall read as follows:
|
|
(D)
|
|
For the Zuma Digital Item, as defined in Exhibit A-2, which
shall be preloaded on Devices, Company shall receive a one-time lump sum
payment in the amount of ***** dollars ($*****) (Preload
Payment 7), payable ***** provided that Nextel has issued to
Company in writing Initial Acceptance and Final Acceptance of the Zuma
Digital Item. For purposes of clarification, no Preload Payment 7 shall
be due from or payable by Nextel if Nextel has not issued such Initial
Acceptance and Final Acceptance in writing, however, if Nextel Preloads
the Zuma Digital Item on Devices, then such Preload Payment 7 shall be
due and payable on the later of ***** or the date of such
Preload. In addition, Company shall issue and Nextel shall receive an
invoice for the Preload Payment 7 no later than forty-five (45) days
before such Preload Payment 7 is due and payable. If, in its sole
discretion, Nextel Preloads the Zuma Digital Item on Devices, after the
first ***** (*****) Devices Preloaded with the Zuma Digital
Item (for which no payment shall be due from or made by Nextel), Nextel
will pay to Company ***** ($*****) per Device Preloaded with Zuma
(Preload Payment 8), payable per calendar quarter.
|
***** The omitted portions of this exhibit have been filed with the Securities and Exchange
Commission pursuant to a request for confidential treatment under Rule 406 promulgated under
the Securities Act of 1933.
Nextel Privileged and Confidential
III.
|
|
Exhibit E-2, Section 3.a of the Agreement is amended by deleting it in its
entirety and replacing it with the following:
|
|
a.
|
|
Preload Payment 1, Preload Payment 2, Preload Payment 3, Preload
Payment 4, Preload Payment 5, Preload Payment 6, Preload Payment 7,
Preload Payment 8 and Digital Item Payment 1 are, collectively, the
Payments.
|
IN WITNESS WHEREOF, Company and Nextel have caused this Amendment No. 2 to be signed and delivered
by their duly authorized representatives, all as of the Amendment No. 2 Effective Date.
GLU
MOBILE INC. (formerly SORRENT, NEXTEL OPERATIONS, INC.
|
|
|
|
|
|
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By:
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/s/ Paul Zuzelo
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By:
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/s/ Donald Girskis
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Name: Paul Zuzelo
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Name: Donald Girskis
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Title: Chief Administration Officer
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Title: Authorized Signatory
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Date: September 15, 2005
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Date: 9-20-2005
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Nextel Privileged and Confidential