7,317,074 Shares GLU MOBILE INC. Common Stock (Plus an Option Purchase up to 1,097,561 Shares to Cover Overallotments) UNDERWRITING AGREEMENT
Exhibit 1.01
7,317,074 Shares
Common Stock
(Plus an Option Purchase up to 1,097,561 Shares to Cover Overallotments)
January 11, 2011
Xxxx Capital Partners, LLC
as Representative of the several underwriters
as Representative of the several underwriters
c/o Roth Capital Partners, LLC
00 Xxxxxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
00 Xxxxxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Ladies and Gentlemen:
Glu Mobile Inc., a Delaware corporation (the “Company”), proposes, subject to the
terms and conditions stated herein, to the several underwriters listed in Schedule IV hereto
(collectively, the “Underwriters”) an aggregate of 7,317,074 authorized but unissued shares
(the “Underwritten Shares”) of Common Stock, par value $0.0001 per share (the “Common
Stock”), of the Company. The Company has granted the Underwriters the option to purchase an
aggregate of up to 1,097,561 additional shares of Common Stock (the “Additional Shares”) as
may be necessary to cover over-allotments made in connection with the offering. The Underwritten
Shares and Additional Shares are collectively referred to as the “Shares.” Xxxx Capital
Partners, LLC shall act as the representative (the “Representative”) of the several
Underwriters.
The Company and each of the Underwriter hereby confirms their agreement as follows:
1. Registration Statement and Prospectus. The Company has prepared and filed with the
Securities and Exchange Commission (the “Commission”) a shelf registration statement on
Form S-3 (File No. 333-170577) under the Securities Act of 1933, as amended (the “Securities
Act”), and the rules and regulations (the “Rules and Regulations”) of the Commission
thereunder, and such amendments to such registration statement (including post effective
amendments) as may have been required to the date of this Agreement. Such registration statement,
as amended (including any post effective amendments) has been declared effective by the Commission.
Such registration statement, including amendments thereto (including post effective amendments
thereto) at such time, the exhibits and any schedules thereto at such time,
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the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the
Securities Act at such time and the documents and information otherwise deemed to be a part thereof
or included therein by Rule 430B under the Securities Act or otherwise pursuant to the Rules and
Regulations at such time, is herein called the “Registration Statement.” If the Company
has filed or files an abbreviated registration statement pursuant to Rule 462(b) under the
Securities Act (the “Rule 462 Registration Statement”), then any reference herein to the
term Registration Statement shall include such Rule 462 Registration Statement.
The Company is filing with the Commission pursuant to Rule 430B and Rule 424 under the
Securities Act a final prospectus supplement relating to the Shares to a form of prospectus
included in the Registration Statement. Such prospectus in the form in which it appears in the
Registration Statement is hereinafter called the “Base Prospectus,” and such final
prospectus supplement as filed, along with the Base Prospectus, is hereinafter called the
“Final Prospectus.” Such Final Prospectus and any preliminary prospectus supplement or
“red xxxxxxx,” in the form in which they shall be filed with the Commission pursuant to Rule 424(b)
under the Securities Act (including the Base Prospectus as so supplemented) is hereinafter called a
“Prospectus.” Any reference herein to the Base Prospectus, the Final Prospectus or a
Prospectus shall be deemed to include the documents incorporated by reference therein pursuant to
Item 12 of Form S-3 under the Securities Act as of the date of such Prospectus.
For purposes of this Agreement, all references to the Registration Statement, the Rule 462
Registration Statement, the Base Prospectus, the Final Prospectus, the Prospectus or any amendment
or supplement to any of the foregoing shall be deemed to include the copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval System. All references in this
Agreement to financial statements and schedules and other information which is “described,”
“contained,” “included” or “stated” in the Registration Statement, the Rule 462 Registration
Statement, the Base Prospectus, the Final Prospectus or the Prospectus (or other references of like
import) shall be deemed to mean and include all such financial statements, pro forma financial
information and schedules and other information which is incorporated by reference in or otherwise
deemed by the Rules and Regulations to be a part of or included in the Registration Statement, the
Rule 462 Registration Statement, the Base Prospectus or the Prospectus, as the case may be; and all
references in this Agreement to amendments or supplements to the Registration Statement, the Rule
462 Registration Statement, the Base Prospectus, the Final Prospectus or the Prospectus shall be
deemed to mean and include the subsequent filing of any document under the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), that is deemed to be incorporated therein by
reference therein or otherwise deemed by the Rules and Regulations to be a part thereof.
2. Representations and Warranties of the Company Regarding the Offering.
(a) The Company represents and warrants to, and agrees with, each Underwriter, as of the date
hereof and as of each Closing Date (as defined in Section 4(c) below), except as otherwise
indicated, as follows:
(i) At each time of effectiveness, at the date hereof and at each Closing Date, the
Registration Statement and any post-effective amendment thereto complied or will comply in
all material respects with the requirements of the Securities
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Act and the Rules and Regulations and did not and will not contain any untrue statement
of a material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. The Time of Sale Disclosure
Package (as defined in Section 2(a)(iii)(A)(1) below) as of the date hereof and at each
Closing Date, and the Final Prospectus, as amended or supplemented, at the time of filing
pursuant to Rule 424(b) under the Securities Act and at each Closing Date, did not and will
not contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The representations and
warranties set forth in the two immediately preceding sentences shall not apply to
statements in or omissions from the Registration Statement or any Prospectus in reliance
upon, and in conformity with, written information furnished to the Company by the
Underwriters specifically for use in the preparation thereof. The Registration Statement
(including each document incorporated by reference therein) contains all exhibits and
schedules required to be filed by the Securities Act or the Rules and Regulations. No order
by the Commission preventing or suspending the effectiveness or use of the Registration
Statement or any Prospectus is in effect and no proceedings for such purpose have been
instituted or are pending, or, to the knowledge of the Company, are contemplated or
threatened by the Commission. The Company has complied with all requests by the Commission
for additional or supplemental information.
(ii) The documents incorporated by reference in the Registration Statement, the Time of
Sale Disclosure Package and any Prospectus, when they became effective or were filed with
the Commission, as the case may be, conformed in all material respects to the requirements
of the Securities Act or the Exchange Act, as applicable, were filed on a timely basis with
the Commission and none of such documents, when they were filed (or, if amendments to such
documents were filed, when such amendments were filed), contained an untrue statement of a
material fact or omitted to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading. Any further
documents so filed and incorporated by reference in the Registration Statement, the Time of
Sale Disclosure Package or the Final Prospectus, when such documents are filed with the
Commission, will conform in all material respects to the requirements of the Exchange Act,
and will not contain an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances under which they
were made, not misleading.
(iii) (A) The Company has provided a copy to the Representative of each Issuer Free
Writing Prospectus (as defined below) used in the sale of Shares. The Company has filed all
Issuer Free Writing Prospectuses required to be so filed with the Commission, and no order
preventing or suspending the effectiveness or use of any Issuer Free Writing Prospectus is
in effect and no proceedings for such purpose have been instituted or are pending, or, to
the knowledge of the Company, are contemplated or threatened by the Commission. When taken
together with the rest of the Time of Sale Disclosure Package or the Final Prospectus, since
its first use and at all relevant times since then, no Issuer Free Writing Prospectus has,
does or will include (1) any untrue statement of a material fact or omission to state any
material fact necessary in order to
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make the statements therein, in the light of the circumstances under which they were
made, not misleading, or (2) information that conflicted, conflicts or will conflict with
the information contained in the Registration Statement or the Final Prospectus. The
representations and warranties set forth in the immediately preceding sentence shall not
apply to statements in or omissions from the Time of Sale Disclosure Package, the Final
Prospectus or any Issuer Free Writing Prospectus in reliance upon, and in conformity with,
written information furnished to the Company by the Representative specifically for use in
the preparation thereof. As used in this paragraph and elsewhere in this Agreement:
(1) “Time of Sale Disclosure Package” means the Base Prospectus, the
Prospectus most recently filed with the Commission before the time of this
Agreement, including any preliminary prospectus supplement deemed to be a part
thereof, each Issuer Free Writing Prospectus, and any description of the transaction
provided by the Representative included on Schedule I.
(2) “Issuer Free Writing Prospectus” means any “issuer free writing
prospectus,” as defined in Rule 433 under the Securities Act, relating to the Shares
that (A) is required to be filed with the Commission by the Company, or (B) is
exempt from filing pursuant to Rule 433(d)(5)(i) or (d)(8) under the Securities Act,
in each case in the form filed or required to be filed with the Commission or, if
not required to be filed, in the form retained in the Company’s records pursuant to
Rule 433(g) under the Securities Act.
(B) At the time of filing of the Registration Statement and at the date hereof, the
Company was not and is not an “ineligible issuer,” as defined in Rule 405 under the
Securities Act or an “excluded issuer” as defined in Rule 164 under the Securities Act.
(C) Each Issuer Free Writing Prospectus satisfied, as of its issue date and at all
subsequent times through the Prospectus Delivery Period, all other conditions as may be
applicable to its use as set forth in Rules 164 and 433 under the Securities Act, including
any legend, record-keeping or other requirements.
(iv) The consolidated financial statements of the Company, together with the related
notes, included or incorporated by reference in the Registration Statement, the Time of Sale
Disclosure Package and the Final Prospectus comply in all material respects with the
applicable requirements of the Securities Act and the Exchange Act and fairly present in all
material respects the financial condition of the Company as of the dates indicated and the
results of operations and changes in cash flows for the periods therein specified in
conformity with generally accepted accounting principles consistently applied throughout the
periods involved; and the supporting schedules included or incorporated in the Registration
Statement present fairly the information required to be stated therein in all material
respects. No other financial statements, pro forma financial information or schedules are
required under the Securities Act to be included or incorporated by reference in the
Registration Statement, the Time of Sale Disclosure Package or the Final Prospectus. To the
Company’s knowledge,
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PricewaterhouseCoopers LLP, which has expressed its opinion with respect to the
financial statements and schedules filed as a part of or incorporated by reference in the
Registration Statement and included in the Registration Statement, the Time of Sale
Disclosure Package and the Final Prospectus is an independent public accounting firm with
respect to the Company within the meaning of the Securities Act and the Rules and
Regulations.
(v) The Company had a reasonable basis for, and made in good faith, each
“forward-looking statement” (within the meaning of Section 27A of the Securities Act or
Section 21E of the Exchange Act) contained or incorporated by reference in the Registration
Statement, the Time of Sale Disclosure Package or the Final Prospectus.
(vi) All statistical or market-related data included or incorporated by reference in
the Registration Statement, the Time of Sale Disclosure Package or the Final Prospectus are
based on or derived from sources that the Company reasonably believes to be reliable and
accurate, and the Company has obtained the written consent to the use of such data from such
sources, to the extent required.
(vii) The Common Stock is registered pursuant to Section 12(b) of the Exchange Act and
is included or approved for inclusion on the Nasdaq Global Market. There is no action
pending by the Company or, to the Company’s knowledge, the Nasdaq Global Market to delist
the Common Stock from the Nasdaq Global Market, nor has the Company received any
notification that the Nasdaq Global Market is contemplating terminating such listing. When
issued, the Shares will be listed on the Nasdaq Global Market.
(viii) The Company has not taken, directly or indirectly, any action that is designed
to or that has constituted or that would reasonably be expected to cause or result in the
stabilization or manipulation of the price of any security of the Company to facilitate the
sale or resale of the Shares.
(ix) The Company is not and during the past three years neither the Company nor any
predecessor was: (A) a blank check company as defined in Rule 419(a)(2) of the Securities
Act, (B) a shell company, other than a business combination shell company, each as defined
in Rule 405 of the Securities Act, or (C) an issuer for an offering of xxxxx stock as
defined in Rule 3a51-1 of the Exchange Act.
(x) The Company is not and, after giving effect to the offering and sale of the Shares,
will not be an “investment company,” as such term is defined in the Investment Company Act
of 1940, as amended.
(xi) The Company was at the time of filing the Registration Statement, and at the date
hereof, remains eligible to use Form S-3 under the Securities Act for primary offerings. The
conditions for use of Form S-3 set forth in the General Instructions thereto have been
satisfied in connection with the Registration Statement and sale of the Shares thereunder.
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(b) Any certificate signed by any officer of the Company and delivered to the Representative
or to the Representative’s counsel shall be deemed a representation and warranty by the Company to
the Underwriters as to the matters covered thereby.
3. Representations and Warranties Regarding the Company.
(a) The Company represents and warrants to and agrees with, the Underwriters, except as set
forth in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus, as
follows:
(i) Each of the Company and its significant subsidiaries as such term is defined in
Rule 1-02(w) of Regulation S-X (each, a “Significant Subsidiary”) has been duly
organized and is validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, to the extent that the concept of “good standing” is
applicable under the laws of such jurisdiction. Each of the Company and its Significant
Subsidiaries has the corporate power and authority to own its properties and conduct its
business as currently being carried on and as described in the Registration Statement, the
Time of Sale Disclosure Package and the Prospectus, and is duly qualified to do business as
a foreign corporation in good standing in each jurisdiction, to the extent that the concept
of “good standing” is applicable under the laws of such jurisdiction, in which it owns or
leases real property or in which the conduct of its business makes such qualification
necessary and in which the failure to so qualify would have or is reasonably likely to
result in a material adverse effect upon the business, prospects, properties, operations,
condition (financial or otherwise) or results of operations of the Company and its
subsidiaries, taken as a whole, or in its ability to perform its obligations under this
Agreement (“Material Adverse Effect”).
(ii) The Company has the corporate power and authority to enter into this Agreement and
to authorize, issue and sell the Shares as contemplated by this Agreement. This Agreement
has been duly authorized, executed and delivered by the Company, and constitutes a valid,
legal and binding obligation of the Company, enforceable in accordance with its terms,
except as rights to indemnity or contribution hereunder may be limited by federal or state
securities laws or other applicable law and except as such enforceability may be limited by
bankruptcy, insolvency, fraudulent transfer, moratorium, reorganization or similar laws
affecting the rights of creditors generally and subject to general principles of equity
(including laws governing specific performance, injunctive relief or other equitable
remedies) and principles of public policy.
(iii) The execution, delivery and performance of this Agreement and the consummation of
the transactions herein contemplated will not (A) result in a breach or violation of any of
the terms and provisions of, or constitute a default under, any law, rule or regulation to
which the Company or any subsidiary is subject, or by which any property or asset of the
Company or any subsidiary is bound or affected, (B) conflict with, result in any violation
or breach of, or constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or give to others any right of termination, amendment,
acceleration or cancellation (with or without notice, lapse of
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time or both) of, any agreement, lease, credit facility, debt, note, bond, mortgage,
indenture or other instrument (the “Contracts”) or obligation or other understanding
to which the Company or any subsidiary is a party of by which any property or asset of the
Company or any subsidiary is bound or affected, except in each case of (A) and (B) to the
extent that such breach, violation, conflict, default, termination, amendment, acceleration
or cancellation right would not, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect, or (C) result in a breach or violation of any of the
terms and provisions of, or constitute a default under, the Company’s charter or by-laws.
(iv) Neither the Company nor any of its Significant Subsidiaries is in violation,
breach or default under its certificate of incorporation, by-laws or other equivalent
organizational or governing documents.
(v) All consents, approvals, orders, authorizations and filings required on the part of
the Company and its subsidiaries in connection with the execution, delivery or performance
of this Agreement have been obtained or made, other than such consents, approvals, orders
and authorizations the failure of which to make or obtain would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect.
(vi) All of the issued and outstanding shares of capital stock of the Company are duly
authorized and validly issued, fully paid and nonassessable, and have been issued in
compliance with all applicable securities laws, and conform in all material respects to the
description thereof in the Registration Statement, the Time of Sale Disclosure Package and
the Prospectus. There are no shares of the Company’s Capital Stock outstanding except as
set forth in the Section of the Prospectus titled “Description of Securities We May Offer.”
Except for the issuances of options or restricted stock in the ordinary course of business,
since the respective dates as of which information is provided in the Registration
Statement, the Time of Sale Disclosure Package or the Prospectus, the Company has not
entered into or granted any convertible or exchangeable securities, options, warrants,
agreements, contracts or other rights in existence to purchase or acquire from the Company
any shares of the capital stock of the Company. The Shares, when issued, will be duly
authorized and validly issued, fully paid and nonassessable, will be issued in compliance
with all applicable securities laws, and will be free of preemptive, rights to subscription
or purchase securities, registration or similar rights.
(vii) Each of the Company and its Significant Subsidiaries has filed all returns (as
hereinafter defined) required to be filed with taxing authorities prior to the date hereof
or has duly obtained extensions of time for the filing thereof. Each of the Company and its
Significant Subsidiaries has paid all taxes (as hereinafter defined) shown as due on such
returns that were filed and has paid all taxes imposed on or assessed against the Company or
such respective Significant Subsidiary, other than any such taxes which the Company or any
Significant Subsidiary are contesting in good faith and for which adequate reserves have
been provided and reflected in the Company’s financial statements included in Commission
filings. The provisions for taxes payable, if any, shown on the financial statements filed
with or as part of or incorporated into the
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Registration Statement are sufficient for all accrued and unpaid taxes, whether or not
disputed, and for all periods to and including the dates of such consolidated financial
statements. Except as disclosed the Registration Statement, the Time of Sale Disclosure
Package and the Prospectus or otherwise in writing to the Underwriters, (i) no issues have
been raised (and are currently pending) by any taxing authority in connection with any of
the returns or taxes asserted as due from the Company or its subsidiaries, and (ii) no
waivers of statutes of limitation with respect to the returns or collection of taxes have
been given by or requested from the Company or its subsidiaries. The term “taxes”
mean all federal, state, local, foreign, and other net income, gross income, gross receipts,
sales, use, ad valorem, transfer, franchise, profits, license, lease, service, service use,
withholding, payroll, employment, excise, severance, stamp, occupation, premium, property,
windfall profits, customs, duties or other taxes, fees, assessments, or charges of any kind
whatever, together with any interest and any penalties, additions to tax, or additional
amounts with respect thereto. The term “returns” means all returns, declarations,
reports, statements, and other documents required to be filed in respect to taxes.
(viii) Since the respective dates as of which information is given in the Registration
Statement, the Time of Sale Disclosure Package or the Prospectus, (a) neither the Company
nor any of its Significant Subsidiaries has incurred any material liabilities or
obligations, direct or contingent, or entered into any material transactions other than in
the ordinary course of business, (b) the Company has not declared or paid any dividends or
made any distribution of any kind with respect to its capital stock; (c) there has not been
any change in the capital stock of the Company or any of its Significant Subsidiaries (other
than a change in the number of outstanding shares of Common Stock due
to the issuance of shares upon the exercise of outstanding options or warrants or the issuance of restricted
stock awards or restricted stock units under the Company’s existing stock awards plan, or
any new grants thereof in the ordinary course of business), (d) there has not been any
material change in the Company’s long-term or short-term debt, and (e) there has not been
the occurrence of any Material Adverse Effect.
(ix) There is not pending or, to the knowledge of the Company, threatened, any action,
suit or proceeding to which the Company or any of its subsidiaries is a party or of which
any property or assets of the Company is the subject before or by any court or governmental
agency, authority or body, or any arbitrator or mediator, would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect.
(x) The Company and each of its subsidiaries holds, and is in compliance with, all
franchises, grants, authorizations, licenses, permits, easements, consents, certificates and
orders (“Permits”) of any governmental or self-regulatory agency, authority or body
required for the conduct of its business, and all such Permits are in full force and effect,
in each case, except where the failure to possess or comply with any such Permits is not
reasonably likely to result in a Material Adverse Effect.
(xi) The Company and its subsidiaries have good and marketable title to all property
(whether real or personal) described in the Registration Statement, the
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Time of Sale Disclosure Package and the Prospectus as being owned by them that are
material to the business of the Company, in each case free and clear of all liens, claims,
security interests, other encumbrances or defects, except those that are not reasonably
likely to result in a Material Adverse Effect. The property held under lease by the Company
and its subsidiaries is held by them under valid, subsisting and enforceable leases with
only such exceptions with respect to any particular lease as do not interfere in any
material respect with the conduct of the business of the Company and its subsidiaries.
(xii) The Company and each of its subsidiaries owns or possesses or has valid right to
use all patents, patent applications, trademarks, service marks, trade names, trademark
registrations, service xxxx registrations, copyrights, licenses, inventions, trade secrets
and rights necessary for the conduct of the business of the Company and its subsidiaries as
currently carried on and as described in or incorporated by reference into the Registration
Statement, the Time of Sale Disclosure Package and the Prospectus; except as stated in the
Registration Statement, in the Time of Sale Disclosure Package or in the Prospectus, to the
knowledge of the Company, no name which the Company or any of its subsidiaries uses and no
other aspect of the business of the Company or any of its subsidiaries will involve or give
rise to any infringement of, or license or similar fees for, any patents, patent
applications, trademarks, service marks, trade names, trademark registrations, service xxxx
registrations, copyrights, licenses, inventions, trade secrets or other similar rights of
others material to the business or prospects of the Company and neither the Company nor any
of its subsidiaries has received any written notice alleging any such infringement or fee,
in each case which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would reasonably be expected to have a Material Adverse Effect.
(xiii) The Company and each of its subsidiaries has complied with, is not in violation
of, and has not received any notice of violation relating to any law, rule or regulation
relating to the conduct of its business, or the ownership or operation of its property and
assets, including, without limitation, (A) the Currency and Foreign Transactions Reporting
Act of 1970, as amended, or any money laundering laws, rules or regulations, (B) any laws,
rules or regulations related to health, safety or the environment, including those relating
to the regulation of hazardous substances, (C) the Xxxxxxxx-Xxxxx Act of 2002 (the
“Xxxxxxxx-Xxxxx Act”) and the rules and regulations of the Commission thereunder,
(D) the Foreign Corrupt Practices Act of 1977 and the rules and regulations thereunder, and
(E) the Employment Retirement Income Security Act of 1974 and the rules and regulations
thereunder, in each case except where the failure to be in compliance is not reasonably
likely to result in a Material Adverse Effect.
(xiv) Neither the Company nor any of its subsidiaries nor, to the knowledge of the
Company, any director, officer, employee, representative, agent or affiliate of the Company
or any of its subsidiaries is currently subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the
Company will not directly or indirectly use the proceeds of the offering of the Shares
contemplated hereby, or lend, contribute or otherwise make available such proceeds to any
person or entity, for the purpose of financing the activities of any person currently
subject to any U.S. sanctions administered by OFAC.
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(xv) The Company and each of its subsidiaries carries, or is covered by, insurance in
such amounts and covering such risks as is reasonable for the conduct of its business and
the value of its properties and as the Company reasonably believes is customary for
companies engaged in similar businesses in similar industries.
(xvi) No labor dispute with the employees of the Company or any of its subsidiaries
exists or, to the knowledge of the Company, is imminent that is reasonably likely to result
in a Material Adverse Effect.
(xvii) Except as disclosed in the Registration Statement, the Time of Sale Disclosure
Package and the Prospectus, none of the Company, its subsidiaries nor, to its knowledge, any
other party is in violation, breach or default of any Contract that is reasonably likely to
result in a Material Adverse Effect.
(xviii) No supplier, customer, distributor or sales agent of the Company has notified
the Company that it intends to discontinue or decrease the rate of business done with the
Company, except where such decrease is not reasonably likely to result in a Material Adverse
Effect.
(xix) There are no claims, payments, issuances, arrangements or understandings for
services in the nature of a finder’s, broker, consulting or origination fee to which the
Company is a party by which the Company is bound with respect to the introduction of the
Company to the Underwriters or the sale of the Shares hereunder or any other arrangements,
agreements, understandings, payments or issuances with respect to the Company that may
affect the Underwriters’ compensation, as determined by the Financial Industry Regulatory
Authority (“FINRA”).
(xx) Except as disclosed to the Representative in writing, the Company has not made any
direct or indirect payments (in cash, securities or otherwise) to (i) any person, as a
finder’s fee, investing fee or otherwise, in consideration of such person raising capital
for the Company or introducing to the Company persons who provided capital to the Company,
(ii) any FINRA member, or (iii) any person or entity that has any direct or indirect
affiliation or association with any FINRA member within the 12-month period prior to the
date on which the Registration Statement was filed with the Commission (“Filing
Date”) or thereafter, except as contemplated by this Agreement.
(xxi) None of the net proceeds of the offering will be paid by the Company to any
participating FINRA member or any affiliate or associate of any participating FINRA member,
except as specifically authorized herein.
(xxii) Other than as described in the footnotes to the table under the heading “Selling
Stockholders” in the prospectus filed by the Company with the Commission on October 22, 2010
pursuant to Rule 424(b)(3) under Registration No. 333 169131, to the Company’s knowledge, no
(i) officer or director of the Company or its subsidiaries, (ii) owner of 5% or more of the
Company’s unregistered securities or that of its subsidiaries or (iii) owner of any amount
of the Company’s unregistered securities acquired within the 180-day period prior to the
Filing Date, has any direct or indirect
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affiliation or association with any FINRA member. The Company will advise the
Representative and its counsel if it becomes aware that any officer, director or other
stockholder of the Company or its subsidiaries is or becomes an affiliate or associated
person of a FINRA member participating in the offering.
(xxiii) Other than the Underwriters, no person has the right to act as an underwriter
or as a financial advisor to the Company in connection with the transactions contemplated
hereby.
(xxiv) The Company and each of its subsidiaries maintain, on a consolidated basis, a
system of internal accounting controls sufficient to provide reasonable assurance that: (1)
transactions are executed in accordance with management’s general or specific authorization;
(2) transactions are recorded as necessary to permit preparation of financial statements in
conformity with United States generally accepted accounting principles and to maintain
accountability for assets; (3) access to assets is permitted only in accordance with
management’s general or specific authorization; and (4) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences. Except as described in the Time of Sale
Disclosure Package and the Prospectus, since the end of the Company’s most recent audited
fiscal year, there has been (I) no material weakness in the Company’s internal control over
financial reporting (whether or not remediated) and (II) no change in the Company’s internal
control over financial reporting that has materially affected, or is reasonably likely to
materially affect, the Company’s internal control over financial reporting.
(xxv) The Company and its subsidiaries employ, on a consolidated basis, disclosure
controls and procedures that are designed to ensure that information required to be
disclosed by the Company in the reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported, within the time periods specified in the
Commission’s rules and forms, and is accumulated and communicated to the Company’s
management, including its principal executive officer or officers and principal financial
officer or officers, as appropriate, to allow timely decisions regarding disclosure.
(xxvi) Except as disclosed in the Registration Statement, the Time of Sale Disclosure
Package and the Prospectus, no event has occurred which, with notice or lapse of time or
both, would constitute such a default, in the performance of any material obligation,
agreement or condition contained in any bond, debenture, note, indenture, loan agreement or
any other material contract, lease or other instrument to which it is subject or by which
any of them may be bound, or to which any of the material property or assets of the Company
or any of its subsidiaries is subject, except as individually or in the aggregate would not
reasonably be expected to have a Material Adverse Effect.
(xxvii) Other than the subsidiaries of the Company listed in the Registration
Statement, the Time of Sale Disclosure Package and the Prospectus, the Company, directly or
indirectly, owns no capital stock or other equity or ownership or proprietary interest in
any corporation, partnership, association, trust or other entity.
11
(xxviii) There are no related-party transactions involving the Company or any
subsidiary or any other person required to be described in the Registration Statement, the
Time of Sale Disclosure Package and the Prospectus that have not been described as required.
4. Purchase, Sale and Delivery of Shares.
(a) On the basis of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Company agrees to issue and sell the
Underwritten Shares to the Underwriters, and the Underwriters, severally and not jointly, agree to
purchase the Underwritten Shares. The purchase price for each Underwritten Share shall be $1.9475 per share (the “Per Share Price”).
(b) The Company hereby grants to the Underwriters the option to purchase some or all of the
Additional Shares and, upon the basis of the warranties and representations and subject to the
terms and conditions herein set forth, the Underwriters shall have the right to purchase all or any
portion of the Additional Shares at the Per Share Price as may be necessary to cover
over-allotments made in connection with the transactions contemplated hereby. This option may be
exercised by the Representative at any time on or before the thirtieth day following the date
hereof, by written notice to the Company (the “Option Notice”). The Option Notice shall
set forth the aggregate number of Additional Shares as to which the option is being exercised, and
the date and time when the Additional Shares are to be delivered (such date and time being herein
referred to as the “Option Closing Date”); provided, however, that the Option Closing Date
shall not be earlier than the Closing Date (as defined below) nor earlier than the second business
day after the date on which the option shall have been exercised nor later than the fifth business
day after the date on which the option shall have been exercised unless the Company and the
Representative otherwise agrees. If any Additional Shares are to be purchased, each Underwriter
agrees, severally and not jointly, to purchase the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as the Representative may determine) that bears the same
proportion to the total number of Additional Shares to be purchased as the number of Underwritten
Shares set forth on Schedule I opposite the name of such Underwriter bears to the total number of
Underwritten Shares. The Representative may cancel on behalf of all Underwriters the option at any
time prior to its expiration by giving written notice of such cancellation to the Company.
Payment of the purchase price for and delivery of the Additional Shares shall be made at the
Option Closing Date in the same manner and at the same office as the payment for the Underwritten
Shares as set forth in subparagraph (c) below. For the purpose of expediting the checking of the
certificate for the Additional Shares by the Underwriters, the Company agrees to make a form of
such certificate available to the Underwriters for such purpose at least one full business day
preceding the Option Closing Date.
(c) The Underwritten Shares will be delivered by the Company to the Representative for the
account of the Underwriters against payment of the purchase price therefor by wire transfer of same
day funds payable to the order of the Company at the offices of Xxxx Capital Partners, LLC, 00
Xxxxxxxxx Xxxxx, Xxxxxxx Xxxxx, XX 00000, or such other location as may be mutually acceptable, at
6:00 a.m. Pacific Time, on the third (or if the
12
Underwritten Shares are priced, as contemplated by Rule 15c6-1(c) under the Exchange Act,
after 4:30 p.m. Eastern time, the fourth) full business day following the date hereof, or at such
other time and date as the Underwriters and the Company determine pursuant to Rule 15c6-1(a) under
the Exchange Act, or, in the case of the Additional Shares, at such date and time set forth in the
Option Notice. The time and date of delivery of the Underwritten Shares or the Additional Shares,
as applicable, is referred to herein as the “Closing Date.” If the Representative so
elects, delivery of the Underwritten Shares and Additional Shares may be made by credit through
full fast transfer to the account at The Depository Trust Company designated by the Representative.
Certificates representing the Shares, in definitive form and in such denominations and registered
in such names as the Representative may request upon at least two business days’ prior notice to
the Company, will be made available for checking and packaging not later than 10:30 a.m. Pacific
Time on the business day next preceding the Closing Date at the above addresses, or such other
location as may be mutually acceptable.
(d) It is understood that the Representative has been authorized, for its own account and the
accounts of the several Underwriters, to accept delivery of and receipt for, and make payment of
the purchase price for, the Underwritten Shares and any Additional Shares the Underwriters have
agreed to purchase. Xxxx Capital Partners LLC, individually and not as the Representative of the
Underwriters, may (but shall not be obligated to) make payment for any Shares to be purchased by
any Underwriter whose funds shall not have been received by the Representative by the applicable
Closing Date, as the case may be, for the account of such Underwriter, but any such payment shall
not relieve such Underwriter from any of its obligations under this Agreement.
(e) The Underwriters shall reasonably endeavor to sell the Shares to both institutional and
retail investors.
5. Covenants.
(a) The Company covenants and agrees with each Underwriter as follows:
(i) During the period beginning on the date hereof and ending on the later of the
Closing Date or such date as determined by the Representative that the Prospectus is no
longer required by law to be delivered in connection with sales by an underwriter or dealer
(the “Prospectus Delivery Period”), prior to amending or supplementing the
Registration Statement, including any Rule 462 Registration Statement, the Time of Sale
Disclosure Package or the Prospectus, the Company shall furnish to the Underwriters for
review and comment a copy of each such proposed amendment or supplement, and the Company
shall not file any such proposed amendment or supplement to which the Representative
reasonably objects.
(ii) From the date of this Agreement until the end of the Prospectus Delivery Period,
the Company shall promptly advise the Representative in writing (A) of the receipt of any
comments of, or requests for additional or supplemental information from, the Commission,
(B) of the time and date of any filing of any post-effective amendment to the Registration
Statement or any amendment or supplement to the Time of Sale Disclosure Package, the
Prospectus or any Issuer Free Writing Prospectus, (C) of the time and date that any
post-effective amendment to the Registration Statement
13
becomes effective and (D) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of any order preventing or
suspending its use or the use of the Time of Sale Disclosure Package or any Issuer Free
Writing Prospectus, or of any proceedings to remove, suspend or terminate from listing or
quotation the Common Stock from any securities exchange upon which it is listed for trading
or included or designated for quotation, or of the threatening or initiation of any
proceedings for any of such purposes. If the Commission shall enter any such stop order at
any time during the Prospectus Delivery Period, the Company will use its reasonable efforts
to obtain the lifting of such order at the earliest possible moment. Additionally, the
Company agrees that it shall comply with the provisions of Rules 424(b), 430A and 430B, as
applicable, under the Securities Act and will use its reasonable efforts to confirm that any
filings made by the Company under Rule 424(b) or Rule 433 were received in a timely manner
by the Commission (without reliance on Rule 424(b)(8) or 164(b) of the Securities Act).
(iii) (A) During the Prospectus Delivery Period, the Company will comply with all
requirements imposed upon it by the Securities Act, as now and hereafter amended, and by the
Rules and Regulations, as from time to time in force, and by the Exchange Act, as now and
hereafter amended, so far as necessary to permit the continuance of sales of or dealings in
the Shares as contemplated by the provisions hereof, the Time of Sale Disclosure Package,
the Registration Statement and the Prospectus. If during such period any event occurs the
result of which the Prospectus (or if the Prospectus is not yet available to prospective
purchasers, the Time of Sale Disclosure Package ) would include an untrue statement of a
material fact or omit to state a material fact necessary to make the statements therein, in
the light of the circumstances then existing, not misleading, or if during such period it is
necessary or appropriate in the reasonable opinion of the Company or its counsel or the
Representative or its counsel to amend the Registration Statement or supplement the
Prospectus (or if the Prospectus is not yet available to prospective purchasers, the Time of
Sale Disclosure Package ) to comply with the Securities Act or to file under the Exchange
Act any document that would be deemed to be incorporated by reference in the Prospectus in
order to comply with the Securities Act or the Exchange Act, the Company will promptly
notify the Representative and will amend the Registration Statement or supplement the
Prospectus (or if the Prospectus is not yet available to prospective purchasers, the Time of
Sale Disclosure Package) or file such document (at the expense of the Company) so as to
correct such statement or omission or effect such compliance.
(B) If at any time following the issuance of an Issuer Free Writing Prospectus there
occurred or occurs an event or development the result of which such Issuer Free Writing
Prospectus conflicted or would conflict with the information contained in the Registration
Statement or any Prospectus or included or would include an untrue statement of a material
fact or omitted or would omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances prevailing at that subsequent time,
not misleading, the Company has promptly notified or promptly will notify the Representative
and has promptly amended or will promptly amend or supplement, at its own expense, such
Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or
omission.
14
(iv) The Company shall use reasonable efforts to qualify the Shares for sale under the
securities laws of such jurisdictions as the Representative reasonably designates and to
continue such qualifications in effect so long as required for the distribution of the
Shares, except that the Company shall not be required in connection therewith to qualify as
a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so
qualified, to execute a general consent to service of process in any state or to subject
itself to taxation in respect of doing business in any jurisdiction in which it is not
otherwise subject.
(v) The Company will furnish to the Representative and counsel for the Representative
copies of the Registration Statement, each Prospectus, any Issuer Free Writing Prospectus,
and all amendments and supplements to such documents, in each case as soon as available and
in such quantities as the Underwriters may from time to time reasonably request.
(vi) The Company will make generally available to its security holders as soon as
practicable, but in any event not later than 15 months after the end of the Company’s
current fiscal quarter, an earnings statement (which need not be audited) covering a
12-month period that shall satisfy the provisions of Section 11(a) of the Securities Act and
Rule 158 of the Rules and Regulations.
(vii) The Company, whether or not the transactions contemplated hereunder are
consummated or this Agreement is terminated, will pay or cause to be paid (A) all expenses
(including transfer taxes allocated to the respective transferees) incurred in connection
with the delivery to the Underwriters of the Shares, (B) all expenses and fees (including,
without limitation, fees and expenses of the Company’s counsel) in connection with the
preparation, printing, filing, delivery, and shipping of the Registration Statement
(including the financial statements therein and all amendments, schedules, and exhibits
thereto), the Shares, the Time of Sale Disclosure Package, the Prospectus, any Issuer Free
Writing Prospectus and any amendment thereof or supplement thereto, (C) all reasonable
filing fees and reasonable fees and disbursements of the Underwriters’ counsel incurred in
connection with the qualification of the Shares for offering and sale by the Underwriters or
by dealers under the securities or blue sky laws of the states and other jurisdictions that
the Representative shall designate, (D) the fees and expenses of any transfer agent or
registrar, (E) the reasonable filing fees and reasonable fees and disbursements of
Underwriters’ counsel incident to any required review and approval by FINRA, of the terms of
the sale of the Shares, (F) listing fees, if any, and (G) all other costs and expenses
incident to the performance of its obligations hereunder that are not otherwise specifically
provided for herein. In addition to the foregoing, the Company will pay the Underwriters,
on the Closing Date, an amount equal to 2% of the gross proceeds received by the Company
from the sale of the Underwritten Shares and the Additional Shares, as applicable, as a
non-accountable reimbursement of the Underwriters’ other expenses (the “Underwriters’
Expenses”). If this Agreement is terminated by the Representative in accordance with
the provisions of Section 6 or Section 9, the Company will reimburse the Underwriters for
all out-of-pocket disbursements (including, but not limited to, reasonable fees and
disbursements of counsel, travel expenses, postage, facsimile and telephone charges)
incurred by the
15
Underwriters in connection with its investigation, preparing to market and marketing
the Shares or in contemplation of performing its obligations hereunder. Notwithstanding
anything contained herein, the maximum amount payable by the Company for Underwriters’
counsel fees, disbursements and other out-of-pocket expenses pursuant to this Section
5(a)(vii) exclusive of the Underwriters’ Expenses shall be $125,000.
(viii) The Company intends to apply the net proceeds from the sale of the Shares to be
sold by it hereunder for the purposes set forth in the Time of Sale Disclosure Package and
in the Final Prospectus.
(ix) The Company has not taken and will not take, directly or indirectly, during the
Prospectus Delivery Period, any action designed to or which might reasonably be expected to
cause or result in, or that has constituted, the stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of the Shares.
(x) The Company and its subsidiaries will substantially comply with all effective
applicable provisions of the Xxxxxxxx-Xxxxx Act.
(xi) During the Prospectus Delivery Period, the Company will file on a timely basis
with the Commission such periodic and current reports as required by the Rules and
Regulations.
(xii) Prior to the Closing Date, the Company will not issue any press release or other
communication directly or indirectly or hold any press conference with respect to the
Company, its condition, financial or otherwise, or the earnings, business, operations or
prospects of any of them, or the offering of the Shares, other than information disclosed in
or incorporated by reference into the Registration Statement, the Time of Sale Disclosure
Package or the Prospectus, without the prior written consent of the Representative, which
consent will not be unreasonably withheld, unless in the reasonable judgment of the Company
and its counsel, and after notification to the Representative, such press release or
communication is required by law, in which case the Company shall use its reasonable best
efforts to allow the Representative reasonable time to comment on such release or other
communication in advance of such issuance.
(xiii) The Company represents and agrees that, unless it obtains the prior written
consent of the Representative, and the Representative represents and agrees that, unless it
obtains the prior written consent of the Company, it has not made and will not make any
offer relating to the Shares that would constitute an Issuer Free Writing Prospectus;
provided that the prior written consent of the parties hereto shall be deemed to have been
given in respect of the free writing prospectuses included in Schedule I. Any such free
writing prospectus consented to by the Company and the Representative is hereinafter
referred to as a “Permitted Free Writing Prospectus.” The Company represents that
it has treated or agrees that it will treat each Permitted Free Writing Prospectus as an
“issuer free writing prospectus,” as defined in Rule 433, and has complied or will comply
with the requirements of Rule 433 applicable to any Permitted
16
Free Writing Prospectus, including timely Commission filing where required, legending
and record-keeping.
(xiv) The Company hereby agrees that, without the prior written consent of the
Underwriter, it will not, during the period ending 90 days after the date hereof
(“Lock-Up Period”), (i) offer, pledge, issue, sell, contract to sell, purchase,
contract to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or exchangeable for
Common Stock; or (ii) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of the Common Stock, whether
any such transaction described in clause (i) or (ii) above is to be settled by delivery of
Common Stock or such other securities, in cash or otherwise; or (iii) file any registration
statement with the Commission relating to the offering of any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock (other than
registration statements on Form S-4 and Form S-8). The restrictions contained in the
preceding sentence shall not apply to (1) the Shares to be sold hereunder, (2) the issuance
of Common Stock upon the exercise of options or warrants disclosed as outstanding in the
Registration Statement (excluding exhibits thereto) or the Prospectus, (3) the issuance of
employee stock options not exercisable during the Lock-Up Period and the grant of restricted
stock awards or restricted stock units pursuant to equity incentive plans described in the
Registration Statement (excluding exhibits thereto) and the Prospectus (4) the issuance of
Common Stock pursuant to the Company’s 2007 Employee Stock Purchase Plan, or (5) the
issuance by the Company of shares of Common Stock, or securities convertible into or
exercisable or exchangeable for the Common Stock, in connection with mergers or acquisitions
(irrespective of whether in the form of an acquisition of securities, businesses, properties
or assets), or joint ventures, commercial relationships or strategic transactions (including
but not limited to marketing or distribution arrangements, collaboration agreements or
intellectual property license agreements) with, another company or the securityholders of
another company in an aggregate amount not to exceed 10% of the number of shares of Common
Stock issued and outstanding immediately following the completion of the transactions
contemplated by this Agreement, provided that the recipient of the shares of Common Stock
pursuant to this clause (5) executes a lock-up agreement substantially in the form of
Exhibit A hereto. Notwithstanding the foregoing, to the extent that the Underwriters are at
such time providing research coverage to the Company and is subject to the restrictions set
forth in FINRA Rule 2711(f)(4), then if (x) the Company issues an earnings release or
material news, or a material event relating to the Company occurs, during the last 17 days
of the Lock-Up Period, or (y) prior to the expiration of the Lock-Up Period, the Company
announces that it will release earnings results during the 16-day period beginning on the
last day of the Lock-Up Period, the restrictions imposed by this clause shall continue to
apply until the expiration of the 18-day period beginning on the issuance of the earnings
release or the occurrence of the material news or material event, unless the Underwriter
waives such extension in writing; provided, however, that this sentence shall not apply if
the research published or distributed on the Company is compliant with Rule 139 of the
Securities Act and the Company’s securities are “actively traded” as defined in Rule
101(c)(1) of Regulation M of the Exchange Act.
17
6. Conditions of the Underwriters’ Obligations. The obligations of the Underwriters hereunder
to purchase the Shares are subject to the accuracy, as of the date hereof and at the Closing Date
(as if made at the Closing Date), of and compliance with all representations, warranties and
agreements of the Company contained herein, the performance by the Company of its obligations
hereunder and the following additional conditions:
(a) If filing of the Prospectus, or any amendment or supplement thereto, or any Issuer Free
Writing Prospectus, is required under the Securities Act or the Rules and Regulations, the Company
shall have filed the Prospectus (or such amendment or supplement) or such Issuer Free Writing
Prospectus with the Commission in the manner and within the time period so required (without
reliance on Rule 424(b) or 164(b) under the Securities Act); the Registration Statement shall
remain effective; no stop order suspending the effectiveness of the Registration Statement or any
part thereof, any Rule 462 Registration Statement, or any amendment thereof, nor suspending or
preventing the use of the Time of Sale Disclosure Package, the Prospectus or any Issuer Free
Writing Prospectus shall have been issued by the Commission; no proceedings for the issuance of
such an order shall have been initiated or threatened; any reasonable request of the Commission or
the Underwriters for additional information (to be included in the Registration Statement, the Time
of Sale Disclosure Package, the Prospectus, any Issuer Free Writing Prospectus or otherwise) shall
have been complied with to the Representative’s reasonable satisfaction.
(b) FINRA shall have raised no objection to the fairness and reasonableness of the
underwriting terms and arrangements.
(c) The Representative shall not have reasonably determined, and advised the Company, that the
Registration Statement, the Time of Sale Disclosure Package or the Prospectus, or any amendment
thereof or supplement thereto, or any Issuer Free Writing Prospectus, contains an untrue statement
of fact which, in the Representative’s reasonable opinion, is material, or omits to state a fact
which, in the Representative’s reasonable opinion, is material and is required to be stated therein
or necessary to make the statements therein not misleading.
(d) On or after the date hereof (i) no downgrading shall have occurred in the rating accorded
any of the Company’s securities by any “nationally recognized statistical organization,” as that
term is defined by the Commission for purposes of Rule 436(g)(2) under the Securities Act, and (ii)
no such organization shall have publicly announced that it has under surveillance or review, with
possible negative implications, its rating of any of the Company’s securities.
(e) On each Closing Date, there shall have been furnished to the Representative the opinion
and negative assurance letter of Fenwick & West, LLP, dated the Closing Date and the Option Closing
Date, as applicable, and addressed to the Representative, in form and substance reasonably
satisfactory to the Representative, to the effect set forth in Schedule II.
(f) The Representative shall have received a letter of PricewaterhouseCoopers LLP, on the date
hereof and on the Closing Date and Option Close Date, as applicable, addressed
18
to the Representative, confirming that they are independent public accountants within the
meaning of the Securities Act and are in compliance with the applicable requirements relating to
the qualifications of accountants under Rule 2-01 of Regulation S-X of the Commission, and
confirming, as of the date of each such letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial information is given in the
Time of Sale Disclosure Package, as of a date not prior to the date hereof or more than five days
prior to the date of such letter), the conclusions and findings of said firm with respect to the
financial information and other matters required by the Representative.
(g) On or before the date hereof, the Representative shall have received duly executed
“lock-up” agreements, in a form attached as Exhibit A hereto, between the Representative and the
individuals listed on Schedule III.
(h) On the Closing Date, there shall have been furnished to the Representative a certificate,
dated the Closing Date and addressed to the Representative, signed by the chief executive officer
and the chief financial officer of the Company, in their capacity as officers of the Company, to
the effect that:
(i) The representations and warranties of the Company in this Agreement are true and
correct, in all material respects, as if made at and as of the Closing Date or the Option
Closing Date, as applicable, and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied at or prior to the
Closing Date or the Option Closing Date, as applicable;
(ii) No stop order or other order (A) suspending the effectiveness of the Registration
Statement or any part thereof or any amendment thereof, (B) suspending the qualification of
the Shares for offering or sale, or (C) suspending or preventing the use of the Time of Sale
Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus, has been issued,
and no proceeding for that purpose has been instituted or, to their knowledge, is
contemplated by the Commission or any state or regulatory body; and
(iii) There has been no occurrence of any event resulting or reasonably likely to
result in a Material Adverse Effect during the period from and after the date of this
Agreement and prior to the Closing Date or the Option Closing Date, as applicable.
(i) The Company shall have furnished to the Underwriters and their counsel such additional
documents, certificates and evidence customary under the circumstances as the Representative or its
counsel may have reasonably requested.
If any condition specified in this Section 6 shall not have been fulfilled when and as
required to be fulfilled, this Agreement may be terminated by the Representative by notice to the
Company at any time at or prior to the Closing Date and such termination shall be without liability
of any party to any other party, except that Section 5(a)(vii), Section 7 and Section 8 shall
survive any such termination and remain in full force and effect.
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7. Indemnification and Contribution.
(a) The Company agrees to indemnify, defend and hold harmless each Underwriter, its
respective affiliates, directors and officers and employees, and each person, if any, who controls
such Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, from and against any losses, claims, damages or liabilities to which the Underwriter
or such person may become subject, under the Securities Act or otherwise (including in settlement
of any litigation if such settlement is effected with the written consent of the Company), insofar
as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, including the information deemed to be a part of the Registration Statement
at the time of effectiveness and at any subsequent time pursuant to Rules 430A and 430B of the
Rules and Regulations, the Time of Sale Disclosure Package, the Prospectus, or any amendment or
supplement thereto (including any documents filed under the Exchange Act and deemed to be
incorporated by reference into the Registration Statement or the Prospectus), or any Issuer Free
Writing Prospectus, or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, and will reimburse the
Underwriters for any legal or other expenses reasonably incurred by them in connection with
evaluating, investigating or defending against such loss, claim, damage, liability or action;
provided, however, that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in the Registration Statement, the
Time of Sale Disclosure Package, the Prospectus, or any amendment or supplement thereto or any
Issuer Free Writing Prospectus, in reliance upon and in conformity with written information
furnished to the Company by the Underwriters specifically for use in the preparation thereof.
(b) Each Underwriter will, severally and not jointly, indemnify, defend and hold harmless the
Company, its affiliates, directors, officers and employees, and each person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, from and against any losses, claims, damages or liabilities to which the Company may become
subject, under the Securities Act or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of the Underwriters), insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in the Registration
Statement, the Time of Sale Disclosure Package, the Prospectus, or any amendment or supplement
thereto or any Issuer Free Writing Prospectus, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged omission was made in
the Registration Statement, the Time of Sale Disclosure Package, the Prospectus, or any amendment
or supplement thereto or any Issuer Free Writing Prospectus in reliance upon and in conformity with
written information furnished to the Company by the Underwriters specifically for use in the
preparation thereof, and will reimburse the Company for any legal or other expenses reasonably
incurred by the Company in connection with defending against any such loss, claim, damage,
liability or action.
20
(c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice
of the commencement of any action, such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the failure to notify the indemnifying party shall not
relieve the indemnifying party from any liability that it may have to any indemnified party except
to the extent such indemnifying party has been materially prejudiced by such failure. In case any
such action shall be brought against any indemnified party, and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled to participate in, and,
to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of the indemnifying party’s
election so to assume the defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof; provided, however, that if (i) the
indemnified party has reasonably concluded (based on advice of counsel) that there may be legal
defenses available to it or other indemnified parties that are different from or in addition to
those available to the indemnifying party, (ii) a conflict or potential conflict exists (based on
advice of counsel to the indemnified party) between the indemnified party and the indemnifying
party (in which case the indemnifying party will not have the right to direct the defense of such
action on behalf of the indemnified party), or (iii) the indemnifying party has not in fact
employed counsel reasonably satisfactory to the indemnified party to assume the defense of such
action within a reasonable time after receiving notice of the commencement of the action, the
indemnified party shall have the right to employ a single counsel to represent it in any claim in
respect of which indemnity may be sought under subsection (a) or (b) of this Section 7, in which
event the reasonable and documented fees and expenses of such separate counsel shall be borne by
the indemnifying party or parties and reimbursed to the indemnified party as incurred; it being
understood, however, that the indemnifying party shall not be liable for the expenses of more than
one separate counsel (plus local counsel to the extent applicable).
The indemnifying party under this Section 7 shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such consent or if there be a
final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party
against any loss, claim, damage, liability or expense by reason of such settlement or judgment. No
indemnifying party shall, without the prior written consent of the indemnified party, effect any
settlement, compromise or consent to the entry of judgment in any pending or threatened action,
suit or proceeding in respect of which any indemnified party is a party or could be named and
indemnity was or would be sought hereunder by such indemnified party, unless such settlement,
compromise or consent (a) includes an unconditional release of such indemnified party from all
liability for claims that are the subject matter of such action, suit or proceeding and (b) does
not include a statement as to or an admission of fault, culpability or a failure to act by or on
behalf of any indemnified party.
(d) If the indemnification provided for in this Section 7 is unavailable or insufficient to
hold harmless an indemnified party under subsection (a) or (b) above, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above, (i) in
21
such proportion as is appropriate to reflect the relative benefits received by the Company on
the one hand and the Underwriters on the other from the offering and sale of the Shares or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other shall be deemed to be in
the same proportion as the total net proceeds from the offering (before deducting expenses)
received by the Company bear to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the Final Prospectus.
The relative fault shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission to state a material
fact relates to information supplied by the Company or the Underwriters and the parties’ relevant
intent, knowledge, access to information and opportunity to correct or prevent such untrue
statement or omission. The Company and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this subsection (d) were to be determined by pro rata
allocation or by any other method of allocation that does not take account of the equitable
considerations referred to in the first sentence of this subsection (d). The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities referred to in the
first sentence of this subsection (d) shall be deemed to include any documented legal or other
expenses reasonably incurred by such indemnified party in connection with investigating or
defending against any action or claim that is the subject of this subsection (d). Notwithstanding
the provisions of this subsection (d), the Underwriters shall not be required to contribute any
amount in excess of the amount of the Underwriters’ commissions referenced in Section 4(a) actually
received by such Underwriter pursuant to this Agreement. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent misrepresentation. The
Underwriters’ obligations to contribute pursuant to this Section 7 are several, and not joint, in
proportion to their respective underwriting commitments as set forth opposite their respective
names on Schedule I. For purposes of this Section 7, each officer and employee of an Underwriter
and each person, if any, who controls an Underwriter within the meaning of the Securities Act or
the Exchange Act shall have the same rights to contribution as such Underwriter, and each director
of the Company, each officer of the Company who signed the Registration Statement, and each person,
if any, who controls the Company with the meaning of the Securities Act and the Exchange Act shall
have the same rights to contribution as the Company.
(e) The obligations of the Company under this Section 7 shall be in addition to any liability
that the Company may otherwise have and the benefits of such obligations shall extend, upon the
same terms and conditions, to each person, if any, who controls any Underwriter within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act; and the obligations of the
Underwriters under this Section 7 shall be in addition to any liability that the Underwriters may
otherwise have and the benefits of such obligations shall extend, upon the same terms and
conditions, to the Company, and its officers, directors and each person who controls the Company
within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act.
22
(f) For purposes of this Agreement, the Representative confirms, and the Company acknowledges,
that there is no information concerning the Underwriters furnished in writing to the Company by the
Representative specifically for preparation of or inclusion in the Registration Statement, the Time
of Sale Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus, other than the
statements set forth in the last paragraph on the cover page of the Prospectus and the statements
set forth in the “Underwriting” section of the Prospectus and Time of Sale Disclosure Package, only
insofar as such statements relate to the amount of selling concession and re-allowance or to
over-allotment and related activities that may be undertaken by the Underwriters.
(g) If, on any Closing Date, any one or more of the several Underwriters shall fail or refuse
to purchase Shares that it or they have agreed to purchase hereunder on such date, and the
aggregate number of Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase does not exceed 10% of the aggregate number of the Shares to be purchased on
such date, the Representative may make arrangements satisfactory to the Company for the purchase of
such Shares by other persons, including any of the Underwriters, but if no such arrangements are
made by such Closing Date, the other Underwriters shall be obligated, severally and not jointly, in
the proportions that the number of Underwritten Shares set forth opposite their respective names on
Schedule I bears to the aggregate number of Underwritten Shares set forth opposite the names of all
such non-defaulting Underwriters, or in such other proportions as may be specified by the
Representative with the consent of the non-defaulting Underwriters, to purchase the Shares which
such defaulting Underwriter or Underwriters agreed but failed or refused to purchase on such date.
If, on any Closing Date, any one or more of the Underwriters shall fail or refuse to purchase
Shares and the aggregate number of Shares with respect to which such default occurs exceeds 10% of
the aggregate number of Shares to be purchased on such date, and arrangements satisfactory to the
Representative and the Company for the purchase of such Shares are not made within 48 hours after
such default, this Agreement shall terminate without liability of any party to any other party
except that the provisions of Section 5(a)(vii) and Section 7 shall at all times be effective and
shall survive such termination. In any such case either the Representative or the Company shall
have the right to postpone the Closing Date, but in no event for longer than seven days in order
that the required changes, if any, to the Registration Statement and the Prospectus or any other
documents or arrangements may be effected.
8. Representations and Agreements to Survive Delivery. All representations, warranties, and
agreements of the Company herein or in certificates delivered pursuant hereto, including, but not
limited to, the agreements of the Underwriters and the Company contained in Section 5(a)(vii) and
Section 7 hereof, shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Underwriters or any controlling person thereof, or the
Company or any of its officers, directors, or controlling persons, and shall survive delivery of,
and payment for, the Shares to and by the Underwriters hereunder.
9. Termination of this Agreement.
(a) The Representative shall have the right to terminate this Agreement by giving notice to
the Company as hereinafter specified at any time at or prior to the Closing Date, if (i) trading in
the Company’s Common Stock shall have been suspended by the Commission or
23
the Nasdaq Global Market or trading in securities generally on the Nasdaq Global Market, New
York Stock Exchange or NYSE Amex shall have been suspended, (ii) minimum or maximum prices for
trading shall have been fixed, or maximum ranges for prices for securities shall have been
required, on the Nasdaq Global Market, New York Stock Exchange or NYSE Amex, by such exchange or by
order of the Commission or any other governmental authority having jurisdiction, (iii) a banking
moratorium shall have been declared by federal or state authorities, (iv) there shall have occurred
any attack on, outbreak or escalation of hostilities or act of terrorism involving the United
States, any declaration by the United States of a national emergency or war, any change in
financial markets, any substantial change or development involving a prospective substantial change
in United States or international political, financial or economic conditions or any other calamity
or crisis, or (v) the Company suffers any loss by strike, fire, flood, earthquake, accident or
other calamity, whether or not covered by insurance, the effect of which, in each case described in
this subsection (a), in the Representative’s reasonable judgment is material and adverse and makes
it impractical or inadvisable to proceed with the completion of the sale of and payment for the
Shares. Any such termination shall be without liability of any party to any other party except
that the provisions of Section 5(a)(vii) and Section 7 hereof shall at all times be effective and
shall survive such termination.
(b) If the Representative elects to terminate this Agreement as provided in this Section, the
Company shall be notified promptly by the Representative by telephone, confirmed by letter.
10. Notices. Except as otherwise provided herein, all communications hereunder shall be in
writing and, if to the Representative, shall be mailed, delivered or telecopied to Xxxx Capital
Partners, LLC, 00 Xxxxxxxxx Xxxxx, Xxxxxxx Xxxxx, XX 00000, telecopy number: (000) 000-0000,
Attention: Xxx Xxxxxxxxxxxxxxx, with a copy to Xxxxxx & Xxxxxxx LLP, 000 Xxxxxxxxxx Xxxxx 00xx
Xxxxx, Xxxxx Xxxx, XX 00000, Attention: Xxxxxx Xxxxxx; and if to the Company, shall be mailed,
delivered or telecopied to it at 00 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, XX 00000 2209
Attention: Chief Financial Officer and General Counsel, with a copy to Fenwick & West, LLP,
Silicon Valley Center, 000 Xxxxxxxxxx Xxxxxx, Xxxxxxxx Xxxx, XX 00000 Attention: Xxxxx X. Xxxx,
Esq. or in each case to such other address as the person to be notified may have requested in
writing. Any party to this Agreement may change such address for notices by sending to the parties
to this Agreement written notice of a new address for such purpose.
11. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and assigns and the
controlling persons, officers and directors referred to in Section 7. Nothing in this Agreement is
intended or shall be construed to give to any other person, firm or corporation any legal or
equitable remedy or claim under or in respect of this Agreement or any provision herein contained.
The term “successors and assigns” as herein used shall not include any purchaser, as such
purchaser, of any of the Shares from the Underwriters.
12. Absence of Fiduciary Relationship. The Company acknowledges and agrees that: (a) the
Underwriters have been retained solely to act as underwriter in connection with the sale of the
Shares and that no fiduciary, advisory or agency relationship between the Company and the
Underwriters has been created in respect of any of the transactions contemplated by this
24
Agreement, irrespective of whether the Underwriters have advised or are advising the Company
on other matters; (b) the price and other terms of the Shares set forth in this Agreement were
established by the Company following discussions and arms-length negotiations with the Underwriters
and the Company is capable of evaluating and understanding and understands and accepts the terms,
risks and conditions of the transactions contemplated by this Agreement; (c) it has been advised
that each of Underwriters and its affiliates are engaged in a broad range of transactions that may
involve interests that differ from those of the Company and that the Underwriters have no
obligation to disclose such interest and transactions to the Company by virtue of any fiduciary,
advisory or agency relationship; (d) it has been advised that the Underwriters are acting, in
respect of the transactions contemplated by this Agreement, solely for the benefit of the
Underwriters, and not on behalf of the Company.
13. Amendments and Waivers. No supplement, modification or waiver of this Agreement shall be
binding unless executed in writing by the party to be bound thereby. The failure of a party to
exercise any right or remedy shall not be deemed or constitute a waiver of such right or remedy in
the future. No waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provision hereof (regardless of whether similar), nor shall any
such waiver be deemed or constitute a continuing waiver unless otherwise expressly provided.
14. Partial Unenforceability. The invalidity or unenforceability of any section, paragraph,
clause or provision of this Agreement shall not affect the validity or enforceability of any other
section, paragraph, clause or provision.
15. Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
16. Counterparts. This Agreement may be executed in one or more counterparts and, if executed
in more than one counterpart, the executed counterparts shall each be deemed to be an original and
all such counterparts shall together constitute one and the same instrument.
25
Please sign and return to the Company the enclosed duplicates of this letter whereupon this
letter will become a binding agreement between the Company and the Underwriters in accordance with
its terms.
Very truly yours, | ||||||
GLU MOBILE INC. | ||||||
By: | /s/ Xxxxxxx xx Xxxx | |||||
Name: | ||||||
Title: | ||||||
Confirmed as of the date first above-
mentioned on behalf of itself and the several
Underwriters named in Schedule IV hereto
mentioned on behalf of itself and the several
Underwriters named in Schedule IV hereto
XXXX CAPITAL PARTNERS, LLC | ||||
By: |
/s/ Xxxxx X. Xxxxxxxx | |||
Name:
|
||||
Title:
|
||||
[Signature page to Underwriting Agreement]
SCHEDULE I
FREE WRITING PROSPECTUS
Filed Pursuant to Rule 433
Supplementing the Preliminary Prospectus Supplement dated January 11, 2011
Registration Statement No. 333-170577
Dated January 11, 2011
Filed Pursuant to Rule 433
Supplementing the Preliminary Prospectus Supplement dated January 11, 2011
Registration Statement No. 333-170577
Dated January 11, 2011
7,317,074 Shares of Common Stock
Final Term Sheet
Issuer:
|
GLU Mobile Inc. (the “Company”) | |
Symbol:
|
GLUU | |
Security:
|
Common stock, par value $0.0001 per share | |
Size:
|
7,317,074 shares of common stock | |
Over-allotment option:
|
1,097,561 additional shares of common stock | |
Public offering price:
|
$2.05 per share | |
Underwriting discounts
and commissions:
|
$0.1025 per share | |
Net proceeds (excluding the over-allotment): |
$[_______] (after deducting the underwriters’ discounts and commissions and estimated offering expenses payable by the Company) | |
Trade date:
|
January 11, 2011 | |
Settlement date:
|
January 14, 2011 | |
Underwriters:
|
Xxxx Capital Partners, LLC Xxxxx-Xxxxxx Capital Group LLC Xxxxxxxx Capital, Inc. Northland Capital Markets |
The issuer has filed a registration statement (including a prospectus) with the SEC for the
offering to which this communication relates. Before you invest, you should read the prospectus in
that registration statement and other documents the issuer has filed with the SEC for more complete
information about the issuer and this offering. You may get these documents for free by visiting
XXXXX on the SEC Web site at xxx.xxx.xxx. Alternatively, the issuer, any underwriter or any dealer
participating in the offering will arrange to send you the prospectus if you request it from Xxxx
Capital Partners, LLC, Attention: Syndicate Department, 00 Xxxxxxxxx Xxxxx Xxxxx, Xxxxxxx Xxxxx,
XX, 00000, by telephone at 0-000-000-0000, by e-mail to xxxxxxx@xxxx.xxx, by fax to (000) 000-0000.
SCHEDULE II
Company Opinions
SCHEDULE
III
Lockups
Xxxxxxx xx Xxxx
Xxxx Xxxxxx
Xxx Xxxx
Xxxxxxxxx Xxxx
Xxxxxxx Xxxxxxx
Xxx Xxxxxx
Xxxx Xxxxxx
Xxxx Xxxx
Xxxxxx Xxxxxxx
Xxxxx Xxxxxxxx
Xxxxxxxx Xxxxx
Xxxx Xxxxxx
Xxx Xxxx
Xxxxxxxxx Xxxx
Xxxxxxx Xxxxxxx
Xxx Xxxxxx
Xxxx Xxxxxx
Xxxx Xxxx
Xxxxxx Xxxxxxx
Xxxxx Xxxxxxxx
Xxxxxxxx Xxxxx
Xxxxxx Xxxxxxx Partners (Xxxx Xxxxxxx)
NEA (Xxxxxx Xxxxxxx)
Granite Global Ventures (Hany Nada)
NEA (Xxxxxx Xxxxxxx)
Granite Global Ventures (Hany Nada)
SCHEDULE IV
Underwriter | Underwritten Shares | Additional Shares | ||||||
Xxxx Capital Partners, LLC |
5,487,806 | 823,171 | ||||||
Xxxxx-Xxxxxx Capital Group LLC |
731,706 | 109,756 | ||||||
Xxxxxxxx Capital, Inc. |
548,781 | 82,317 | ||||||
Northland Capital Markets |
548,781 | 82,317 | ||||||
Total |
7,317,074 | 1,097,561 |