GLU MOBILE INC. WRITTEN CONSENT AND AGREEMENT TO CONVERT
Exhibit 10.31
This Written Consent and Agreement to Convert (this “Agreement”) is entered into and made as
of February 28, 2007 by and among Glu Mobile Inc., a California corporation (“Glu California”), Glu
Mobile Inc., a Delaware corporation that will be the successor-in-interest to the Glu California
following the proposed reincorporation of the Company in Delaware (“Glu Delaware” and collectively
with Glu Delaware, the “Company”), and certain holders of shares of the Company’s Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock,
Series D-1 Preferred Stock and Special Junior Preferred Stock (sometimes collectively referred to,
irrespective of series, as “Preferred Stock”) identified on Exhibit A hereto (the
“Investors”).
RECITALS
WHEREAS, the Company has filed a Registration Statement on Form S-1, File No. 333-139493 (the
“Registration Statement”), under the Securities Act of 1933, as amended (the “Securities Act”) in
connection with the proposed initial public offering of the Company’s Common Stock (the “IPO”).
WHEREAS, under Article III, Section (B)(3)(b)(1) of each of the current Glu California Amended
and Restated Articles of Incorporation (the “Glu California Charter”) and Article V, Section
3(b)(1) of the proposed Glu Delaware Restated Certificate of Incorporation that will become
effective upon the consummation of the proposed reincorporation (the “Glu Delaware Charter” and
collectively with the Glu California Charter, the “Charter”), each share of the Company’s Preferred
Stock shall automatically be converted into shares of Common Stock upon the effectiveness of a firm
commitment underwritten public offering pursuant to an effective registration statement under the
Securities Act at a per share price of at least $4.50 (as adjusted for recapitalizations stock
combinations, stock dividends, stock splits and the like) and for an aggregate offering price of
not less than $50,000,000.
WHEREAS, the Company currently anticipates that the proposed offering price per share in the
IPO (the “IPO Price Per Share”) will be within a range that is less than $4.50, as adjusted for
recapitalizations stock combinations, stock dividends, stock splits and the like.
WHEREAS, under Article III, Section (B)(3)(b)(2) of the Glu California Charter and Article V,
Section 3(b)(2) of the Glu Delaware Charter, each share of the Company’s Preferred Stock shall
automatically be converted into shares of Common Stock upon the date specified pursuant to an
election to convert all Preferred Stock into Common Stock by holders of at least a majority of the
then outstanding shares of Preferred Stock, including the holders of at least (i) a majority of the
then outstanding shares of Series A Preferred Stock,
(ii) at least
662/3% of the outstanding shares
of Series B Preferred Stock, (iii) a majority of the then outstanding shares of Series C Preferred
Stock, and (iv) 72% of the outstanding shares of Senior Preferred Stock (as defined therein), in
the case of (i), (ii), and (iii) above, each voting as a separate series, and, in
the case of (iv) above, voting together as a single series, in each case on an as-converted to
Common Stock basis, at a duly held meeting or by written consent or other agreement (collectively,
the “Required Preferred Holders”).
WHEREAS, the Investors and the Company desire to enter into this Agreement, pursuant to
Article III, Section (B)(3)(b)(2) of the Glu California Charter and Article V, Section 3(b)(2) of
the Glu Delaware Charter, to elect to convert all of the Company’s shares of Preferred Stock to
Common Stock upon the closing of the IPO.
WHEREAS, the Investors desire that the Company complete the IPO in order to gain liquidity for
their investment in the Company and in order for the Company to raise additional working capital.
WHEREAS, as an inducement to certain holders of the Company’s Series D Preferred Stock and
Series D-1 Preferred Stock to enter into this Agreement, the Company desires to issue certain
warrants to purchase shares of its Common Stock and the other Investors desire to waive
participation in such issuance and application of any anti-dilution adjustment related thereto, as
described below.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. Agreement to Convert. Each Investor hereby irrevocably elects, pursuant Article
II, Section (B)(3)(b)(2) of the Glu California Charter and Article V, Section 3(b)(2) of the Glu
Delaware Charter, to convert, effective upon the closing of the IPO pursuant to the Registration
Statement, all shares of the Company’s Preferred Stock into shares of Common Stock, such conversion
to be effected as provided for in the Glu Delaware Charter, as then in effect; provided, however,
that such election is contingent upon the Registration Statement having been declared effective by
the Securities and Exchange Commission on or before March 31, 2007. Each Investor hereby
understands and agrees that the election to convert pursuant to this Section 1 is effective and
irrevocable irrespective of the IPO Price Per Share, so long as the IPO Price Per Share is approved
by the Pricing Committee of the Company’s Board of Directors.
2. Agreement to Issue Warrants. As an inducement to certain holders of the Company’s
Senior Preferred Stock, the Company hereby agrees, concurrently with the effectiveness of this
Agreement, to issue to each of Granite Global Ventures II L.P. and TWI Glu Mobile Holdings Inc. a
warrant to purchase 408,306 shares of the Company’s Common Stock in substantially the form attached
hereto as Exhibit B (the “Warrants”).
3. Agreement Regarding Definition of “Additional Shares of Common Stock”. Each
undersigned holder does hereby determine, consent agree and approve, by written consent without a
meeting, pursuant to Section 603(a) of the California Corporations Code, Section 228 of the
Delaware General Corporation Law and the Bylaws of the Company, effective as of the date first set
forth above, that pursuant to Article III, Section (B)(3)(d)(i)(L) of the Glu California Charter
and Article V, Section 3(d)(i)(3)(L) of the Glu Delaware Charter, the Warrants to be
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issued pursuant to Section 2 hereof, and any shares issued upon exercise of such Warrants,
shall not be deemed “Additional Shares of Common Stock” as such term is defined in the Charter.
4. Waiver of Right of First Offer. Pursuant to Section 8.6 of the Amended and
Restated Investors’ Rights Agreement, dated as of March 29, 2006 (the “Rights Agreement”), each
Investor hereby waives, for purposes of applicability both individually and to all parties to the
Rights Agreement, (a) the right of first offer set forth in Section 8.1 of the Rights Agreement
with respect to the Warrants (and any shares issuable pursuant thereto) and (b) any rights to
notice required in the Rights Agreement with respect to the issuance of the Warrants (or such
shares).
5. Amendment of Investor Rights Agreement. Pursuant to Section 12 of the Rights
Agreement, provided that the Registration Statement is declared effective by the Securities and
Exchange Commission on or before March 31, 2007, each Investor hereby agrees that the definition of
“Registrable Securities” in Section 1 of the Rights Agreement is amended and restated, effective as
of the closing of the IPO, to read in its entirety as follows:
“Registrable Securities” means (1) the Senior Conversion Stock and any
Common Stock of the Company issuable or issued with respect to the Senior
Preferred Stock or Senior Conversion Stock upon any stock split, stock
dividend, or similar event, (2) the Common Stock of the Company issued
pursuant to the Restricted Stock Purchase Agreement (the “RSPA”) dated as of
April 25, 2005 between the Company and the Investor defined as the Purchaser
therein, (3) the Common Stock of the Company issuable or issued upon
exercise of the warrants to purchase shares of the Company’s Common Stock,
dated as of February 28, 2007, issued to Granite Global Ventures II L.P. and
TWI Glu Mobile Holdings Inc. pursuant to the Written Consent and Agreement
to Convert, dated as of February 28, 2007, between the Company and certain
Investors, or (4) the Exchange Related Shares provided, however, that the
Exchange Related Shares shall not be deemed Registrable Securities and the
Holders of Exchange Related Shares shall not be deemed Initiating Holders or
Major Holders for the purposes of Sections 5.1, 6 and 8 and provided further
however, that the term “Registrable Securities” shall exclude in all cases
any shares of Common Stock issued upon conversion of Preferred Stock
pursuant to Article III, Section B.3(e) of the Company’s Amended and
Restated Articles of Incorporation (or any successor thereto) (the “Restated
Articles”) (which Paragraph is entitled “Special Mandatory Conversion”), as
such provision may be amended from time to time (“Special Mandatory
Conversion Shares”). In addition, securities shall only be treated as
Registrable Securities if and so long as (i) they have not been registered
or sold to or through a broker, dealer, market maker or underwriter in a
public distribution or a public securities transaction and (ii) the
registration rights with respect to such securities have not terminated
pursuant to Section 5.10 below.”
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6. Agreement Regarding Participation in the IPO. By their execution of this
Agreement, each of Granite Global Ventures II L.P., GGV II Entrepreneurs Fund L.P. and TWI Glu
Mobile Holdings Inc. (and any funds affiliated with any such entity that hold securities of the
Company) agrees that, provided that the Registration Statement is declared effective by the
Securities and Exchange Commission on or before March 31, 2007 and the Warrants have been issued to
them, then each such Investor waives any rights it may have to participate as a selling security
holder in the IPO.
7. Miscellaneous.
7.1. Successors and Assigns. The terms and conditions of this Agreement shall inure
to the benefit of and be binding upon the respective successors and assigns of the parties.
Nothing in this Agreement, express or implied, is intended to confer upon any party other than the
parties hereto or their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
7.2. Entire Agreement. This Agreement and the Warrants constitute the full and entire
understanding and agreement among the parties with regard to the subjects hereof and thereof.
7.3. Amendment; Waiver. This Agreement may be amended and any provision hereof waived
only by the written consent of both the Company and each of the Required Preferred Holders.
7.4. Severability. In the event any provision of this Agreement becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement
shall continue in full force and effect, with such provision being replaced with an enforceable
provision closest in intent and economic effect to the severed provision; provided, however, that
no such severability shall be effective if it materially changes the economic benefit of any party
to this Agreement.
7.5. Governing Law. This Agreement shall be governed in all respects by the laws of
the State of California as such laws are applied to agreements between or among California
residents entered into and to be performed entirely within California.
7.6. Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be an original, and all of which together shall constitute one instrument.
7.7. Facsimile; PDF Signatures. This Agreement may be executed and delivered by
facsimile or portable document format (.pdf or similar format) via electronic transmission and upon
such delivery, the facsimile or .pdf signature will be deemed to have the same effect as if the
original signature had been delivered to the other party.
7.8. Titles and Subtitles. The titles and subtitles used in this Agreement are used
for convenience only and are not to be considered in construing or interpreting this Agreement.
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7.9. Attorneys’ Fees. If any legal action is necessary to enforce or interpret the
terms of this Agreement, the prevailing party shall be entitled to reasonable attorney’s fees,
costs and necessary disbursements in addition to any other relief to which such party may be
entitled.
7.10. 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 Agreement.
SIGNATURE PAGES FOLLOW
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IN WITNESS WHEREOF, the parties have executed this Written Consent and Agreement to Convert as
of the date first above written.
| GLU MOBILE INC., | ||||||
| a California Corporation | ||||||
| By: | /s/ L. Xxxxxxx Xxxxxxx | |||||
| L. Xxxxxxx Xxxxxxx, | ||||||
| Its: | President and Chief Executive Officer | |||||
| Address: | 0000 Xxxxxxx Xxxxx, Xxxxx 000 | |||||
| Xxx Xxxxx, XX 00000 | ||||||
IN WITNESS WHEREOF, the parties have executed this Written Consent and Agreement to Convert as
of the date first above written.
| GLU MOBILE INC., | ||||||
| a Delaware Corporation | ||||||
| By: | /s/ L. Xxxxxxx Xxxxxxx | |||||
| L. Xxxxxxx Xxxxxxx, | ||||||
| Its: | President and Chief Executive Officer | |||||
| Address: | 0000 Xxxxxxx Xxxxx, Xxxxx 000 | |||||
| Xxx Xxxxx, XX 00000 | ||||||
IN WITNESS WHEREOF, the parties have executed this Written Consent and Agreement to Convert as
of the date first above written.
| INVESTORS: | ||||||
| NEW ENTERPRISE ASSOCIATES 10, L.P. | ||||||
| By: | NEA Partners 10, L.P. | |||||
| Its: | General Partner | |||||
| By: | /s/ Xxxxxx X. Xxxxxxx, III | |||||
| Name: | Xxxxxx X. Xxxxxxx, III | |||||
| Its: | Administrative General Partner & Chief Operating Officer | |||||
| Address: | 0000 Xxxx Xxxx Xxxx | |||||
| Xxxxx Xxxx, XX 00000 | ||||||
| Fax: | (000) 000-0000 | |||||
| XXX XXXXXXXX 0000, X.X. | ||||||
| By: | /s/ Xxxxx X. Xxxxxx | |||||
| Its: | Vice-President | |||||
| By: | ||||||
| Name: | ||||||
| Its: | ||||||
| Address: | 0000 Xxxx Xxxx Xxxx | |||||
| Xxxxx Xxxx, XX 00000 | ||||||
| Fax: | (000) 000-0000 | |||||
IN WITNESS WHEREOF, the parties have executed this Written Consent and Agreement to Convert as
of the date first above written.
| INVESTORS: | ||||||
| SIENNA LIMITED PARTNERSHIP III, L.P. | ||||||
| By: | Sienna Associates III, L.L.C. | |||||
| Its: | General Partner | |||||
| By: | /s/ Xxxxxx X. Xxxxx | |||||
| Xxxxxx X. Xxxxx, Managing Member | ||||||
| Address: | 0000 Xxxxxxxxx Xxx, Xxxxx 000 | |||||
| Xxxxxxxxx, XX 00000 | ||||||
| Fax: | (000) 000-0000 | |||||
IN WITNESS WHEREOF, the parties have executed this Written Consent and Agreement to Convert as
of the date first above written.
| INVESTORS: | ||||||
| GRANITE GLOBAL VENTURES II L.P. | ||||||
| By: | Granite Global Ventures II L.L.C., its General Partner | |||||
| By: | /s/ Hany Nada | |||||
| Name: | Hany Nada | |||||
| Its: | Managing Director | |||||
| Address: | c/o Granite Global Ventures | |||||
| 0000 Xxxx Xxxx Xxxx | ||||||
| Xxxxx 000 | ||||||
| Xxxxx Xxxx, XX 00000 | ||||||
| Fax: | (000) 000-0000 | |||||
| GGV II ENTREPRENEURS FUND L.P. | ||||||
| By: | Granite Global Ventures II L.L.C., its General Partner | |||||
| By: | /s/ Hany Nada | |||||
| Name: | Hany Nada | |||||
| Its: | Managing Director | |||||
| Address: | c/o Granite Global Ventures | |||||
| 0000 Xxxx Xxxx Xxxx | ||||||
| Xxxxx 000 | ||||||
| Xxxxx Xxxx, XX 00000 | ||||||
| Fax: | (000) 000-0000 | |||||
IN WITNESS WHEREOF, the parties have executed this Written Consent and Agreement to Convert as
of the date first above written.
| INVESTORS: | ||||||
| BAVP, L.P. | ||||||
| By: | Scale Venture Management I, LLC | |||||
| Its: | General Partner | |||||
| By: | /s/ Xxxxxx Xxxxxxx | |||||
| Name: | Xxxxxx Xxxxxxx | |||||
| Address: | 000 Xxxxx Xxxx, Xxxxx 000 | |||||
| Xxxxxx Xxxx, XX 00000 | ||||||
| Attn: | Xxxxxx Xxxxxxx | |||||
| Fax: | (000) 000-0000 | |||||
| Title: | Member | |||||
IN WITNESS WHEREOF, the parties have executed this Written Consent and Agreement to Convert as
of the date first above written.
| INVESTORS: | ||||||
| TWI GLU MOBILE HOLDINGS INC. | ||||||
| By: | /s/ Xxxxxx Xxx | |||||
| Xxxxxx Xxx, Vice President | ||||||
| Address: | c/o Time Warner Investments | |||||
| One Time Xxxxxx Xxxxxx | ||||||
| Xxx Xxxx, XX 00000 | ||||||
| Fax: | (000) 000-0000 | |||||
IN WITNESS WHEREOF, the parties have executed this Written Consent and Agreement to Convert as
of the date first above written.
| INVESTORS: | ||||||
| JAFCO AMERICA TECHNOLOGY FUND III, LP | ||||||
| JAFCO AMERICA TECHNOLOGY CAYMAN FUND III, LP | ||||||
| JAFCO USIT FUND III, LP | ||||||
| JAFCO AMERICA TECHNOLOGY AFFILIATES FUND III, LP | ||||||
| By: | /s/ Xxxxx X. Xxxxxxxxx | |||||
| Xxxxx X. Xxxxxxxxx | ||||||
| Managing Member | ||||||
| JAV Management Associates III, L.L.C. | ||||||
| Its General Partner | ||||||
| Address: | 000 Xxxxxxxx Xxxxxx Xxx Xxxxx | |||||
| Xxxx Xxxx, XX 00000 | ||||||
| Attn: | Xxx Xxxxxxxxx | |||||
| Fax: | (000) 000-0000 | |||||
| GLOBESPAN CAPITAL PARTNERS IV, L.P. | ||||||
| GCP IV AFFILIATES FUND, L.P. | ||||||
| JAFCO GLOBESPAN USIT IV, L.P. | ||||||
| By: | Globespan Management Associates IV, L.P., its sole General Partner | |||||
| By: | Globespan Management Associates IV, LLC, its sole General Partner |
|||||
| By: | /s/ Xxxxx X. Xxxxxxxxx | |||||
| Xxxxx X. Xxxxxxxxx | ||||||
| Member | ||||||
| Address: | 000 Xxxxxxxx Xxxxxx Xxx Xxxxx | |||||
| Xxxx Xxxx, XX 00000 | ||||||
| Attn: | Xxx Xxxxxxxxx | |||||
| Fax: | (000) 000-0000 | |||||
IN WITNESS WHEREOF, the parties have executed this Written Consent and Agreement to Convert as
of the date first above written.
| INVESTORS: | ||||||
| GLOBESPAN CAPITAL PARTNERS (CAYMAN) IV, L.P. | ||||||
| By: | Globespan Management Associates (Cayman) IV, L.P., its sole General Partner | |||||
| By: | Globespan Management Associates IV, LLC, its sole General Partner |
|||||
| By: | /s/ Xxxxx X. Xxxxxxxxx | |||||
| Xxxxx X. Xxxxxxxxx | ||||||
| Member | ||||||
| Address: | 000 Xxxxxxxx Xxxxxx Xxx Xxxxx | |||||
| Xxxx Xxxx, XX 00000 | ||||||
| Attn: | Xxx Xxxxxxxxx | |||||
| Fax: | (000) 000-0000 | |||||
| GLOBESPAN CAPITAL PARTNERS IV GmbH & Co. KG | ||||||
| By: | Globespan Management Associates IV, GmbH its General Partner |
|||||
| By: | /s/ Xxxxx X. Xxxxxxxxx | |||||
| Xxxxx X. Xxxxxxxxx | ||||||
| Managing Director | ||||||
| Address: | 000 Xxxxxxxx Xxxxxx Xxx Xxxxx | |||||
| Xxxx Xxxx, XX 00000 | ||||||
| Attn: | Xxx Xxxxxxxxx | |||||
| Fax: | (000) 000-0000 | |||||
