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Exhibit 10.1  

 
 

LOAN AND SECURITY AGREEMENT    
    

        This LOAN AND SECURITY AGREEMENT (this "Agreement") dated July 13, 2001 between SILICON VALLEY BANK ("Bank") and JAMDAT Mobile Inc. ("Borrower"),
provides the terms on which Bank will lend to Borrower and Borrower will repay Bank. The parties agree as follows: 

1.     ACCOUNTING AND OTHER TERMS  

        Accounting terms not defined in this Agreement will be construed following GAAP. Calculations and determinations must be made following GAAP. The term "financial
statements" includes the notes and schedules. The terms "including" and "includes" always mean "including (or includes) without limitation" in this or any Loan Document. Capitalized terms in this
Agreement shall have the meanings set forth in Section 13. 

2.     LOAN AND TERMS OF PAYMENT  

        2.1    Credit Extensions.    Borrower will pay
Bank the unpaid principal amount of all Credit Extensions and interest on the unpaid principal amount of the Credit Extensions in accordance with the terms and conditions hereof. 

        2.1.1    Equipment Advances.    

        (a)   Subject
to the terms and conditions of this Agreement, Bank agrees to lend to Borrower, from time to time prior to the Commitment Termination Date, equipment advances
(each an "Equipment Advance" and collectively the "Equipment Advances") in an aggregate amount not to exceed the Committed Equipment Line. When repaid, the Equipment Advances may not be
re-borrowed. The proceeds of the Equipment Advances will be used solely to reimburse Borrower for the purchase of Eligible Equipment purchased on and after 120 days prior to the
making of an Equipment Advance. Each Loan Supplement relating to an Equipment Advance shall be considered a promissory note evidencing the amounts due hereunder for all purposes. Bank's obligation to
make Equipment Advances hereunder shall terminate on the earlier of (i) the occurrence and continuance of an Event of Default, (ii) the Commitment Termination Date or (iii) the
occurrence of any event in clause (c) below. For purposes hereof, the minimum amount of each Equipment Advance is $50,000 and the maximum number of Equipment Advances to be made per month is
one. 

        (b)   To
obtain an Equipment Advance, Borrower will deliver to Bank a completed supplement in substantially the form attached as Exhibit C (the "Loan Supplement"),
copies of invoices for the Financed Equipment, together with a UCC Financing Statement covering the Equipment described on the Loan Supplement, and such additional information as Bank may request, all
at least five (5) Business Days before the proposed funding date (the "Funding Date"). On each Funding Date, Bank will specify in the Loan Supplement for each Equipment Advance, the Basic Rate,
the Loan Factor, and the Payment Dates. If Borrower satisfies the conditions of each Equipment Advance specified herein, Bank will disburse such Equipment Advance by internal transfer to Borrower's
deposit account with Bank. Each Equipment Advance may not exceed 100% of the Original Stated Cost of the proposed Financed Equipment. 

        (c)   Bank's
obligation to lend the undisbursed portion of the Committed Equipment Line will terminate if, in Bank's sole discretion, there has been a material adverse change
in the general affairs, management, results of operation, condition (financial or otherwise) or the prospects of Borrower, whether or not arising from transactions in the ordinary course of business,
or there has 

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been
any material adverse deviation by Borrower from the most recent business plan of Borrower presented to and accepted by Bank prior to the execution of this Agreement. 

        2.2    Interest Rate: Payments.    

        (a)   Principal and Interest Payments On Payment Dates.    Borrower will repay each Equipment Advance on the terms
provided in the Loan Supplement relating thereto. Borrower will make payments monthly in advance of principal and accrued interest for each Equipment Advance (collectively, "Scheduled
Payments") on the first Business Day of the month following the Funding Date (or commencing on the Funding Date if the Funding Date is the first Business Day of the month) with respect to such
Equipment Advance and continuing thereafter during the Repayment Period on the first Business Day of each calendar month (each a "Payment Date"), in an amount equal to the Loan Factor multiplied by
the Loan Amount for such Equipment Advance. All unpaid principal and accrued and unpaid interest are due and payable in full on the last Payment Date with respect to such Equipment Advance. Payments
received after 12:00 noon Pacific time are considered received at the opening of business on the next Business Day. An Equipment Advance may only be prepaid in accordance with the terms hereof. 

        (b)   Interest Rate.    Borrower will pay interest on the Payment Dates (as described above) at the per annum rate of
interest equal to the Basic Rate determined by Bank as of the Funding Date for each Equipment Advance in accordance with the definition of the Basic Rate. Any amounts outstanding during the
continuance of an Event of Default shall bear interest at a per annum rate equal to the Basic Rate plus five percentage points (5%). If any change in the law increases Bank's expenses or decreases its
return from the Equipment Advances, Borrower will pay Bank upon request the amount of such increase or decrease. 

        (c)   Interim Payment.    In addition to the Scheduled Payments, on the Funding Date for each Equipment Advance
(unless the Funding Date is the first Business Day of the month) Borrower shall pay to Bank, on behalf of Bank, the projected interest to accrue from the Funding Date to the first Payment Date,
pursuant to subsection (b) of this Section. 

        (d)   Final Payment.    On the Maturity Date with respect to each Equipment Advance, Borrower will pay, in addition
to the unpaid principal and accrued and unpaid interest and all other amounts due on such date with respect to such Equipment Advance, an amount equal to the Final Payment. 

        (e)   Prepayment Upon an Event of Loss.    If any Financed Equipment is subject to an Event of Loss and Borrower is
required to or elects to prepay the Equipment Advance with respect to such Financed Equipment pursuant to Section 6.7, then such Equipment Advance shall be prepaid to the extent and in the
manner provided in such section. 

        (f)    Mandatory Prepayment Upon an Acceleration.    If the Equipment Advances are accelerated following the
occurrence of an Event of Default or otherwise (other than following an Event of Loss), then Borrower will immediately pay to Bank (i) all unpaid Scheduled Payments (including principal and
interest) with respect to each Equipment Advance due prior to the date of prepayment, (ii) all remaining Scheduled Payments (including principal and interest unpaid) due after such date,
(iii) all accrued unpaid interest, including the default rate of interest, to the date of the prepayment, but without duplication of any other payment item included herein, (iv) the
Final Payment, (v) the product of the Applicable Percentage (as defined below) multiplied by the principal amount outstanding of the Equipment Advance; and (vi) all other sums, if any,
that shall have become due and payable hereunder with respect to this Agreement. As used herein the term "Applicable Percentage" shall mean three percent (3%) if the prepayment of such Advance occurs
within 12 months of the making of such Advance; two percent (2%) if the prepayment of such 

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Advance
occurs after 12 months of the making of such Advance and before 24 months of the making thereof; and, otherwise, one percent (1%). 

        (g)   Permitted Prepayment of Loans.    Borrower shall have the option to prepay some or all of the Equipment
Advances (but in any event no repayment of a portion of any Equipment Advance shall be permitted) advanced by Bank under this Agreement, provided Borrower (i) provides written notice to Bank of
its request to prepay the Equipment Advances at least thirty (30) days prior to such prepayment, and (ii) Borrower pays, on the date of the prepayment (1) all unpaid Scheduled
Payments (including principal and interest) with respect to each Equipment Advance due prior to the date of prepayment; (2) all remaining Scheduled Payments due after such date; (3) all
other unpaid accrued interest to the date of the prepayment (but without duplication of any sum in item (1) hereof); (4) the Final Payment with respect to each Equipment Advance;
(5) the product of the Applicable Percentage (as defined below) multiplied by the principal amount outstanding of the Equipment Advance; and (6) all other sums, if any, that shall have
become due and payable hereunder with respect to this Agreement. As used herein the term "Applicable Percentage" shall mean three percent (3%) if the prepayment of such Advance occurs within
12 months of the making of such Advance; two percent (2%) if the prepayment of such Advance occurs after 12 months of the making of such Advance and before 24 months of the making
thereof; and, otherwise, one percent (1%). 

        2.3    Request to Debit.    Bank may debit any
of Borrower's deposit accounts for principal and interest payments or any amounts Borrower owes Bank when due. Bank will notify Borrower when it debits Borrower's accounts. Such debits are not a
set-off. 

        2.4    Fees.    Borrower will pay to Bank: 

        (a)   Deposit by Borrower.    Borrower has paid to Bank a deposit of $10,000, which shall be applied to Bank
Expenses. The amount of such deposit remaining after application to Bank Expenses shall be applied thereafter to the payment of Equipment Advances in a manner reasonably determined by Bank. 

        (b)   Bank Expenses.    All Bank Expenses (including reasonable attorneys' fees and expenses) incurred through and
after the Closing Date when due. 

        2.5    Additional Costs.    If any law or
regulation increases Bank's costs or reduces its income for any loan, Borrower will pay the increase in cost or reduction in income or additional expense. 

3.     CONDITIONS OF CREDIT EXTENSIONS  

        3.1    Conditions Precedent to Initial Credit
Extension.    Bank's obligation to make the initial Credit Extension is subject to the condition precedent that it receive the agreements,
documents and fees it requires, including, without limitation, the following: 

        (a)   this
Agreement; 

        (b)   a
certificate of the Secretary of Borrower with respect to certificate of incorporation, corporate bylaws, incumbency and resolutions authorizing the execution and
delivery of this Agreement; 

        (c)   financing
statements (Forms UCC-1); 

        (d)   a
negative pledge agreement, in form acceptable to the Bank; 

        (e)   an
insurance certificate and loss payable endorsement in accordance with the provisions hereof; 

        (f)    payment
of the fees and Bank Expenses then due; 

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        (g)   warrant
to purchase 26,000 shares of common stock of Borrower at an initial exercise price of $0.45 per share, and related documents and agreements, in form acceptable
to Bank; and 

        (h)   such
other documents, and completion of such other matters, as Bank may reasonably deem necessary or appropriate. 

        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)   the
satisfaction of the conditions set forth in section 2.1.1 hereof with respect to the making of an Equipment Advance; and 

        (b)   the
representations and warranties in Section 5 hereof must be materially true on the date of the submission of the Loan Supplement relating to the proposed
Equipment Advances and on the effective date of each Credit Extension and no Event of Default may 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. 

4.     CREATION OF SECURITY INTEREST  

        4.1    Grant of Security Interest.    Borrower
grants Bank a continuing security interest in all presently existing and later acquired Collateral to secure all Obligations and performance of each of Borrower's duties under the Loan Documents.
Except for Permitted Liens, any security interest will be a first priority security interest in the Collateral. Bank may place a "hold" on any deposit account pledged as Collateral. If the Agreement
is terminated, Bank's lien and security interest in the Collateral will continue until Borrower fully satisfies its Obligations. 

5.     REPRESENTATIONS AND WARRANTIES  

        Borrower represents and warrants as follows: 

        5.1    Due Organization and
Authorization.    Each of Borrower and its Subsidiaries is duly existing and in good standing in its state of formation and qualified and
licensed to do business in, and in good standing in, any state in which the conduct of its business or its ownership of property requires that it be qualified. The execution, delivery and performance
of the Loan Documents have been duly authorized, and do not conflict with Borrower's formation 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 or by which it is bound in which the default could cause a Material Adverse Change. 

        5.2    Collateral.    Borrower has good title
to the Collateral, free of Liens except Permitted Liens. The Accounts are bona fide, existing obligations, and the service or property has been performed or delivered to the account debtor or its
agent for immediate shipment to and unconditional acceptance by the account debtor. All Inventory is in all material respects of good and marketable quality, free from material defects. 

        5.3    Litigation.    Except as shown in the
Schedule, there are no actions or proceedings pending or, to Borrower's knowledge, threatened by or against Borrower or any Subsidiary of Borrower in which an adverse decision could cause a Material
Adverse Change. 

        5.4    No Material Adverse Change in Financial
Statements.    All consolidated financial statements for Borrower and 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 

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any
material deterioration in Borrower's consolidated financial condition since the date of the most recent financial statements submitted to Bank. 

        5.5    Solvency.    The fair salable value of
Borrower's assets (including goodwill minus disposition costs) exceeds the fair value of its liabilities; the Borrower is not left with unreasonably small capital after the transactions in this
Agreement; and Borrower is able to pay its debts (including trade debts) as they mature. 

        5.6    Regulatory Compliance.    Borrower is
not an "investment company" or a company "controlled" by an "investment company" under the Investment Company Act. Borrower is not engaged as one of its important activities in extending credit for
margin stock (under Regulations T and U of the Federal Reserve Board of Governors). Borrower has complied with the Federal Fair Labor Standards Act. Borrower has not violated any laws, ordinances or
rules, the violation of which could cause a Material Adverse Change. None of Borrower's or any of its Subsidiary's properties or assets has been used by Borrower or such Subsidiary or, to the best of
Borrower's knowledge, by previous Persons, in disposing, producing, storing, treating, or transporting any hazardous substance other than by legally doing so. Each of Borrower and its Subsidiaries has
timely filed all required tax returns and paid, or made
adequate provision to pay, all material taxes. Each of Borrower and its Subsidiaries has obtained all consents, approvals and authorizations of, made all declarations or filings with, and given all
notices to, all government authorities that are necessary to continue its business as currently conducted. 

        5.7    Subsidiaries.    Borrower does not own
any stock, partnership interest or other equity securities except for Permitted Investments. 

        5.8    Full Disclosure.    No representation,
warranty or other statement of Borrower in any certificate or written statement 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. 

6.     AFFIRMATIVE COVENANTS  

        Borrower will do all of the following during the term of this facility: 

        6.1    Government Compliance.    Borrower will
maintain its corporate existence and good standing in its jurisdiction of incorporation and maintain qualification in each jurisdiction in which the failure to so qualify could have a material adverse
effect on Borrower's business or operations. Borrower will cause each of its Subsidiaries to maintain such Subsidiary's corporate existence and good standing in its jurisdiction of incorporation and
maintain qualification in each jurisdiction in which the failure to so qualify could have a material adverse effect on such Borrower's business or operations. Borrower will comply, and will cause each
of its Subsidiaries to comply, with all laws, ordinances and regulations to which it is subject, the noncompliance with which could have a material adverse effect on Borrower's business or operations
or cause a Material Adverse Change. 

        6.2    Financial Statements, Reports,
Certificates.    

        (a)   Borrower
will deliver to Bank: (i) as soon as available, but no later than 30 days after the last day of each
month, a company prepared consolidated balance sheet and income statement covering Borrower's consolidated operations during the period, in a form acceptable to Bank and certified by a Responsible
Officer; (ii) as soon as available, but no later than 120 days after the end of Borrower's fiscal year, audited consolidated financial statements
prepared under GAAP, consistently applied, together with an unqualified opinion on the financial statements from an independent certified public accounting firm acceptable to Bank; (iii) a
prompt report of any legal actions pending or threatened against Borrower or any Subsidiary that could result in damages or costs to Borrower or any Subsidiary of $100,000 or more; and
(iv) budgets, sales projections, operating plans or other financial information Bank requests. 

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        (b)   Within
30 days after the last day of each month, Borrower will deliver to Bank with the monthly financial statements a
Compliance Certificate signed by a Responsible Officer in the form of Exhibit D. 

        (c)   Bank
has the right to audit the Collateral from time to time at Borrower's expense; and the Bank acknowledges that (1) prior to the occurrence and continuance of
an Event of Default, the Bank shall only conduct one such audit for which Borrower shall bear the expense thereof and the cost of any such audit that is passed to Borrower for reimbursement shall not
exceed $1,500 and (2) after the occurrence and continuance of an Event of Default, the limitations as to frequency and cost that are set forth in clause (1) hereof shall no longer be
applicable. 

        6.3    Inventory: Returns.    Borrower will
keep all Inventory in good and marketable condition, free from material defects. Returns and allowances between Borrower and its account debtors will follow Borrower's customary practices as they
exist at the Closing Date. Borrower must promptly notify Bank of all returns, recoveries, disputes and claims that involve more than $50,000. 

        6.4    Taxes.    Borrower will make, and cause
each of its Subsidiaries to make, timely payment of all material federal, state, and local taxes or assessments and will deliver to Bank, on demand, appropriate certificates attesting to the payment. 

        6.5    Insurance.    Borrower will keep its
business and the Collateral insured for risks and in amounts, as Bank requests. Insurance policies will be in a form, with companies, and in amounts that are reasonably satisfactory to Bank. All
property policies will have a lender's loss payable endorsement showing Bank as an additional loss payee and all liability policies will show the Bank as an additional insured and provide that the
insurer must give Bank at least 20 days notice before canceling its policy. At Bank's request, Borrower will deliver certified copies of policies and evidence of all premium payments. Subject
to Section 6.7(a) below, so long as no Event of Default has occurred and is continuing, Borrower shall have the option of applying the proceeds of any casualty policy to the replacement or
repair of destroyed or damaged property; provided that, after the occurrence and during the continuance of an Event of Default, all proceeds payable under any such casualty policy shall, at the option
of Bank, be payable to Bank on account of the Obligations. 

        6.6    Accounts.    Borrower will maintain its
primary banking and investment account relationships with Bank, which relationships shall include Borrower maintaining banking and investment account balances in accounts at or through Bank
representing at least 85% of all such account balances of Borrower at any and all financial institutions. 

        6.7    Loss: Destruction; or Damage.    

        Borrower
will bear the risk of the Financed Equipment being lost, stolen, destroyed, or damaged. If during the term of this Agreement any item of Financed Equipment is lost, stolen,
destroyed, damaged beyond repair, rendered permanently unfit for use, or seized by a governmental authority for any reason for a period equal to at least the remainder of the term of this Agreement
(an "Event of Loss"), then in each case, Borrower: 

        (a)   Prior
to the occurrence of an Event of Default, at Borrower's option, will (i) pay to Bank on account of the Obligations all accrued interest to the date of the
prepayment, plus all outstanding principal, plus the Final Payment; or (ii) repair or replace any Financed Equipment subject to an Event of Loss provided the repaired or replaced Financed
Equipment is of equal or like value to the Financed Equipment subject to an Event of Loss and provided further that Bank has a first priority perfected security interest in such repaired or replaced
Financed Equipment. Bank agrees that during the entire term of this Agreement considered on an aggregate and joint basis and with respect to an Event of Loss regarding items of Financed Equipment
having an aggregate initial financed value of $10,000 or less (i.e., $10,000 in the aggregate for the entire duration of this Agreement), Borrower shall
not be required to treat such occurrences as an Event 

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of
Loss under this clause (a) only, and Borrower shall therefore be allowed to proceed to make payments on the Equipment Advance relating to such items in an unaccelerated manner. The foregoing
is an exception to the general obligation of Borrower regarding Events of Loss as otherwise set forth herein and is limited to the specific terms and provisions relating thereto as set forth herein. 

        (b)   During
the continuance of an Event of Default, on or before the Payment Date after such Event of Loss for each such item of Financed Equipment subject to such Event of
Loss, Borrower will, at Bank's option, pay to Bank an amount equal to the sum of: (i) all accrued and unpaid Scheduled Payments (with respect to such Equipment Advance related to the Event of
Loss) due prior to the next such Payment Date due prior to the date of such payment, (ii) all regularly Scheduled Payments (including principal and interest) due after to the date of such
payment, (iii) the Final Payment, (iv) such additional sums as are set forth in section 2.2 hereof, plus (v) all other sums, if any, that shall have become due and payable,
including interest at the Default Rate with respect to any past due amounts. 

        (c)   On
the date of receipt by Bank of the amount specified above with respect to each such item of Financed Equipment subject to an Event of Loss, this Agreement shall
terminate as to such Financed Equipment. If any proceeds of insurance or awards received from governmental authorities are in excess of the amount owed under this Section, Bank shall promptly remit to
Borrower the amount in excess of the amount owed to Bank. 

        6.8    Financial Covenant.    Borrower will
maintain as of the last day of each month a ratio of (i) Quick Assets to (ii) Adjusted Current Liabilities minus deferred revenue of at least  2.50 to 1.0. 

        6.9    Further Assurances.    Borrower will
execute any further instruments and take further action as Bank requests to perfect or continue Bank's security interest in the Collateral or to effect the purposes of this Agreement. 

        7.    NEGATIVE COVENANTS    

        Borrower
will not do any of the following without the Bank's written consent, which will not be unreasonably withheld: 

        7.1    Dispositions.    Convey, sell, lease,
transfer or otherwise dispose of (collectively a "Transfer"), or permit any of its Subsidiaries to Transfer, all or any part of its business or property, other than a Transfer (i) of Inventory
in the ordinary course of business; (ii) of non-exclusive licenses and similar arrangements for the use of the property of Borrower or its Subsidiaries in the ordinary course of
business; or (iii) of worn-out or obsolete Equipment, other than for Financed Equipment. 

        7.2    Changes in Business, Ownership, Management or Business Locations; Location of
Equipment.    Engage in or permit any of its Subsidiaries to engage in any business other than the businesses currently engaged in by Borrower
or have a change in its ownership (other than the sale of Borrower's equity securities in a public offering, to venture capital investors identified to Bank and to current strategic investors in the
Borrower) of greater than 35% or the persons holding the offices of President or Chief Financial Officer change and replacements satisfactory to Bank are not made within 60 days. Borrower will
not, without at least 30 days prior written notice to Bank, relocate its principal executive office or add any new offices or business locations. Further, all Equipment financed hereunder shall
not be removed from California at any time without the prior written consent of Bank. 

        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. The foregoing negative covenant provision shall include and be applicable to mergers or other corporate actions that have the effect of changing the state of the
Borrower's incorporation, all of which shall not be permitted without the written consent and concurrence of the Bank, and relating to which, if any such action is approved, 

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Borrower
shall enter into and execute such additional documentation and instruments in order for, among other things, the Bank to remain perfected in the Collateral. 

        7.4    Indebtedness.    Create, incur, assume,
or be liable for any Indebtedness, or permit any Subsidiary to do so, other than Permitted Indebtedness. 

        7.5    Encumbrance.    Create, incur, or allow
any Lien on any of its property, 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, or permit
any of Collateral that is subject to the Bank's first priority security interest in the Collateral to change, subject only to Permitted Liens. 

        7.6    Investments;
Distributions.    (i) Directly or indirectly acquire or own any Person, or make any Investment in any Person, other than Permitted
Investments, or permit any of its Subsidiaries to do so; or (ii) pay any dividends or make any distribution or payment or redeem, retire or purchase any capital stock of the Borrower. 

        7.7    Transactions with
Affiliates.    Directly or indirectly enter or permit any material transaction with any Affiliate, except transactions that are in the
ordinary course of Borrower's business, on terms less favorable to Borrower than would be obtained in an arm's length transaction with a non-affiliated Person. 

        7.8    Subordinated Debt.    Make or permit
any payment on any Subordinated Debt, except under the terms of the Subordinated Debt, or amend any provision in any document relating to the Subordinated Debt, without Bank's prior written consent. 

        7.9    Compliance.    Undertake as one of its
important activities extending credit to purchase or carry margin stock, or use the proceeds of any Advance 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 have
a material adverse effect on Borrower's business or operations or cause a Material Adverse Change, or permit any of its Subsidiaries to do so. 

        8.    EVENTS OF DEFAULT    

        Any
one of the following is an "Event of Default" hereunder: 

        8.1    Payment Default.    Borrower fails to
pay any of the Obligations within 3 days after their due date. During the additional period the failure to cure the default is not an Event of Default (but no Credit Extensions will be made
during the cure period); 

        8.2    Covenant Default.    Borrower does not
perform any obligation in Section 6 or violates any covenant in Article 7 or does not perform or observe any other material term, condition or covenant in this Agreement, any Loan
Documents, or in any agreement between Borrower and Bank and as to any default under a term, condition or covenant that can be cured, has not cured the default within 10 days after it occurs,
or if the default cannot be cured within 10 days or cannot be cured after Borrower's attempts in the 10 day period, and the default may be cured within a reasonable time, then Borrower
has an additional time, (of not more than 30 days) to attempt to cure the default. During the additional period the failure to cure the default is not an Event of Default (but no Credit
Extensions will be made during the cure period); 

        8.3    Material Adverse
Change.    (i) A material impairment in the perfection or priority of the Bank's security interest in the Collateral or in the value of
such Collateral which is not covered by adequate insurance occurs; (ii) a material adverse change in the business, operations, or condition (financial or otherwise) of the Borrower occurs; or
(iii) a material impairment of the prospect of repayment of any portion of the Obligations occurs (any of the foregoing is referred to herein as the a "Material Adverse Change"); 

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        8.4    Attachment.    (i) 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 10 days;
(ii) Borrower is enjoined, restrained, or prevented by court order from conducting a material part of its business; (iii) a judgment or other claim becomes a Lien on a material portion
of Borrower's assets; or (iv) a notice of lien, levy, or assessment is filed against any of Borrower's assets by any government agency and not paid within 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 will be made during the cure period); 

        8.5    Insolvency.    (i) Borrower
becomes insolvent; (ii) Borrower begins an Insolvency Proceeding; or (iii) an Insolvency Proceeding is begun against Borrower and not dismissed or stayed within 45 days (but no
Credit Extensions will be made before any Insolvency Proceeding is dismissed); 

        8.6    Other Agreements.    If there is a
default in any agreement between Borrower and a third party that gives the third party the right to accelerate any Indebtedness exceeding $100,000 or that could cause a Material Adverse Change; 

        8.7    Judgments.    If a money judgment or
judgments in the aggregate of at least $50,000 is rendered against the Borrower and is unsatisfied and unstayed for 10 days (but no Credit Extensions will be made before the judgment is stayed
or satisfied); 

        8.8    Misrepresentations.    If Borrower or
any Person acting for Borrower makes any material misrepresentation or material misstatement now or later in any warranty or representation in this Agreement or in any communication delivered to Bank
or to induce Bank to enter this Agreement or any Loan Document; or 

        9.    BANK'S RIGHTS AND REMEDIES    

        9.1    Rights and Remedies.    When 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)   Settle
or adjust disputes and claims directly with account debtors for amounts, on terms and in any order that Bank considers advisable; 

        (d)   Make
any payments and do any acts it considers necessary or reasonable to protect its security interest in the Collateral. Borrower will assemble the Collateral if Bank
requests and make it available as Bank designates. Bank may enter the premises, in accordance with law, 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, in
accordance with law, any of its premises, without charge, in order to exercise any of Bank's rights or remedies; 

        (e)   Apply
to the Obligations any (i) balances and deposits of Borrower it holds, or (ii) any amount held by Bank owing to or for the credit or the account of
Borrower; 

        (f)    Ship,
reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and sell the Collateral. Bank is 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 

9

 

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; and 

        (g)   Dispose
of the Collateral according to the Code or otherwise pursuant to law. 

        9.2    Power of Attorney.    When an Event of
Default occurs and continues, Borrower irrevocably appoints Bank as its lawful attorney to: (i) endorse Borrower's name on any checks or other forms of payment or security; (ii) sign
Borrower's name on any invoice or bill of lading for any Account or drafts against account debtors; (iii) make, settle, and adjust all claims under Borrower's insurance policies;
(iv) settle and adjust disputes and claims about the Accounts directly with account debtors, for amounts and on terms Bank determines reasonable; and (v) transfer the Collateral into the
name of Bank or a third party as the Code permits. Bank may exercise the power of attorney to sign Borrower's name on any documents necessary to perfect or continue the perfection of any security
interest regardless of whether an Event of Default has occurred. Bank's 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    Accounts Collection.    When an Event
of Default occurs and continues, Bank may notify any Person owing Borrower money of Bank's security interest in the funds and verify the amount of the Account. Borrower must collect all payments in
trust for Bank and, if requested by Bank, immediately deliver the payments to Bank in the form received from the account debtor, with proper endorsements for deposit. 

        9.4    Bank Expenses.    If Borrower fails to
pay any amount or furnish any required proof of payment to third persons Bank may make all or part of the payment or obtain insurance policies required in Section 6.5, and take any action under
the policies Bank deems prudent. Any amounts paid by Bank are Bank Expenses and immediately due and payable, bearing interest at the then applicable rate and secured by the Collateral. No payments by
Bank are deemed an agreement to make similar payments in the future or Bank's waiver of any Event of Default. 

        9.5    Bank's Liability for Collateral.    If
Bank complies with commercially reasonable banking practices under law, it is not 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, other than that arising from gross negligence or wilful misconduct. 

        9.6    Remedies Cumulative.    Bank's rights
and remedies under this Agreement, the Loan Documents, and all other agreements 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 is not a waiver, election, or acquiescence. No waiver is effective unless signed
by Bank and then is only effective for the specific instance and purpose for which it was given. 

        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 guaranties held by Bank on which Borrower is liable. 

        10.    NOTICES    

        Unless
otherwise provided in this Agreement, all notices or demands by any party relating to this Agreement or any other agreement entered into in connection herewith shall be in writing
and (except for financial statements and other informational documents which may be sent by first-class mail, postage prepaid) shall be personally delivered or sent by a recognized overnight delivery
service, by 

10

 

certified
mail, postage prepaid, return receipt requested, or by telefacsimile to Borrower or to Bank, as the case may be, at its addresses set forth below: 

	If to Borrower:	 	JAMDAT Mobile Inc.

3415 South Sepulveda Blvd., Suite 500

Los Angeles, California 90034

Attention: Chief Financial Officer

FAX: 310-397-0353
	

If to Bank:	
 	

Silicon Valley Bank

10585 Santa Monica Blvd., Suite 140

Los Angeles, CA 90025

Attn: Manager

FAX: 310-234-3569

        11.    CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER    

        California
law governs the Loan Documents without regard to principles of conflicts of law. Borrower and Bank each submit to the exclusive jurisdiction of the State and Federal courts in
Los Angeles County, California. 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.

        12.    GENERAL PROVISIONS    

        12.1    Successors and Assigns.    This
Agreement binds and is for the benefit of the successors and permitted assigns of each party. Borrower may not assign this Agreement or any rights or Obligations under it without 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, the Loan Documents or any related agreement. 

        12.2    Indemnification.    Borrower will
indemnify, defend and hold harmless Bank and its officers, employees and agents against: (a) all obligations, demands, claims, and liabilities asserted by any other party in connection with the
transactions contemplated by the Loan Documents; and (b) all losses or Bank Expenses incurred, or paid by Bank from, following, or consequential to transactions between Bank and Borrower
(including reasonable attorneys' fees and expenses), except for losses caused by Bank's gross negligence or willful misconduct. 

        12.3    Time of Essence.    Time is of the
essence for the performance of all Obligations in this Agreement. 

        12.4    Severability of Provision.    Each
provision of this Agreement is severable from every other provision in determining the enforceability of any provision. 

        12.5    Amendments in Writing,
Integration.    All amendments to this Agreement must be in writing signed by both Bank and Borrower. This Agreement and the Loan Documents
represent the entire agreement about this subject matter, and supersedes prior or contemporaneous negotiations or agreements. All prior or contemporaneous 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. 

11

 

        12.6    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, are one Agreement. 

        12.7    Survival.    All covenants,
representations and warranties made in this Agreement continue in full force while any Obligations remain outstanding. The obligations of Borrower in Section 12.2 to indemnify Bank will survive
until all statutes of limitations for actions that may be brought against Bank have run. 

        12.8    Confidentiality.    In handling any
confidential information, Bank will exercise the same reasonable degree of care that it exercises for its own proprietary information, but disclosure of information may be made: (i) to Bank's
subsidiaries or affiliates in connection with their present or prospective business relations with Borrower; (ii) to prospective transferees or purchasers of any interest in the Obligations;
(iii) as required by law, regulation, subpoena, or other order, (iv) as required in connection with Bank's examination or audit; and (v) as Bank considers appropriate in
exercising remedies under this Agreement. Confidential information does not include information that either: (a) 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 (b) is disclosed to Bank by a third party, if Bank does not know that the third party is prohibited from disclosing the information. 

        12.9    Attorneys' Fees, Costs and
Expenses.    In any action or proceeding between Borrower and Bank arising out of the Loan Documents, the prevailing party will 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, whether or not a lawsuit is filed. 

        13.    DEFINITIONS    

        "Accounts" are all existing and later arising accounts, contract rights, and other obligations owed Borrower in connection with its sale
or lease of goods (including licensing software and other technology) or provision of services, all credit insurance, guaranties, other security and all merchandise returned or reclaimed by Borrower
and Borrower's Books relating to any of the foregoing. 

        "Adjusted Current Liabilities" are the aggregate amount of Borrower's Total Liabilities regarding the Advances hereunder together with
those other Total Liabilities of Borrower which mature within one (1) year from the date of determination. 

        "Advance" or "Advances" is a loan advance (or advances) under the Committed Equipment
Line. 

        "Affiliate" of a 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. 

        "Bank Expenses" are all audit fees and expenses and reasonable costs or expenses (including reasonable attorneys' fees and expenses) for
preparing, negotiating, administering, defending and enforcing the Loan Documents (including appeals or Insolvency Proceedings). 

        "Basic Rate" is, as of the Funding Date, a fixed per annum rate of interest (based on a year of 360 days) equal to the sum of the
applicable Prime Rate as of such date, plus 1.00%, provided that the Basic Rate shall not be deemed to be less than 8.00% per annum, regardless of the actual applicable Prime Rate from time to time. 

        "Borrower's Books" are all Borrower's books and records including ledgers, records regarding Borrower's assets or liabilities, the
Collateral, business operations or financial condition and all computer programs or discs or any equipment containing the information. 

        "Business Day" is any day that is not a Saturday, Sunday or a day on which the Bank is closed. 

12

 

        "Closing Date" is the date of this Agreement. 

        "Code" is the California Uniform Commercial Code, as amended or otherwise modified from time to time. 

        "Collateral" is the property described on Exhibit A. 

        "Committed Equipment Line" is a line of credit of up to $400,000. 

        "Commitment Termination Date" is forty-five (45) calendar days from the date of this Agreement. 

        "Contingent Obligation" is, for any Person, any direct or indirect liability, contingent or not, of that Person for (i) 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; (ii) any obligations for undrawn letters of credit for the account of that Person; and (iii) 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 the guarantee or other support arrangement. 

        "Credit Extension" is each Advance and each other extension of credit by Bank for Borrower's benefit. 

        "Eligible Equipment" is mission critical equipment., test equipment, workstations, desktop computers, portable computers, office
furniture, telephone systems, security systems and peripherals, and, subject to the limitations set forth below, Other Equipment that complies with all of Borrower's representations, warranties and
covenants in favor of the Bank and which is acceptable to Bank in all respects. All Equipment financed with the proceeds of Equipment Advances shall be new when purchased, provided that Bank, in its
sole discretion, may finance used equipment. 

        "Equipment" is all present and future machinery, equipment, tenant improvements, furniture, fixtures, vehicles, tools, parts and
attachments in which Borrower has any interest. 

        "Equipment Advance" and "Equipment Advances" are defined in Section 2.1.1. 

        "ERISA" is the Employment Retirement Income Security Act of 1974, and its regulations. 

        "Event of Loss" shall have the meaning set forth in Section 6.7 hereof. 

        "Final Payment" is a payment due on the Maturity Date for each Equipment Advance equal to the Loan Amount for such Equipment Advance
multiplied by the Final Payment Percentage. 

        "Final Payment Percentage" is 7% for each Equipment Advance. 

        "Financed Equipment" is defined in the Loan Supplement. 

        "Funding Date" shall have the meaning ascribed to such term in section 2.1.1 hereof. 

        "GAAP" shall mean generally accepted accounting principles, consistently applied. 

        "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. 

13

 

        "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. 

        "Interim Payment" shall have the meaning set forth in section 2.2(c) hereof. 

        "Inventory" is present and future inventory in which Borrower has any interest, including merchandise, raw materials, parts, supplies,
packing and shipping materials, work in process and finished products intended for sale or lease or to be furnished under a contract of service, of every kind and description now or later owned by or
in the custody or possession, actual or constructive, of Borrower, including inventory temporarily out of its custody or possession or in transit and including returns on any accounts or other
proceeds (including insurance proceeds) from the sale or disposition of any of the foregoing and any documents of title. 

        "Investment" is any beneficial ownership of (including stock, partnership interest or other securities) any Person, or any loan, advance
or capital contribution to any Person. 

        "Lien" is a mortgage, lien, deed of trust, charge, pledge, security interest or other encumbrance. 

        "Loan Amount" is the aggregate original amount of each Equipment Advance. 

        "Loan Documents" are, collectively, this Agreement, any note, or notes or guaranties executed by Borrower, and any other present or future
agreement between Borrower and/or for the benefit of Bank in connection with this Agreement, all as amended, extended or restated. 

        "Loan Factor" is the percentage which results from amortizing the Equipment Advance over the Repayment Period, using the Basic Rate as the
interest rate. 

        "Loan Supplement" has the meaning ascribed to such term in section 2.1.1 hereof. 

        "Material Adverse Change" has the meaning set forth in Section 8.3 hereof. 

        "Maturity Date" is, with respect to each Equipment Advance, the last day of the Repayment Period for such Equipment Advance, or, if
earlier, the date of acceleration of such Equipment Advance by Bank following an Event of Default. 

        "Obligations" are debts, principal, interest, Bank Expenses and other amounts Borrower owes Bank now or later, including Equipment
Advances, letters of credit and foreign exchange contracts, if any, and including interest accruing after Insolvency Proceedings begin and debts, liabilities, or obligations of Borrower assigned to
Bank. 

        "Original Stated Cost" is (i) the original cost to the Borrower of the item of new Equipment net of any and all freight,
installation, tax or (ii) the fair market value assigned to such item of used Equipment by mutual agreement of Borrower and Bank at the time of making of the Equipment Advance. 

        "Other Equipment" is furnishings, software, application software, tenant improvements, application software bundled into computer
hardware, hand held items, and other items and similar property that the Bank determines to be acceptable to it in its discretion. 

        "Payment Date" shall have the meaning ascribed to such term in section 2.2(a) hereof. 

        "Permitted Indebtedness" is: 

        (a)   Borrower's
indebtedness to Bank under this Agreement or the Loan Documents; 

        (b)   Indebtedness
existing on the Closing Date and shown on the Schedule; 

        (c)   Subordinated
Debt; 

14

 

        (d)   Indebtedness
to trade creditors incurred in the ordinary course of business; and 

        (e)   Indebtedness
secured by Permitted Liens. 

        "Permitted Investments" are: 

        (a)   Investments
shown on the Schedule and existing on the Closing Date; 

        (b)   (i) marketable
direct obligations issued or unconditionally guaranteed by the United States or its agency or any State maturing within 1 year from its
acquisition, (ii) commercial paper maturing no more than 1 year after its creation and having the highest rating from either Standard & Poor's Corporation or Moody's Investors
Service, Inc., (iii) Bank's certificates of deposit issued maturing no more than 1 year after issue and (iv) all other Investments deposited in or managed by the Bank; 

        (c)   Investments
consisting of the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of Borrower; 

        (d)   Investments
accepted in connection with Transfers permitted by Section 7.1; 

        (e)   Investments
consisting of travel advances and employee relocation loans and other employee loans and advances in the ordinary course of business; and 

        (f)    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. 

        "Permitted Liens" are: 

        (a)   Liens
existing on the Closing Date and shown on the Schedule or arising under this Agreement or 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 security interests; 

        (c)   Purchase
money Liens (i) on Equipment acquired or held by Borrower or its Subsidiaries incurred for financing the acquisition of the Equipment, or
(ii) existing on equipment when acquired, if the Lien is confined to the property and improvements and the proceeds of the equipment; 

        (d)   Leases
or subleases and licenses or sublicenses granted in the ordinary course of Borrower's business, if the leases, subleases, licenses and sublicenses permit granting
Bank a security interest; and 

        (e)   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 relating thereto may not increase. 

        "Person" is any individual, sole proprietorship, partnership, limited liability company, joint venture, company, trust, unincorporated
organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or government agency. 

        "Prime Rate" is Bank's most recently announced "prime rate," even if it is not Bank's lowest rate. 

        "Quick Assets" is, on any date, the Borrower's consolidated, unrestricted cash, cash equivalents, net billed accounts receivable and
investments with maturities of less than 12 months determined according to GAAP. 

15

 

        "Repayment Period" is 36 months. 

        "Responsible Officer" is each of the Chief Executive Officer, the President, the Chief Financial Officer, and the Controller of Borrower. 

        "Schedule" is any attached schedule of exceptions. 

        "Scheduled Payments" shall have the meaning ascribed to such term in section 2.2(a) hereof. 

        "Subordinated Debt" is debt incurred by Borrower subordinated to Borrower's indebtedness owed to Bank and which is reflected in a written
agreement in a manner and form acceptable to Bank and approved by Bank in writing. 

        "Subsidiary" is for any Person, joint venture, or any other business entity of which more than 50% of the voting stock or other equity
interests is owned or controlled, directly or indirectly, by the Person or one or more Affiliates of the Person. 

        "Total Liabilities" is on any day, obligations that should, under GAAP, be classified as liabilities on Borrower's consolidated balance
sheet, including all Indebtedness, and current portion of Subordinated Debt allowed to be paid, but excluding all other Subordinated Debt. 

        IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written. 

	BORROWER:	 	Bank:
	

JAMDAT Mobile Inc	
 	

SILICON VALLEY BANK
	

By: /s/ MICHAEL MARCHETTI	
 	

By: /s/ TROY V. ERICKSON
	Title: Chief Financial Officer	 	Title: Vice President

16

   EXHIBIT A  

        The Collateral consists of all of Borrower's right, title and interest in and to the following: 

        All
goods and equipment now owned or hereafter acquired, including, without limitation, all machinery, fixtures, vehicles (including motor vehicles and trailers), and any interest in any
of the foregoing, and all attachments, accessories, accessions, replacements, substitutions, additions, and improvements to any of the foregoing, wherever located; 

        All
inventory, now owned or hereafter acquired, including, without limitation, all merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and
finished products including such inventory as is temporarily out of Borrower's custody or possession or in transit and including any returns upon any accounts or other proceeds, including insurance
proceeds, resulting from the sale or disposition of any of the foregoing and any documents of title representing any of the above; 

        All
contract rights and general intangibles now owned or hereafter acquired, including, without limitation, goodwill, leases, license agreements, franchise agreements, purchase orders,
customer lists, route lists, claims, income tax refunds, payments of insurance and rights to payment of any kind; 

        All
now existing and hereafter arising accounts, contract rights, royalties, license rights and all other forms of obligations owing to Borrower arising out of the sale or lease of
goods, the licensing of technology or the rendering of services by Borrower, whether or not earned by performance, and any and all credit insurance, guaranties, and other security therefor, as well as
all merchandise returned to or reclaimed by Borrower; 

        All
documents, cash, deposit accounts, securities, securities entitlements, securities accounts, investment property, financial assets, letters of credit and letter of credit rights,
commercial tort claims, certificates of deposit, instruments and chattel paper now owned or hereafter acquired and Borrower's Books relating to the foregoing; 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 and accessions to and proceeds
thereof. 

        Notwithstanding
the foregoing, the Collateral does not include: any copyright rights, copyright applications, copyright registrations and like protections in each work of authorship and
derivative work, whether published or unpublished, now owned or later acquired; any patents, trademarks, service marks and applications therefor; any trade secret rights, including any rights to
unpatented inventions, know-how, operating manuals, license rights and agreements and confidential information, now owned or hereafter acquired; or any claims for damages by way of any
past, present and future infringement of any of the foregoing (the "Intellectual Property"); 

PROVIDED,
THAT, the Collateral shall include, without limitation, the proceeds of all the Intellectual Property that are accounts (including, without limitation, accounts receivable) of Borrower, or
general intangibles consisting of rights to payment or other proceeds, of any kind or nature, of the Intellectual Property that are themselves not Intellectual Property, provided that if a judicial
authority (including a U.S. Bankruptcy Court) holds that a security interest in the underlying Intellectual Property is necessary to have a security interest in such accounts, general intangibles or
such other proceeds of the Intellectual Property, then the Collateral shall automatically, and effective as of the date hereof, include the Intellectual Property to the extent necessary to permit
perfection of the Bank's security interest in such accounts, general intangibles and other proceeds. 

17

 
EXHIBIT B  

[Reserved]

18

 
EXHIBIT C  

 FORM OF LOAN AGREEMENT SUPPLEMENT  

 LOAN AGREEMENT SUPPLEMENT No. [    ]  

LOAN AGREEMENT SUPPLEMENT No. [    ], dated                        ,
200    ("Supplement"), to the Loan and Security Agreement dated as of
July     , 2001 (the "Loan Agreement") by and between the undersigned ("Borrower"), and Silicon Valley Bank ("Bank"). Capitalized terms used herein but not otherwise defined herein
are used with the respective meanings given to such terms in the Loan Agreement.

To
secure the prompt payment by Borrower of all amounts from time to time outstanding under the Loan Agreement, and the performance by Borrower of all the terms contained in the Loan Agreement,
Borrower grants Bank, a first priority security interest in each item of equipment and other property described in Annex A hereto, which equipment and other property shall be deemed to be additional
Financed Equipment and Collateral. The Loan Agreement is hereby incorporated by reference herein and is hereby ratified, approved and confirmed. 

Annex A
(Equipment Schedule) and Annex B (Loan Terms Schedule) are attached hereto. 

The
proceeds of the Loan should be transferred to Borrower's account with Bank set forth below: 

	Bank Name:	 	Silicon Valley Bank	 	 
	Account No.:	 	    
	 	 

Borrower
hereby certifies that (a) the foregoing information is true and correct and authorizes Bank to endorse in its respective books and records, the Basic Rate applicable to the Funding
Date of the Loan contemplated in this Loan Agreement Supplement and the principal amount set forth in the Loan Terms Schedule; (b) the representations and warranties made by Borrower in the
Loan Agreement are true and correct on the date hereof and will be true and correct on such Funding Date. No Event of Default has occurred and is continuing under the Loan Agreement This Supplement
may be executed by Borrower and Bank in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the
same instrument. 

This Supplement is delivered as of this day and year first above written.

	SILICON VALLEY BANK	 	JAMDAT Mobile Inc
	

By:	
 	

    
	
 	

By:	
 	

    

	 	 	Name:	 	    
	 	 	 	Name:	 	    

	 	 	Title:	 	    
	 	 	 	Title:	 	    

Annex A—Description
of Financed Equipment

Annex B—Loan Terms Schedule 

19

  

 
  Annex A to Exhibit C    
    

        The Financed Equipment being financed with the Equipment Advance which this Loan Agreement Supplement is being executed is listed below.
Upon the funding of such Equipment Advance, this schedule automatically shall be deemed to be a part of the Collateral.

	Description of Equipment:
 
	 	Make
	 	Model
	 	Serial #
	 	Invoice #

20

 
Annex B to Exhibit C  

LOAN TERMS SCHEDULE #        

Loan
Funding Date:                  , 200  

Original
Loan Amount: $                  

Basic
Rate:        % 

Loan
Factor:        % 

Scheduled
Payment Dates and Amounts*: 

One
(1) payment of
$                due                      

          payment of $                due monthly in advance
from          through                 

One (1) payment of
$                  due                       
 

Maturity
Date:                        

	Final Payment:	 	An additional amount equal to the Final Payment Percentage multiplied by the Loan Amount then in effect, shall be paid on the Maturity Date with respect to such Loan.

	
Payment No.
 
	
 	

Payment Date

	1	 	 
	2	 	 
	3	 	 
	4	 	 
	...	 	 
	[36]	 	 
	...	 	 

	*/
	The
amount of each Scheduled Payment will change as the Loan Amount changes. 

21

 
EXHIBIT D  

COMPLIANCE CERTIFICATE  

TO:
SILICON VALLEY BANK 

FROM:
JAMDAT MOBILE INC. 

        The
undersigned authorized officer of JAMDAT Mobile Inc. certifies that under the terms and conditions of the Loan and Security Agreement between Borrower and Bank (the
"Agreement"), (i) Borrower is in complete compliance for the period ending                        with all required covenants
except as noted below and (ii) all representations and warranties
in the Agreement are true and correct in all material respects on this date. Attached are the required documents supporting the certification. The Officer certifies that these are prepared in
accordance with Generally Accepted Accounting Principles (GAAP) consistently applied from one period to the next except as explained in an accompanying letter or footnotes. The Officer 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. 

 Please indicate compliance status by circling Yes/No under "Complies" column.  

	Reporting Covenant
 
	 	Required
	 	 
	 	Complies

	Monthly Financial Statements and Compliance Certificate	 	Monthly within 30 days	 	 	 	Yes    No    
	Annual (CPA Audited)	 	FYE within 120 days	 	 	 	Yes    No    
	
 Financial Covenant
 
	
 	

Required
	
 	

Actual
	
 	

Complies

	Monthly Adjusted Quick Ratio (per §6.8 of the Loan Agreement)	 	2.50 to 1	 	                	 	Yes    No    

Comments Regarding Exceptions: See Attached. 

	Sincerely,	 	 	 	BANK USE ONLY
	

Signature	
 	

 	
 	

Received by:	
 	

	 	 	 	 	 	 	Authorized Signer
	
	 	 	 	 	 	 
	Title	 	 	 	Date:	 	

	

	
 	

 	
 	

Verified:	
 	

	Date	 	 	 	 	 	Authorized Signer
	

 	
 	

 	
 	

Date:	
 	

	

 	
 	

 	
 	

Compliance Status:	
 	

Yes    No    

22

 
Silicon Valley Bank  

August 17,
2001 

Mr. Michael
Marchetti

Chief Financial Officer

JAMDAT Mobile

3415 S. Sepulveda Blvd.

Los Angeles, CA 90034 

Dear
Michael, 

        This
letter is written in connection with that certain Loan & Security Agreement between Silicon Valley Bank ("Bank") and JAMDAT Mobile ("Borrower:), dated July 13, 2001,
and related loan documents (collectively, the "Loan Agreement"). 

        Bank
hereby modifies the definition of "Other Equipment" in Section 13 to include that certain Oracle invoice #1470173, dated May 25, 2001, which details the purchase of
product support and updates related to an Oracle Database Enterprise Edition—Universal Power Unit 2. 

        By
signing below and returning a copy of this letter to Bank, Borrower acknowledges that the Loan Agreement is hereby modified in accordance with the provision set forth above. Borrower
further understands and agrees that, except as expressly modified pursuant to this letter, the terms of the Loan Agreement remain unchanged and in full force and effect. 

        Bank's
agreement to modify the Loan Agreement in accordance with the provisions set forth in this letter in no way shall obligate Bank to make any future modification to the Loan
Agreement. 

        The
provisions of this letter shall not be deemed effective until such time as Borrower has returned a countersigned original of this letter to Bank. 

Very
Sincerely Yours, 

/s/  TROY V. ERICKSON

Troy V. Erickson

Vice President 

23

 

        By
executing below, the undersigned acknowledges and confirms the effectiveness of this letter to amend the definition of "Other Equipment" in Section 13 of the Loan Agreement. 

	By:	 	/s/  MICHAEL MARCHETTI      
	 	 	

	Title:	 	Chief Financial Officer
	 	 	

	Date:	 	8-20-2001
	 	 	

24

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Exhibit 10.3  

 
 

JAMDAT MOBILE INC.    
    
    SERIES C PREFERRED STOCK PURCHASE AGREEMENT    
    
    August 30, 2002    
    

 
 

TABLE OF CONTENTS    
    

	1. Purchase and Sale of Series C Preferred Stock.	 	1
	 	
 1.1	

Authorization of Series C Preferred Stock.	
 	

1
	 	1.2	Sale and Issuance of Series C Preferred Stock.	 	1
	 	1.3	The Initial Closing.	 	1
	 	1.4	Subsequent Closings.	 	2
	 	1.5	Definition of Closing.	 	2
	

2. Representations And Warranties Of The Company.	
 	

2
	 	
 2.1	

Organization, Good Standing and Qualification.	
 	

2
	 	2.2	Capitalization.	 	2
	 	2.3	Subsidiaries.	 	3
	 	2.4	Authorization.	 	3
	 	2.5	Valid Issuance of Preferred and Common Stock.	 	3
	 	2.6	Governmental Consents.	 	4
	 	2.7	Offering.	 	4
	 	2.8	Litigation.	 	4
	 	2.9	Compliance with Other Instruments.	 	4
	 	2.10	Intellectual Property.	 	5
	 	2.11	Registration Rights, Rights to Acquire Company Securities and Voting Obligations.	 	5
	 	2.12	Title to Property and Assets.	 	6
	 	2.13	Employees.	 	6
	 	2.14	Employee Benefit Plans.	 	6
	 	2.15	Tax Returns and Payments.	 	6
	 	2.16	Permits.	 	6
	 	2.17	Environment and Safety Laws.	 	6
	 	2.18	Corporate Documents.	 	7
	 	2.19	Foreign Corrupt Practices Act.	 	7
	 	2.20	Insurance.	 	7
	 	2.21	Related Party Transactions.	 	7
	 	2.22	Financial Statements; Material Liabilities.	 	8
	 	2.23	Absence of Changes.	 	8
	 	2.24	Agreements; Action.	 	8
	 	2.25	Qualified Small Business.	 	9
	

3. Representations and Warranties of the Investors.	
 	

9
	 	
 3.1	

Authorization.	
 	

9
	 	3.2	Purchase for Own Account.	 	9
	 	3.3	Disclosure of Information.	 	9
	 	3.4	Investment Experience.	 	10
	 	3.5	Accredited Investor.	 	10
	 	3.6	Restricted Securities.	 	10
	 	3.7	Legends.	 	10
	

4. Conditions to Investors' Obligations at Closing.	
 	

10
	 	
 4.1	

Closing Conditions.	
 	

10
	

5. Conditions to the Company's Obligations at Closing.	
 	

11
	 	
 5.1	

Closing Conditions.	
 	

11
	

6. Miscellaneous.	
 	

12
	 	
 6.1	

Notice of Breaches; Updating of Schedules.	
 	

12
	 	6.2	Successors and Assigns.	 	12
	 	 	 	 

	 	6.3	No Third Party Beneficiaries.	 	12
	 	6.4	Governing Law.	 	12
	 	6.5	Counterparts; Facsimile Signatures.	 	12
	 	6.6	Titles and Subtitles.	 	13
	 	6.7	Notices.	 	13
	 	6.8	Finder's Fee.	 	13
	 	6.9	Expenses; Attorneys' Fees.	 	13
	 	6.10	Amendments.	 	13
	 	6.11	Severability.	 	14
	 	6.12	Entire Agreement.	 	14

 
 

List of Schedules    
    

	Schedule 1	 	Investors
	Schedule 2	 	Disclosure Schedule

 
 

List of Exhibits    
    

	EXHIBIT A	 	Form of Restated Certificate of Incorporation
	EXHIBIT B	 	Form of Escrow Agreement
	EXHIBIT C	 	Form of Investors' Rights Agreement
	EXHIBIT D	 	Form of Voting Agreement
	EXHIBIT E	 	Form of Opinion of Company Counsel

 
 

SERIES C PREFERRED STOCK PURCHASE AGREEMENT    
    

        This SERIES C PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement") is entered into as of August 30, 2002
by and among JAMDAT Mobile Inc., a Delaware corporation (the "Company"), and the Investors listed on Schedule 1  hereto (collectively, the
"Investors" and each individually, an "Investor"). 

        THE
PARTIES HERETO HEREBY AGREE AS FOLLOWS: 

        1.    Purchase and Sale of Series C Preferred Stock.    

        1.1    Authorization of Series C Preferred Stock.    The Company shall authorize the issuance and sale to
Investors of an aggregate of up to 9,259,259 shares of the Company's 8% Series C Convertible Preferred Stock, par value $.0001 per share (the "Series C Preferred
Stock"), having the rights, preferences, privileges and restrictions set forth in the Third Restated Certificate of Incorporation in the form attached hereto as  Exhibit A (the "Restated Certificate"). Prior to the Initial Closing (as such term is defined in  Section 1.3 below), the Company will file with the
Secretary of State of the State of Delaware the Restated Certificate.
 

        1.2    Sale and Issuance of Series C Preferred Stock.    Subject to the terms and conditions of this Agreement,
each Investor listed on Schedule 1 hereto severally and not jointly subscribes for and agrees to purchase, and the Company agrees to sell and
issue to each Investor as provided herein, that number of shares of Series C Preferred Stock as is set forth opposite such Investor's name on Schedule 1  hereto, for a purchase price of $1.08
per share (the "Purchase Price") with the aggregate purchase price for each Investor being
as is set forth opposite such Investor's name on Schedule 1 hereto. 

        1.3    The Initial Closing.    

        (a)   The
closing of the initial purchase and sale of the Series C Preferred Stock contemplated by Section 1.2  (the "Initial Closing") shall take place at
the offices of Sheppard, Mullin, Richter & Hampton LLP, 333 South Hope
Street, 48th Floor, Los Angeles, California 90071, by an exchange of executed counterpart copies of this Agreement and the other closing documents via facsimile and overnight courier
between counsel for the Company and the Investors, on August 30, 2002 or upon such other date as the Investors purchasing at least a majority of the Series C Preferred Stock sold
hereunder and the Company may agree. The Initial Closing shall be conducted with respect to 6,746,441 shares of
Series C Preferred Stock for an aggregate Purchase Price of $7,286,156.28. At the Initial Closing and each Subsequent Closing (as defined in Section 1.4  hereof), subject to the provisions of
Sections 4 and 5, the Company shall
deliver to each Investor certificates representing the shares of Series C Preferred Stock that such Investor is purchasing at such Initial or Subsequent Closing, as applicable, against delivery
by such Investor of payment of the purchase price therefore by check or wire transfer. The net cash proceeds from the sale of the Series C Preferred Stock to be sold at the Initial Closing and
each Subsequent Closing shall be used for working capital and general corporate purposes. 

        (b)   At
the Initial Closing, Apax Excelsior VI, L.P., Apax Excelsior VI-A C.V. L.P., Apax Excelsior VI-B C.V. L.P. and Patricof Private Investment
Club III, L.P. or such parties' affiliates identified as "Investors" on Schedule 1 hereto (the "Patricof Investors") shall cause to be deposited
into an escrow account (the "Escrow Account") pursuant to the escrow agreement attached hereto as Exhibit B  (the "Escrow
Agreement") an aggregate of $713,844.36 in immediately available funds (the "Escrowed
Funds"). The Escrowed Funds shall be in addition to the aggregate Purchase Price of $720,384.84 delivered by the Patricof Investors at the Initial Closing for the aggregate
667,023 shares of Series C Preferred Stock purchased by the Patricof Investors at the Initial Closing. The Escrowed Funds shall be held in the Escrow Account pursuant to the terms and
conditions of the Escrow Agreement until the Final Closing. 

 

        1.4    Subsequent Closings.    

        (a)   For
a period beginning on the date hereof and terminating at 12:00 p.m., Los Angeles time, on September 30, 2002 (the "Final
Closing Date"), the Company may, in its discretion, provide for subsequent sales of up to 2,512,818 shares of Series C Preferred Stock pursuant to this Agreement upon
the terms set forth in Section 1.2 hereof at such time and dates as the Company may determine (each, a "Subsequent
Closing"). Subsequent Closings shall take place at such place as the Company and the Investors mutually agree substantially in the manner set forth in  Section 1.3.

        (b)   If
the Company has not, pursuant to the Initial Closing and all Subsequent Closings issued and sold at least 7,407,408 shares of Series C Preferred Stock for an
aggregate Purchase Price of at least $8,000,000.64, then on the Final Closing Date the Company and the Patricof Investors shall cause a portion of the Escrowed Funds in the amount equal to the lesser
of the Escrowed Funds or the difference between $8,000,000.64 and the result of $1.08 times the number of shares of Series C Preferred Stock actually issued and sold by the Company to be
released to the Company as the Purchase Price for additional shares of Series C Preferred Stock. If the Company has, pursuant to the Initial Closing and all Subsequent Closings issued and sold
at least 7,407,408 shares of Series C
Preferred Stock for an aggregate Purchase Price of at least $8,000,000.64, then the Company and the Patricof Investors shall cause the Escrowed Funds to be returned to the Patricof Investors upon the
terms set forth in the Escrow Agreement. 

        1.5    Definition of Closing.    The Initial Closing and each Subsequent Closing may be referred to in this Agreement
from time to time simply as the "Closing" and such term shall refer to the particular closing (the Initial Closing or a Subsequent Closing) which takes
place between the Company and a particular Investor substantially in the manner set forth in Section 1.3. 

        2.    Representations And Warranties Of The Company.    The Company hereby represents and warrants to each Investor
that the following statements are true and correct as of the date hereof, except as set forth on the Disclosure Schedule attached hereto as  Schedule 2: 

        2.1    Organization, Good Standing and Qualification.    The Company is a corporation duly organized, validly
existing, in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to carry on its business as now conducted and as proposed to be conducted. The
Company is duly qualified to transact business and is in good standing in the State of California. The Company is duly qualified to transact business and is in good standing in each jurisdiction in
which such qualification is required, except where the failure to be so qualified would not have a material adverse effect on the Company. 

        2.2    Capitalization.    The authorized capital stock of the Company consists of 100,000,000 shares of common stock,
par value $.0001 per share (the "Common Stock"), of which 9,960,543 shares are issued and outstanding and 28,259,259 shares of preferred stock, par
value $.0001 per share (the "Preferred Stock"), of which 5,666,667 shares are designated as Founders Convertible Preferred Stock (the
"Founders' Stock"), all of which are issued and outstanding, and 13,333,333 shares are designated as 8% Series B Convertible Preferred Stock (the
"Series B Preferred Stock"), all of which are issued and outstanding. Pursuant to the Restated Certificate, a series of Preferred Stock has been
created consisting of 9,259,259 shares which are designated as "8% Series C Convertible Preferred Stock," of which none are issued and
outstanding prior to the consummation of the transactions contemplated by this Agreement. The rights, powers, preferences, qualifications, limitations and restrictions of the Series C Preferred
Stock are as stated in the Restated Certificate. Except for (i) the conversion privileges of the Founders' Stock, (ii) the conversion privileges of Series B Preferred Stock,
(iii) the conversion privileges of the Series C Preferred Stock to be issued under this Agreement, (iv) the rights provided for in the Investors' Rights Agreement, dated as of
February 26, 2001, as amended, (v) the rights provided for in the 

2

 

Amended
and Restated Investors' Rights Agreement, to be entered into concurrently with the Closing as provided in Section 4.1(e) hereof (the
"Investors' Rights Agreement") and a copy of which is attached hereto as Exhibit C,
(vi) restricted stock grants and outstanding options that have been granted under the JAMDAT Mobile Inc. Amended and Restated 2000 Stock Incentive Plan, as such plan may be amended from
time to time (the "Plan") and (vii) as set forth on the disclosure schedule attached hereto as Schedule 2  (the "Disclosure
Schedule"), there are no outstanding options, warrants, rights (including conversion or preemptive rights) or
other agreement for the purchase or acquisition from the Company of any shares of its capital stock or securities exercisable for or convertible into its capital stock. Other than as set forth in the
Investors' Rights Agreement and the Disclosure Schedule, the Company is not a party to or bound by any agreement or understanding between any persons and/or entities with respect to any shares of its
capital stock. The Plan has been duly adopted by the Board of Directors and approved by the stockholders of the Company. An aggregate of 9,552,550 shares of Common Stock have been reserved for
issuance under the Plan of which 6,627,209 shares of Common Stock have been issued pursuant to restricted stock grants, and options to purchase 163,584 shares of Common Stock have been granted, all of
which are currently outstanding, and 2,761,757 shares of Common Stock are available for future issuance. All outstanding shares of Common Stock and Preferred Stock are duly and validly authorized and
issued, fully paid and nonassessable, and were issued in accordance with the registration or qualification provisions of the Securities Act of 1933, as amended, (the "Act") and from any applicable
state securities laws or pursuant to valid exemptions therefrom. 

        2.3    Subsidiaries.    The Company does not own or control, directly or indirectly, any interest in any other
corporation, association or other business entity, and the Company is not a participant in any joint venture, partnership or similar arrangement. 

        2.4    Authorization.    The Restated Certificate has been approved by the Board of Directors of the Company and the
stockholders of the Company. The Company has all requisite corporate power to enter into and perform its obligations under this Agreement, the Investors' Rights Agreement, the Amended and Restated
Voting Agreement, to be entered into concurrently herewith in the form attached hereto as Exhibit B (the "Voting
Agreement"), and all other agreements contemplated hereby and thereby and to issue the shares of Series C Preferred Stock in accordance with the terms hereof. All
corporate action
on the part of the Company, its officers, directors and stockholders necessary for the authorization, execution and delivery of this Agreement, the Investors' Rights Agreement, the Voting Agreement
and all other agreements and obligations contemplated hereby and thereby, the performance of all obligations of the Company hereunder and thereunder, and the authorization, issuance (or reservation
for issuance), sale and delivery of the Series C Preferred Stock to be issued hereunder, and of the Common Stock issuable upon conversion of the Series C Preferred Stock (collectively,
the "Conversion Stock"), has been taken. This Agreement constitutes, and at the Closing, the Restated Certificate, the Voting Agreement and Investors'
Rights Agreement will constitute, valid and legally binding obligations of the Company, enforceable in accordance with their respective terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally, (ii) as limited by general principles of equity, including
concepts of materiality, reasonableness, good faith and fair dealing and by the possible unavailability of specific performance, injunctive relief or other equitable remedies and (iii) to the
extent the indemnification provisions contained in the Investors' Rights Agreement may be limited by applicable federal or state securities laws. 

        2.5    Valid Issuance of Preferred and Common Stock.    The Series C Preferred Stock being issued hereunder,
when issued, sold and delivered in accordance with the terms of this Agreement for the consideration expressed herein, will be duly and validly issued, fully paid and nonassessable and will be free of
restrictions on transfer other than restrictions on transfer under this 

3

 

Agreement,
the Investors' Rights Agreement and applicable state and federal securities laws. The Conversion Stock has been duly and validly reserved for issuance and, upon issuance in accordance with
the terms of the Restated Certificate, will be duly and validly issued, fully paid and nonassessable and will be free of restrictions on transfer other than restrictions under this Agreement, the
Investors' Rights Agreement, the Company's Bylaws and applicable state and federal securities laws. 

        2.6    Governmental Consents.    No consent, approval, order or authorization of, or registration, qualification,
designation, declaration or filing with, any federal, state or local governmental authority on the part of the Company is required in connection with the valid execution of this Agreement, the Voting
Agreement and the Investors' Rights Agreement and the consummation of the transactions contemplated by this Agreement, the Voting Agreement and the Investors' Rights Agreement except for filings
pursuant to applicable state and federal securities laws which will be made following the Initial Closing but in no event later than 15 days after the Initial Closing. 

        2.7    Offering.    Subject in part to the truth and accuracy of each Investor's representations set forth in  Section 3 of
this Agreement, the offer, sale and issuance of the Series C Preferred Stock and Conversion Stock as contemplated by this
Agreement are exempt from the registration requirements of the Act and will not result in the violation of the qualification or registration requirements of any applicable state securities laws
subject to filings pursuant to applicable federal and California securities laws that may be made following the Initial Closing. Neither the Company nor any authorized agent acting on its behalf will
take any action that would cause the loss of such exemptions. 

        2.8    Litigation.    There is no action, suit, proceeding or investigation pending or currently threatened against
the Company, or any of its officers, directors or stockholders, (or to the Company's knowledge, any basis therefor) that questions the validity of this Agreement, the Voting Agreement, the Investors'
Rights Agreement or the Restated Certificate, or the right of the Company to enter into such agreements, or to consummate the transactions contemplated hereby or thereby, or that might result, either
individually or in the aggregate, in (i) any material adverse change in the assets, properties, condition, affairs, business or prospects of the Company or the assets of any stockholder,
financially or otherwise, (ii) any liability on the part of the Company or its stockholders or (iii) any material adverse change in the current equity ownership of the Company. The
foregoing includes, without limitation, (i) actions, suits, proceedings or investigations (pending or threatened) involving the prior employment of any of the Company's employees,
(ii) the use, in connection with the Company's business, of any information or techniques allegedly proprietary to any of the former employers of the Company's employees, or
(iii) obligations of the Company's employees under any agreements with former employers. The Company is not a party or subject to the provisions of any order, writ, injunction, judgment or
decree of any court or government agency or instrumentality. There is no action, suit, proceeding or investigation by the Company currently pending or that the Company intends to initiate. 

        2.9    Compliance with Other Instruments.    The Company is not in violation or default of its Certificate of
Incorporation or Bylaws, or of any instrument, judgment, order, writ, decree, mortgage, agreement, statute or contract to which it is a party or by which it is bound, or of any provision of any
federal or state statute, rule or regulation applicable to the Company. The execution, delivery, compliance with and the performance of the Company's obligations under this Agreement, the Voting
Agreement, the Investors' Rights Agreement and the other agreements, documents and transactions contemplated hereby and thereby, will not and do not (A) materially violate or conflict with,
with or without the passage of time and giving of notice, (i) any provision of the Company's Certificate of Incorporation or Bylaws, (ii) any material instrument, judgment, order, writ,
decree, mortgage, contract or agreement to which the Company is a party or by which it is bound, or (iii) any provision of any federal or state statute, rule or regulation applicable to the 

4

 

Company,
the violation of which could reasonably be anticipated to have a material adverse affect on the Company or (B) result in the creation of any material lien, charge or encumbrance upon
any assets or properties of the Company or the suspension, revocation, impairment, forfeiture or non-renewal of any material permit, license, authorization or approval applicable to the
Company, its business or operations, any of its assets or properties, or any of its officers, directors or stockholders. 

        2.10    Intellectual Property.    

        (a)   The
Company has sufficient title or other sufficient right to use all patents, trademarks, service marks, trade names, copyrights, trade secrets, information,
proprietary rights and processes necessary for and currently used in its business as now conducted or proposed to be conducted. The Company's products do not infringe on any third party trademark,
service mark, trade name, copyright or any trade secret right or any issued and existing patents or other proprietary right. Except as set forth in
the Disclosure Schedule, there are no material outstanding options, licenses or agreements relating to the foregoing nor is the Company bound by or a party to any material options, licenses or
agreements with respect to the patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information, proprietary rights and processes of any other person or entity. For
purposes of this Section 2.10(a) only, any such option, license or agreement shall be deemed to be material only if it may involve
(i) obligations (contingent or otherwise) of, or payments to the Company, in excess of $50,000 or (ii) the incurring of any indebtedness for money borrowed or any other liabilities
individually in excess or $15,000 or in excess of $30,000 in the aggregate. The Company has not received any communications alleging that the Company has violated or, by conducting its business as
proposed, would violate any of the patents, trademarks, service marks, trade names, copyrights or trade secrets or other proprietary rights of any other person or entity. 

        (b)   Each
employee and officer of, and consultant to, the Company has executed an Inventions Assignment and Confidentiality Agreement or Consulting Agreement (containing an
inventions assignment and confidentiality agreement), as applicable, with the Company in the form made available to the Investors. The Company is not aware that any of its employees, officers or
consultants is in violation thereof. Each employee-inventor has assigned his or her rights to the Company on all inventions, pending patent applications and patents issued and other intellectual
property rights created or developed by such employee-inventor that are related to the business of the Company. To the extent that the Company has ever used consultants or independent contractors,
each consultant or independent contractor has assigned to the Company his or her rights in and to all material intellectual property rights relating to the Company's products or business. To the
Company's knowledge, none of the Company's employees is obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or subject to any judgment, decree
or order of any court or administrative agency, that would interfere with the use of his or her best efforts to promote the interests of the Company or that would conflict with the Company's business
as conducted or as proposed to be conducted or that would prevent any such service provider from assigning inventions to the Company. To its knowledge, the Company is not using any inventions of any
of its service providers or employees made prior to their employment by or relationship with the Company. Neither the execution nor delivery of this Agreement, the Investors' Rights Agreements and all
other agreements contemplated hereby or thereby, nor the carrying on of the Company's business as proposed, will, to the Company's knowledge, conflict with or result in a breach of the terms,
conditions or provisions of, or constitute a default under, any contract, covenant or instrument under which any of such employees is now obligated. 

        2.11    Registration Rights, Rights to Acquire Company Securities and Voting Obligations.    Except as set forth in
the Investors' Rights Agreement and the Disclosure Schedule, as of the Closing, the 

5

 

Company
shall not be under any contractual obligation to register any of its presently outstanding securities or any of its securities that may hereafter be issued. Except as set forth in this
Agreement and the Disclosure Schedule, there are no agreements, written or oral, between the Company and any of its stockholders or among any stockholders, relating to the acquisition or disposition
of the capital stock of the Company. Except as set forth in the Voting Agreement, to the Company's knowledge, no stockholder of the Company has entered into any agreements with respect to the voting
of capital shares of the Company. 

        2.12    Title to Property and Assets.    The Company owns its property and assets free and clear of all mortgages,
liens, loans and encumbrances, except such encumbrances and liens which arise in the ordinary course of business and do not materially impair the Company's ownership or use of such property or assets.
With respect to the property and assets it leases, the Company is in compliance with such leases and, to the best of its knowledge, holds a valid leasehold interest free of any liens, claims or
encumbrances. 

        2.13    Employees.    The employment of each officer and employee of the Company is terminable at will. The Company
does not have any collective bargaining agreements covering any of its employees. The Company is not aware of any key employee of the Company who has any plans to terminate his or her employment with
the Company nor does the Company have a present intention to terminate the employment of any employee. The Company has complied with all applicable state and federal equal employment opportunity and
other laws relating to employment. 

        2.14    Employee Benefit Plans.    Except for the JAMDAT Mobile Inc. 401(k) Plan and the Company's health plan,
the Company does not have or maintain any Employee Benefit Plans as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). Except for the Plan,
the Company does not have any deferred compensation, bonus, stock option, severance or other similar employee benefit plan. The Company does not maintain any plan subject to Title IV of ERISA or
Section 412 of the Code, and at no time has the Company maintained or contributed to any "Multiemployer Plan" described in Section 413 of ERISA. Each employee benefit plan has been
maintained and operated in all material respects in accordance with its terms and with applicable provisions of ERISA, the Code and all applicable rulings, regulations and authority issued thereunder
and all payments due to such plans have been made when due. No Employee Welfare Benefit Plan, as defined in Section 3(1) of ERISA, provides benefits with respect to current or former employees
of the Company beyond their retirement or other termination of service other than coverage mandated by applicable law. 

        2.15    Tax Returns and Payments.    The Company has timely filed all tax returns and reports as required by law.
These returns and reports are true and correct in all material respects. The Company has paid all taxes and other assessments due. The provision for taxes of the Company as shown in the Financial
Statements (as defined below) is adequate for taxes due or accrued as of the date thereof. The Company has not made any elections pursuant to the Internal Revenue Code of 1986 which would have a
material adverse effect on the Company, its financial condition, its business as presently conducted or any of its properties or material assets. 

        2.16    Permits.    The Company has all franchises, permits, licenses and any similar authority necessary for the
conduct of its business, and the lack of which could materially and adversely affect the business, properties, prospects, or financial condition of the Company. All of such franchises, permits,
licenses or other similar authority are in full force and effect. The Company is not in default in any material respect under any of such franchises, permits, licenses or other similar authority. 

        2.17    Environment and Safety Laws.    To the best of the Company's knowledge, the Company is not in violation of any
applicable statute, law or regulation relating to the environment or 

6

 

occupational
health and safety, the violation of which would materially adversely affect the Company, and to the best of the Company's knowledge, no material expenditures are or will be required in
order to comply with any such existing statute, law or regulation. 

        2.18    Corporate Documents.    The Bylaws and the Restated Certificate of the Company are in the form provided to
counsel for the Investors. The minute books of the Company contain minutes of all meetings of directors and stockholders and all actions by written consent without a meeting by the directors and
stockholders since the date of incorporation and accurately reflect all actions by the directors (and any committee of directors) and stockholders with respect to all transactions referred to in such
minutes in all material respects. 

        2.19    Foreign Corrupt Practices Act.    None of the activities or types of conduct below have been or may have been
engaged in by the Company, either directly or indirectly: 

        (a)   Any
bribes or kickbacks to government officials or their relatives, or any other payments to such persons, whether or not legal, to obtain or retain business or to
receive favorable treatment with regard to business; or 

        (b)   Any
bribes or kickbacks to persons other than government officials, or to relatives of such persons, or any other payments to such persons or their relatives, whether or
not legal, to obtain or retain business or to receive favorable treatment with regard to business; or 

        (c)   Any
illegal contributions made to any political party, political candidate or holder of governmental office; or 

        (d)   Any
bank accounts, funds or pools of funds created or maintained without being reflected on the corporate books of account, or as to which the receipts and disbursements
therefrom have not been reflected on such books; or 

        (e)   Any
receipts or disbursements, the actual nature of which has been "disguised" or intentionally misrecorded on the corporate books of account; or 

        (f)    Fees
paid to consultants or commercial agents which exceeded the reasonable value of the services purported to have been rendered; or 

        (g)   Any
payments or reimbursements made to personnel of the Company for the purposes of enabling them to expend time or to make contributions or payments of the kind or for
the purpose referred to in subparagraphs (a)-(f) above. The Company has not violated the United States Foreign Corrupt Practices Act or any other similar laws, statute, rule or regulation of any
country. 

        2.20    Insurance.    The Company maintains insurance policies, with extended coverage, in commercially reasonable
amounts (subject to reasonable deductibles) to allow it to replace any of its properties that might be damaged or destroyed. 

        2.21    Related Party Transactions.    Except as set forth on the Disclosure Schedule, no employee, officer, director
or stockholder of the Company or member of his or her immediate family is indebted to the Company, nor is the Company indebted (or committed to make loans or extend or guarantee credit) to any of
them. Except as set forth on the Disclosure Schedule, to the best of the Company's knowledge, none of such persons, other than the direct and indirect holders of the Founders' Stock, has any direct or
indirect ownership interest in any firm or corporation with which the Company is affiliated or with which the Company has a business relationship, or any firm or corporation that competes with the
Company, except that employees, officers, directors or stockholders of the Company and members of their immediate families may own stock in publicly traded companies that may compete with the Company.
No member of the immediate 

7

 

family
of any officer or director of the Company is directly or indirectly interested in any material contract with the Company. 

        2.22    Financial Statements; Material Liabilities.    The Company has delivered to the Investors true, correct and
complete copies of its balance sheet and income statement at and for the year ended December 31, 2001 (collectively, the "Financial Statements").
The Financial Statements fairly and accurately present the Company's financial position as of such date and the results of operations and changes in its financial position for such period ended.
Except as otherwise disclosed in the Financial Statements, the Company has no material liability or obligation, absolute or contingent (individually or in the aggregate), other than
(i) liabilities incurred after December 31, 2001, in the ordinary course of business, that are not material, individually or in the aggregate, and (ii) obligations under contracts
and commitments incurred in the ordinary course of business and that would not be required to be reflected in financial statements prepared in accordance with generally accepted accounting principles. 

        2.23    Absence of Changes.    Except as set forth in the Disclosure Schedule and as contemplated by this Agreement,
since December 31, 2001, (a) the Company has not entered into any transaction which was
not in the ordinary course of business, (b) there has been no adverse change in the condition (financial or otherwise) of the business, property, assets, liabilities or prospects of the Company
other than changes in the ordinary course of business, none of which, individually or in the aggregate, has been materially adverse, (c) there has been no damage to, destruction of or loss of
physical property (whether or not covered by insurance) adversely affecting the assets, financial condition, operating results, business or operations of the Company, (d) the Company has not
declared or paid any dividend or made any distribution on its capital stock, or redeemed, purchased or otherwise acquired any of its capital stock, (e) the Company has not, other than the
declaration or payment of bonuses to the Company's executive officers, changed any compensation arrangement or agreement with any of its key employees or officers, or changed the rate of pay of its
employees as a group, (f) the Company has not changed or amended any material contract by which the Company or any of its assets is bound or subject, (g) there has been no resignation or
termination of employment of any key officer or service provider of the Company and the Company does not know of any impending resignation or termination of employment of any such officer or service
provider that if consummated would have an adverse effect on the business of the Company, (h) there has been no other event or condition of any character pertaining to and materially adversely
affecting the assets or business prospects of the Company. 

        2.24    Agreements; Action.    

        (a)   Except
as set forth in the Disclosure Schedule and for agreements contemplated hereby and by the Investors' Rights Agreement, there are no material agreements between
the Company and any of its officers, directors, affiliates or any affiliate thereof. 

        (b)   Except
as set forth herein, in the Disclosure Schedule or as explicitly contemplated hereby and by the Investors' Rights Agreement, there are no agreements,
understandings, instruments, contracts, proposed transactions, judgments, orders, writs or decrees to which the Company is a party or by which it is bound that may involve (i) obligations
(contingent or otherwise) of, or payments to the Company in excess of $50,000 or (ii) the license of any patent, copyright, trade secret or other proprietary right to or from the Company,
except for off-the-shelf software, or (iii) provisions restricting the development, manufacture or distribution of the Company's products or services. 

        (c)   Except
as set forth in the Disclosure Schedule, the Company has not (i) declared or paid any dividends or authorized or made any distribution upon or with respect
to any class or series of its capital stock, (ii) incurred any indebtedness for money borrowed or any other liabilities 

8

 

individually
in excess of $15,000 or in excess of $30,000 in the aggregate, (iii) made any loans or advances to any person, other than ordinary advances for travel expenses, or
(iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. 

        (d)   For
the purposes of subsections (a) and (b) above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed
transactions involving the same person or entity (including persons or entities the Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the
individual minimum dollar amounts of such subsections. 

        (e)   The
Company is not a party to and is not bound by any contract, agreement or instrument, or subject to any restriction under its Restated Certificate or Bylaws, that
materially adversely affects its business as now conducted, its properties or its financial condition. 

        2.25    Qualified Small Business.    The Company represents and warrants to the Investors that as of the date of the
Closing, the Company is a "qualified small business" within the meaning of Section 1202(d) of the Internal Revenue Code of 1986, as amended (the
"Code") as of the date hereof and the shares of Series C Preferred Stock sold hereunder should qualify as "qualified small business stock" as
defined in Section 1202(c) of the Code as of the date hereof. The Company further represents and warrants that, as of the date hereof, it meets the "active business requirement" of
Section 1202(e) of the Code, and it has made no "significant redemptions" within the meaning of Section 1202(c)(3)(B) of the Code. 

        3.    Representations and Warranties of the Investors.    Each Investor hereby severally and not jointly represents
and warrants to the Company that the following statements are true and correct as of the date hereof: 

        3.1    Authorization.    Such Investor has full power and authority to enter into this Agreement and the Investors'
Rights Agreement and this Agreement constitutes, and at the Closing, the Investors' Rights Agreement will constitute, valid and legally binding obligations of such Investor, enforceable in accordance
with their respective terms, except (i) as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of
creditors rights generally, (ii) as limited by general principles of equity including concepts of materiality, reasonableness, good faith and fair dealing and by the possible unavailability of
specific performance, injunctive relief or other equitable remedies, and (iii) to the extent the indemnification provisions contained in the Investors' Rights Agreement may be limited by
applicable federal or state securities laws. 

        3.2    Purchase for Own Account.    The securities to be purchased by such Investor hereunder are being acquired for
investment for such Investor's own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof. Such Investor has no present intention of selling,
granting any participation in, or otherwise distributing such securities. Such Investor does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person with respect to such securities, provided that the disposition by such Investor of its property
shall at all times be within its control. To the extent such Investor is a legal entity, such Investor has not been organized for the purpose of acquiring the securities to be purchased hereunder. 

        3.3    Disclosure of Information.    Such Investor has received all the information such Investor considers necessary
or appropriate for deciding whether to purchase the securities to be purchased hereunder. Such Investor has had an opportunity to ask questions and receive answers from the Company regarding the terms
and conditions of the offering of such securities and the business, properties, prospects and financial condition of the Company. 

9

 

        3.4    Investment Experience.    Such Investor is an investor in securities of companies in the development stage, is
able to bear the economic risk of this investment and has such knowledge and experience in financial and business matters that such Investor is capable of evaluating the merits and risks of the
investment in the securities to be purchased hereunder. If other than an individual, such Investor also represents it has not been organized for the purpose of acquiring the securities to be purchased
hereunder. 

        3.5    Accredited Investor.    Such Investor is an "accredited investor" within the meaning of Rule 501 of
Regulation D promulgated under the Act, as presently in effect. 

        3.6    Restricted Securities.    Such Investor understands that the securities to be purchased are characterized as
"restricted securities" under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable
regulations such securities may be resold without registration under the Act only in certain limited circumstances. Such Investor has been advised or is aware of the provisions of Rule 144
promulgated under the Act as presently in effect and understands the resale limitations imposed thereby and by the Act. 

        3.7    Legends.    Each Investor understands that the certificates evidencing the securities to be purchased hereunder
shall have endorsed upon them a legend substantially as follows: 

"THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED EXCEPT IN COMPLIANCE WITH SUCH
ACT AND ALL APPLICABLE SECURITIES LAWS." 

        4.    Conditions to Investors' Obligations at Closing.    

        4.1    Closing Conditions.    The obligations of each Investor to participate in the Closing are subject to the
fulfillment on or before the Closing of each of the following conditions (or waiver by such Investor of any condition that is not so fulfilled): 

        (a)    Representations and Warranties.    The representations and warranties of the Company contained in  Section 2 hereof
shall be true and correct on and as of the Closing with the same effect as though such representations and warranties had been
made on and as of the date of the Closing. 

        (b)    Performance.    The Company shall have performed and complied with all agreements, obligations and conditions
contained in this Agreement that are required to be performed or complied with by it on or before the Closing. Without limiting the generality of the foregoing, the Company shall have filed the
Restated Certificate with the Secretary of State of the State of Delaware as required by Section 1.1. 

        (c)    Compliance Certificate.    The Company shall deliver to the Investors a certificate signed by an officer of the
Company stating that the conditions specified in the foregoing Sections 4.1(a) and 4.1(b) have been
fulfilled. 

        (d)    Proceedings and Documents.    All corporate and other proceedings in connection with the transactions
contemplated at the Closing and all documents incident thereto shall be reasonably satisfactory in form and substance to the Investors and they shall have received all such counterpart original and
certified or other copies of such documents as they may reasonably request. 

        (e)    Investors' Rights Agreement.    The Company and each Investor shall have executed and delivered the Investors'
Rights Agreement in substantially the form attached hereto as Exhibit C. 

10

 

        (f)    Opinion of Company Counsel.    The Investors shall have received from Sheppard, Mullin, Richter &
Hampton LLP, counsel to the Company, an opinion dated as of the Closing in the form attached as Exhibit D. 

        (g)    Delivery of Certificates.    The Investors shall have received the stock certificates representing the shares
of Series C Preferred Stock to be purchased at the Closing. 

        (h)    Qualifications.    All authorizations, approvals or permits, if any, of any governmental authority or
regulatory body of the United States or of any state that are required in connection with the lawful issuance and sale of the securities pursuant to this Agreement shall be duly obtained and effective
as of the Closing. 

        (i)    Board of Directors.    The Company shall have taken all necessary corporate action such that immediately
following the Closing, the directors of the Company shall be Mitch Lasky (nominated by the holders of Common Stock), Neeraj Bharadwaj (nominated by the holders of Founders' Stock), Paul Vais
(nominated by the holders of the Series B Preferred Stock), Sangam Pant (nominated by the unanimous consent of the other four directors) and a director to be appointed by the holders of the
Series C Preferred Stock. 

        (j)    Proceedings and Documents.    All corporate and other proceedings in connection with the transactions
contemplated at the Closing and all documents incident thereto shall be reasonably satisfactory in form and substance to the Investors, and each Investor shall have received all counterpart originals
and certified or other copies of such documents as it may reasonably request. Such documents shall include (but not be limited to) the following: 

        (i)    Certified Charter Documents.    A copy of the Restated Certificate and the Bylaws of the Company (as amended
through the date of the Closing), certified by the Secretary of the Company as true and correct copies thereof as of the Closing. 

        (ii)   Secretary's Incumbency Certificate.    A certificate of the Secretary or other officer of the Company
certifying the names of the officers of the company authorized to sign this Agreement, the certificates for the Series C Preferred Stock and the other documents, instruments or certificates to
be delivered pursuant to this Agreement by the Company or any of its officers, together with the true signatures of such officers. 

        (iii)  Corporate Actions.    A copy of the resolutions of the Board of Directors and, if required, the stockholders
of the Company approving the Restated Certificate, this Agreement, the Voting Agreement, the Investors' Rights Agreement and the other matters contemplated hereby, certified by the Secretary of the
Company to be true, complete and correct. 

        (iv)  Good Standing Certificates.    Good standing certificates and applicable tax certificates issued by the
Delaware Secretary of State and California Secretary of State dated within 10 days of the Closing with applicable "bring-down" certificates dated as of the date hereof. 

        5.    Conditions to the Company's Obligations at Closing.    

        5.1    Closing Conditions.    The obligations of the Company under this Agreement are subject to the fulfillment on or
before Closing, of each of the following conditions by each Investor (or the waiver by the Company of any condition that is not so fulfilled): 

        (a)    Representations and Warranties.    The representations and warranties of each Investor contained in  Section 3 shall be
true and correct at the Closing with the same effect as though such representations and warranties had been made on and as of
the Closing. 

11

 

        (b)    Payment of Purchase Price.    Each Investor shall have delivered the applicable purchase price for the
securities to be purchased by such Investor at the Closing. 

        (c)    Investors' Rights Agreement.    The Company and each Investor shall have executed and delivered the Investors'
Rights Agreement in substantially the form attached hereto as Exhibit C. 

        (d)    Escrow Agreement.    The Company and each Patriciof Investor shall have executed and delivered the Escrow
Agreement in substantially the form attached hereto as Exhibit B. 

        (e)    Qualifications.    All authorizations, approvals or permits, if any, of any governmental authority or
regulatory body of the United States or of any state that are required in connection with the lawful issuance and sale of the Series C Preferred Stock pursuant to this Agreement shall be duly
obtained and effective as of the Closing. 

        6.    Miscellaneous.    

        6.1    Notice of Breaches; Updating of Schedules.    From and after the date of this Agreement and through the
Closing, each party shall notify the other party of (i) any material changes that may be required to the representations and warranties contained herein (including any required changes in the
Schedules attached hereto) to make such representations and warranties true and correct in light of any change in fact or circumstances and (ii) any breaches of any such representations or
warranties. Provision of notice shall not, however, limit any party's liability for any breach of any warranty nor shall such amendment or correction to any representation or warranty have the effect
of amending such representation or warranty for the purposes of satisfying the Closing condition set forth in Section 4.1(a); provided, however,
that if the Investors elect to proceed with the Closing having received notice of any such amendment or correction of any such representation or warranty, such representation or warranty shall
be deemed to be so amended or corrected concurrently with the Closing for the purposes of any subsequent claims based on the alleged breach of such representation or warranty. 

        6.2    Successors and Assigns.    Except as otherwise provided herein, the terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective successors and permitted assigns of the parties. The Investors may assign some or all of the rights hereunder,  provided, however, that
any such assignment shall not release the Investor from its obligations hereunder unless such obligations are assumed by such
assignee and the Company has consented to such assignment and assumption. The Company may not assign its rights, obligations or liabilities under this Agreement without the written consent of the
holders of a majority of the outstanding Series C Preferred Stock. 

        6.3    No Third Party Beneficiaries.    Nothing in this Agreement, express or implied, is intended to confer upon any
party, other than the parties hereto or their respective successors and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly
provided in this Agreement. 

        6.4    Governing Law.    This Agreement is to be construed in accordance with and governed by the internal laws of the
State of California (as permitted by Section 1646.5 of the California Civil Code (or any similar such provision)) without giving effect to any choice of law rule that would cause the
application of the laws of any jurisdiction other than the internal laws of the State of California to the rights and duties of the parties. 

        6.5    Counterparts; Facsimile Signatures.    This Agreement may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the 

12

 

same
agreement. Any signature page delivered by facsimile or telecopy machine shall be binding to the same extent as an original. 

        6.6    Titles and Subtitles.    The titles and subtitles used in this Agreement are used for convenience only and are
not to be considered in construing or interpreting this Agreement. 

        6.7    Notices.    Any notice under this Agreement shall be in writing and any written notice or other document shall
be deemed to have been given: (i) on the date of personal service of the parties, (ii) on the third business day after mailing, if the document is mailed by registered mail,
(iii) one day after being sent by professional or overnight courier, or (iv) on the date of transmission if sent by telecopy or other means of electronic transmission, with receipt
confirmed. Any such notice shall be delivered or addressed to the Company at the address set forth below or at the most recent address specified by the
addressee through written notice under this provision. Failure to conform to the requirements of this section shall not defeat the effectiveness of notice actually received by the addressee. 

If
to the Company: 

JAMDAT
Mobile Inc.

3415 S. Sepulveda Blvd., Suite 500

Los Angeles, California 90034

Facsimile: (310) 636-3103

Attn: Craig S. Gatarz, Esq.

Chief Operating Officer and General Counsel 

with
a copy to: 

Sheppard,
Mullin, Richter & Hampton LLP

800 Anacapa Street

Santa Barbara, California 93101

Facsimile: (805) 568-1955

Attn: C. Thomas Hopkins, Esq. 

If
to an Investor: 

At
the address set forth under each such Investor's name on Schedule 1 hereto. 

        6.8    Finder's Fee.    Each party represents that it neither is nor will be obligated for any finder's fee or
commission in connection with this transaction. Each Investor agrees to indemnify and to hold harmless the Company from any liability for any commission or compensation in the nature of a finder's fee
(and the costs and expenses of defending against such liability or asserted liability) for which such Investor or any of its officers, partners, employees or representatives is responsible. The
Company agrees to indemnify and hold harmless each Investor from any liability for any commission or compensation in the nature of a finder's fee (and the costs and expenses of defending against such
liability or asserted liability) for which the Company or any of its officers, employees or representatives is responsible. 

        6.9    Expenses; Attorneys' Fees.    Each party shall pay its own costs and expenses with respect to the negotiation,
execution, delivery and performance of this Agreement. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the Investors' Rights Agreement, the Restated
Certificate, or any other agreement or document contemplated hereby or thereby, the prevailing party shall be entitled to reasonable attorneys' fees, costs and necessary disbursements in addition to
any other relief to which such party is entitled. 

        6.10    Amendments.    This Agreement may be amended only with the written consent of the Company and the holders of a
majority of the voting power of the Series C Preferred Stock then 

13

 

outstanding,
treated as a single class. Any amendment effected in accordance with this Section shall be binding upon each holder of any securities purchased under this Agreement at the time
outstanding (including securities into which such securities are convertible), each future holder of all such securities and the Company. 

        6.11    Severability.    If one or more provisions of this Agreement are held to be unenforceable under applicable
law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its
terms. 

        6.12    Entire Agreement.    This Agreement and the other agreements and documents referred to herein (including the
Exhibits and Schedules hereto) constitute the entire agreement among the parties with respect to the subject matter hereof and no party shall be liable or bound to any other party in any manner with
respect to the subject matter hereof by any representations, warranties or covenants except as specifically set forth herein or therein. 

14

 

        IN
WITNESS WHEREOF, the parties hereto have caused this Series C Preferred Stock Purchase Agreement to be duly executed as of the date first above written. 

	 	 	COMPANY:
	

 	
 	
JAMDAT MOBILE INC.,

a Delaware corporation
	

 	
 	

By:	

/s/ MITCH LASKY
 Mitch Lasky
 Chief Executive Officer

[SIGNATURE PAGE TO JAMDAT MOBILE INC.

SERIES C STOCK PURCHASE AGREEMENT]  

15

 

	 	 	INVESTORS:
	

 	
 	

QUALCOMM INCORPORATED
	

 	
 	

By:	
 	

/s/ TONY THOMLEY

	 	 	Name:	 	Tony Thomley
	 	 	Title:	 	President and COO
	

 	
 	
Address:

5775 Morehouse Drive

San Diego, CA 92121
	

 	
 	

INTEL CAPITAL CORPORATION
	

 	
 	

By:	
 	

/s/ NOEL LAZO

	 	 	Name:	 	Noel Lazo
	 	 	Title:	 	Assistant Treasurer
	

 	
 	
Address:

Intel Capital Corporation

c/o Intel Corporation

Attn: Intel Capital Portfolio Manager

2200 Mission College Blvd., M/S RN6-46

Santa Clara, CA 95052

Facsimile: (408) 765-6038
	

 	
 	

With a copy by email to:

portfolio.manager@intel.com

16

 

	 	 	SUN MICROSYSTEMS, INC.
	

 	
 	

By:	
 	

/s/ BRIAN SUTPHIN

	 	 	Name:	 	Brian Sutphin
	 	 	Title:	 	VP, Corporate Strategy and Development
	

 	
 	
Address:

Brian Sutphin

VP, Corporate Strategy and Development

Sun Microsystems, Inc.

4120 Network Circle

MS: SCA12-302

Santa Clara, CA 95054

Phone: (650) 960-1300

Fax: (408) 276-4202

Email: brian.sutphin@sun.com
	

 	
 	

With a copy to:
	

 	
 	

Don Scully, CB1S

The Northern Trust Company

Re: Sun Microsystems, Inc.

801 S. Canal Street

Chicago, IL 60607

Phone: (312) 557-6309

Fax: (312) 557-6502

Email: ds71@ntrs.com

17

 

	 	 	APAX EXCELSIOR VI, L.P.
	

 	
 	

By:	
 	

Apax Excelsior VI Partners, L.P.

Its General Partner
	 	 	By:	 	Patricof & Co. Managers, Inc.

Its General Partner
	

 	
 	

By:	
 	

/s/ PAUL VAIS

	 	 	Name:	 	 
	 	 	Title:	 	 
	

 	
 	
Address:

445 Park Avenue

New York, NY 10022
	

 	
 	

APAX EXCELSIOR VI-A C.V. L.P.
	

 	
 	

By:	
 	

Apax Excelsior VI Partners, L.P.

Its General Partner
	 	 	By:	 	Patricof & Co. Managers, Inc.

Its General Partner
	

 	
 	

By:	
 	

/s/ PAUL VAIS

	 	 	Name:	 	 
	 	 	Title:	 	 
	

 	
 	
Address:

445 Park Avenue

New York, NY 10022

18

 

	 	 	APAX EXCELSIOR VI-B C.V. L.P.
	

 	
 	

By:	
 	

Apax Excelsior VI Partners, L.P.

Its General Partner
	 	 	By:	 	Patricof & Co. Managers, Inc.

Its General Partner
	

 	
 	

By:	
 	

/s/ PAUL VAIS

	 	 	Name:	 	 
	 	 	Title:	 	 
	

 	
 	
Address:

445 Park Avenue

New York, NY 10022
	

 	
 	

PATRICOF PRIVATE INVESTMENT CLUB III, L.P.
	

 	
 	

By:	
 	

Apax Excelsior VI Partners, L.P.

Its General Partner
	 	 	By:	 	Patricof & Co. Managers, Inc.

Its General Partner
	

 	
 	

By:	
 	

/s/ PAUL VAIS

	 	 	Name:	 	 
	 	 	Title:	 	 
	

 	
 	
Address:

445 Park Avenue

New York, NY 10022

19

 

	 	 	SHEPPARD, MULLIN, RICHTER & HAMPTON, LLP
	

 	
 	

By:	
 	

/s/  JAMES J. SLABY      

	 	 	Name:	 	James J. Slaby
	 	 	Title:	 	Partner
	

 	
 	
Address:

333 S. Hope Street, 48th Floor

Los Angeles, CA 90071
	

 	
 	

HOPKINS-KANEOKA FAMILY TRUST,

U/T/D JULY 2, 2002
	

 	
 	

By:	
 	

/s/ C. THOMAS HOPKINS

	 	 	Name:	 	C. Thomas Hopkins
	 	 	Title:	 	Trustee
	

 	
 	
Address:

800 Anacapa Street

Santa Barbara, CA 93101

20

 
 

SCHEDULE 1    
    
    INVESTORS    
    

	Investor
 
	 	Total Number of Shares of Series C Preferred Stock
	 	Total Dollar Commitment for Shares of Series C Preferred Stock

	QUALCOMM Incorporated	 	4,629,630	 	$	5,000,000.40
	Intel Capital Corporation	 	667,023	 	$	720,384.84
	Sun Microsystems, Inc.	 	667,023	 	$	720,384.84
	Apax Excelsior VI, L.P.	 	569,504	 	$	615,064.32
	Apax Excelsior VI-A C.V. L.P.	 	46,558	 	$	50,282.64
	Apax Excelsior VI-B C.V. L.P.	 	31,017	 	$	33,498.36
	Patricof Private Investment Club III, L.P.	 	19,944	 	$	21,539.52
	Sheppard, Mullin, Richter & Hampton, LLP	 	92,592	 	$	99,999.36
	Hopkins-Kaneoka Family Trust, u/t/d July 2, 2002	 	23,150	 	$	25,002.00
	 	 	
	 	

	Sub Total:	 	6,746,441	 	$	7,286,156.28
	 	 	
	 	

	Escrowed Funds	 	660,967	 	$	713,844.36
	 	 	
	 	

	Total	 	7,407,408	 	$	8,000,000.64

[SCHEDULE 1 TO JAMDAT MOBILE INC.

SERIES C STOCK PURCHASE AGREEMENT]  

  
 

    SCHEDULE 2    
    
    DISCLOSURE SCHEDULE    
    

        2.2    Option/Warrant Grants.    

	Name of Optionee/Warrant Holder
 
	 	Number of Shares

	Nida & Maloney, LLP (prior counsel to the Company) (No. 1)	 	12,000
	Electronic Arts, Inc. (No. 3)	 	1,000,000
	Activision Publishing, Inc. (No. 4)	 	400,000
	Yan Qui (expired on 6/30/02)	 	12,000
	Silicon Valley Bank (No. 2)	 	26,000

 Preemptive Rights.  

        Pursuant to that certain Preemptive Rights Agreement, dated August 18, 2000 and entered into by and between the Company, eCompanies Wireless Enterprises
LLC ("eCompanies") and Sprint eWireless, Inc. ("Sprint") (the "Preemptive
Rights Agreement"), eCompanies (and its successors or permitted assigns) holds a preemptive right to purchase its pro-rata share, as determined on a fully diluted
and as-converted basis, of equity securities issued by the Company as part of an equity financing transaction. 

        Pursuant
to the Preemptive Rights Agreement, Sprint has the right, to the extent that eCompanies waives or does not fully exercise its preemptive right under the same agreement, to
purchase the remaining portion, if any, of the shares subject to eCompanies' preemptive right, provided that the number of shares which Sprint may
purchase shall be limited to such number of shares that corresponds on a pro-rata basis, to Sprint's then current aggregate direct and indirect fully diluted ownership position held in
eCompanies. 

        2.10    Intellectual Property    

        See
Section 2.24 of this Disclosure Schedule. 

        2.11    Rights to Acquire Company Securities and Registration Rights.    

        The
following instruments or agreements contain provisions pursuant to which the Company has granted registration rights with respect to the Company's securities: 

	1.
	Nida &
Maloney Warrant

	2.
	Silicon
Valley Bank Warrant

	3.
	Activision
Publishing, Inc. Warrant 

        The
following instruments or agreements contain provisions pursuant to which the Company has granted rights to acquire the Company's securities: 

	1.
	Activision
Publishing, Inc. Warrant

	2.
	Nida &
Maloney Warrant

	3.
	Silicon
Valley Bank Warrant

	4.
	Yan
Qui Warrant (expired on 6/30/02)

	5.
	Electronic
Arts, Inc. Warrant

	6.
	Investors'
Rights Agreement, dated as of February 26, 2001, as amended. (Series B).

	7.
	Amended
and Restated Investors' Rights Agreement, dated as of August 30, 2002. (Series C).

	8.
	See
discussion of Preemptive Rights in Section 2.2 of this Disclosure Schedule 
[SCHEDULE 2 TO JAMDAT MOBILE INC.

SERIES C STOCK PURCHASE AGREEMENT]  

        2.13    See Schedule 2.23 regarding Shumeet
Baluja.    

        2.21    Related Party Transactions.    

        The
Company has loaned to certain of its officers 90% of the purchase price required to be paid by such officers in connection with certain restricted stock grants. The employee name,
restricted stock grant amount and loan amount are as follows: 

	Name
 
	 	Shares Granted
	 	Loan Amount

	Mitch Lasky, Chief Executive Officer	 	2,543,000	 	87,120
	Scott Lahman, President, JAMDAT Studios	 	550,000	 	30,600
	Zachary Norman, VP-Creative	 	370,000	 	13,743
	Austin Murray, VP-Business Development	 	370,000	 	13,770
	Navid Ghiami, VP-Engineering	 	333,000	 	10,773
	Michael Marchetti, CFO	 	800,000	 	35,100
	Craig Gatarz, COO and General Counsel	 	333,000	 	13,473
	Eric Wilson, VP-Platform Engineering	 	85,000	 	2,835
	Benjamin Jones, VP-Corporate Services Sales	 	150,000	 	6,750
	Thomas Ellsworth, EVP, Corp Development and Marketing	 	225,000	 	18,225
	Minard Hamilton	 	225,000	 	18,225

        The
total indebtedness to the Company in connection with these notes is $250,614. A copy of the form of promissory note has been made available to the Investors. 

        The
notes (a) bear interest at a variable rate equal to the minimum sufficient stated rate allowable under Proposed Treasury Regulations Sections 1.7872-3(b) and
1.7872-3(c) or any successor regulations to such sections, (b) are secured by the restricted stock purchased by such officer, (c) are recourse up to fifty percent (50%) of
the outstanding principal amount of the note and (d) are due and payable upon the earlier of (i) the fifth anniversary of the date of the note or (ii) on such date as the officer
is no longer providing services to the Company or an affiliate thereof. 

        One
or more officers or directors of the Company may hold stock or other equity interests in one or more affiliates of the Company, including without limitation, eCompanies Wireless LLC,
eCompanies LLC or any of their respective portfolio companies, arising out of such directors' or officers' prior or continuing employment with one or more of these affiliated entities. 

        By
agreement dated as of August 19, 2002, the Company repurchased 683,583 shares of unvested common stock from Shumeet Baluja by canceling two promissory notes that Baluja made in
favor of the Company, one in the principal amount of $24,300.00 and the other in the principal amount of $9,538.00. 

        2.23    Changes.    

        (a)   On
August 15, 2002, the Company entered into a Letter of Intent to acquire a wireless multiplayer gaming technology (the "Technology") from DemiVision, LLC,
located in Huntington Beach, CA. In consideration for the Technology, the Company will pay $155,000 in cash and grant an option to purchase 175,000 shares of the Company's common stock at an exercise
price of $.11 per share or such other amount as may be fixed by the Company's board of directors. The option shall become fully exercisable in six months under certain conditions. In addition,
DemiVision's founder and two other DemiVision employees will be joining the Company as employees; these new employees will spearhead the integration of the Technology with the Company's existing
technology offerings. The closing of the transaction to acquire the Technology is contingent upon the consummation of the transactions contemplated by this Agreement. 

        (e);(g)    Shumeet
Baluja, the Company's Chief Technology Officer, began a Company-approved leave of absence on March 1, 2002 for personal family reasons. During his
leave, he continued to work with the Company from Virginia. As of May 1, 2002, Mr. Baluja's annual base salary was reduced to 

$42,000
and the vesting on his restricted stock was suspended, all pending his return to the Company.    As of August 16, 2002, the Company terminated Mr. Baluja. By
agreement dated as of August 19, 2002, the Company repurchased 683,583 shares of unvested common stock from Mr. Baluja. These shares will be returned to the employee option pool. 

        2.24    Agreements; Actions.    

(a)    1.    Wireless
Internet Service Agreement by and between Sprint Spectrum L.P. and JAMDAT Mobile Inc., dated October 20, 2000 (WAP). 

        2.     Wireless
Internet Service Agreement by and between Sprint Spectrum L.P. and JAMDAT Mobile Inc., dated May 17, 2002 (J2ME). 

        3.     Professional
Services Agreement by and between Sprint Spectrum, L.P. and JAMDAT Mobile Inc., dated April 30, 2002 (Sprint Launch). 

        4.     The
Company's officers and directors may be party to the following agreements with the Company: (i) Restricted Stock Grant Agreements; or (ii) Stock Option
Agreements, in each case related to compensation for services rendered to the Company by such officer or director. See also Section 2.21 of this Disclosure Schedule. 

(b)(i) 1.    Wireless
Internet Service Agreement by and between Sprint Spectrum L.P. and JAMDAT Mobile Inc., dated May 17, 2002 (J2ME). 

        2.     Professional
Services Agreement by and between Sprint Spectrum, L.P. and JAMDAT Mobile Inc., dated April 30, 2002 (Sprint Launch). 

        3.     BREW
Publisher Agreement, by and between Qualcomm Incorporated and JAMDAT Mobile Inc., dated November 12, 2001. 

        4.     Support
and Services Agreement by and between Cybird Co., Ltd. and JAMDAT Mobile Inc., dated February 6, 2002 (Japan Distribution). 

        5.     License
Agreement by and between M-Dream Co., Ltd. and JAMDAT Mobile Inc., dated March 1, 2002 (Korea Distribution). 

        6.     Software
Distribution Agreement by and between Motorola, Inc. and JAMDAT Mobile Inc., dated April 26, 2002 (Motorola/Nextel Distribution). 

        7.     BREW
Application License by and between Cellco Partnership d/b/a Verizon Wireless and JAMDAT Mobile Inc. (Verizon Brew Agreement). 

        8.     AT&T
Master Agreement by and between AT&T Corp. and JAMDAT Mobile Inc., dated September 4, 2001 (Hosting Services). 

        9.     Engagement
Agreement by and between Burson-Marsteller and JAMDAT Mobile Inc., dated November 20, 2001 (Public Relations). 

        10.   Support
Agreement by and between Data Systems Worldwide and JAMDAT Mobile Inc., dated July 9, 2001 (Computer Equipment and Services). 

        11.   Sublease
by and among Spieker Properties, L.P., iFilm Corp. and JAMDAT Mobile Inc., dated March 14, 2001 (Office Sublease). 

        12.   Purchase
Order by and between Oracle Corporation and JAMDAT Mobile Inc., dated May 25, 2001(and additional supporting documentation) (Database Software and
Licensing). 

        13.   eEnterprise
License Agreement by and between Great Plains Software O.C. and JAMDAT Mobile Inc., dated May 31, 2001 (Accounting Software). 

        14.   Development
Agreement by and between BLAM! and JAMDAT Mobile Inc., dated July 20, 2001 (Third Party Developer). 

        15.   Development
Agreement by and between Hypnos Entertainment, Inc. and JAMDAT Mobile Inc., dated July 18, 2001 (Third Party Developer). 

        16.   Development
Agreement by and between Mascon Information Technologies and JAMDAT Mobile Inc., dated May 31, 2001 (Third Party Developer). 

        17.   Development
Agreement by and between Mark Phoenix d/b/a Phoenix Soft Entertainment and JAMDAT Mobile Inc., dated September 27, 2001 (Third Party
Developer). 

        18.   Development
Agreement by and between Sennari Interactive, Inc. and JAMDAT Mobile Inc., dated June 29, 2001 [sic] (Third
Party Developer). 

        19.   Software
License Agreement by and between Alltel Communications, Inc. and JAMDAT Mobile Inc., dated June 26, 2002 (Alltel BREW Agreement). 

        20.   Software
License Agreement by and between United States Cellular Corporation and JAMDAT Mobile Inc., dated as of July 17, 2002 (USCC BREW Agreement). 

        21.   Letter
of Intent to acquire wireless multiplayer gaming platform technology from DemiVision, LLC, dated August 15, 2002. See  Section 2.23(a) of this Disclosure Schedule. 

        22.   The
Company has entered into various software development agreements with certain other third party developers, which do not individually, but may in the aggregate,
involve obligations (contingent or otherwise) of, or payments to the Company, in excess of $50,000. 

(b)(ii) 1.    Wireless
Game Development and Distribution Agreement by and between Electronic Arts, Inc. and JAMDAT Mobile Inc., dated September 13, 2001. 

        2.     License
Agreements by and between Activision Publishing, Inc. and JAMDAT Mobile Inc. dated March 1, 2002 and July 3, 2002, respectively. 

        3.     License
Agreement by and between Infogrames Interactive Inc. and JAMDAT Mobile Inc. 

        4.     Wireless
Development and Distribution Agreement by and between PopCap Games Inc. and JAMDAT Mobile Inc., dated August 16, 2001. 

        5.     Wireless
Development and Distribution Agreement by and between Steven Seagal and JAMDAT Mobile Inc., dated September 19, 2001. 

        6.     License
Agreement by and between M-Dream Co. Ltd. and JAMDAT Mobile Inc., dated July 1, 2002 (North American Distribution of
M-Dream Content). 

(c)(ii) Loan
and Security Agreement by and between Silicon Valley Bank and JAMDAT Mobile Inc., dated as of July 13, 2001 for $400,000 equipment financing line of credit. 

(c)(iii) See  Section 2.21 of this Disclosure Schedule. 

QuickLinks

JAMDAT MOBILE INC. SERIES C PREFERRED STOCK PURCHASE AGREEMENT August 30, 2002

TABLE OF CONTENTS

List of Schedules

List of Exhibits

SERIES C PREFERRED STOCK PURCHASE AGREEMENT

SCHEDULE 1 INVESTORS

SCHEDULE 2 DISCLOSURE SCHEDULE

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