Exhibit 10.06
AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
     THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “Agreement”)
dated as of the Effective Date between SILICON VALLEY BANK, a California
corporation (“Bank”), and each of Glu Mobile Inc., a Delaware corporation (“Glu
Mobile”), Glu Games Inc., a Delaware corporation (“Glu Games”), and Superscape
inc., a Delaware corporation (“Superscape”, together with Glu Mobile and Glu
Games, each a “Borrower” and collectively, jointly and severally, “Borrower”),
provides the terms on which Bank shall lend to Borrower and Borrower shall repay
Bank.
WHEREAS, Bank and Borrower have entered into that certain Loan and Security
Agreement dated as of February 14, 2007 (as amended to date, the “Original
Agreement”) pursuant to which the Bank has agreed to extend and make available
to Borrower certain advances of money;
WHEREAS, the parties hereto desire to amend, restate and modify, but not
extinguish, the Original Agreement in its entirety as hereinafter set forth;
NOW THEREFORE, in consideration of the premises herein contained and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree to amend and restate the Original Agreement as
follows:
     1 ACCOUNTING AND OTHER TERMS
     Accounting terms not defined in this Agreement shall be construed following
GAAP. Calculations and determinations must be made following GAAP. Capitalized
terms not otherwise defined in this Agreement shall have the meanings set forth
in Section 13. All other terms contained in this Agreement, unless otherwise
indicated, shall have the meaning provided by the Code to the extent such terms
are defined therein.
     2 LOAN AND TERMS OF PAYMENT
     2.1 Promise to Pay. Each Borrower hereby, jointly and severally,
unconditionally promises to pay Bank the outstanding principal amount of all
Credit Extensions and accrued and unpaid interest thereon as and when due in
accordance with this Agreement.
     2.1.1 Revolving Advances.
          (a) Availability. Subject to the terms and conditions of this
Agreement and to deduction of Reserves, Bank shall make Advances not exceeding
the Availability Amount. Amounts borrowed hereunder may be repaid and, prior to
the Revolving Line Maturity Date, reborrowed, subject to the applicable terms
and conditions precedent herein.
          (b) Termination; Repayment. The Revolving Line terminates on the
Revolving Line Maturity Date, when the principal amount of all Advances, the
unpaid interest thereon, and all other Obligations relating to the Revolving
Line shall be immediately due and payable.
     2.1.2 Letters of Credit Sublimit.
          (a) As part of the Revolving Line, Bank shall issue or have issued
Letters of Credit for Borrower’s account. Such aggregate amounts utilized
hereunder shall at all times reduce the amount otherwise available for Advances
under the Revolving Line. The face amount of outstanding Letters of Credit
(including drawn but unreimbursed Letters of Credit and any Letter of Credit
Reserve) may not exceed Five Million Dollars ($5,000,000). The aggregate amount
available to be used for the issuance of Letters of Credit may not exceed (i) 
the lesser of (A) the Revolving Line or (B) the Borrowing Base, minus (ii) the
outstanding principal amount of any Advances (including any amounts used for
Cash Management Services and the face amount of any outstanding Letters of
Credit (including drawn but unreimbursed Letters of Credit and any Letter of
Credit Reserve) and minus (iii) the FX Reserve. If, on the Revolving Line
Maturity Date, there are any outstanding Letters of Credit, then on such date
Borrower shall provide to Bank cash collateral in an amount equal to 105% of the
face amount of all such Letters of Credit plus all interest, fees, and costs due
or to become due in connection therewith (as estimated by

 

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Bank in its good faith business judgment), to secure all of the Obligations
relating to said Letters of Credit. All Letters of Credit shall be in form and
substance acceptable to Bank in its sole discretion and shall be subject to the
terms and conditions of Bank’s standard Application and Letter of Credit
Agreement (the “Letter of Credit Application”). Borrower agrees to execute any
further documentation in connection with the Letters of Credit as Bank may
reasonably request. Borrower further agrees to be bound by the regulations and
interpretations of the issuer of any Letters of Credit guarantied by Bank and
opened for Borrower’s account or by Bank’s interpretations of any Letter of
Credit issued by Bank for Borrower’s account, and Borrower understands and
agrees that Bank shall not be liable for any error, negligence, or mistake,
whether of omission or commission, in following Borrower’s instructions or those
contained in the Letters of Credit or any modifications, amendments, or
supplements thereto.
          (b) The obligation of Borrower to immediately reimburse Bank for
drawings made under Letters of Credit shall be absolute, unconditional, and
irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement, such Letters of Credit, and the Letter of Credit Application.
          (c) Borrower may request that Bank issue a Letter of Credit payable in
a Foreign Currency. If a demand for payment is made under any such Letter of
Credit, Bank shall treat such demand as an Advance to Borrower of the equivalent
of the amount thereof (plus fees and charges in connection therewith such as
wire, cable, SWIFT or similar charges) in Dollars at the then-prevailing rate of
exchange in San Francisco, California, for sales of the Foreign Currency for
transfer to the country issuing such Foreign Currency.
          (d) To guard against fluctuations in currency exchange rates, upon the
issuance of any Letter of Credit payable in a Foreign Currency, Bank shall
create a reserve (the “Letter of Credit Reserve”) under the Revolving Line in an
amount equal to ten percent (10%) of the face amount of such Letter of Credit.
The amount of the Letter of Credit Reserve may be adjusted by Bank from time to
time to account for fluctuations in the exchange rate. The availability of funds
under the Revolving Line shall be reduced by the amount of such Letter of Credit
Reserve for as long as such Letter of Credit remains outstanding.
     2.1.3 Foreign Exchange Sublimit. As part of the Revolving Line, Borrower
may enter into foreign exchange contracts with Bank under which Borrower commits
to purchase from or sell to Bank a specific amount of Foreign Currency (each, a
“FX Forward Contract”) on a specified date (the “Settlement Date”). FX Forward
Contracts shall have a Settlement Date of at least one (1) FX Business Day after
the contract date and shall be subject to a reserve of ten percent (10%) of each
outstanding FX Forward Contract in a maximum aggregate amount equal to $500,000
(the “FX Reserve”). The aggregate amount of FX Forward Contracts at any one time
may not exceed ten (10) times the amount of the FX Reserve. The amount otherwise
available for Credit Extensions under the Revolving Line shall be reduced by an
amount equal to ten percent (10%) of each outstanding FX Forward Contract (the
“FX Reduction Amount”).  Any amounts needed to fully reimburse Bank will be
treated as Advances under the Revolving Line and will accrue interest at the
interest rate applicable to Advances.
     2.1.4 Cash Management Services Sublimit. Borrower may use up to Five
Million Dollars ($5,000,000) of the Revolving Line for Bank’s cash management
services which may include merchant services, direct deposit of payroll,
business credit card, and check cashing services identified in Bank’s various
cash management services agreements (collectively, the “Cash Management
Services”). Any amounts Bank pays on behalf of Borrower for any Cash Management
Services will be treated as Advances under the Revolving Line and will accrue
interest at the interest rate applicable to Advances.
     2.2 Overadvances If, at any time, the sum of (a) the outstanding principal
amount of any Advances (including any amounts used for Cash Management
Services), plus (b) the face amount of any outstanding Letters of Credit
(including drawn but unreimbursed Letters of Credit and any Letter of Credit
Reserve), plus (c) the FX Reduction Amount exceeds the lesser of either the
Revolving Line or the Borrowing Base (such sum being an “Overadvance”), Borrower
shall immediately pay to Bank in cash such Overadvance. Without limiting
Borrower’s obligation to repay Bank any amount of the Overadvance, Borrower
agrees to pay Bank interest on the outstanding amount of any Overadvance, on
demand, at the Default Rate.
     2.3 Payment of Interest on the Credit Extensions.
          (a) Interest Rate; Advances. Subject to Section 2.3(b), the principal
amount outstanding under the Revolving Line shall accrue interest at the greater
of (a) the Prime Rate, floating, plus one percent (1%), or (b) five percent
(5%), which interest shall be payable monthly.

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          (b) Default Rate. Immediately upon the occurrence and during the
continuance of an Event of Default, Obligations shall bear interest at a rate
per annum which is five percentage points above the rate that is otherwise
applicable thereto (the “Default Rate”). Payment or acceptance of the increased
interest rate provided in this Section 2.3(b) is not a permitted alternative to
timely payment and shall not constitute a waiver of any Event of Default or
otherwise prejudice or limit any rights or remedies of Bank.
          (c) Adjustment to Interest Rate. Changes to the interest rate of any
Credit Extension based on changes to the Prime Rate shall be effective on the
effective date of any change to the Prime Rate and to the extent of any such
change.
          (d) 360-Day Year. Interest shall be computed on the basis of a 360-day
year for the actual number of days elapsed.
          (e) Debit of Accounts. Bank may debit any of Borrower’s deposit
accounts, including the Designated Deposit Account, for principal and interest
payments or any other amounts Borrower owes Bank when due. These debits shall
not constitute a set-off.
          (f) Payment; Interest Computation; Float Charge. Interest is payable
monthly on the last calendar day of each month. In computing interest on the
Obligations, all Payments received after 12:00 p.m. Pacific time on any day
shall be deemed received on the next Business Day. Bank shall not, however, be
required to credit Borrower’s account for the amount of any item of payment
which is unsatisfactory to Bank in its good faith business judgment, and Bank
may charge Borrower’s Designated Deposit Account for the amount of any item of
payment which is returned to Bank unpaid.
     2.4 Fees. Borrower shall pay to Bank:
          (a) Commitment Fee. A fully earned, non-refundable commitment fee of
$55,000 (or 0.6875% of the Commitment) per annum, payable on the Effective Date
and again on the first anniversary thereof, which fee is fully earned and
non-refundable in its entirety on the Effective Date;
          (b) Letter of Credit Fee. Bank’s customary fees and expenses for the
issuance or renewal of Letters of Credit , including, without limitation, a
Letter of Credit Fee of one percentage point (1.00%) per annum of the face
amount of each Letter of Credit issued, upon the issuance, each anniversary of
the issuance, and the renewal of such Letter of Credit by Bank;
          (c) Termination Fee. Subject to the terms of Section 12.1, a
termination fee;
          (d) Unused Revolving Line Facility Fee. A fee (the “Unused Revolving
Line Facility Fee”), payable monthly, in arrears, on a calendar year basis, in
an amount equal to 0.35% per annum of the average unused portion of the
Revolving Line, as determined by Bank. The unused portion of the Revolving Line,
for the purposes of this calculation, shall include amounts reserved under the
Cash Management Services Sublimit for products provided and under the Foreign
Exchange Sublimit for FX Forward Contracts. Borrower shall not be entitled to
any credit, rebate or repayment of any Unused Revolving Line Facility Fee
previously earned by Bank pursuant to this Section notwithstanding any
termination of the Agreement, or suspension or termination of Bank’s obligation
to make loans and advances hereunder; and
          (f) Bank Expenses. All Bank Expenses (including reasonable attorneys’
fees and expenses, plus expenses, for documentation and negotiation of this
Agreement) incurred through and after the Effective Date, when due.
     3 CONDITIONS OF LOANS
     3.1 Conditions Precedent to Initial Credit Extension. Bank’s obligation to
make the initial Credit Extension is subject to the condition precedent that
Borrower shall consent to or have delivered, in form and substance satisfactory
to Bank, such documents, and completion of such other matters, as Bank may
reasonably deem necessary or appropriate, including, without limitation:

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          (a) duly executed original signatures to (i) this Agreement executed
by Bank and Borrower, (ii) the Pledge Agreement, and (iii) the other fully
executed Loan Documents to which it is a party;
          (b) the certificates representing the shares of Capital Stock pledged
pursuant to the Pledge Agreement, together with an undated stock power for each
such certificate executed in blank by a duly authorized officer of the pledgor
thereof;
          (c) duly executed original signatures to the Control Agreements;
          (d) its Operating Documents and a good standing certificate of
Borrower certified by the Secretary of State of the State of Delaware as of a
date no earlier than thirty (30) days prior to the Effective Date;
          (e) duly executed original signatures to the completed Borrowing
Resolutions for Borrower;
          (f) evidence satisfactory to Bank that Glu Mobile has entered into
definitive agreements and all relevant documentation for the restructuring of
the remaining payments owed by Glu Mobile to each of Wang Xin, an individual,
Wang Bin, an individual, and the former shareholders of Awaken Limited, a
business company with limited liability incorporated under the laws of the
British Virgin Islands (together, the “MIG Shareholders”) pursuant to the
Agreement and Plan of Merger (the “Merger Agreement”) dated November 28, 2007
among Borrower, Maverick Acquisition Corp., a business company incorporated
under the laws of the British Virgin Islands, Awaken Limited, Awaken (Beijing)
Communications Technology Co. Ltd., a wholly foreign-owned enterprise organized
under the laws of the PRC, Beijing Zhangzhong MIG Information Technology Co.
Ltd., a domestic limited liability company organized under the laws of the PRC,
Beijing Qinwang Technology Co. Ltd., a domestic limited liability company
organized under the laws of the PRC, each of Wang Bin, Wang Xin and You Yanli,
and Wang Xin, as the representative of (and on behalf of each of) the MIG
Shareholders.
          (g) the Subordination Agreement duly executed by or on behalf of the
MIG Shareholders in favor of Bank;
          (h) certified copies, dated as of a recent date, of financing
statement searches, as Bank shall request, accompanied by written evidence
(including any UCC termination statements) that the Liens indicated in any such
financing statements either constitute Permitted Liens or have been or, in
connection with the initial Advance, will be terminated or released;
          (i) each document (including Uniform Commercial Code financing
statement) required by the Pledge Agreement, the Guaranty and Pledge Agreement,
or under law or reasonably requested by Bank to be filed, registered or recorded
in order to create in favor of Bank, for the benefit of the Secured Parties, a
perfected Lien on the Collateral described therein, prior to and superior in
right to any other Person (other than with respect to Permitted Liens) shall be
in the proper form for filing, registration or recordation;
          (j) the Perfection Certificate(s) executed by Borrower;
          (k) evidence satisfactory to Bank that the insurance policies required
by Section 6.7 hereof are in full force and effect, together with appropriate
evidence showing loss payable and/or additional insured clauses or endorsements
in favor of Bank;
          (l) the completion of the Initial Audit with results satisfactory to
Bank in its sole and absolute discretion;
          (m) all documentation and other information required by governmental
authorities under applicable “know your customer” and anti-money-laundering
rules and regulations, including the Patriot Act;
          (n) annual consolidating financial projections for each of fiscal
years 2009 and 2010, satisfactory to Bank, together with any related business
forecasts used in the preparation thereof; and
          (o) payment of the fees and Bank Expenses then due as specified in
Section 2.4 hereof.

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     3.2 Conditions Precedent to all Credit Extensions. Bank’s obligations to
make each Credit Extension, including the initial Credit Extension, is subject
to the following:
          (a) except as otherwise provided in Section 3.4, timely receipt of an
executed Transaction Report, executed by a Responsible Officer;
          (b) the representations and warranties in Section 5 shall be true in
all material respects on the date of the Transaction Report and on the Funding
Date of each Credit Extension; provided, however, that such materiality
qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof; and
provided, further that those representations and warranties expressly referring
to a specific date shall be true, accurate and complete in all material respects
as of such date, and no Default or Event of Default shall have occurred and be
continuing or result from the Credit Extension. Each Credit Extension is
Borrower’s representation and warranty on that date that the representations and
warranties in Section 5 remain true in all material respects; provided, however,
that such materiality qualifier shall not be applicable to any representations
and warranties that already are qualified or modified by materiality in the text
thereof; and provided, further that those representations and warranties
expressly referring to a specific date shall be true, accurate and complete in
all material respects as of such date; and
          (c) in Bank’s sole discretion, there has not been a Material Adverse
Change.
     3.3 Covenant to Deliver. Borrower agrees to deliver to Bank each item
required to be delivered to Bank under this Agreement as a condition to any
Credit Extension. Borrower expressly agrees that a Credit Extension made prior
to the receipt by Bank of any such item shall not constitute a waiver by Bank of
Borrower’s obligation to deliver such item, and any such Credit Extension in the
absence of a required item shall be made in Bank’s sole discretion.
     3.4 Procedures for Borrowing. Subject to the prior satisfaction of all
other applicable conditions to the making of an Advance set forth in this
Agreement, to obtain an Advance (other than Advances under Sections 2.1.2 or
2.1.4), Borrower shall notify Bank (which notice shall be irrevocable) by
electronic mail, facsimile, or telephone by 12:00 p.m. Pacific time on the
Funding Date of the Advance. Together with such notification, Borrower must
promptly deliver to Bank by electronic mail or facsimile a completed Transaction
Report executed by a Responsible Officer or his or her designee. Bank shall
credit Advances to the Designated Deposit Account. Bank may make Advances under
this Agreement based on instructions from a Responsible Officer or his or her
designee or without instructions if the Advances are necessary to meet
Obligations which have become due. Bank may rely on any telephone notice given
by a person whom Bank believes is a Responsible Officer or designee.
     4 CREATION OF SECURITY INTEREST
     4.1 Grant of Security Interest.
          (a) Borrower hereby grants Bank, to secure the payment and performance
in full of all of the Obligations, a continuing security interest in, and
pledges to Bank, the Collateral, wherever located, whether now owned or
hereafter acquired or arising, and all proceeds and products thereof. Borrower
represents, warrants, and covenants that the security interest granted herein is
and shall at all times continue to be a first priority perfected security
interest in the Collateral (subject only to Permitted Liens that may have
superior priority to Bank’s Lien under this Agreement). If Borrower shall
acquire a commercial tort claim, Borrower shall promptly notify Bank in a
writing signed by Borrower of the general details thereof and grant to Bank in
such writing a security interest therein and in the proceeds thereof, all upon
the terms of this Agreement, with such writing to be in form and substance
reasonably satisfactory to Bank.
          (b) If this Agreement is terminated, Bank’s Lien in the Collateral
shall continue until the Obligations (other than inchoate indemnity obligations)
are repaid in full in cash. Upon payment in full in cash of such Obligations and
at such time as Bank’s obligation to make Credit Extensions has terminated, Bank
shall, at Borrower’s sole cost and expense, release its Liens in the Collateral
and all rights therein shall revert to Borrower.
     4.2 Authorization to File Financing Statements. Borrower hereby authorizes
Bank to file financing statements, without notice to Borrower, with all
appropriate jurisdictions to perfect or protect Bank’s interest or rights
hereunder, including a notice that any disposition of the Collateral, by either
Borrower or any other Person,

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shall be deemed to violate the rights of Bank under the Code. Such financing
statements may indicate the Collateral as “all assets of the Debtor” or words of
similar effect, or as being of an equal or lesser scope, or with greater detail,
all in Bank’s discretion.
     5 REPRESENTATIONS AND WARRANTIES
          Borrower represents and warrants as follows:
     5.1 Due Organization, Authorization; Power and Authority.
          (a) Borrower is duly existing and in good standing as a Registered
Organization in its jurisdiction of formation and is qualified and licensed to
do business and is in good standing in any jurisdiction in which the conduct of
its business or its ownership of property requires that it be qualified except
where the failure to do so could not reasonably be expected to have a material
adverse effect on Borrower’s business. In connection with this Agreement,
Borrower has delivered to Bank a completed certificate signed by Borrower,
entitled “Perfection Certificate”. Borrower represents and warrants to Bank that
(a) Borrower’s exact legal name is that indicated on the Perfection Certificate
and on the signature page hereof; (b) Borrower is an organization of the type
and is organized in the jurisdiction set forth in the Perfection Certificate;
(c) the Perfection Certificate accurately sets forth Borrower’s organizational
identification number or accurately states that Borrower has none; (d) the
Perfection Certificate accurately sets forth Borrower’s place of business, or,
if more than one, its chief executive office as well as Borrower’s mailing
address (if different than its chief executive office); (e) Borrower (and each
of its predecessors) has not, in the past five (5) years, changed its
jurisdiction of formation, organizational structure or type, or any
organizational number assigned by its jurisdiction; and (f) all other
information set forth on the Perfection Certificate pertaining to Borrower and
each of its Subsidiaries is accurate and complete as of the Effective Date (it
being understood and agreed that Borrower shall from time to time update certain
information in the Perfection Certificate after the Effective Date to the extent
permitted by one or more specific provisions in this Agreement and that any
updated information in the Perfection Certificate pertaining to Borrower and
each of its Subsidiaries is accurate and complete as of the date provided). If
Borrower is not now a Registered Organization but later becomes one, Borrower
shall promptly notify Bank of such occurrence and provide Bank with Borrower’s
organizational identification number.
          (b) The execution, delivery and performance of the Loan Documents have
been duly authorized, and do not conflict with Borrower’s organizational
documents, nor constitute an event of default under any material agreement by
which Borrower is bound. Borrower is not in default under any agreement to which
it is a party or by which it is bound in which the default could reasonably be
expected to have a material adverse effect on Borrower’s business.
     5.2 Collateral.
          (a) Except as otherwise provided in the Perfection Certificate,
Borrower has good title to, has rights in, and the power to transfer each item
of the Collateral upon which it purports to grant a Lien hereunder, free and
clear of any and all Liens except Permitted Liens. Borrower has no deposit
accounts other than the deposit accounts with Bank, the deposit accounts, if
any, described in the Perfection Certificate delivered to Bank in connection
herewith, or of which Borrower has given Bank notice and taken such actions as
are necessary to give Bank a perfected security interest therein. The Accounts
are bona fide, existing obligations of the Account Debtors.
          (b) The Collateral is not in the possession of any third party bailee
(such as a warehouse) except as otherwise provided in the Perfection
Certificate. None of the components of the Collateral shall be maintained at
locations other than as provided in the Perfection Certificate or as permitted
pursuant to Section 7.2. In the event that Borrower, after the date hereof,
intends to store or otherwise deliver any portion of the Collateral to a bailee,
then Borrower will first receive the written consent of Bank and such bailee
must execute and deliver a bailee agreement in form and substance satisfactory
to Bank in its sole discretion.
          (c) All Inventory is in all material respects of good and marketable
quality, free from material defects.
          (d) Borrower and its Subsidiaries own, or possess the right to use,
all of Intellectual Property that is reasonably necessary for the operation of
their respective businesses, without conflict with the rights of any

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other Person, except for such Intellectual Property for which the failure to own
or possess the right to use could not reasonably be expected to result in a
Material Adverse Change. To the best of Borrower’s knowledge, none of such
Intellectual Property has been judged invalid or unenforceable, in whole or in
part, and no claim has been made that any part of such Intellectual Property
created or owned by Borrower violates the rights of any third party.
     5.3 Accounts Receivable.
          (a) For each Account with respect to which Advances are requested, on
the date each Advance is requested and made, such Account shall be an Eligible
Account.
          (b) All statements made and all unpaid balances appearing in all
invoices, instruments and other documents evidencing the Accounts are and shall
be true and correct and all such invoices, instruments and other documents, and
all of Borrower’s Books are genuine and in all respects what they purport to be.
Whether or not an Event of Default has occurred and is continuing, Bank may
notify any Account Debtor owing Borrower money of Bank’s security interest in
such funds and verify the amount of such Eligible Account. All sales and other
transactions underlying or giving rise to each Eligible Account shall comply in
all material respects with all applicable laws and governmental rules and
regulations. Borrower has no knowledge of any actual or imminent Insolvency
Proceeding of any Account Debtor whose accounts are Eligible Accounts in any
Transaction Report. To the best of Borrower’s knowledge, all signatures and
endorsements on all documents, instruments, and agreements relating to all
Eligible Accounts are genuine, and all such documents, instruments and
agreements are legally enforceable in accordance with their terms.
     5.4 Litigation. As of the date hereof, except as described in the
Perfection Certificate, there are no actions or proceedings pending or, to the
knowledge of the Responsible Officers, threatened in writing by or against
Borrower or any of its Subsidiaries involving more than Five Hundred Thousand
Dollars ($500,000).
     5.5 No Material Deviation in Financial Statements. All consolidated
financial statements for Borrower and any of its Subsidiaries delivered to Bank
fairly present in all material respects Borrower’s consolidated financial
condition and Borrower’s consolidated results of operations. There has not been
any material deterioration in Borrower’s consolidated financial condition since
the date of the most recent financial statements submitted to Bank.
     5.6 Solvency. Borrower is able to pay its debts (including trade debts) as
they mature.
     5.7 Regulatory Compliance. Borrower is not an “investment company” or a
company “controlled” by an “investment company” under the Investment Company Act
of 1940, as amended. Borrower is not engaged as one of its important activities
in extending credit for margin stock (under Regulations X, T and U of the
Federal Reserve Board of Governors). Borrower has complied in all material
respects with the Federal Fair Labor Standards Act. Neither Borrower nor any of
its Subsidiaries is a “holding company” or an “affiliate” of a “holding company”
or a “subsidiary company” of a “holding company” as each term is defined and
used in the Public Utility Holding Company Act of 2005. Borrower has not
violated any laws, ordinances or rules, the violation of which could reasonably
be expected to have a material adverse effect on its business. None of
Borrower’s or any of its Subsidiaries’ properties or assets has been used by
Borrower or any Subsidiary or, to the best of Borrower’s knowledge, by previous
Persons, in disposing, producing, storing, treating, or transporting any
hazardous substance other than legally. Borrower and each of its Subsidiaries
have obtained all consents, approvals and authorizations of, made all
declarations or filings with, and given all notices to, all Government
Authorities that are necessary to continue their respective businesses as
currently conducted.
     5.8 Subsidiaries; Investments. Borrower does not own any stock, partnership
interest or other equity securities except for Permitted Investments.
     5.9 Tax Returns and Payments; Pension Contributions. Borrower has timely
filed all required tax returns and reports, and Borrower has timely paid all
foreign, federal, state and local taxes, assessments, deposits and contributions
owed by Borrower. Borrower may defer payment of any contested taxes, provided
that Borrower (a) in good faith contests its obligation to pay the taxes by
appropriate proceedings promptly and diligently instituted and conducted,
(b) notifies Bank in writing of the commencement of, and any material
development in, the proceedings, and (c) posts bonds or takes any other steps
required to prevent the governmental authority levying such contested taxes from
obtaining a Lien upon any of the Collateral that is other than a “Permitted
Lien”. Borrower is unaware of any claims or adjustments proposed for any of
Borrower’s prior tax years which could result

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in additional taxes becoming due and payable by Borrower. Borrower has paid all
amounts necessary to fund all present pension, profit sharing and deferred
compensation plans in accordance with their terms, and Borrower has not
withdrawn from participation in, and has not permitted partial or complete
termination of, or permitted the occurrence of any other event with respect to,
any such plan which could reasonably be expected to result in any liability of
Borrower, including any liability to the Pension Benefit Guaranty Corporation or
its successors or any other governmental agency.
     5.10 Use of Proceeds. Borrower shall use the proceeds of the Credit
Extensions solely as working capital and to fund its general business
requirements and not for personal, family, household or agricultural purposes.
     5.11 Designation of Indebtedness under this Agreement as Senior
Indebtedness. All principal of, interest (including all interest accruing after
the commencement of any bankruptcy or similar proceeding, whether or not a claim
for post-petition interest is allowable as a claim in any such proceeding), and
all fees, costs, expenses and other amounts accrued or due under this Agreement
shall constitute ‘Designated Senior Indebtedness’ (if applicable) under the
terms of any indenture to which it is a party relating to any Subordinated Debt.
     5.12 Full Disclosure. No written representation, warranty or other
statement of Borrower in any certificate or written statement given to Bank, as
of the date such representation, warranty, or other statement was made, taken
together with all such written certificates and written statements given to
Bank, contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements contained in the certificates or
statements not misleading (it being recognized by Bank that the projections and
forecasts provided by Borrower in good faith and based upon reasonable
assumptions are not viewed as facts and that actual results during the period or
periods covered by such projections and forecasts may differ from the projected
or forecasted results).
     6 AFFIRMATIVE COVENANTS
     Borrower shall do all of the following:
     6.1 Government Compliance. Maintain its and all its Subsidiaries’ legal
existence and good standing in their respective jurisdictions of formation and
maintain qualification in each jurisdiction in which the failure to so qualify
would reasonably be expected to have a material adverse effect on Borrower’s
business or operations. Borrower shall comply, and have each Subsidiary comply,
with all laws, ordinances and regulations to which it is subject, noncompliance
with which could have a material adverse effect on Borrower’s business.
     6.2 Financial Statements, Reports, Certificates.
          (a) Borrower shall provide Bank with the following:
          (i) within twenty (20) days after the end of each month, (A) monthly
accounts receivable agings, aged by invoice date, (B) monthly accounts payable
agings, aged by invoice date, and outstanding or held check registers, if any,
(C) monthly reconciliations of accounts receivable agings, aged by invoice date,
transaction reports and general ledger, and (D) Transaction Report, signed by a
Responsible Officer or his or her designee, and a Deferred Revenue report;
          (ii) as soon as available, and in any event within thirty (30) days
after the end of each month, monthly unaudited consolidating financial
statements together with a Compliance Certificate;
          (iii) (A) as soon as available, within five (5) days after filing, but
in no event later than 50 days after the end of each fiscal quarter and 95 days
after each fiscal year end (subject to any extensions pursuant to Rule 12b-25),
all reports on Form 10-K, 10-Q and 8-K filed with the Securities and Exchange
Commission or a link thereto on Borrower’s or another website on the Internet;
(B) a Compliance Certificate together with delivery of the 10-K and 10-Q
reports; (C) within forty-five (45) days after the end of each fiscal year,
annual projections for the following fiscal year (on a quarterly basis) as
approved by Borrower’s board of directors, together with any related business
forecasts used in the preparation of such annual financial projections;
(D) prompt report of any legal action pending or threatened against Borrower or
any Subsidiary that could result in damages or costs to Borrower or any
Subsidiary of $200,000 or more; and (E) budgets, sales projections, operating
plans or other financial information, in each case as Bank reasonably requests;

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          (iv) Allow Bank to audit Borrower’s Collateral at Borrower’s expense,
such audits to be conducted prior to the Initial Advance and no more than two
times per year thereafter or as conditions may warrant;
          (v) a monthly Compliance Certificate signed by a Responsible Officer,
certifying that as of the end of such month, Borrower was in full compliance
with all of the terms and conditions of this Agreement, and setting forth
calculations showing compliance with the financial covenants set forth in this
Agreement and such other information as Bank shall reasonably request,
including, without limitation, a statement that at the end of such month there
were no held checks; and
          (vi) Prompt written notice of (x) the registration of any Copyright
(including any subsequent ownership right of Borrower in or to any Copyright)
Patent or Trademark not previously disclosed to the Bank, or (y) Borrower’s
knowledge of an event that materially adversely affects the value of the
Intellectual Property.
          (b) During any period in which amounts are outstanding under the
Revolving Line, Borrower shall provide Bank weekly and with each Advance
request, a transaction report with respect to sales, credit memoranda and other
adjustments to the value of Accounts, on Bank’s standard form
     6.3 Accounts Receivable.
          (a) Schedules and Documents Relating to Accounts. Borrower shall
deliver to Bank transaction reports and schedules of collections, as provided in
Section 6.2, on Bank’s standard forms; provided, however, that Borrower’s
failure to execute and deliver the same shall not affect or limit Bank’s Lien
and other rights in all of Borrower’s Accounts, nor shall Bank’s failure to
advance or lend against a specific Account affect or limit Bank’s Lien and other
rights therein. If requested by Bank, Borrower shall furnish Bank with copies
(or, at Bank’s request, originals) of all contracts, orders, invoices, and other
similar documents, and all shipping instructions, delivery receipts, bills of
lading, and other evidence of delivery, for any goods the sale or disposition of
which gave rise to such Accounts. In addition, Borrower shall deliver to Bank,
on its request, the originals of all instruments, chattel paper, security
agreements, guarantees and other documents and property evidencing or securing
any Accounts, in the same form as received, with all necessary endorsements, and
copies of all credit memos.
          (b) Disputes. Borrower shall promptly notify Bank of all disputes or
claims relating to Accounts if such disputes or claims are in excess of Fifty
Thousand Dollars ($50,000). Borrower may forgive (completely or partially),
compromise, or settle any Account for less than payment in full, or agree to do
any of the foregoing so long as (i) Borrower does so in good faith, in a
commercially reasonable manner, in the ordinary course of business, in
arm’s-length transactions, and reports the same to Bank in the regular reports
provided to Bank; (ii) no Default or Event of Default has occurred and is
continuing; and (iii) after taking into account all such discounts, settlements
and forgiveness, the total outstanding Advances will not exceed the Availability
Amount.
          (c) Collection of Accounts. Borrower shall have the right to collect
all Accounts, unless and until a Default or an Event of Default has occurred and
is continuing. During any period in which amounts are outstanding under the
Revolving Line, Borrower shall establish a lockbox account, or such other
“blocked account” as Bank may specify, pursuant to a blocked account agreement
in such form as Bank may specify in its good faith business judgment, into which
all proceeds of Accounts shall be deposited by Borrower. All payments and
proceeds received by Bank shall be applied on a daily basis to the Obligations
pursuant to the terms of Section 9.4 hereof. Whether or not an Event of Default
has occurred and is continuing, if and to the extent that a lockbox is required
under this Section 6.3(c), Borrower shall hold all payments on, and proceeds of,
Accounts in trust for Bank and Borrower shall immediately deliver all such
payments and proceeds to Bank in their original form, duly endorsed.
          (d) Returns. Provided no Event of Default has occurred and is
continuing, if any Account Debtor returns any Inventory to Borrower, Borrower
shall promptly (i) determine the reason for such return, (ii) issue a credit
memorandum to the Account Debtor in the appropriate amount, and (iii) provide a
copy of such credit memorandum to Bank, upon request from Bank. In the event any
attempted return occurs after the occurrence and during the continuance of any
Event of Default, Borrower shall hold the returned Inventory in trust for Bank,
and immediately notify Bank of the return of the Inventory.

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          (e) Verification. Bank may, from time to time, verify directly with
the respective Account Debtors the validity, amount and other matters relating
to the Accounts, either in the name of Borrower or Bank or such other name as
Bank may choose.
          (f) No Liability. Bank shall not be responsible or liable for any
shortage or discrepancy in, damage to, or loss or destruction of, any goods, the
sale or other disposition of which gives rise to an Account, or for any error,
act, omission, or delay of any kind occurring in the settlement, failure to
settle, collection or failure to collect any Account, or for settling any
Account in good faith for less than the full amount thereof, nor shall Bank be
deemed to be responsible for any of Borrower’s obligations under any contract or
agreement giving rise to an Account. Nothing herein shall, however, relieve Bank
from liability for its own gross negligence or willful misconduct.
     6.4 Remittance of Proceeds. Except as otherwise provided in Section 6.3(c),
deliver, in kind, all proceeds arising from the disposition of any Collateral to
Bank in the original form in which received by Borrower not later than the
following Business Day after receipt by Borrower, to be applied to the
Obligations pursuant to the terms of Section 9.4 hereof; provided that, if no
Default or Event of Default has occurred and is continuing, Borrower shall not
be obligated to remit to Bank the proceeds of the sale of unneeded, worn out or
obsolete Equipment disposed of by Borrower in good faith in an arm’s length
transaction for an aggregate purchase price of $50,000 or less (for all such
transactions in any fiscal year). Except for the proceeds identified in the
immediately preceding sentence, Borrower agrees that it will not commingle
proceeds of Collateral with any of Borrower’s other funds or property, but will
hold such proceeds separate and apart from such other funds and property and in
an express trust for Bank. Nothing in this Section limits the restrictions on
disposition of Collateral set forth elsewhere in this Agreement.
     6.5 Taxes; Pensions. Timely file, and require each of its Subsidiaries to
timely file, all required tax returns and reports and timely pay, and require
each of its Subsidiaries to timely file, all foreign, federal, state and local
taxes, assessments, deposits and contributions owed by Borrower and each of its
Subsidiaries, except for deferred payment of any taxes contested pursuant to the
terms of Section 5.10 hereof, and shall deliver to Bank, on demand, appropriate
certificates attesting to such payments, and pay all amounts necessary to fund
all present pension, profit sharing and deferred compensation plans in
accordance with their terms.
     6.6 Access to Collateral; Books and Records. At reasonable times, on one
(1) Business Day’s notice (provided no notice is required if an Event of Default
has occurred and is continuing), Bank, or its agents, shall have the right to
inspect the Collateral and the right to audit and copy Borrower’s Books. The
foregoing inspections and audits shall be at Borrower’s expense, and the charge
therefor shall be $750 per person per day (or such higher amount as shall
represent Bank’s then-current standard charge for the same), plus reasonable
out-of-pocket expenses. In the event Borrower and Bank schedule an audit more
than ten (10) days in advance, and Borrower cancels or seeks to reschedules the
audit with less than ten (10) days written notice to Bank, then (without
limiting any of Bank’s rights or remedies), Borrower shall pay Bank a fee of
$1,000 plus any out-of-pocket expenses incurred by Bank to compensate Bank for
the anticipated costs and expenses of the cancellation or rescheduling.
     6.7 Insurance. Keep its business and the Collateral insured for risks and
in amounts standard for companies in Borrower’s industry and location and as
Bank may reasonably request. Insurance policies shall be in a form, with
companies, and in amounts that are satisfactory to Bank. All property policies
shall have a lender’s loss payable endorsement showing Bank as an additional
loss payee and waive subrogation against Bank, and all liability policies shall
show, or have endorsements showing, Bank as an additional insured. All policies
(or the loss payable and additional insured endorsements) shall provide that the
insurer must give Bank at least twenty (20) days notice before canceling or
declining to renew its policy. At Bank’s request, Borrower shall deliver
certified copies of policies and evidence of all premium payments. Proceeds
payable under any policy shall, at Bank’s option, be payable to Bank on account
of the Obligations. If Borrower fails to obtain insurance as required under this
Section 6.7 or to pay any amount or furnish any required proof of payment to
third persons and Bank, Bank may make all or part of such payment or obtain such
insurance policies required in this Section 6.7, and take any action under the
policies Bank deems prudent.

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     6.8 Operating Accounts.
          (a) Maintain (except with regard to Superscape, who by February 22,
2009 shall maintain) its primary domestic operating accounts and a securities
account with Bank and Bank’s Affiliates.
          (b) Provide Bank five (5) days prior written notice before
establishing any Collateral Account at or with any bank or financial institution
other than Bank or Bank’s Affiliates. For each Collateral Account that Borrower
at any time maintains, Borrower shall cause the applicable bank or financial
institution (other than Bank) at or with which any Collateral Account is
maintained to execute and deliver a Control Agreement or other appropriate
instrument with respect to such Collateral Account to perfect Bank’s Lien in
such Collateral Account in accordance with the terms hereunder. The provisions
of the previous sentence shall not apply to deposit accounts exclusively used
for payroll, payroll taxes and other employee wage and benefit payments to or
for the benefit of Borrower’s employees and identified to Bank by Borrower as
such.
     6.9 Financial Covenants.
          Borrower shall maintain at all times, to be tested as of the last day
of each month, unless otherwise noted, on a consolidated basis with respect to
Borrower and its Subsidiaries:
          (a) EBITDA. Maintain, for the fiscal quarter ended December 31, 2008,
EBITDA of at least ($1,672,000), and for each of the following periods, measured
as of the end of such period, EBITDA of at least the following:

          Period   Minimum EBITDA
October 1, 2008 through March 31, 2009
  $ (2,382,000 )
 
       
January 1, 2009 through June 30, 2009
  $ (812,000 )
 
       
April 1, 2009 through September 30, 2009
  $ 1,572,000  
 
       
July 1, 2009 through December 31, 2009
  $ 4,263,000  
 
       
October 1, 2009 through March 31, 2010
  $ 5,092,000  
 
       
January 1, 2010 through June 30, 2010
  $ 5,257,000  
 
       
April 1, 2010 through September 30, 2010
  $ 5,298,000  
 
       
July 1, 2010 through December 31, 2010
  $ 6,073,000  

          (b) Minimum Domestic Liquidity. Maintain at Bank or its Affiliates, an
amount of cash, cash equivalents and short-term investments of not less than the
greater of: (a) 20% of Borrower’s total consolidated unrestricted cash, cash
equivalents and short-term investments, or (b) 15% of outstanding Obligations.
     6.10 Protection and Registration of Intellectual Property Rights. Borrower
shall: (a) protect, defend and maintain the validity and enforceability of the
intellectual property owned by it and material to its business; (b) promptly
advise Bank in writing of material infringements of such intellectual property;
and (c) not allow any such intellectual property material to Borrower’s business
to be abandoned, forfeited or dedicated to the public without Bank’s written
consent. If Borrower (i) obtains ownership of any patent, registered trademark
or servicemark, registered copyright, registered mask work, or any pending
application for any of the foregoing, whether as owner, licensee or otherwise,
or (ii) applies for any patent or the registration of any trademark or
servicemark, then Borrower shall immediately provide written notice thereof to
Bank and shall execute such intellectual property security agreements and other
documents and take such other actions as Bank shall request in its good faith
business judgment to perfect and maintain a first priority perfected security
interest in favor of Bank in such property. If Borrower decides to register any
copyrights or mask works in the United States Copyright Office, Borrower shall:
(x) provide Bank with at least fifteen (15) days prior written notice of
Borrower’s intent to

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register such copyrights or mask works together with a copy of the application
it intends to file with the United States Copyright Office (excluding exhibits
thereto); (y) execute an intellectual property security agreement and such other
documents and take such other actions as Bank may request in its good faith
business judgment to perfect and maintain a first priority perfected security
interest in favor of Bank in the copyrights or mask works intended to be
registered with the United States Copyright Office; and (z) record such
intellectual property security agreement with the United States Copyright Office
contemporaneously with filing the copyright or mask work application(s) with the
United States Copyright Office. Borrower shall promptly provide to Bank copies
of all applications that it files for patents or for the registration of
trademarks, servicemarks, copyrights or mask works, together with evidence of
the recording of the intellectual property security agreement necessary for Bank
to perfect and maintain a first priority perfected security interest in such
property.
     6.11 Litigation Cooperation. From the date hereof and continuing through
the termination of this Agreement, make available to Bank, without expense to
Bank, Borrower and its officers, employees and agents and Borrower’s books and
records, to the extent that Bank may deem them reasonably necessary to prosecute
or defend any third-party suit or proceeding instituted by or against Bank with
respect to any Collateral or relating to Borrower.
     6.12 Designated Senior Indebtedness. Borrower shall designate all principal
of, interest (including all interest accruing after the commencement of any
bankruptcy or similar proceeding, whether or not a claim for post-petition
interest is allowable as a claim in any such proceeding), and all fees, costs,
expenses and other amounts accrued or due under this Agreement as ‘Designated
Senior Indebtedness’, or such similar term (if applicable), in any future
Subordinated Debt incurred by Borrower after the date hereof, if such
Subordinated Debt contains such term or similar term.
     6.13 Further Assurances. Borrower shall execute any further instruments and
take further action as Bank reasonably requests to perfect or continue Bank’s
Lien in the Collateral or to effect the purposes of this Agreement. Borrower
shall deliver to Bank, within five (5) days after the same are sent or received,
copies of all correspondence, reports, documents and other filings with any
Governmental Authority regarding compliance with or maintenance of Governmental
Approvals or Requirements of Law or that could reasonably be expected to have a
material effect on any of the Governmental Approvals or otherwise on the
operations of Borrower or any of its Subsidiaries.
     7 NEGATIVE COVENANTS
     Borrower shall not do any of the following without Bank’s prior written
consent:
     7.1 Dispositions. Convey, sell, lease, transfer or otherwise dispose of
(collectively, “Transfer”), or permit any of its Subsidiaries to Transfer, all
or any part of its business or property, except for Transfers (a) of Inventory
in the ordinary course of business; (b) of unneeded, worn-out or obsolete
Equipment; (c) in connection with Permitted Liens and Permitted Investments and
(d) Transfers from any Loan Party to any other Loan Party, not otherwise
prohibited under any other Section of this Agreement.
     7.2 Changes in Business, Management, or Business Locations. (a) Engage in
or permit any of its Subsidiaries to engage in any business other than the
businesses currently engaged in by Borrower and such Subsidiary, as applicable,
or reasonably related thereto; (b) liquidate or dissolve; or (c) (i) if the Key
Person ceases to hold such office with Borrower and replacements satisfactory to
Bank are not made within 60 days after his departure from Borrower or
(ii) permit or suffer any Change in Control. Borrower shall not, without at
least thirty (30) days prior written notice to Bank: (1) add any new offices or
business locations, including warehouses (unless such new offices or business
locations contain less than $150,000 in Borrower’s assets or property),
(2) change its jurisdiction of organization, (3) change its organizational
structure or type, (4) change its legal name, or (5) change any organizational
number (if any) assigned by its jurisdiction of organization; provided however
that the Perfection Certificate is deemed amended to reflect such information
upon Bank’s receipt of such written notice.
     7.3 Mergers or Acquisitions. Merge or consolidate, or permit any of its
Subsidiaries to merge or consolidate, with any other Person, or acquire, or
permit any of its Subsidiaries to acquire, all or substantially all of the
capital stock or property of another Person except where (a) total consideration
including cash and the value of any non-cash consideration, for all such
transactions does not in the aggregate exceed $1,000,000 in any fiscal year of
Borrower; (b) no Event of Default has occurred and is continuing or would exist
after giving effect to the

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transactions; and (c) Borrower is the surviving legal entity. A Subsidiary may
merge or consolidate into another Subsidiary or into Borrower.
     7.4 Indebtedness. Create, incur, assume, or be liable for any Indebtedness,
or permit any Subsidiary to do so, other than Permitted Indebtedness.
     7.5 Encumbrance. Create, incur, allow, or suffer any Lien on any of the
Collateral, or assign or convey any right to receive income, including the sale
of any Accounts, or permit any of its Subsidiaries to do so, except for
Permitted Liens, permit any Collateral not to be subject to the first priority
security interest granted herein, or enter into any agreement, document,
instrument or other arrangement (except with or in favor of Bank) with any
Person which directly or indirectly prohibits or has the effect of prohibiting
Borrower or any Subsidiary from assigning, mortgaging, pledging, granting a
security interest in or upon, or encumbering any of Borrower’s or any
Subsidiary’s intellectual property, except as is otherwise permitted in
Section 7.1 hereof and the definition of “Permitted Lien” herein and except for
customary restrictions on assignment of licenses to intellectual property from
third parties.
     7.6 Maintenance of Collateral Accounts. Maintain any Collateral Account
except pursuant to the terms of Section 6.8(b) hereof.
     7.7 Distributions; Investments. (a) Directly or indirectly make any
Investment other than Permitted Investments, or permit any of its Subsidiaries
to do so; or (b) pay any dividends or make any distribution or payment or
redeem, retire or purchase any capital stock; provided that (i) Borrower may
convert any of its convertible securities into other securities pursuant to the
terms of such convertible securities or otherwise in exchange thereof,
(ii) Borrower may pay dividends solely in common stock; and (iii) Borrower may
repurchase the stock of former employees or consultants pursuant to stock
repurchase agreements so long as an Event of Default does not exist at the time
of such repurchase and would not exist after giving effect to such repurchase.
     7.8 Transactions with Affiliates. Directly or indirectly enter into or
permit to exist any material transaction with any Affiliate of Borrower, except
for transactions that are in the ordinary course of Borrower’s business, upon
fair and reasonable terms that are no less favorable to Borrower than would be
obtained in an arm’s length transaction with a non-affiliated Person.
     7.9 Subordinated Debt. (a) Make or permit any payment on any Subordinated
Debt, except as permitted under the terms of the subordination, intercreditor,
or other similar agreement to which a Borrower is a party and to which such
Subordinated Debt is subject, or (b) amend any provision in any document
relating to the Subordinated Debt which would increase the amount thereof or
adversely affect the subordination thereof to Obligations owed to Bank.
     7.10 Compliance. Become an “investment company” or a company controlled by
an “investment company”, under the Investment Company Act of 1940, as amended,
or undertake as one of its important activities extending credit to purchase or
carry margin stock (as defined in Regulation U of the Board of Governors of the
Federal Reserve System), or use the proceeds of any Credit Extension for that
purpose; fail to meet the minimum funding requirements of ERISA, permit a
Reportable Event or Prohibited Transaction, as defined in ERISA, to occur; fail
to comply with the Federal Fair Labor Standards Act or violate any other law or
regulation, if the violation could reasonably be expected to have a material
adverse effect on Borrower’s business, or permit any of its Subsidiaries to do
so; withdraw or permit any Subsidiary to withdraw from participation in, permit
partial or complete termination of, or permit the occurrence of any other event
with respect to, any present pension, profit sharing and deferred compensation
plan which could reasonably be expected to result in any liability of Borrower,
including any liability to the Pension Benefit Guaranty Corporation or its
successors or any other governmental agency.
     8 EVENTS OF DEFAULT
     Any one of the following shall constitute an event of default (an “Event of
Default”) under this Agreement:
     8.1 Payment Default. Borrower fails to (a) make any payment of principal or
interest on any Credit Extension on its due date, or (b) pay any other
Obligations within five (5) Business Days after such Obligations are

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due and payable (which five (5) Business Day grace period shall not apply to
payments due on the Revolving Line Maturity Date). During the cure period, the
failure to cure the payment default is not an Event of Default (but no Credit
Extension will be made during the cure period);
     8.2 Covenant Default.
          (a) Borrower fails or neglects to perform any obligation in
Sections 6.2, 6.3, 6.4, 6.5, 6.7, 6.8, 6.9 or 6.12 or violates any covenant in
Section 7; or
          (b) Borrower fails or neglects to perform, keep, or observe any other
term, provision, condition, covenant or agreement contained in this Agreement or
any Loan Documents, and as to any default (other than those specified in this
Section 8) under such other term, provision, condition, covenant or agreement
that can be cured, has failed to cure the default within ten (10) days after the
occurrence thereof; provided, however, that if the default cannot by its nature
be cured within the ten (10) day period or cannot after diligent attempts by
Borrower be cured within such ten (10) day period, and such default is likely to
be cured within a reasonable time, then Borrower shall have an additional period
(which shall not in any case exceed thirty (30) days) to attempt to cure such
default, and within such reasonable time period the failure to cure the default
shall not be deemed an Event of Default (but no Credit Extensions shall be made
during such cure period). Grace periods provided under this section shall not
apply, among other things, to financial covenants or any other covenants set
forth in subsection (a) above;
     8.3 Material Adverse Change. A Material Adverse Change occurs;
     8.4 Attachment; Levy; Restraint on Business. (a) Any material portion of
Borrower’s assets is attached, seized, levied on, or comes into possession of a
trustee or receiver and the attachment, seizure or levy is not removed in ten
(10) days; (b) the service of process upon Borrower seeking to attach, by
trustee or similar process, any funds of Borrower on deposit with Bank, or any
entity under control of Bank (including a subsidiary); (c) Borrower is enjoined,
restrained, or prevented by court order from conducting a material part of its
business; (d) a judgment or other claim in excess of $100,000 becomes a Lien on
any of Borrower’s assets; or (e) a notice of lien, levy, or assessment is filed
against any of Borrower’s assets by any government agency and not paid within
ten (10) days after Borrower receives notice. These are not Events of Default if
stayed or if a bond is posted pending contest by Borrower (but no Credit
Extensions shall be made during the cure period);
     8.5 Insolvency. (a) Borrower is unable to pay its debts (including trade
debts) as they become due or otherwise becomes insolvent; (b) Borrower begins an
Insolvency Proceeding; or (c) an Insolvency Proceeding is begun against Borrower
and not dismissed or stayed within sixty (60) days (but no Credit Extensions
shall be made while of any of the conditions described in clause (a) exist
and/or until any Insolvency Proceeding is dismissed);
     8.6 Change of Control. A Change of Control occurs;
     8.7 Other Agreements. There is a default in any agreement to which Borrower
is a party with a third party or parties resulting in a right by such third
party or parties, whether or not exercised, to accelerate the maturity of any
Indebtedness in an amount in excess of Two Hundred Thousand Dollars ($200,000)
or that could have a material adverse effect on Borrower’s business;
     8.8 Judgments. One or more judgments, orders, or decrees for the payment of
money in an amount, individually or in the aggregate, of at least Two Hundred
Thousand Dollars ($200,000) (not covered by independent third-party insurance as
to which liability has been accepted by such insurance carrier) shall be
rendered against Borrower and shall remain unsatisfied, unvacated, or unstayed
for a period of ten (10) days after the entry thereof (provided that no Credit
Extensions will be made prior to the satisfaction, vacation, or stay of such
judgment, order, or decree); or
     8.9 Misrepresentations. Borrower or any Person acting for Borrower makes
any representation, warranty, or other statement now or later in this Agreement,
any Loan Document or in any writing delivered to Bank or to induce Bank to enter
this Agreement or any Loan Document, and such representation, warranty, or other
statement is incorrect in any material respect when made;
     8.10 Subordinated Debt. A default or breach occurs under any agreement
between Borrower and any creditor of Borrower that signed a subordination,
intercreditor, or other similar agreement with Bank, and which

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agreement governs or provides for the terms of Indebtedness to such creditor, or
any creditor that has signed such an agreement with Bank breaches any terms of
such agreement.
     9 BANK’S RIGHTS AND REMEDIES
     9.1 Rights and Remedies. While an Event of Default occurs and continues
Bank may, without notice or demand, do any or all of the following:
          (a) declare all Obligations immediately due and payable (but if an
Event of Default described in Section 8.5 occurs all Obligations are immediately
due and payable without any action by Bank);
          (b) stop advancing money or extending credit for Borrower’s benefit
under this Agreement or under any other agreement between Borrower and Bank;
          (c) demand that Borrower (i) deposit cash with Bank in an amount equal
to the aggregate amount of any Letters of Credit remaining undrawn, as
collateral security for the repayment of any future drawings under such Letters
of Credit, and Borrower shall forthwith deposit and pay such amounts, and
(ii) pay in advance all Letter of Credit fees scheduled to be paid or payable
over the remaining term of any Letters of Credit;
          (d) terminate any FX Forward Contracts;
          (e) settle or adjust disputes and claims directly with Account Debtors
for amounts on terms and in any order that Bank considers advisable, notify any
Person owing Borrower money of Bank’s security interest in such funds, and
verify the amount of such account;
          (f) make any payments and do any acts it considers necessary or
reasonable to protect the Collateral and/or its security interest in the
Collateral. Borrower shall assemble the Collateral if Bank requests and make it
available as Bank designates. Bank may enter premises where the Collateral is
located, take and maintain possession of any part of the Collateral, and pay,
purchase, contest, or compromise any Lien which appears to be prior or superior
to its security interest and pay all expenses incurred. Borrower grants Bank a
license to enter and occupy any of its premises, without charge, to exercise any
of Bank’s rights or remedies;
          (g) apply to the Obligations any (i) balances and deposits of Borrower
it holds, or (ii) any amount held by Bank owing to or for the credit or the
account of Borrower;
          (h) ship, reclaim, recover, store, finish, maintain, repair, prepare
for sale, advertise for sale, and sell the Collateral. Bank is hereby granted a
non-exclusive, royalty-free license or other right to use, without charge,
Borrower’s labels, patents, copyrights, mask works, rights of use of any name,
trade secrets, trade names, trademarks, service marks, and advertising matter,
or any similar property as it pertains to the Collateral, in completing
production of, advertising for sale, and selling any Collateral and, in
connection with Bank’s exercise of its rights under this Section, Borrower’s
rights under all licenses and all franchise agreements inure to Bank’s benefit;
          (i) place a “hold” on any account maintained with Bank and/or deliver
a notice of exclusive control, any entitlement order, or other directions or
instructions pursuant to any Control Agreement or similar agreements providing
control of any Collateral;
          (j) demand and receive possession of Borrower’s Books; and
          (k) exercise all rights and remedies available to Bank under the Loan
Documents or at law or equity, including all remedies provided under the Code
(including disposal of the Collateral pursuant to the terms thereof).
     9.2 Power of Attorney. Borrower hereby irrevocably appoints Bank as its
lawful attorney-in-fact, exercisable upon the occurrence and during the
continuance of an Event of Default, to: (a) endorse Borrower’s name on any
checks or other forms of payment or security; (b) sign Borrower’s name on any
invoice or bill of lading for any Account or drafts against Account Debtors;
(c) settle and adjust disputes and claims about the Accounts directly with
Account Debtors, for amounts and on terms Bank determines reasonable; (d) make,
settle, and adjust

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all claims under Borrower’s insurance policies; (e) pay, contest or settle any
Lien, charge, encumbrance, security interest, and adverse claim in or to the
Collateral, or any judgment based thereon, or otherwise take any action to
terminate or discharge the same; and (f) transfer the Collateral into the name
of Bank or a third party as the Code permits. Borrower hereby appoints Bank as
its lawful attorney-in-fact to sign Borrower’s name on any documents necessary
to perfect or continue the perfection of Bank’s security interest in the
Collateral regardless of whether an Event of Default has occurred until all
Obligations have been satisfied in full and Bank is under no further obligation
to make Credit Extensions hereunder. Bank’s foregoing appointment as Borrower’s
attorney in fact, and all of Bank’s rights and powers, coupled with an interest,
are irrevocable until all Obligations have been fully repaid and performed and
Bank’s obligation to provide Credit Extensions terminates.
     9.3 Protective Payments. If Borrower fails to obtain the insurance called
for by Section 6.7 or fails to pay any premium thereon or fails to pay any other
amount which Borrower is obligated to pay under this Agreement or any other Loan
Document, Bank may obtain such insurance or make such payment, and all amounts
so paid by Bank are Bank Expenses and immediately due and payable, bearing
interest at the then highest applicable rate, and secured by the Collateral.
Bank will make reasonable efforts to provide Borrower with notice of Bank
obtaining such insurance at the time it is obtained or within a reasonable time
thereafter. No payments by Bank are deemed an agreement to make similar payments
in the future or Bank’s waiver of any Event of Default.
     9.4 Application of Payments and Proceeds. Unless otherwise specified by
this Agreement, Borrower shall have no right to specify the order or the
accounts to which Bank shall allocate or apply any payments required to be made
by Borrower to Bank or otherwise received by Bank under this Agreement. Unless
an Event of Default has occurred and is continuing, Bank shall apply any funds
in its possession, whether from Borrower or any Guarantor account balances,
payments, or proceeds realized as the result of any collection of Accounts or
other disposition of the Collateral, first, to Bank Expenses, including without
limitation, the reasonable costs, expenses, liabilities, obligations and
attorneys’ fees incurred by Bank in the exercise of its rights under this
Agreement; second, to the interest due upon any of the Obligations; and third,
to the principal of the Obligations and any applicable fees and other charges,
in such order as Bank shall determine in its sole discretion. Any surplus shall
be paid to Borrower or other Persons legally entitled thereto; Borrower and
Guarantors shall remain liable to Bank for any deficiency. If an Event of
Default has occurred and is continuing, Bank may apply any funds in its
possession, whether from Borrower account balances, payments, proceeds realized
as the result of any collection of Accounts or other disposition of the
Collateral, or otherwise, to the Obligations in such order as Bank shall
determine in its sole discretion. Any surplus shall be paid daily to Borrower by
credit to the Designated Deposit Account or to other Persons legally entitled
thereto; Borrower shall remain liable to Bank for any deficiency. If Bank, in
its good faith business judgment, directly or indirectly enters into a deferred
payment or other credit transaction with any purchaser at any sale of
Collateral, Bank shall have the option, exercisable at any time, of either
reducing the Obligations by the principal amount of the purchase price or
deferring the reduction of the Obligations until the actual receipt by Bank of
cash therefor.
     9.5 Bank’s Liability for Collateral. So long as Bank complies with
reasonable banking practices regarding the safekeeping of the Collateral in the
possession or under the control of Bank, Bank shall not be liable or responsible
for: (a) the safekeeping of the Collateral; (b) any loss or damage to the
Collateral; (c) any diminution in the value of the Collateral; or (d) any act or
default of any carrier, warehouseman, bailee, or other Person. Borrower bears
all risk of loss, damage or destruction of the Collateral.
     9.6 No Waiver; Remedies Cumulative. Bank’s failure, at any time or times,
to require strict performance by Borrower of any provision of this Agreement or
any other Loan Document shall not waive, affect, or diminish any right of Bank
thereafter to demand strict performance and compliance herewith or therewith. No
waiver hereunder shall be effective unless signed by Bank and then is only
effective for the specific instance and purpose for which it is given. Bank’s
rights and remedies under this Agreement and the other Loan Documents are
cumulative. Bank has all rights and remedies provided under the Code, by law, or
in equity. Bank’s exercise of one right or remedy is not an election, and Bank’s
waiver of any Event of Default is not a continuing waiver. Bank’s delay in
exercising any remedy is not a waiver, election, or acquiescence.
     9.7 Demand Waiver. Borrower waives demand, notice of default or dishonor,
notice of payment and nonpayment, notice of any default, nonpayment at maturity,
release, compromise, settlement, extension, or renewal of accounts, documents,
instruments, chattel paper, and guarantees held by Bank on which Borrower is
liable.

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     10 NOTICES
     All notices, consents, requests, approvals, demands, or other communication
by any party to this Agreement or any other Loan Document must be in writing and
shall be deemed to have been validly served, given, or delivered: (a) upon the
earlier of actual receipt and three (3) Business Days after deposit in the U.S.
mail, first class, registered or certified mail return receipt requested, with
proper postage prepaid; (b) upon transmission, when sent by electronic mail or
facsimile transmission; (c) one (1) Business Day after deposit with a reputable
overnight courier with all charges prepaid; or (d) when delivered, if
hand-delivered by messenger, all of which shall be addressed to the party to be
notified and sent to the address, facsimile number, or email address indicated
below. Advance requests made pursuant to Section 3.4 must be in writing and may
be in the form of electronic mail, delivered to Bank by Borrower at the e-mail
address of Bank provided below and shall be deemed to have been validly served,
given, or delivered when sent (with such electronic mail promptly confirmed by
delivery of a copy by personal delivery or United States mail as otherwise
provided in this Section 10). Bank or Borrower may change its mailing or
electronic mail address or facsimile number by giving the other party written
notice thereof in accordance with the terms of this Section 10.

         
 
  If to Borrower:   Glu Mobile Inc.
 
      2207 Bridgepoint Parkway, Suite 300
 
      San Mateo, CA 94404
 
      (650) 532-2436
 
      Attn: Eric Ludwig, SVP and CFO
 
      Fax: (650) 532-2493
 
      Email: eric.ludwig@glu.com
 
       
 
  If to Bank:   Silicon Valley Bank
 
      2400 Hanover Street
 
      Palo Alto CA 94303
 
      Attn: Tom Smith
 
      Fax: (650) 320-0016
 
      Email:  tsmith@svb.com

     11 CHOICE OF LAW, VENUE, JURY TRIAL WAIVER AND JUDICIAL REFERENCE
     California law governs the Loan Documents without regard to principles of
conflicts of law. Borrower and Bank each submit to the exclusive jurisdiction of
the State and Federal courts in Santa Clara County, California; provided,
however, that nothing in this Agreement shall be deemed to operate to preclude
Bank from bringing suit or taking other legal action in any other jurisdiction
to realize on the Collateral or any other security for the Obligations, or to
enforce a judgment or other court order in favor of Bank. Borrower expressly
submits and consents in advance to such jurisdiction in any action or suit
commenced in any such court, and Borrower hereby waives any objection that it
may have based upon lack of personal jurisdiction, improper venue, or forum non
conveniens and hereby consents to the granting of such legal or equitable relief
as is deemed appropriate by such court. Borrower hereby waives personal service
of the summons, complaints, and other process issued in such action or suit and
agrees that service of such summons, complaints, and other process may be made
by registered or certified mail addressed to Borrower at the address set forth
in Section 10 of this Agreement and that service so made shall be deemed
completed upon the earlier to occur of Borrower’s actual receipt thereof or
three (3) days after deposit in the U.S. mails, proper postage prepaid.
     TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, BORROWER AND BANK EACH
WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF
OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY CONTEMPLATED
TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS
WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT.
EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.
     WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO WAIVE THEIR
RESPECTIVE RIGHT TO A TRIAL BY JURY, if the above waiver of the right to a trial
by jury is not enforceable, the parties hereto agree that any and all disputes
or controversies of any nature between them arising at any time shall be decided
by a reference to a private judge, mutually selected by the parties (or, if they
cannot agree, by the Presiding Judge of the Santa Clara County, California
Superior Court) appointed in accordance with California Code of Civil Procedure
Section 638 (or pursuant to comparable provisions of federal law if the dispute
falls within the

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exclusive jurisdiction of the federal courts), sitting without a jury, in Santa
Clara County, California; and the parties hereby submit to the jurisdiction of
such court. The reference proceedings shall be conducted pursuant to and in
accordance with the provisions of California Code of Civil Procedure §§ 638
through 645.1, inclusive. The private judge shall have the power, among others,
to grant provisional relief, including without limitation, entering temporary
restraining orders, issuing preliminary and permanent injunctions and appointing
receivers. All such proceedings shall be closed to the public and confidential
and all records relating thereto shall be permanently sealed. If during the
course of any dispute, a party desires to seek provisional relief, but a judge
has not been appointed at that point pursuant to the judicial reference
procedures, then such party may apply to the Santa Clara County, California
Superior Court for such relief. The proceeding before the private judge shall be
conducted in the same manner as it would be before a court under the rules of
evidence applicable to judicial proceedings. The parties shall be entitled to
discovery which shall be conducted in the same manner as it would be before a
court under the rules of discovery applicable to judicial proceedings. The
private judge shall oversee discovery and may enforce all discovery rules and
order applicable to judicial proceedings in the same manner as a trial court
judge. The parties agree that the selected or appointed private judge shall have
the power to decide all issues in the action or proceeding, whether of fact or
of law, and shall report a statement of decision thereon pursuant to the
California Code of Civil Procedure § 644(a). Nothing in this paragraph shall
limit the right of any party at any time to exercise self-help remedies,
foreclose against collateral, or obtain provisional remedies. The private judge
shall also determine all issues relating to the applicability, interpretation,
and enforceability of this paragraph.
     12 GENERAL PROVISIONS
     12.1 Termination Prior to Revolving Line Maturity Date. This Agreement may
be terminated prior to the Revolving Line Maturity Date by Borrower, effective
seven (7) Business Days after written notice of termination is given to Bank. If
such termination is at Borrower’s election or at Bank’s election due to the
occurrence and continuance of an Event of Default, Borrower shall pay to Bank,
in addition to the payment of any other expenses or fees then-owing, a
termination fee in an amount equal to $80,000 (or one percent (1%) of the
Revolving Line) provided that no termination fee shall be charged if the credit
facility hereunder is replaced with a new facility from another division of
Silicon Valley Bank.
     12.2 Successors and Assigns. This Agreement binds and is for the benefit of
the successors and permitted assigns of each party. Borrower may not assign this
Agreement or any rights or obligations under it without Bank’s prior written
consent (which may be granted or withheld in Bank’s discretion). Bank has the
right, without the consent of or notice to Borrower, to sell, transfer,
negotiate, or grant participation in all or any part of, or any interest in,
Bank’s obligations, rights, and benefits under this Agreement and the other Loan
Documents.
     12.3 Indemnification. Borrower agrees to indemnify, defend and hold Bank
and its directors, officers, employees, agents, attorneys, or any other Person
affiliated with or representing Bank (each, an “Indemnified Person”) harmless
against: (a) all obligations, demands, claims, and liabilities (collectively,
“Claims”) asserted by any other party in connection with the transactions
contemplated by the Loan Documents; and (b) all losses or Bank Expenses
incurred, or paid by such Indemnified Person from, following, or arising from
transactions between Bank and Borrower (including reasonable attorneys’ fees and
expenses), except for Claims and/or losses directly caused by such Indemnified
Person’s gross negligence or willful misconduct.
     12.4 Time of Essence. Time is of the essence for the performance of all
Obligations in this Agreement.
     12.5 Severability of Provisions. Each provision of this Agreement is
severable from every other provision in determining the enforceability of any
provision.
     12.6 Correction of Loan Documents. Bank may correct patent errors and fill
in any blanks in this Agreement and the other Loan Documents consistent with the
agreement of the parties.
     12.7 Amendments in Writing; Integration. All amendments to this Agreement
must be in writing and signed by both Bank and Borrower. This Agreement and the
Loan Documents represent the entire agreement about this subject matter and
supersede prior negotiations or agreements. All prior agreements,
understandings, representations, warranties, and negotiations between the
parties about the subject matter of this Agreement and the Loan Documents merge
into this Agreement and the Loan Documents.

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     12.8 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties on separate counterparts, each of which,
when executed and delivered, are an original, and all taken together, constitute
one Agreement.
     12.9 Survival. All covenants, representations and warranties made in this
Agreement continue in full force until this Agreement has terminated pursuant to
its terms and all Obligations (other than inchoate indemnity obligations and any
other obligations which, by their terms, are to survive the termination of this
Agreement) have been satisfied. The obligation of Borrower in Section 12.2 to
indemnify Bank shall survive until the statute of limitations with respect to
such claim or cause of action shall have run.
     12.10 Confidentiality. In handling any confidential information, Bank shall
exercise the same degree of care that it exercises for its own proprietary
information, but disclosure of information may be made: (a) to Bank’s
Subsidiaries or Affiliates; (b) to prospective transferees or purchasers of any
interest in the Credit Extensions (provided, however, Bank shall use
commercially reasonable efforts to obtain such prospective transferee’s or
purchaser’s agreement to the terms of this provision); (c) as required by law,
regulation, subpoena, or other order; (d) to Bank’s regulators or as otherwise
required in connection with Bank’s examination or audit; (e) as Bank considers
appropriate in exercising remedies under the Loan Documents; and (f) to
third-party service providers of Bank so long as such service providers have
executed a confidentiality agreement with Bank with terms no less restrictive
than those contained herein. Confidential information does not include
information that either: (i) is in the public domain or in Bank’s possession
when disclosed to Bank, or becomes part of the public domain after disclosure to
Bank; or (ii) is disclosed to Bank by a third party, if Bank does not know that
the third party is prohibited from disclosing the information.
     Bank may use confidential information for any purpose, including, without
limitation, for the development of client databases, reporting purposes, and
market analysis, so long as Bank does not disclose Borrower’s identity or the
identity of any person associated with Borrower unless otherwise expressly
permitted by this Agreement. The provisions of this Section 12.10 shall survive
the termination of this Agreement.
     12.11 Attorneys’ Fees, Costs and Expenses. In any action or proceeding
between Borrower and Bank arising out of or relating to the Loan Documents, the
prevailing party shall be entitled to recover its reasonable attorneys’ fees and
other costs and expenses incurred, in addition to any other relief to which it
may be entitled.
     12.12 Waiver of Surety Defenses. To the extent permitted by applicable law,
each Borrower hereby waives any and all defenses and rights of discharge based
upon suretyship or impairment of collateral (including lack of attachment or
perfection with respect thereto) that it may now have or may hereafter acquire
with respect to Bank or any of its Obligations hereunder, under any Loan
Document or under any other agreement that it may have or may hereafter enter
into with Bank.
     12.13 Joint and Several Obligations and Related Matters. The obligations of
each Borrower hereunder and under the other Loan Documents shall be joint and
several in nature notwithstanding which Borrower actually or directly received
the proceeds of any particular Credit Extension. Each Borrower acknowledges that
for purposes of the Loan Documents, Borrowers constitute a single integrated
financial entity or enterprise and that each receives a benefit from the
availability of the financing hereunder to all Borrowers. Each Borrower waives
all defenses arising under the laws of suretyship, to the extent that such laws
are applicable, in connection with its joint and several obligations under this
Agreement and the other Loan Documents.
     12.14 Subordination of Claims. As further consideration for the Credit
Extensions by the Bank Borrowers and as a material inducement to Bank to make
the Credit Extensions and accept this Agreement, each Borrower hereby
irrevocably subordinates in all respects all claims, whether based in equity or
law, whether by contract, statute or otherwise, that it might now or hereafter
have against other Borrower or that arise from the existence or performance of
the Obligations under this Agreement, including, but not limited to, any right
of subrogation, reimbursement, exoneration, contribution, indemnification, or
participation, to any and all of the Obligations of such Borrower to Bank
hereunder and under the other Loan Documents.
     12.15 USA PATRIOT Act Notice. Bank hereby notifies Borrowers that pursuant
to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)) (the “Act”), it is required to obtain, verify and
record information that identifies Borrowers, which information includes the
name and address of Borrowers and other information that will allow Bank to
identify Borrowers in accordance with the Act.

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     13 DEFINITIONS
     13.1 Definitions. As used in this Agreement, the following terms have the
following meanings:
     “Account” is any “account” as defined in the Code with such additions to
such term as may hereafter be made, and includes, without limitation, all
accounts receivable and other sums owing to Borrower.
     “Account Debtor” is any “account debtor” as defined in the Code with such
additions to such term as may hereafter be made.
     “Advance” or “Advances” means an advance (or advances) under the Revolving
Line.
     “Affiliate” of any Person is a Person that owns or controls directly or
indirectly the Person, any Person that controls or is controlled by or is under
common control with the Person, and each of that Person’s senior executive
officers, directors, partners and, for any Person that is a limited liability
company, that Person’s managers and members.
     “Agreement” is defined in the preamble hereof.
     “Availability Amount” is (a) the lesser of (i) the Revolving Line or
(ii) the amount available under the Borrowing Base minus (b) the amount of all
outstanding Letters of Credit (including drawn but unreimbursed Letters of
Credit) plus an amount equal to the Letter of Credit Reserve, minus (c) the FX
Reserve, minus (d) any amounts used for Cash Management Services, and minus
(e) the outstanding principal balance of any Advances.
     “Bank” is defined in the preamble hereof.
     “Bank Expenses” are all audit fees and expenses, costs, and expenses
(including reasonable attorneys’ fees and expenses) for preparing, amending,
negotiating, administering, defending and enforcing the Loan Documents
(including, without limitation, those incurred in connection with appeals or
Insolvency Proceedings) or otherwise incurred with respect to Borrower.
     “Bankruptcy-Related Defaults” is defined in Section 9.1.
     “Borrower” is defined in the preamble hereof.
     “Borrower’s Books” are all Borrower’s books and records including ledgers,
federal and state tax returns, records regarding Borrower’s assets or
liabilities, the Collateral, business operations or financial condition, and all
computer programs or storage or any equipment containing such information.
     “Borrowing Base” is 80% of Eligible Accounts; provided, however, that Bank
may decrease the foregoing percentage in its good faith business judgment based
on events, conditions, contingencies, or risks which, as determined by Bank, may
adversely affect Collateral.
     “Borrowing Resolutions” are, with respect to any Person, those resolutions
adopted by such Person’s Board of Directors and delivered by such Person to Bank
approving the Loan Documents to which such Person is a party and the
transactions contemplated thereby, together with a certificate executed by its
secretary on behalf of such Person certifying that (a) such Person has the
authority to execute, deliver, and perform its obligations under each of the
Loan Documents to which it is a party, (b) that attached as an exhibit to such
certificate is a true, correct, and complete copy of the resolutions then in
full force and effect authorizing and ratifying the execution, delivery, and
performance by such Person of the Loan Documents to which it is a party, (c) the
name(s) of the Person(s) authorized to execute the Loan Documents on behalf of
such Person, together with a sample of the true signature(s) of such Person(s),
and (d) that Bank may conclusively rely on such certificate unless and until
such Person shall have delivered to Bank a further certificate canceling or
amending such prior certificate.
     “Business Day” is any day that is not a Saturday, Sunday or a day on which
Bank is closed.
     “Cash Equivalents” means (a) marketable direct obligations issued or
unconditionally guaranteed by the United States or any agency or any State
thereof having maturities of not more than one (1) year from the date of

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acquisition; (b) commercial paper maturing no more than one (1) year after its
creation and having the highest rating from either Standard & Poor’s Ratings
Group or Moody’s Investors Service, Inc.; (c) Bank’s certificates of deposit
issued maturing no more than one (1) year after issue; and (d) money market
funds at least ninety-five percent (95%) of the assets of which constitute Cash
Equivalents of the kinds described in clauses (a) through (c) of this
definition.
     “Cash Management Services” is defined in Section 2.1.4.
     “Change in Control” means any event, transaction, or occurrence as a result
of which (a) any “person” (as such term is defined in Sections 3(a)(9) and
13(d)(3) of the Securities Exchange Act of 1934, as an amended (the “Exchange
Act”)), other than a trustee or other fiduciary holding securities under an
employee benefit plan of Borrower, is or becomes a beneficial owner (within the
meaning Rule 13d-3 promulgated under the Exchange Act), directly or indirectly,
of securities of Borrower, representing thirty five (35%) or more of the
combined voting power of Borrower’s then outstanding securities; or (b) during
any period of twelve consecutive calendar months, individuals who at the
beginning of such period constituted the Board of Directors of Borrower
(together with any new directors whose election by the Board of Directors of
Borrower was approved by a vote of at least two-thirds of the directors then
still in office who either were directions at the beginning of such period or
whose election or nomination for election was previously so approved) cease for
any reason other than death or disability to constitute a majority of the
directors then in office.
     “Code” is the Uniform Commercial Code, as the same may, from time to time,
be enacted and in effect in the State of California; provided, that, to the
extent that the Code is used to define any term herein or in any Loan Document
and such term is defined differently in different Articles or Divisions of the
Code, the definition of such term contained in Article or Division 9 shall
govern; provided further, that in the event that, by reason of mandatory
provisions of law, any or all of the attachment, perfection, or priority of, or
remedies with respect to, Bank’s Lien on any Collateral is governed by the
Uniform Commercial Code in effect in a jurisdiction other than the State of
California, the term “Code” shall mean the Uniform Commercial Code as enacted
and in effect in such other jurisdiction solely for purposes on the provisions
thereof relating to such attachment, perfection, priority, or remedies and for
purposes of definitions relating to such provisions.
     “Collateral” is any and all properties, rights and assets of Borrower
described on Exhibit A.
     “Collateral Account” is any Deposit Account, Securities Account, or
Commodity Account.
     “Commodity Account” is any “commodity account” as defined in the Code with
such additions to such term as may hereafter be made.
     “Compliance Certificate” is that certain certificate in the form attached
hereto as Exhibit B.
     “Contingent Obligation” is, for any Person, any direct or indirect
liability, contingent or not, of that Person for (a) any indebtedness, lease,
dividend, letter of credit or other obligation of another such as an obligation
directly or indirectly guaranteed, endorsed, co-made, discounted or sold with
recourse by that Person, or for which that Person is directly or indirectly
liable; (b) any obligations for undrawn letters of credit for the account of
that Person; and (c) all obligations from any interest rate, currency or
commodity swap agreement, interest rate cap or collar agreement, or other
agreement or arrangement designated to protect a Person against fluctuation in
interest rates, currency exchange rates or commodity prices; but “Contingent
Obligation” does not include endorsements in the ordinary course of business.
The amount of a Contingent Obligation is the stated or determined amount of the
primary obligation for which the Contingent Obligation is made or, if not
determinable, the maximum reasonably anticipated liability for it determined by
the Person in good faith; but the amount may not exceed the maximum of the
obligations under any guarantee or other support arrangement.
     “Control Agreement” is any control agreement entered into among the
depository institution at which Borrower maintains a Deposit Account or the
securities intermediary or commodity intermediary at which Borrower maintains a
Securities Account or a Commodity Account, Borrower, and Bank pursuant to which
Bank obtains control (within the meaning of the Code) over such Deposit Account,
Securities Account, or Commodity Account.
     “Copyright” means any of the following now owned or hereafter acquired or
created (as a work for hire for the benefit of Borrower) by Borrower or in which
Borrower now holds or hereafter acquires or receives any right or interest, in
whole or in part: (a) any copyright, whether registered or unregistered, held
pursuant to the laws of

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the United States or of any other country or foreign jurisdiction,
(b) registration, application or recording in the United States Copyright Office
or in any similar office or agency of the United States or any other country or
foreign jurisdiction, (c) any continuation, renewal or extension thereof, and
(d) any registration to be issued in any pending application, and shall include
any right or interest in and to work protectable by any of the foregoing which
are presently or in the future owned, created or authorized (as a work for hire
for the benefit of Borrower) or acquired by Borrower, in whole or in part.
     “Default” means any event which with notice or passage of time or both,
would constitute an Event of Default.
     “Credit Extension” is any Advance, Letter of Credit, FX Forward Contract,
amount utilized for Cash Management Services, or any other extension of credit
by Bank for Borrower’s benefit.
     “Default Rate” is defined in Section 2.3(b).
     “Deferred Revenue” is all amounts received or invoiced in advance of
performance under contracts and not yet recognized as revenue and recorded as
deferred revenue, in accordance with GAAP.
     “Deposit Account” is any “deposit account” as defined in the Code with such
additions to such term as may hereafter be made.
     “Designated Deposit Account” is Borrower’s deposit account, account number
3300421466 maintained with Bank.
     “Dollars,” “dollars” and “$” each mean lawful money of the United States.
     “Domestic Subsidiary” means any subsidiary of Glu Mobile (other than a
Borrower) organized under the laws of any jurisdiction within the United States
of America.
     “EBITDA” shall mean (a) Net Income, plus (b) Interest Expense, plus (c) to
the extent deducted in the calculation of Net Income, depreciation expense and
amortization expense, plus (d) income tax expense, plus (e) non-cash stock
compensation expense, plus (f) non-cash, goodwill, other intangible asset and
royalty impairments, plus (g) non-cash foreign exchange translation charges,
minus (h) all non-cash income of Glu Mobile and its Subsidiaries for such
period.
     “Effective Date” is the date Bank executes this Agreement as indicated on
the signature page hereof.
     “Eligible Accounts” means Accounts which arise in the ordinary course of
Borrower’s business that meet all Borrower’s representations and warranties in
Section 5.3 and net of (c) herein. Bank reserves the right at any time and from
time to time after the Effective Date to adjust any of the criteria set forth
below and to establish new criteria in its good faith business judgment. Unless
Bank agrees otherwise in writing, Eligible Accounts shall not include:
     (a) Accounts that the Account Debtor has not paid within ninety (90) days
of invoice date regardless of invoice payment period terms;
     (b) Accounts owing from an Account Debtor, fifty percent (50%) or more of
whose Accounts have not been paid within ninety (90) days of invoice date;
     (c) Credit balances over ninety (90) days from invoice date;
     (d) Accounts owing from an Account Debtor, including Affiliates, whose
total obligations to Borrower exceed twenty-five percent (25%) of all Accounts
(or in the case of Verizon Wireless, fifty percent (50%) of all Accounts) to the
extent such amounts owed by such Account Debtor exceed twenty-five percent (25%)
(or, 50% in the case of Verizon) of Accounts of such Debtor that would otherwise
be Eligible Accounts, unless Bank approves in writing;

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     (e) Accounts billed in the United States and owing from an Account Debtor
which does not have its principal place of business in the United States or
Canada (except for the province of Quebec) unless such Accounts are otherwise
Eligible Accounts and (i) covered in full by credit insurance satisfactory to
Bank, less any deductible, (ii) supported by letter(s) of credit acceptable to
Bank, (iii) supported by a guaranty from the Export-Import Bank of the United
States, or (iv) that Bank otherwise approves of in writing;
     (f) Accounts owing from an Account Debtor which is a United States
government entity or any department, agency, or instrumentality thereof unless
Borrower has assigned its payment rights to Bank and the assignment has been
acknowledged under the Federal Assignment of Claims Act of 1940, as amended;
     (g) Accounts owing from an Account Debtor to the extent that Borrower is
indebted or obligated in any manner to the Account Debtor (as creditor, lessor,
supplier or otherwise — sometimes called “contra” accounts, accounts payable,
customer deposits or credit accounts), with the exception of customary credits,
adjustments and/or discounts given to an Account Debtor by Borrower in the
ordinary course of its business;
     (h) Accounts for demonstration or promotional equipment, or in which goods
are consigned, or sold on a “sale guaranteed”, “sale or return”, “sale on
approval”, “bill and hold”, or other terms if Account Debtor’s payment may be
conditional;
     (i) Accounts for which the Account Debtor is Borrower’s Affiliate, officer,
employee, or agent;
     (j) Accounts in which the Account Debtor disputes liability or makes any
claim (but only up to the disputed or claimed amount), or if the Account Debtor
is subject to an Insolvency Proceeding, or becomes insolvent, or goes out of
business;
     (k) Accounts for which Bank in its good faith business judgment determines
collection to be doubtful; and
     (l) other Accounts Bank deems ineligible in the exercise of its good faith
business judgment.
     “Equipment” is all “equipment” as defined in the Code with such additions
to such term as may hereafter be made, and includes without limitation all
machinery, fixtures, goods, vehicles (including motor vehicles and trailers),
and any interest in any of the foregoing.
     “ERISA” is the Employee Retirement Income Security Act of 1974, and its
regulations.
     “Event of Default” is defined in Section 8.
     “Foreign Currency” means lawful money of a country other than the United
States.
     “Foreign Subsidiary” means any Subsidiary which is not a Domestic
Subsidiary.
     “Funding Date” is any date on which a Credit Extension is made to or on
account of Borrower which shall be a Business Day.
     “FX Business Day” is any day when (a) Bank’s Foreign Exchange Department is
conducting its normal business and (b) the Foreign Currency being purchased or
sold by Borrower is available to Bank from the entity from which Bank shall buy
or sell such Foreign Currency.
     “FX Forward Contract” is defined in Section 2.1.3.
     “FX Reduction Amount” is defined in Section 2.1.3.
     “FX Reserve” is defined in Section 2.1.3.
     “GAAP” is generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other Person as

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may be approved by a significant segment of the accounting profession, which are
applicable to the circumstances as of the date of determination.
     “General Intangibles” is all “general intangibles” as defined in the Code
in effect on the date hereof with such additions to such term as may hereafter
be made, and includes without limitation, all copyright rights, copyright
applications, copyright registrations and like protections in each work of
authorship and derivative work, whether published or unpublished, any patents,
trademarks, service marks and, to the extent permitted under applicable law, any
applications therefor, whether registered or not, any trade secret rights,
including any rights to unpatented inventions, payment intangibles, royalties,
contract rights, goodwill, franchise agreements, purchase orders, customer
lists, route lists, telephone numbers, domain names, claims, income and other
tax refunds, security and other deposits, options to purchase or sell real or
personal property, rights in all litigation presently or hereafter pending
(whether in contract, tort or otherwise), insurance policies (including without
limitation key man, property damage, and business interruption insurance),
payments of insurance and rights to payment of any kind.
     “Governmental Approval” is any consent, authorization, approval, order,
license, franchise, permit, certificate, accreditation, registration, filing or
notice, of, issued by, from or to, or other act by or in respect of, any
Governmental Authority.
     “Governmental Authority” is any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization.
     “Guarantor” is each of Superscape Group Limited, a company incorporated in
England and Wales with registered number 02869780, and Glu Mobile LLC, a
Delaware limited liability company.
     “Guaranty” means that certain Unconditional Secured Guaranty of even date
herewith by Glu Mobile LLC in favor of Bank.
     “Guaranty and Pledge Agreement” means that certain Guaranty and Pledge
Agreement of even date herewith by Superscape Group Limited in favor of the
Bank.
     “Indebtedness” is (a) indebtedness for borrowed money or the deferred price
of property or services, such as reimbursement and other obligations for surety
bonds and letters of credit, (b) obligations evidenced by notes, bonds,
debentures or similar instruments, (c) capital lease obligations, and
(d) Contingent Obligations.
     “Indemnified Person” is defined in Section 12.3.
     “Initial Audit” is Bank’s inspection of Borrower’s Accounts, the
Collateral, and Borrower’s Books.
     “Insolvency Proceeding” is any proceeding by or against any Person under
the United States Bankruptcy Code, or any other bankruptcy or insolvency law,
including assignments for the benefit of creditors, compositions, extensions
generally with its creditors, or proceedings seeking reorganization,
arrangement, or other relief.
     “Intellectual Property” means any intellectual property, in any medium, of
any kind or nature whatsoever, now or hereafter owned or acquired or received by
Borrower or in which Borrower now holds or hereafter acquires or receives any
right or interest, and shall include, in any event, any Copyright, Trademark,
Patent, trade secret, customer list, Internet domain name (including any right
related to the registration thereof), proprietary or confidential information,
mask work, source, object or other programming code, invention (whether or not
patented or patentable), technical information, procedure, design, knowledge,
know-how, software, data base, data, skill, expertise, recipe, experience,
process, model, drawing, material or record, all claims for damages by way of
past, present and future infringement of any of the rights included above and
all licenses or other rights to use any property or rights of a type described
above.
     “IP Agreement” means collectively, that certain Intellectual Property
Security Agreement executed and delivered by Glu Mobile to Bank dated as of
February 2, 2007, and that certain Intellectual Property Security Agreement
executed and delivered by Superscape to Bank of even date herewith.

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     “Investment” is any beneficial ownership interest in any Person (including
stock, partnership interest or other securities), and any loan, advance or
capital contribution to any Person.
     “Key Person” is Borrower’s Chief Executive Officer, who is, as of the
Effective Date, Greg Ballard.
     “Letter of Credit” means a standby letter of credit issued by Bank or
another institution based upon an application, guarantee, indemnity or similar
agreement on the part of Bank as set forth in Section 2.1.2.
     “Letter of Credit Application” is defined in Section 2.1.2(a).
     “Letter of Credit Reserve” has the meaning set forth in Section 2.1.2(d).
     “Lien” is a claim, mortgage, deed of trust, levy, charge, pledge, security
interest or other encumbrance of any kind, whether voluntarily incurred or
arising by operation of law or otherwise against any property.
     “Loan Documents” are, collectively, this Agreement, the Perfection
Certificate, the Pledge Agreement, the Guaranty, the Guaranty and Pledge
Agreement, the Subordination Agreement, any note, or notes or guaranties
executed by Borrower or any Guarantor, and any other present or future agreement
between Borrower, any Guarantor, and/or for the benefit of Bank in connection
with this Agreement, all as amended, restated, or otherwise modified.
     “Material Adverse Change” is (a) a material impairment in the perfection or
priority of Bank’s Lien in the Collateral or in the value of such Collateral;
(b) a material adverse change in the business, operations, or condition
(financial or otherwise) of Borrower; or (c) a material adverse change in the
prospect of repayment of any portion of the Obligations.
     “MIG Subordinated Debt” is an aggregate of $25 million in principal amount
of notes issued to Wang Bin, Wang Xin and the MIG Shareholders in satisfaction
of earnout obligations pursuant to the Merger Agreement and certain bonus
obligations pursuant to certain employment agreements, and guarantees thereof by
Borrower..
     “Net Income” means, as calculated on a consolidated basis for Borrower and
its Subsidiaries for any period as at any date of determination, the net profit
(or loss), after provision for taxes, of Borrower and its Subsidiaries for such
period taken as a single accounting period, determined according to GAAP.
     “Obligations” are Borrower’s obligation to pay when due any debts,
principal, interest, Bank Expenses and other amounts Borrower owes Bank now or
later, whether under this Agreement, the Loan Documents, or otherwise,
including, without limitation, all obligations relating to letters of credit
(including reimbursement obligations for drawn and undrawn letters of credit),
cash management services, and foreign exchange contracts, if any, and including
interest accruing after Insolvency Proceedings begin and debts, liabilities, or
obligations of Borrower assigned to Bank, and the performance of Borrower’s
duties under the Loan Documents.
     “Operating Documents” are, for any Person, such Person’s formation
documents, as certified with the Secretary of State of such Person’s state of
formation on a date that is no earlier than 30 days prior to the Effective Date,
and, (a) if such Person is a corporation, its bylaws in current form, (b) if
such Person is a limited liability company, its limited liability company
agreement (or similar agreement), and (c) if such Person is a partnership, its
partnership agreement (or similar agreement), each of the foregoing with all
current amendments or modifications thereto.
     “Overadvance” is defined in Section 2.2.
     “Patent” means any of the following now hereafter owned or acquired or
received by Borrower or in which Borrower now holds or hereafter acquires or
receives any right or interest: (a) letters patent and right corresponding
thereto, of the United States or any other country or other foreign
jurisdiction, any registration and recording thereof, and any application for
letters patent, and rights corresponding thereto, of the United States or any
other country or other foreign jurisdiction, including, without limitation,
registrations, recordings and applications in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
State thereof or any other country or other foreign jurisdiction; (b) any
reissue, continuation, continuation-in-part or extension thereof; (c) any petty
patent, divisional, and patent of addition; and (d) any patent to issue in any
such application.

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     “Patriot Act” is defined in Section 12.15.
     “Perfection Certificate” is defined in Section 5.1.
     “Permitted Indebtedness” is:
     (a) Borrower’s Indebtedness to Bank under this Agreement and the other Loan
Documents;
     (b) Indebtedness existing on the Effective Date and shown on the Perfection
Certificate;
     (c) Subordinated Debt;
     (d) unsecured Indebtedness to trade creditors and with respect to surety
bonds and similar obligations incurred in the ordinary course of business;
     (e) Indebtedness incurred as a result of endorsing negotiable instruments
received in the ordinary course of business;
     (f) Indebtedness in an aggregate principal amount not to exceed $500,000
secured by Permitted Liens;
     (g) Indebtedness of Borrower to any Loan Party and Contingent Obligations
of any Loan Party with respect to obligations of Borrower (provided that the
primary obligations are not prohibited hereby), and Indebtedness of any Loan
Party to Borrower or any other Loan Party and Contingent Obligations of any Loan
Party with respect to obligations of any other Loan Party (provided that the
primary obligations are not prohibited hereby);
     (h) Borrower guaranties of Loan Parties’ obligations under real property
leases;
     (i) other Indebtedness not otherwise permitted by Section 7.4 not exceeding
$100,000 in the aggregate outstanding at any time; and
     (j) extensions, refinancings, modifications, amendments and restatements of
any items of Permitted Indebtedness (a) through (i) above, provided that the
principal amount thereof is not increased or the terms thereof are not modified
to impose more burdensome terms upon Borrower or its Subsidiary, as the case may
be.
     “Permitted Investments” are:
     (a) Investments shown on the Perfection Certificate and existing on the
Effective Date;
     (b) Cash Equivalents;
     (c) Investments consisting of the endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of
Borrower;
     (d) Investments consisting of deposit accounts in which Bank has a
perfected security interest;
     (e) Investments accepted in connection with Transfers permitted by
Section 7.1;
     (f) Investments of Subsidiaries in or to other Subsidiaries or Borrower and
Investments by Borrower in Subsidiaries, not otherwise included in Permitted
Indebtedness, not to exceed $750,000 in the aggregate in any fiscal year;
     (g) Investments, not to exceed $100,000 in the aggregate in any fiscal
year, consisting of (i) travel advances and employee relocation loans and other
employee loans and advances in the ordinary course of business, and (ii) loans
to employees, officers or directors relating to the purchase of equity
securities of Borrower or its Subsidiaries pursuant to employee stock purchase
plans or agreements approved by Borrower’s Board of Directors;

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     (h) Investments (including debt obligations) received in connection with
the bankruptcy or reorganization of customers or suppliers and in settlement of
delinquent obligations of, and other disputes with, customers or suppliers
arising in the ordinary course of business;
     (i) Investments consisting of notes receivable of, or prepaid royalties and
other credit extensions, to customers and suppliers who are not Affiliates, in
the ordinary course of business; provided that this paragraph (i) shall not
apply to Investments of Borrower in any Subsidiary;
     (j) Investments in connection with acquisitions that are permitted by
Section 7.3; and
     (k) other Investments not otherwise permitted by Section 7.7 not exceeding
$100,000 in the aggregate outstanding at any time.
     “Permitted Liens” are:
     (a) Liens existing on the Effective Date and shown on the Perfection
Certificate or arising under this Agreement and the other Loan Documents;
     (b) Liens for taxes, fees, assessments or other government charges or
levies, either not delinquent or being contested in good faith and for which
Borrower maintains adequate reserves on its Books, if they have no priority over
any of Bank’s Liens;
     (c) purchase money Liens (i) on Equipment acquired or held by Borrower
incurred for financing the acquisition of the Equipment securing no more than
$250,000 in the aggregate amount outstanding, or (ii) existing on Equipment when
acquired, if the Lien is confined to the property and improvements and the
proceeds of the Equipment;
     (d) statutory Liens securing claims or demands of materialmen, mechanics,
carriers, warehousemen, landlords and other Persons imposed without action of
such parties;
     (e) Liens to secure payment of workers’ compensation, employment insurance,
old-age pensions, social security and other like obligations incurred in the
ordinary course of business (other than Liens imposed by ERISA);
     (f) Liens incurred in the extension, renewal or refinancing of the
indebtedness secured by Liens described in (a) through (c), but any extension,
renewal or replacement Lien must be limited to the property encumbered by the
existing Lien and the principal amount of the indebtedness may not increase;
     (g) leases or subleases of real property granted in the ordinary course of
business, and leases, subleases, non-exclusive licenses or sublicenses of
property (other than real property or intellectual property) granted in the
ordinary course of Borrower’s business, if the leases, subleases, licenses and
sublicenses do not prohibit granting Bank a security interest;
     (h) non-exclusive license of intellectual property granted to third parties
in the ordinary course of business and licenses of intellectual property that
could not result in a legal transfer of title of the licensed property that may
be exclusive in respects other than territory and that may be exclusive as to
territory only as to discreet geographical areas outside of the United States;
     (i) Liens arising from judgments, decrees or attachments in circumstances
not constituting an Event of Default under Section 8.4 or 8.7;
     (j) the Lien held by The Royal Bank of Scotland Plc on Glu Mobile Limited
account number 122029 6038743 at The Royal Bank of Scotland containing
restricted cash in the approximate amount of £302,000 in connection with that
certain Lease by and among The Royal Bank of Scotland Plc, as lessor, and Glu
Mobile Limited, as lessess, and Glu Mobile Inc., as guarantor;

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     (k) Liens in favor of other financial institutions arising in connection
with Borrower’s deposit and/or securities accounts held at such institutions,
provided that Bank has a perfected security interest in the amounts held in such
deposit and/or securities accounts;
     (l) deposits with landlords to secure real property lease obligations; and
     (m) other Liens not described above arising in the ordinary course of
business and not having or not reasonably likely to have a material adverse
effect on Borrower and its Subsidiaries taken as a whole and not having any
priority over the Lien in favor of Bank.
     “Person” is any individual, sole proprietorship, partnership, limited
liability company, joint venture, company, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint
stock company, estate, entity or government agency.
     “Pledge Agreement” means the Pledge Agreement of even date herewith by and
among Bank and Glu Mobile.
     “Prime Rate” is Bank’s most recently announced “prime rate,” even if it is
not Bank’s lowest rate.
     “Registered Organization” is any “registered organization” as defined in
the Code with such additions to such term as may hereafter be made.
     “Reserves” means, as of any date of determination, such amounts as Bank may
from time to time establish and revise in its good faith business judgment,
reducing the amount of Advances and other financial accommodations which would
otherwise be available to Borrower (a) to reflect events, conditions,
contingencies or risks which, as determined by Bank in its good faith business
judgment, do or may adversely affect (i) the Collateral or any other property
which is security for the Obligations or its value (including without limitation
any increase in delinquencies of Accounts), (ii) the assets, business or
prospects of Borrower or any Guarantor, or (iii) the security interests and
other rights of Bank in the Collateral (including the enforceability, perfection
and priority thereof); or (b) to reflect Bank’s good faith belief that any
collateral report or financial information furnished by or on behalf of Borrower
or any Guarantor to Bank is or may have been incomplete, inaccurate or
misleading in any material respect; or (c) in respect of any state of facts
which Bank determines in good faith constitutes an Event of Default or may, with
notice or passage of time or both, constitute an Event of Default.
     “Responsible Officer” is any of the Chief Executive Officer, President,
Chief Financial Officer and Controller of Borrower.
     “Revolving Line” is an Advance or Advances in an aggregate amount of up to
Eight Million Dollars ($8,000,000) outstanding at any time.
     “Revolving Line Maturity Date” is December 22, 2010.
     “Securities Account” is any “securities account” as defined in the Code
with such additions to such term as may hereafter be made.
     “Subordination Agreement” means the Subordination and Intercreditor
Agreement dated December 29, 2009, by and among Bank and the MIG Shareholders.
     “Subordinated Debt” is indebtedness incurred by Borrower subordinated to
all of Borrower’s now or hereafter indebtedness to Bank (pursuant to a
subordination, intercreditor, or other similar agreement in form and substance
satisfactory to Bank entered into between Bank and the other creditor), on terms
acceptable to Bank, and includes the MIG Subordinated Debt.
     “Subsidiary” means, with respect to any Person, any Person of which more
than 50.0% of the voting stock or other equity interests (in the case of Persons
other than corporations) is owned or controlled directly or indirectly by such
Person or one or more of Affiliates of such Person.

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     “Trademark” means any of the following now or hereafter owned or acquired
or received by Borrower or in which Borrower now holds or hereafter acquires or
receives any right or interest: (a) any trademark, trade name, corporate name,
business name, trade style, service mark, logo, other source or business
identifier, print or label on which any of the foregoing have appeared or
appear, design or other general intangibles of like nature, now existing or
hereafter adopted or acquired, all registrations and recordings thereof, and any
applications in connection therewith, including registration, recording and
application in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any State thereof or any other country or
other foreign jurisdiction and (b) any reissue, extension or renewal of any of
the foregoing.
     “Transaction Report” is that certain report of transactions and schedule of
collections in the customary form acceptable to Bank.
     “Transfer” is defined in Section 7.1.
     “Unused Revolving Line Facility Fee” is defined in Section 2.4(d).
[Signature page follows.]

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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the Effective Date.
BORROWER:

      GLU MOBILE INC.
 
   
By
  /s/ L. Gregory Ballard
 
   
Name:
  L. Gregory Ballard
Title:
  President & Chief Executive Officer
 
    GLU GAMES INC.
 
   
By
  /s/ L. Gregory Ballard
 
   
Name:
  L. Gregory Ballard
Title:
  President & Chief Executive Officer
 
    SUPERSCAPE INC.
 
   
By
  /s/ L. Gregory Ballard
 
   
Name:
  L. Gregory Ballard
Title:
  President & Chief Executive Officer
 
    BANK:
 
    SILICON VALLEY BANK
 
   
By
  /s/ Tom Smith
 
   
Name:
  Tom Smith
Title:
  Managing Director Effective Date:
 

[Signature Page to Amended and Restated Loan and Security Agreement]

 

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EXHIBIT A
The Collateral consists of all of Borrower’s right, title and interest in and to
the following personal property:
     All goods, Accounts (including health-care receivables), Equipment,
Inventory, contract rights or rights to payment of money, leases, license
agreements, franchise agreements, General Intangibles, commercial tort claims,
documents, instruments (including any promissory notes), chattel paper (whether
tangible or electronic), cash, deposit accounts, fixtures, letters of credit
rights (whether or not the letter of credit is evidenced by a writing),
securities, and all other investment property, supporting obligations, and
financial assets, whether now owned or hereafter acquired, wherever located; and
     all Borrower’s Books relating to the foregoing, and any and all claims,
rights and interests in any of the above and all substitutions for, additions,
attachments, accessories, accessions and improvements to and replacements,
products, proceeds and insurance proceeds of any or all of the foregoing.
     Notwithstanding the foregoing, the “Collateral” does not include more than
65% of the presently existing and hereafter arising issued and outstanding
shares of capital stock owned by Borrower of any Foreign Subsidiary which shares
entitle the holder thereof to vote for directors or any other matter.

 

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EXHIBIT B
COMPLIANCE CERTIFICATE

      TO:     SILICON VALLEY BANK   Date:                            FROM: Glu
Mobile Inc., Glu Games Inc. and Superscape Inc.    

     The undersigned authorized officer[s] of Glu Mobile Inc., Glu Games Inc.
and Superscape Inc. (collectively “Borrower”) certif[ies][y] that under the
terms and conditions of the Loan and Security Agreement between Borrower and
Bank (the “Agreement”), (1) Borrower is in complete compliance for the period
ending                      with all required covenants except as noted below,
(2) there are no Events of Default, (3) all representations and warranties in
the Agreement are true and correct in all material respects on this date except
as noted below; provided, however, that such materiality qualifier shall not be
applicable to any representations and warranties that already are qualified or
modified by materiality in the text thereof; and provided, further that those
representations and warranties expressly referring to a specific date shall be
true, accurate and complete in all material respects as of such date,
(4) Borrower, and each of its Subsidiaries, has timely filed all required tax
returns and reports, and Borrower has timely paid all foreign, federal, state
and local taxes, assessments, deposits and contributions owed by Borrower except
as otherwise permitted pursuant to the terms of Section 5.9 of the Agreement,
and (5) no Liens have been levied or claims made against Borrower or any of its
Subsidiaries relating to unpaid employee payroll or benefits of which Borrower
has not previously provided written notification to Bank. Attached are the
required documents supporting the certification. The undersigned certifies that
these are prepared in accordance with GAAP consistently applied from one period
to the next except as explained in an accompanying letter or footnotes. The
undersigned acknowledges that no borrowings may be requested at any time or date
of determination that Borrower is not in compliance with any of the terms of the
Agreement, and that compliance is determined not just at the date this
certificate is delivered. Capitalized terms used but not otherwise defined
herein shall have the meanings given them in the Agreement.
Please indicate compliance status by circling Yes/No under “Complies” column.

          Reporting Covenant   Required   Complies
Monthly financial statements with
Compliance Certificate (Consolidating Financials)
  Monthly within 30 days   Yes No
 
       
Annual financial statement (CPA Audited) + CC
  FYE within 95 days   Yes No
 
       
10-Q, 10-K and 8-K + CC
  Within 5 days after filing with SEC, but not later than 50 days after quarter
end, and 95 days after FYE, subject to any extensions pursuant to Rule 12b-25  
Yes No
 
       
Transaction Report, A/R & A/P Agings, held check list, reconciliations,
transaction reports, GL and Deferred Revenue report
  Monthly within 20 days   Yes No
 
       
Operating Budgets and Forecasts
  45 days after FYE   Yes No
 
       
Transaction Report
  For Advances and weekly when Advances are outstanding   Yes No

The following Intellectual Property was registered after the Effective Date (if
no registrations, state “None”):

1

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                      Financial Covenant   Required     Actual     Complies
EBITDA
                   
Maintain on a Quarterly Basis:
                   
10/1/08 through 12/31/08
  $(1,672,000)     $       Yes No
 
                 
10/1/08 through 3/31/09
  $(2,382,000)     $       Yes No
 
                 
1/1/09 through 6/30/09
  $(812,000)     $       Yes No
 
                 
4/1/09 through 9/30/09
  $1,572,000     $       Yes No
 
                 
7/1/09 through 12/31/09
  $4,263,000     $       Yes No
 
                 
10/1/09 through 3/31/10
  $5,092,000     $       Yes No
 
                 
1/1/10 through 6/30/10
  $5,257,000     $       Yes No
 
                 
4/1/10 through 9/30/10
  $5,298,000     $       Yes No
 
                 
7/1/10 through 12/31/10
  $6,073,000     $       Yes No
 
                 
 
                   
Minimum Domestic Liquidity
  Greater of (a) 20% consolidated
cash, cash equivalents and short-
term investments, and (b) 15%
of outstanding Obligations           Yes No

2

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The following financial covenant analysis and information set forth in
Schedule 1 attached hereto are true and accurate as of the date of this
Certificate.
     The following are the exceptions with respect to the certification above:
(If no exceptions exist, state “No exceptions to note.”)
 
 
 

Glu Mobile Inc.

     
 
   
By:
   
 
   
Name:
   
 
   
Title:
   
 
   

BANK USE ONLY

     
Received by:
   
 
   
authorized signer
   
Date:
   
 
   
Verified:
   
 
   
authorized signer
   
Date:
   
 
   
Compliance Status:     Yes   No
   

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Schedule 1 to Compliance Certificate
Financial Covenants of Borrower
Dated:                                         
I. EBITDA (Section 6.9 (a))
Required:    See chart below

          Period   Minimum EBITDA
October 1, 2008 through December 31, 2008
  $ (1,672,000 )
October 1, 2008 through March 31, 2009
  $ (2,382,000 )
January 1, 2009 through June 30, 2009
  $ (812,000 )
April 1, 2009 through September 30, 2009
  $ 1,572,00  
July 1, 2009 through December 31, 2009
  $ 4,263,000  
October 1, 2009 through March 31, 2010
  $ 5,092,000  
January 1, 2010 through June 30, 2010
  $ 5,257,000  
April 1, 2010 through September 30, 2010
  $ 5,298,000  
July 1, 2010 through December 31, 2010
  $ 6,073,000  

Actual:

         
A. Net Income
  $    
 
     
B. To the extent included in the determination of Net Income
       
1. The provision for income taxes
  $    
 
     
2. Depreciation expense
  $    
 
     
3. Amortization expense
  $    
 
     
4. Net Interest Expense
  $    
 
     
5. Non-cash stock compensation expense
  $    
 
     
6. Non-cash, goodwill, other intangible asset and royalty impairments
  $    
 
     
7. Non-cash foreign exchange translation charges
  $    
 
     
8. All non-cash income
  $    
 
     
9. The sum of lines 1 through 7 minus line 8
  $    
 
     
C. EBITDA (line A plus line B.7)
  $    
 
     

Is line C equal to or greater than the required amount?

     
                       No, not in compliance
                         Yes, in compliance

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II. Minimum Domestic Liquidity (Section 6.9(b))

Required:      Greater of (a) 20% of cash, cash equivalents and short-term
investments, or (b) 15% of outstanding Obligations

Actual:

         
A. 0.20 times aggregate value of cash, cash equivalents and short-term
investments
  $    
 
     
B. 0.15 times total outstanding Obligations
  $    
 
     

Does the amount on deposit with Bank or Bank Affiliates equal at least the
greater of A or B?

     
                     No, not in compliance
                       Yes, in compliance

2