Document:

Exhibit 4.4

 

WARRANT
TO PURCHASE STOCK

 

THIS WARRANT AND THE SHARES
ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AND
PURSUANT TO THE PROVISIONS OF ARTICLE 5 BELOW, MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED
UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAW OR, IN THE OPINION OF LEGAL
COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER,
PLEDGE OR HYPOTHECATION IS EXEMPT FROM REGISTRATION.

 

	
  Company:

  	
  GameFly, Inc.

  
	
  Number of
  Shares:

  	
  60,000

  
	
  Class of
  Stock:

  	
  Series B
  Preferred

  
	
  Warrant
  Price:

  	
  $1.25 per
  share

  
	
  Issue Date:

  	
  September 3,
  2003

  
	
  Expiration
  Date:

  	
  The later to
  occur of (A) September 3, 2013 or (B) five (5) years
  after the closing of the initial public offering of the common stock of
  GameFly, Inc. (the “IPO”) effected pursuant to a Registration Statement
  on Form S-1 (or its successor) filed under the Securities Act of 1933,
  as amended (the “1933 Act”).

  

 

THIS WARRANT
CERTIFIES THAT, for the agreed upon value of $1.00 and for other good and
valuable consideration, SILICON VALLEY BANK (“Holder”) is entitled to purchase
the number of fully paid and nonassessable shares of the class of securities
(the “Shares”) of the. company (the
“Company”) at the Warrant Price, all as set forth above and as adjusted
pursuant to Article 2 of this Warrant, subject to the provisions and upon
the terms and conditions set forth in this Warrant.

 

ARTICLE 1. EXERCISE.

 

1.1                       Method of Exercise. Holder may exercise this Warrant by
delivering a duly executed Notice of Exercise in substantially the form
attached as Appendix 1 to the principal office of the Company. Unless Holder is
exercising the conversion right set forth in Article 1.2, Holder shall
also deliver to the Company a check, wire transfer (to an account designated by
the Company), or other from of payment acceptable to the Company for the
aggregate Warrant Price for the Shares being purchased.

 

1.2                       Conversion Right. In lieu of exercising this Warrant as specified in Article 1.1,
Holder may from time to time convert this Warrant, in whole or in part, into a
number of Shares determined by dividing (a) the aggregate fair market
value of the Shares or other securities otherwise issuable upon exercise of
this Warrant minus the aggregate Warrant Price of such Shares by (b) the
fair market value of one Share. The fair market value of the Shares shall be
determined pursuant to Article 1.3.

 

1.3                       Fair Market Value. If the Company’s common stock is traded in a public market and
the shares are common stock, the fair market value of each Share shall be the
closing price of a Share reported for the business day immediately before
Holder delivers its Notice of Exercise to the Company (or in the instance where
the Warrant is exercised immediately prior to the effectiveness of the
Company’s initial public offering, the “price to public” per share price

 

 

specified in the final prospectus
relating to such offering). If the Company’s common stock is traded in a public
market and the Shares are preferred stock, the fair market value of a Share
shall be the closing price of a share of the Company’s common stock reported
for the business day immediately before Holder delivers its Notice of Exercise to the Company (or, in the instance where the Warrant is
exercised immediately prior to the effectiveness of the Company’s initial
public offering, the initial “price to public” per share price specified in the
final prospectus relating to such offering), in both cases, multiplied by the
number of shares of the Company’s common stock into which a Share is
convertible. If the Company’s common stock is not traded in a public market,
the Board of Directors of the Company shall determine fair market value in its
reasonable good faith judgment.

 

1.4                       Delivery
of Certificate and New Warrant.
Promptly after Holder exercises or converts this Warrant and, if applicable,
the Company receives payment of the aggregate Warrant Price, the Company shall
deliver to Holder certificates for the Shares acquired and, if this Warrant has
not been fully exercised or converted and has not expired, a new Warrant
representing the Shares not so acquired.

 

1.5                       Replacement
of Warrants. On receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant and, in the case of loss, theft or destruction, on
delivery of an indemnity agreement reasonably satisfactory in form and amount
to the Company or, in the case of mutilation, or surrender and cancellation of
this Warrant, the Company shall execute and deliver, in lieu of this Warrant, a
new warrant of like tenor.

 

1.6                       Treatment
of Warrant Upon Acquisition of Company.

 

1.6.1                        “Acquisition”. For the purpose of this Warrant,
“Acquisition” means any sale, license, or other disposition of all or
substantially all of the assets of the Company, or any reorganization,
consolidation, or merger of the Company where the holders of the Company’s
securities before the transaction beneficially own less than 50% of the
outstanding voting securities of the surviving entity after the transaction.

 

1.6.2                                  Treatment
of Warrant at Acquisition.

 

A)                                  Upon the written request of the Company,
Holder agrees that, in the event of an Acquisition in which the sole
consideration is cash, either (a) Holder shall exercise its conversion or
purchase right under this Warrant and such exercise will be deemed effective
immediately prior to the consummation of such Acquisition or (b) if Holder
elects not to exercise the Warrant, this Warrant will expire upon the
consummation of such Acquisition. The Company shall provide the Holder with
written notice of its request relating to the foregoing (together with such reasonable
information as the Holder may request in connection with such contemplated
Acquisition giving rise to such notice), which is to be delivered to Holder not
less than ten (10) days prior to the closing of the proposed Acquisition.

 

B)                                    Upon the written request of the Company,
Holder agrees that, in the event of an Acquisition that is an “arms length”
sale of all or substantially all of the Company’s assets (and only its assets)
to a third party that is not an Affiliate (as defined below) of the Company (a
“True Asset Sale”), either (a) Holder shall exercise its conversion or
purchase right under this Warrant and such exercise will be deemed effective
immediately prior to the consummation of such Acquisition or (b) if Holder
elects not to exercise the Warrant, this Warrant will continue until the
Expiration Date if the Company continues as a going concern following the
closing of any such True Asset Sale. The Company shall provide the Holder with
written notice of its request relating to the foregoing (together with such
reasonable information as the Holder may request in connection with such
contemplated Acquisition giving rise to such notice), which is to

 

2

 

be delivered to Holder not less than ten (10) days
prior to the closing of the proposed Acquisition.

 

C)                                    Upon the closing of any Acquisition other
than those particularly described in subsections (A) and (B) above,
the successor entity shall assume the obligations of this Warrant, and this
Warrant shall be exercisable for the same securities, cash, and property as
would be payable for the Shares issuable upon exercise of the unexercised
portion of this Warrant as if such Shares were outstanding on the record date
for the Acquisition and subsequent closing. The Warrant Price and/or number of
Shares shall be adjusted accordingly.

 

As used herein “Affiliate” shall mean any person or entity that owns or
controls directly or indirectly ten (10) percent or more of the stock of
Company, any person or entity that controls or is controlled by or is under
common control with such persons or entities, and each of such person’s or
entity’s officers, directors, joint venturers or partners, as applicable.

 

ARTICLE 2. ADJUSTMENTS TO THE
SHARES.

 

2.1                       Stock
Dividends, Splits, Etc. If the
Company declares or pays a dividend on the Shares payable in common stock, or
other securities, then upon exercise of this Warrant, for each Share acquired,
Holder shall receive, without cost to Holder, the total number and kind of securities
to which Holder would have been entitled had Holder owned the Shares of record
as of the date the dividend occurred. If the Company subdivides the Shares by
reclassification or otherwise into a greater number of shares or takes any
other action which increase the amount of stock into which the Shares are
convertible, the number of shares purchasable hereunder shall be
proportionately increased and the Warrant Price shall be proportionately
decreased. If the outstanding shares are combined or consolidated, by
reclassification or otherwise, into a lesser number of shares, the Warrant
Price shall be proportionately increased and the number of Shares shall be
proportionately decreased.

 

2.2                       Reclassification,
Exchange, Combinations or Substitution. Upon any reclassification, exchange, substitution, or other event that
results in a change of the number and/or class of the securities issuable upon
exercise or conversion of this Warrant, Holder shall be entitled to receive,
upon exercise or conversion of this Warrant, the number and kind of securities
and property that Holder would have received for the Shares if this Warrant had
been exercised immediately before such reclassification, exchange,
substitution, or other event. Such an event shall include any automatic
conversion of the outstanding or issuable securities of the Company of the same
class or series as the Shares to common stock pursuant to the terms of the
Company’s Certificate of Incorporation upon the closing of a registered public
offering of the Company’s common stock. The Company or its successor shall
promptly issue to Holder an amendment to this Warrant setting forth the number
and kind of such new securities or other property issuable upon exercise or
conversion of this Warrant as a result of such reclassification, exchange,
substitution or other event that results in a change of the number and/or class
of securities issuable upon exercise or conversion of this Warrant. The
amendment to this Warrant shall provide for adjustments which shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Article 2 including, without limitation, adjustments to the Warrant Price
and to the number of securities or property issuable upon exercise of the new
Warrant. The provisions of this Article 2.2 shall similarly apply to
successive reclassifications, exchanges, substitutions, or other events.

 

2.3                       Adjustments
for Diluting Issuances. The Warrant
Price and the number of Shares issuable upon exercise of this Warrant or, if
the Shares are Preferred Stock, the number of shares of common stock issuable
upon conversion of the Shares, shall be subject to adjustment, from time to
time in the manner set forth in the Company’s Certificate of

 

3

 

Incorporation as if the Shares
were issued and outstanding on and as of the date of any such required
adjustment. The provisions set forth for the Shares in the Company’s
Certificate of Incorporation relating to the above in effect as of the Issue Date
may not be amended, modified or waived, without the prior written consent of
Holder unless such amendment, modification or waiver affects the rights
associated with the Shares in the same manner as such amendment, modification
or waiver affects the rights associated with all other shares of the same
series and class as the Shares granted to the Holder.

 

2.4                       No
Impairment. The Company shall not, by amendment of its Certificate of
Incorporation or through a reorganization, transfer of assets, consolidation,
merger, dissolution, issue, or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the
terms to be observed or performed under this Warrant by the Company, but shall
at all times in good faith assist in carrying out of all the provisions of this
Article 2 and in taking all such action as may be necessary or appropriate
to protect Holder’s rights under this Article against impairment.

 

2.5                       Fractional
Shares. No fractional Shares shall be issuable upon exercise or conversion
of the Warrant and the number of Shares to be issued shall be rounded down to
the nearest whole Share. If a fractional share interest arises upon any
exercise or conversion of the Warrant, the Company shall eliminate such fractional
share interest by paying Holder the amount computed by multiplying the
fractional interest by the fair market value of a full Share.

 

2.6                       Certificate
as to Adjustments. Upon each adjustment of the Warrant Price, the Company
shall promptly notify Holder in writing, and, at the Company’s expense,
promptly compute such adjustment, and furnish Holder with a certificate of its
Chief Financial Officer setting forth such adjustment and the facts upon which
such adjustment is based. The Company shall, upon written request, furnish
Holder a certificate setting forth the Warrant Price in effect upon the date
thereof and the series of adjustments leading to such Warrant Price.

 

ARTICLE 3. REPRESENTATIONS
AND COVENANTS OF THE COMPANY.

 

3.1                       Representations
and Warranties. The Company represents and warrants to the Holder as
follows:

 

(a)                                  The
initial Warrant Price referenced on the first page of this Warrant is not
greater than (i) the price per share at which the Shares were last issued
in an arms-length transaction in which at least $500,000 of the Shares were
sold and (ii) the fair market value of the Shares as of the date of this
Warrant, as determined by the Company’s Board of Directors.

 

(b)                                 All
Shares which may be issued upon the exercise of the purchase right represented
by this Warrant, and all securities, if any, issuable upon conversion of the
Shares, shall, upon issuance, be duly authorized, validly issued, fully paid
and nonassessable, and free of any liens and encumbrances except for
restrictions on transfer provided for herein or under applicable federal and
state securities laws.

 

(c)                                  The
Capitalization Table dated May 9, 2003 previously provided to Holder,
remains true and complete as of the Issue Date.

 

3.2                       Notice
of Certain Events. If the Company proposes at any time (a) to declare
any dividend or distribution upon any of its stock, whether in cash, property,
stock, or other securities and whether or not a regular cash dividend; (b) to
offer for sale additional shares of any class or series of the Company’s stock;
(c) to effect any reclassification or recapitalization

 

4

 

of any of its stock; (d) to
merge or consolidate with or into any other corporation, or sell, lease,
license, or convey all or substantially all of its assets, or to liquidate,
dissolve or wind up; or (e) offer holders of registration rights the
opportunity to participate in an underwritten public offering of the company’s
securities for cash, then, in connection with each such event, the Company
shall give Holder: (1) at least 10 days prior written notice of the date
on which a record will be taken for such dividend, distribution, or
subscription rights (and specifying the date on which the holders of common
stock will be entitled thereto) or the consummation date of the matters
referred to in (c) and (d) above; (2) in the case of the matters
referred to in (c) and (d) above at least 10 days prior written
notice of the date when the same will take place (and specifying the date on
which the holders of common stock will be entitled to exchange their common
stock for securities or other property deliverable upon the occurrence of such
event); and (3) in the case of the matter referred to in (e) above,
the same notice as is given to the holders of such registration rights.

 

3.3                       Registration Under Securities Act of 1933, as
amended. The Company agrees
that the Shares or, if the Shares are convertible into common stock of the
Company, such common stock, shall have certain incidental, or “Piggyback,”
registration rights pursuant to and as set forth in the Company’s Amended and
Restated Investor Rights Agreement dated April 18, 2003. The provisions
set forth therein relating to the above in effect as of the Issue Date may not
be amended, modified or waived without the prior written consent of Holder
unless such amendment, modification or waiver affects the rights associated
with the Shares in the same manner as such amendment, modification, or waiver
affects the rights associated with all other shares of the same series and
class as the Shares granted to the Holder.

 

3.4                       No Shareholder Rights. Except as
provided in this Warrant, the Holder will not have any rights as a shareholder
of the Company until the exercise of this Warrant.

 

ARTICLE 4. REPRESENTATIONS, WARRANTIES OF THE HOLDER.
The Holder represents and warrants to the Company as follows:

 

4.1                       Purchase for Own Account. This Warrant
and the securities to be acquired upon exercise of this Warrant by the Holder
will be acquired for investment for the Holder’s account, not as a nominee or
agent, and not with a view to the public resale or distribution within the
meaning of the Act. Holder also represents that the Holder has not been formed
for the specific purpose of acquiring this Warrant or the Shares.

 

4.2                       Disclosure of Information. The Holder
has received or has had full access to all the information it considers
necessary or appropriate to make an informed investment decision with respect
to the acquisition of this Warrant and its underlying securities. The Holder
further has had an opportunity to ask questions and receive answers from the
Company regarding the terms and conditions of the offering of this Warrant and
its underlying securities and to obtain additional information (to the extent
the Company possessed such information or could acquire it without unreasonable
effort or expense) necessary to verify any information furnished to the Holder
or to which the Holder has access.

 

4.3                       Investment Experience. The Holder
understands that the purchase of this Warrant and its underlying securities
involves substantial risk. The Holder has experience as an investor in
securities of companies in the development stage and acknowledges that the
Holder can bear the economic risk of such Holder’s investment in this Warrant
and its underlying securities and has such knowledge and experience in
financial or business matters that the Holder is capable of evaluating the
merits and risks of its investment in this Warrant and its underlying
securities and/or has a preexisting personal or business relationship with the
Company and certain of its officers, directors or controlling persons of a
nature and duration that enables the

 

5

 

Holder to be aware of the
character, business acumen and financial circumstances of such persons.

 

4.4                       Accredited
Investor Status. The Holder is an “accredited investor” within the meaning
of Regulation D promulgated under the Act.

 

4.5                       The Act.
The Holder understands that this Warrant and the Shares issuable upon exercise
or conversion hereof have not been registered under the Act in reliance upon a
specific exemption therefrom, which exemption depends upon, among other things,
the bona fide nature of the Holder’s investment intent as expressed herein. The
Holder understands that this Warrant and the Shares issued upon any exercise or
conversion hereof must be held indefinitely unless subsequently registered
under the 1933 Act and qualified under applicable state securities laws, or
unless exemption from such registration and qualification are otherwise
available.

 

ARTICLE 5. MISCELLANEOUS.

 

5.1                       Term:
This Warrant is exercisable in whole or in part at any time and from time to
time on or before the Expiration Date.

 

5.2                       Legends.
This Warrant and the Shares (and the securities issuable, directly or
indirectly, upon conversion of the Shares, if any) shall be imprinted with a
legend in substantially the following form:

 

THIS WARRANT
AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE ACT, OR
THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AND PURSUANT TO THE PROVISIONS OF
ARTICLE 5 BELOW, MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED,
PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND
APPLICABLE STATE SECURITIES LAW OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND
SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR
TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM REGISTRATION.

 

5.3                       Compliance
with Securities Laws on Transfer. This Warrant and the Shares issuable upon
exercise of this Warrant (and the securities issuable, directly or indirectly,
upon conversion of the Shares, if any) may not be transferred or assigned in
whole or in part without compliance with applicable federal and state
securities laws by the transferor and the transferee (including, without
limitation, the delivery of investment representation letters and legal
opinions reasonably satisfactory to the Company, as reasonably requested by the
Company). The Company shall not require Holder to provide an opinion of counsel
if the transfer is to Silicon Valley Bancshares (Holder’s parent company) or
any other affiliate of Holder. Additionally, the Company shall also not require
an opinion of counsel if there is no material question as to the availability
of current information as referenced in Rule 144(c), Holder represents
that it has complied with Rule 144(d) and (e) in reasonable
detail, the selling broker represents that it has complied with Rule 144(f),
and the Company is provided with a copy of Holder’s notice of proposed sale.

 

5.4                       Transfer
Procedure. Upon receipt by Holder of the executed Warrant, Holder will
transfer all of this Warrant to Silicon Valley Bancshares, Holder’s parent
company, by execution of an Assignment substantially in the form of Appendix 2.
Subject to the

 

6

 

provisions of Article 5.3
and upon providing Company with written notice, Silicon Valley Bancshares and
any subsequent Holder may transfer all or part of this Warrant or the Shares
issuable upon exercise of this Warrant (or the Shares issuable directly or
indirectly, upon conversion of the Shares, if any) to any transferee, provided,
however, in connection with any such transfer, Silicon Valley Bancshares or any
subsequent Holder will give the Company notice of the portion of the Warrant
being transferred with the name, address and taxpayer identification number of
the transferee and Holder will surrender this Warrant to the Company for
reissuance to the transferee(s) (and Holder if applicable). The Company
may refuse to transfer this Warrant or the Shares to any person who directly
competes with the Company, unless, in either case, the stock of the Company is
publicly traded.

 

5.5                       Notices. All notices and other communications from the Company to the Holder,
or vice versa, shall be deemed delivered and effective when given personally or
mailed by first-class registered or certified mail, postage prepaid, at such
address as may have been furnished to the Company or the Holder, as the case
may (or on the first business day after transmission by facsimile) be, in
writing by the Company or such holder from time to time. Effective upon receipt
of the fully executed Warrant and the initial transfer described in Article 5.4
above, all notices to the Holder shall be addressed as follows until the
Company receives notice of a change of address in connection with a transfer or
otherwise:

 

Silicon Valley Bancshares

Attn: Treasury Department

3003 Tasman Drive, HA 200

Santa Clara, CA 95054

Telephone: 408-654-7400

Facsimile: 408-496-2405

 

Notice to the Company shall be addressed as follows until the Holder
receives notice of a change in address:

 

GameFly, Inc.

Attn: Vice President—Finance

3000 Ocean Park Blvd., Suite 2014

Santa Monica, California 90405

Telephone: 310-664-6400

Facsimile: 310-664-6788

 

5.6                       Waiver. This Warrant and any term hereof may be changed, waived, discharged
or terminated only by an instrument in writing signed by the party against
which enforcement of such change, waiver, discharge or termination is sought.

 

5.7                       Attorney’s Fees. In the event of any dispute between
the parties concerning the terms and provisions of this Warrant, the party
prevailing in such dispute shall be entitled to collect from the other party
all costs incurred in such dispute, including reasonable attorney’s fees.

 

5.8                       Automatic Conversion upon Expiration. In the event that, upon the Expiration
Date, the fair market value of one Share (or other security issuable upon the
exercise hereof) as determined in accordance with Section 1.3 above is
greater than the Exercise Price in effect on such date, then this Warrant shall
automatically be deemed on and as of such date to be converted pursuant to Section 1.2
above as to all Shares (or such other securities) for which it shall not
previously have been exercised or converted, and the Company shall promptly
deliver a certificate representing the Shares (or such other securities) issued
upon such conversion to the Holder.

 

7

 

5.9                       Counterparts.
This Warrant may be executed in counterparts, all of which together shall
constitute one and the same agreement.

 

5.10                 Governing Law.
This Warrant shall be governed by and construed in accordance with the laws of
the State of California, without giving effect to its principles regarding
conflicts of law.

 

 

	
  “COMPANY”

  	
   

  
	
   

  	
   

  
	
  GAMEFLY,
  INC.

  	
  GAMEFLY,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ David
  Hodess

  	
   

  	
  By:

  	
  /s/ Jordan
  Posell

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  David Hodess

  	
   

  	
  Name:

  	
  Jordan
  Posell

  
	
   

  	
  (Print)

  	
   

  	
  (Print)

  
	
  Title: 

  	
  Chairman of
  the Board, President or

  Vice President

  	
  Title: 

  	
  Chief
  Financial Officer, Secretary,

  Assistant Treasurer or Assistant

  Secretary

  

 

 

	
  “HOLDER”

  	
   

  
	
   

  	
   

  
	
  SILICON
  VALLEY BANK

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Troy V.
  Erickson

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Troy V.
  Erickson

  	
   

  	
   

  
	
   

  	
  (Print)

  	
   

  
	
  Title:

  	
  V.P.

  	
   

  	
   

  

 

8

 

APPENDIX 1

 

NOTICE OF EXERCISE

 

1.                                       Holder elects to purchase                       shares
of the Common/Series                         Preferred
[strike one] Stock of GameFly, Inc. pursuant to the terms of the attached
Warrant, and tenders payment of the purchase price of the shares in full.

 

[or]

 

1.                                       Holder elects to convert the attached Warrant
into Shares/cash [strike one] in the manner specified in the Warrant. This
conversion is exercised for                                          of
the Shares covered by the Warrant.

 

[Strike
paragraph that does not apply.]

 

2.                                       Please issue a certificate or certificates
representing the shares in the name specified below:

 

	
   

  	
   

  	
   

  
	
   

  	
  Holders
  Name

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Address)

  	
   

  

 

3.                                       By its execution below and for the benefit of
the Company, Holder hereby restates each of the representations and warranties
in Article 4 of the Warrant as the date hereof

 

	
   

  	
  HOLDER:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Date):

  	
   

  

 

9

 

ASSIGNMENT

 

For
value received, Silicon Valley Bank hereby sells, assigns and transfers unto:

 

Name: Silicon Valley Bancshares

Address: 3003 Tasman Drive (HA-200)

Santa Clara, CA 95054

 

TaxID: 91-1962278

 

that
certain
Warrant to Purchase Stock issued by GameFly, Inc. (the “Company”), on September 3 , 2003 (the “Warrant”)
together with all rights, title and interest therein.

 

 

	
   

  	
  SILICON
  VALLEY BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Troy V. Erickson

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:
  

  	
  Troy V. Erickson

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:
  

  	
  Vice
  President

  

 

 

	
  Date:
  

  	
  September 3,
  2003

  	
   

  

 

 

By
its execution below, and for
the benefit of the Company, Silicon Valley Bancshares makes each of the
representations and warranties set forth in Article 4 of the Warrant as of
the date hereof.

 

 

	
   

  	
  SILICON
  VALLEY BANCSHARES

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paulette
  Mehas

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Paulette Mehas

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  TreasurerExhibit 4.5

 

WARRANT TO PURCHASE STOCK

 

THIS
WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY
STATE AND, EXCEPT AND PURSUANT TO THE PROVISIONS OF ARTICLE 5 BELOW,
MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED
UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAW
OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO
THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR
HYPOTHECATION IS EXEMPT FROM REGISTRATION.

 

	
  Company:

  	
   

  	
  GameFly, Inc.

  
	
  Number
  of Shares:

  	
   

  	
  26,468

  
	
  Class of
  Stock:

  	
   

  	
  Series D
  Preferred

  
	
  Warrant
  Price:

  	
   

  	
  $3.7781
  per share

  
	
  Issue
  Date:

  	
   

  	
  November 3,
  2004

  
	
  Expiration
  Date:

  	
   

  	
  The
  later to occur of (A) November 3, 2014 or (B) five
  (5) years after the closing of the initial public offering of the common
  stock of GameFly, Inc. (the “IPO”) effected pursuant to a Registration
  Statement on Form S-1 (or its successor) filed under the Securities Act
  of 1933, as amended (the “1933 Act”).

  

 

THIS
WARRANT CERTIFIES THAT, for the agreed upon value of $1.00 and for other good
and valuable consideration, SILICON VALLEY BANK (“Holder”) is entitled to
purchase the number of fully paid and nonassessable shares of the class of
securities (the “Shares”) of the company (the “Company”) at the Warrant Price,
all as set forth above and as adjusted pursuant to Article 2 of this
Warrant, subject to the provisions and upon the terms and conditions set forth
in this Warrant.

 

ARTICLE
1. EXERCISE.

 

1.1                                 Method of
Exercise. Holder may exercise this Warrant by delivering a
duly executed Notice of Exercise in substantially the form attached as Appendix
1 to the principal office of the Company. Unless Holder is exercising the
conversion right set forth in Article 1.2, Holder shall also deliver to
the Company a check, wire transfer (to an account designated by the Company),
or other from of payment acceptable to the Company for the aggregate Warrant
Price for the Shares being purchased.

 

1.2                                 Conversion
Right. In lieu of exercising this Warrant as specified in Article 1.1,
Holder may from time to time convert this Warrant, in whole or in part, into a
number of Shares determined by dividing (a) the aggregate fair market
value of the Shares or other securities otherwise issuable upon exercise of
this Warrant minus the aggregate Warrant Price of such Shares by (b) the
fair market value of one Share. The fair market value of the Shares shall be
determined pursuant to Article 1.3.

 

1.3                                 Fair Market
Value. If the Company’s common stock is traded in a public market and the
shares are common stock, the fair market value of each Share shall be the
closing price of a Share reported for the business day immediately before
Holder delivers its Notice of Exercise to the Company (or in the instance where
the Warrant is exercised immediately prior to the effectiveness of the
Company’s initial public offering, the “price to public” per share price

 

 

specified
in the final prospectus relating to such offering). If the Company’s common
stock is traded in a public market and the Shares are preferred stock, the fair
market value of a Share shall be the closing price of a share of the Company’s
common stock reported for the business day immediately before Holder delivers
its Notice of Exercise to the Company (or, in the instance where the Warrant is
exercised immediately prior to the effectiveness of the Company’s initial
public offering, the initial “price to public” per share price specified in the
final prospectus relating to such offering), in both cases, multiplied by the
number of shares of the Company’s common stock into which a Share is
convertible. If the Company’s common stock is not traded in a public market,
the Board of Directors of the Company shall determine fair market value in its
reasonable good faith judgment.

 

1.4                                 Delivery of
Certificate and New Warrant. Promptly after Holder
exercises or converts this Warrant and, if applicable, the Company receives
payment of the aggregate Warrant Price, the Company shall deliver to Holder
certificates for the Shares acquired and, if this Warrant has not been fully
exercised or converted and has not expired, a new Warrant representing the
Shares not so acquired.

 

1.5                                 Replacement of
Warrants. On receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction or mutilation of this Warrant and,
in the case of loss, theft or destruction, on delivery of an indemnity
agreement reasonably satisfactory in form and amount to the Company or, in the
case of mutilation, or surrender and cancellation of this Warrant, the Company
shall execute and deliver, in lieu of this Warrant, a new warrant of like
tenor.

 

1.6                                 Treatment of
Warrant Upon Acquisition of Company.

 

1.6.1                                           “Acquisition”.
For the purpose of this Warrant, “Acquisition” means any sale, license, or
other disposition of all or substantially all of the assets of the Company, or
any reorganization, consolidation, or merger of the Company where the holders of
the Company’s securities before the transaction beneficially own less than 50%
of the outstanding voting securities of the surviving entity after the
transaction.

 

1.6.2                                           Treatment of
Warrant at Acquisition.

 

A)                                  Upon the
written request of the Company, Holder agrees that, in the event of an Acquisition
in which the sole consideration is cash, either (a) Holder shall exercise
its conversion or purchase right under this Warrant and such exercise will be
deemed effective immediately prior to the consummation of such Acquisition or
(b) if Holder elects not to exercise the Warrant, this Warrant will expire
upon the consummation of such Acquisition. The Company shall provide the Holder
with written notice of its request relating to the foregoing (together with such
reasonable information as the Holder may request in connection with such
contemplated Acquisition giving rise to such notice), which is to be delivered
to Holder not less than ten (10) days prior to the closing of the proposed
Acquisition.

 

B)                                         Upon the written
request of the Company, Holder agrees that, in the event of an Acquisition that
is an “arms length” sale of all or substantially all of the Company’s assets
(and only its assets) to a third party that is not an Affiliate (as defined
below) of the Company (a “True Asset Sale”), either (a) Holder shall
exercise its conversion or purchase right under this Warrant and such exercise
will be deemed effective immediately prior to the consummation of such
Acquisition or (b) if Holder elects not to exercise the Warrant, this
Warrant will continue until the Expiration Date if the Company continues as a
going concern following the closing of any such True Asset Sale. The Company
shall provide the Holder with written notice of its request relating to the
foregoing (together with such reasonable information as the Holder may request
in connection with such contemplated Acquisition giving rise to such notice),
which is to

 

2

 

be
delivered to Holder not less than ten (10) days prior to the closing of
the proposed Acquisition.

 

C)                                         Upon the
closing of any Acquisition other than those particularly described in
subsections (A) and (B) above, the successor entity shall assume the
obligations of this Warrant, and this Warrant shall be exercisable for the same
securities, cash, and property as would be payable for the Shares issuable upon
exercise of the unexercised portion of this Warrant as if such Shares were
outstanding on the record date for the Acquisition and subsequent closing. The
Warrant Price and/or number of Shares shall be adjusted accordingly.

 

As
used herein “Affiliate” shall mean any person or entity that owns or
controls directly or indirectly ten (10) percent or more of the stock of
Company, any person or entity that controls or is controlled by or is under
common control with such persons or entities, and each of such person’s or
entity’s officers, directors, joint venturers or partners, as applicable.

 

ARTICLE
2. ADJUSTMENTS TO THE SHARES.

 

2.1                                 Stock Dividends,
Splits, Etc. If the Company declares or pays a dividend on the
Shares payable in common stock, or other securities, then upon exercise of this
Warrant, for each Share acquired, Holder shall receive, without cost to Holder,
the total number and kind of securities to which Holder would have been
entitled had Holder owned the Shares of record as of the date the dividend
occurred. If the Company subdivides the Shares by reclassification or otherwise
into a greater number of shares or takes any other action which increase the
amount of stock into which the Shares are convertible, the number of shares
purchasable hereunder shall be proportionately increased and the Warrant Price
shall be proportionately decreased. If the outstanding shares are combined or consolidated,
by reclassification or otherwise, into a lesser number of shares, the Warrant
Price shall be proportionately increased and the number of Shares shall be
proportionately decreased.

 

2.2                                 Reclassification,
Exchange, Combinations or Substitution. Upon any reclassification,
exchange, substitution, or other event that results in a change of the number
and/or class of the securities issuable upon exercise or conversion of this
Warrant, Holder shall be entitled to receive, upon exercise or conversion of this
Warrant, the number and kind of securities and property that Holder would have
received for the Shares if this Warrant had been exercised immediately before
such reclassification, exchange, substitution, or other event. Such an event
shall include any automatic conversion of the outstanding or issuable
securities of the Company of the same class or series as the Shares to common
stock pursuant to the terms of the Company’s Certificate of Incorporation upon
the closing of a registered public offering of the Company’s common stock. The
Company or its successor shall promptly issue to Holder an amendment to this
Warrant setting forth the number and kind of such new securities or other
property issuable upon exercise or conversion of this Warrant as a result of
such reclassification, exchange, substitution or other event that results in a
change of the number and/or class of securities issuable upon exercise or
conversion of this Warrant. The amendment to this Warrant shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article 2 including, without limitation,
adjustments to the Warrant Price and to the number of securities or property
issuable upon exercise of the new Warrant. The provisions of this
Article 2.2 shall similarly apply to successive reclassifications,
exchanges, substitutions, or other events.

 

2.3                                 Adjustments for
Diluting Issuances. The Warrant Price and the number of Shares
issuable upon exercise of this Warrant or, if the Shares are Preferred Stock,
the number of shares of common stock issuable upon conversion of the Shares,
shall be subject to adjustment, from time to time in the manner set forth in
the Company’s Certificate of

 

3

 

Incorporation
as if the Shares were issued and outstanding on and as of the date of any such
required adjustment. The provisions set forth for the Shares in the Company’s
Certificate of Incorporation relating to the above in effect as of the Issue
Date may not be amended, modified or waived, without the prior written consent
of Holder unless such amendment, modification or waiver affects the rights
associated with the Shares in the same manner as such amendment, modification
or waiver affects the rights associated with all other shares of the same
series and class as the Shares granted to the Holder.

 

2.4                                 No Impairment. The Company
shall not, by amendment of its Certificate of Incorporation or through a
reorganization, transfer of assets, consolidation, merger, dissolution, issue,
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed under
this Warrant by the Company, but shall at all times in good faith assist in
carrying out of all the provisions of this Article 2 and in taking all
such action as may be necessary or appropriate to protect Holder’s rights under
this Article against impairment.

 

2.5                                 Fractional
Shares. No fractional Shares shall be issuable upon exercise or conversion of
the Warrant and the number of Shares to be issued shall be rounded down to the
nearest whole Share. If a fractional share interest arises upon any exercise or
conversion of the Warrant, the Company shall eliminate such fractional share
interest by paying Holder the amount computed by multiplying the fractional
interest by the fair market value of a full Share.

 

2.6                                 Certificate as
to Adjustments. Upon each adjustment of the Warrant Price, the
Company shall promptly notify Holder in writing, and, at the Company’s expense,
promptly compute such adjustment, and furnish Holder with a certificate of its
Chief Financial Officer setting forth such adjustment and the facts upon which
such adjustment is based. The Company shall, upon written request, furnish
Holder a certificate setting forth the Warrant Price in effect upon the date
thereof and the series of adjustments leading to such Warrant Price.

 

ARTICLE
3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.

 

3.1                                 Representations
and Warranties. The Company represents and warrants to the Holder
as follows:

 

(a)                                  The initial
Warrant Price referenced on the first page of this Warrant is not greater
than (i) the price per share at which the Shares were last issued in an
arms-length transaction in which at least $500,000 of the Shares were sold and
(ii) the fair market value of the Shares as of the date of this Warrant,
as determined by the Company’s Board of Directors.

 

(b)                                 All Shares
which may be issued upon the exercise of the purchase right represented by this
Warrant, and all securities, if any, issuable upon conversion of the Shares,
shall, upon issuance, be duly authorized, validly issued, fully paid and
nonassessable, and free of any liens and encumbrances except for restrictions on
transfer provided for herein or under applicable federal and state securities
laws.

 

(c)                                  The
Capitalization Table dated July 28, 2004, previously provided to Holder,
remains true and complete as of the Issue Date.

 

3.2                                 Notice of
Certain Events. If the Company proposes at any time (a) to declare
any dividend or distribution upon any of its stock, whether in cash, property,
stock, or other securities and whether or not a regular cash dividend;
(b) to offer for sale additional shares of any class or series of the
Company’s stock; (c) to effect any reclassification or recapitalization

 

4

 

of
any of its stock; (d) to merge or consolidate with or into any other
corporation, or sell, lease, license, or convey all or substantially all of its
assets, or to liquidate, dissolve or wind up; or (e) offer holders of
registration rights the opportunity to participate in an underwritten public
offering of the company’s securities for cash, then, in connection with each such
event, the Company shall give Holder: (1) at least 10 days prior written
notice of the date on which a record will be taken for such dividend,
distribution, or subscription rights (and specifying the date on which the
holders of common stock will be entitled thereto) or the consummation date of
the matters referred to in (c) and (d) above; (2) in the case of
the matters referred to in (c) and (d) above at least 10 days prior
written notice of the date when the same will take place (and specifying the
date on which the holders of common stock will be entitled to exchange their
common stock for securities or other property deliverable upon the occurrence
of such event); and (3) in the case of the matter referred to in
(e) above, the same notice as is given to the holders of such registration
rights.

 

3.3                                 Registration
Under Securities Act of 1933, as amended. The Company agrees that
the Shares or, if the Shares are convertible into common stock of the Company,
such common stock, shall have certain incidental, or “Piggyback,” registration
rights pursuant to and as set forth in the Company’s Third Amended and Restated
Investor Rights Agreement dated November 15, 2004. The provisions set
forth therein relating to the above in effect as of the Issue Date may not be
amended, modified or waived without the prior written consent of Holder unless
such amendment, modification or waiver affects the rights associated with the
Shares in the same manner as such amendment, modification, or waiver affects
the rights associated with all other shares of the same series and class as the
Shares granted to the Holder.

 

3.4                                 No Shareholder
Rights. Except as provided in this Warrant, the Holder will not have any
rights as a shareholder of the Company until the exercise of this Warrant.

 

ARTICLE
4. REPRESENTATIONS, WARRANTIES OF THE HOLDER. The Holder represents and
warrants to the Company as follows:

 

4.1                                 Purchase for
Own Account. This Warrant and the securities to be acquired upon
exercise of this Warrant by the Holder will be acquired for investment for the
Holder’s account, not as a nominee or agent, and not with a view to the public
resale or distribution within the meaning of the Act. Holder also represents
that the Holder has not been formed for the specific purpose of acquiring this Warrant
or the Shares.

 

4.2                                 Disclosure of
Information. The Holder has received or has had full access to
all the information it considers necessary or appropriate to make an informed
investment decision with respect to the acquisition of this Warrant and its
underlying securities. The Holder further has had an opportunity to ask
questions and receive answers from the Company regarding the terms and
conditions of the offering of this Warrant and its underlying securities and to
obtain additional information (to the extent the Company possessed such
information or could acquire it without unreasonable effort or expense)
necessary to verify any information furnished to the Holder or to which the
Holder has access.

 

4.3                                 Investment
Experience. The Holder understands that the purchase of this Warrant
and its underlying securities involves substantial risk. The Holder has
experience as an investor in securities of companies in the development stage
and acknowledges that the Holder can bear the economic risk of such Holder’s
investment in this Warrant and its underlying securities and has such knowledge
and experience in financial or business matters that the Holder is capable of
evaluating the merits and risks of its investment in this Warrant and its
underlying securities and/or has a preexisting personal or business
relationship with the Company and certain of its officers, directors or
controlling persons of a nature and duration that enables the

 

5

 

Holder
to be aware of the character, business acumen and financial circumstances of
such persons.

 

4.4                                 Accredited
Investor Status. The Holder is an “accredited investor” within the
meaning of Regulation D promulgated under the Act.

 

4.5                                 The Act. The Holder
understands that this Warrant and the Shares issuable upon exercise or
conversion hereof have not been registered under the Act in reliance upon a
specific exemption therefrom, which exemption depends upon, among other things,
the bona fide nature of the Holder’s investment intent as expressed herein. The
Holder understands that this Warrant and the Shares issued upon any exercise or
conversion hereof must be held indefinitely unless subsequently registered
under the 1933 Act and qualified under applicable state securities laws, or
unless exemption from such registration and qualification are otherwise
available.

 

ARTICLE
5. MISCELLANEOUS.

 

5.1                                 Term:  This
Warrant is exercisable in whole or in part at any time and from time to time on
or before the Expiration Date.

 

5.2                                 Legends.   This
Warrant and the Shares (and the securities issuable, directly or indirectly,
upon conversion of the Shares, if any) shall be imprinted with a legend in
substantially the following form:

 

THIS
WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE
ACT, OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AND PURSUANT TO THE
PROVISIONS OF ARTICLE 5 BELOW, MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SAID ACT
AND APPLICABLE STATE SECURITIES LAW OR, IN THE OPINION OF LEGAL COUNSEL IN
FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH
OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM REGISTRATION.

 

5.3                                 Compliance with
Securities Laws on Transfer. This Warrant and the Shares
issuable upon exercise of this Warrant (and the securities issuable, directly
or indirectly, upon conversion of the Shares, if any) may not be transferred or
assigned in whole or in part without compliance with applicable federal and
state securities laws by the transferor and the transferee (including, without
limitation, the delivery of investment representation letters and legal
opinions reasonably satisfactory to the Company, as reasonably requested by the
Company). The Company shall not require Holder to provide an opinion of counsel
if the transfer is to Silicon Valley Bancshares (Holder’s parent company) or
any other affiliate of Holder. Additionally, the Company shall also not require
an opinion of counsel if there is no material question as to the availability
of current information as referenced in Rule 144(c), Holder represents
that it has complied with Rule 144(d) and (e) in reasonable
detail, the selling broker represents that it has complied with
Rule 144(f), and the Company is provided with a copy of Holder’s notice of
proposed sale.

 

5.4                                 Transfer
Procedure. Upon receipt by Holder of the executed Warrant, Holder
will transfer all of this Warrant to Silicon Valley Bancshares, Holder’s parent
company, by execution of an Assignment substantially in the form of Appendix 2.
Subject to the

 

6

 

provisions
of Article 5.3 and upon providing Company with written notice, Silicon
Valley Bancshares and any subsequent Holder may transfer all or part of this
Warrant or the Shares issuable upon exercise of this Warrant (or the Shares
issuable directly or indirectly, upon conversion of the Shares, if any) to any
transferee, provided, however, in connection with any such transfer, Silicon
Valley Bancshares or any subsequent Holder will give the Company notice of the
portion of the Warrant being transferred with the name, address and taxpayer
identification number of the transferee and Holder will surrender this Warrant
to the Company for reissuance to the transferee(s) (and Holder if
applicable). The Company may refuse to transfer this Warrant or the Shares to
any person who directly competes with the Company, unless, in either case, the
stock of the Company is publicly traded.

 

5.5                                 Notices. All notices
and other communications from the Company to the Holder, or vice versa, shall
be deemed delivered and effective when given personally or mailed by
first-class registered or certified mail, postage prepaid, at such address as
may have been furnished to the Company or the Holder, as the case may (or on
the first business day after transmission by facsimile) be, in writing by the
Company or such holder from time to time. Effective upon receipt of the fully
executed Warrant and the initial transfer described in Article 5.4 above,
all notices to the Holder shall be addressed as follows until the Company
receives notice of a change of address in connection with a transfer or
otherwise:

 

Silicon Valley Bancshares 

Attn: Treasury Department 

3003 Tasman Drive, HA 200 

Santa Clara, CA 95054 

Telephone: 408-654-7400 

Facsimile: 408-496-2405

 

Notice
to the Company shall be addressed as follows until the Holder receives notice
of a change in address:

 

GameFly, Inc.

Attn: Vice President-Finance 

5870 W. Jefferson Blvd., Suite J 

Los Angeles, CA 90016-3109 

Telephone: 310-237-7037

Facsimile: 310-664-6788

 

5.6                                 Waiver. This Warrant
and any term hereof may be changed, waived, discharged or terminated only by an
instrument in writing signed by the party against which enforcement of such
change, waiver, discharge or termination is sought.

 

5.7                                 Attorney’s Fees. In the event
of any dispute between the parties concerning the terms and provisions of this
Warrant, the party prevailing in such dispute shall be entitled to collect from
the other party all costs incurred in such dispute, including reasonable
attorney’s fees.

 

5.8                                 Automatic
Conversion upon Expiration. In the event that, upon
the Expiration Date, the fair market value of one Share (or other security issuable
upon the exercise hereof) as determined in accordance with Section 1.3
above is greater than the Exercise Price in effect on such date, then this
Warrant shall automatically be deemed on and as of such date to be converted
pursuant to Section 1.2 above as to all Shares (or such other securities)
for which it shall not previously have been exercised or converted, and the
Company shall promptly deliver a certificate representing the Shares (or such
other securities) issued upon such conversion to the Holder.

 

7

 

5.9                                 Counterparts. This Warrant
may be executed in counterparts, all of which together shall constitute one and
the same agreement.

 

5.10                           Governing Law. This Warrant
shall be governed by and construed in accordance with the laws of the State of
California, without giving effect to its principles regarding conflicts of law.

 

 

“COMPANY”

 

	
  GAMEFLY, INC.

  	
   

  	
  GAMEFLY, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ David A. Hodess

  	
   

  	
  By:

  	
  /s/ Jordan Posell

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  David A. Hodess

  	
   

  	
  Name:

  	
  Jordan Posell

  
	
   

  	
  (Print)

  	
   

  	
   

  	
  (Print)

  
	
  Title:

  	
  Chairman of the Board,
  President or

  Vice President

  	
   

  	
  Title:

  	
  Chief Financial Officer,
  Secretary, 

  Assistant Treasurer or Assistant

  Secretary

  

 

 

“HOLDER”

 

SILICON
VALLEY BANK

 

 

	
  By:

  	
  /s/ Troy V. Erickson

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Troy V. Erickson

  	
   

  	
   

  
	
   

  	
  (Print)

  	
   

  	
   

  
	
  Title:

  	
  Relationship
  Manager

  	
   

  	
   

  

 

8

 

APPENDIX 1

 

NOTICE OF EXERCISE

 

1.             Holder elects
to purchase                               
shares of the Common/Series
                    Preferred
[strike one] Stock of GameFly, Inc. pursuant to the terms of the attached
Warrant, and tenders payment of the purchase price of the shares in full.

 

[or]

 

1.             Holder elects
to convert the attached Warrant into Shares/cash [strike one] in the manner
specified in the Warrant. This conversion is exercised for
                                                of
the Shares covered by the Warrant.

 

[Strike
paragraph that does not apply.]

 

2.             Please issue a
certificate or certificates representing the shares in the name specified
below:

 

	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
           Holders
  Name

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
           (Address)

  	
   

  

 

3.       By its execution below and
for the benefit of the Company, Holder hereby restates each of the
representations and warranties in Article 4 of the Warrant as the date
hereof.

 

	
   

  	
  HOLDER:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Date):

  	
   

  

 

9

 

ASSIGNMENT

 

For value received, Silicon Valley Bank hereby sells, assigns
and transfers unto:

 

Name: Silicon Valley Bancshares 

Address: 3003 Tasman Drive (HA-200) 

Santa Clara, CA 95054

 

TaxID: 91-1962278

 

that certain Warrant to
Purchase Stock issued by GameFly, Inc. (the “Company”), on November 3, 2004 (the “Warrant”) together with all
rights, title and interest therein.

 

 

	
   

  	
   

  	
  SILICON
  VALLEY BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Troy V. Erickson

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Troy V. Erickson

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Relationship Manager

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:
  

  	
  11/3/04

  	
   

  	
   

  	
   

  
					

 

By
its execution below, and for the benefit of the Company, Silicon Valley
Bancshares makes each of the representations and warranties set forth in
Article 4 of the Warrant as of the date hereof.

 

 

	
   

  	
   

  	
  SILICON
  VALLEY BANCSHARES

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Paulette Mehas

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Paulette
  Mehas

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Treasurer

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