GAME GameSquare Holdings Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): May 15, 2024

 

GameSquare Holdings, Inc.

(Exact Name of Registrant as Specified in Its Charter)

 

Delaware		001-39389		99-1946435
(State or other Jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

6775 Cowboys Way, Ste. 1335 Frisco, Texas, USA		75034
(Address of principal executive offices)		(Zip Code)

 

Registrant’s telephone number, including area code: (216) 464-6400

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol		Name of each exchange on which registered
Common Stock, $0.0001 par value per share		GAME		The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

Item 1.01.

Entry into a Material Definitive Agreement.

 

On May 15, 2024, GameSquare Holdings, Inc., a Delaware corporation (the “Company” or “GameSquare”), FaZe Holdings, Inc., a Delaware corporation and wholly owned subsidiary of GameSquare (“FaZe Holdings”), Faze Clan, Inc., a Delaware corporation and wholly owned subsidiary of FaZe Holdings (“Faze Clan Inc.”), and FaZe Media Holdings, LLC, a Delaware limited liability company and wholly owned subsidiary of Faze Clan Inc. (“Media Holdings, and together with GameSquare, FaZe Holdings and Faze Clan Inc., the “GAME Parties”), and Gigamoon Media LLC, a Delaware limited liability company (“Gigamoon”), entered into the definitive agreements described below in connection with the formation of Faze Media, Inc. (“Faze Media”), a Delaware corporation in which the Company will hold a 51% equity interest by way of Media Holdings and in which Gigamoon will hold a 49% equity interest. Faze Media is a game-focused lifestyle media and intellectual property holding created as a joint venture between the GAME Parties and Gigamoon.

 

Contribution Agreement

 

On May 15, 2024, GameSquare, FaZe Holdings, Media Holdings and Faze Media entered into a contribution agreement (the “Contribution Agreement”), pursuant to which the GAME Parties contributed, assigned and transferred certain of assets relating to FaZe Holdings’ and its subsidiaries’ agency, and other business operations, including certain intellectual property assets, to Faze Media. For such contributions and the services described in the following sentence, Media Holdings received a 51% equity interest in Faze Media. The Contribution Agreement further provides that GameSquare will provide certain professional and corporate services to Faze Media pursuant to a separate services agreement. Simultaneously with the Contribution Agreement, Gigamoon and Faze Media entered into an agreement pursuant to which Gigamoon purchased 49% of the equity interest Faze Media for an aggregate purchase price of $11.0 million.

 

In connection with the Contribution Agreement and the transactions contemplated thereby, GameSquare also granted Gigamoon the right to nominate one director (the “Gigamoon Nominee”) for election to the board of directors of GameSquare (the “Board”). GameSquare further agreed to take all corporate action necessary to cause the Board to elect the Gigamoon Nominee to fill the current vacancy on the Board. To the extent permitted by applicable law, for so long as Gigamoon holds 80% or more of its initial equity interest in FaZe Media, (i) Gigamoon will have the right to nominate one member of the Board in connection with the election of directors at each subsequent annual meeting of stockholders of GameSquare, and (ii) GameSquare will include such Gigamoon Nominee in the slate of directors that is included in the proxy statement (or consent solicitation or similar document) of GameSquare and recommend that its stockholders vote in favor of the election of such nominee in connection with such annual meeting.

 

The foregoing summary of the Contribution Agreement and the transactions contemplated thereby does not purport to be a complete description of all the parties’ rights and obligations under the Contribution Agreement and is qualified in its entirety by reference to the Contribution Agreement, a copy of which is filed as Exhibit 2.1 hereto and is incorporated herein by reference.

 

Trademark License Agreement

 

On May 15, 2024, GameSquare and Faze Media entered into a trademark license agreement (the “License Agreement”), pursuant to which Faze Media granted GameSquare an exclusive, worldwide license to certain of the intellectual property contributed in connection with the Contribution Agreement. The initial term of the License Agreement is 10 years, and the License Agreement automatically renews for successive renewal terms of five years (the “Initial License Term”) and shall automatically renew for successive additional terms of five years (each, a “Renewal License Term”). Either party may terminate the License Agreement in the event of an uncured material breach by the other party. Additionally, Faze Media may terminate the License Agreement in the event (i) GameSquare experiences certain change of control or corporate transactions, (ii) GameSquare’s common stock fails to remain listed on a national exchange, or (iii) GameSquare files for certain bankruptcy proceedings. During the Initial License Term, GameSquare will pay Faze Media an annual license fee equal to 2.5% of Faze e-sports gross revenues. During any Renewal License Term, GameSquare will pay Faze Media an annual license fee equal to 2.75% of Faze e-sports gross revenues. All such license fees will be payable by the issuance by GameSquare of shares of its common stock to Faze Media. The number of shares to be issued for such license fees shall be based on a per share price equal to the average of the VWAP of the GameSquare common stock for each trading day in the applicable fiscal year.

 

 

The foregoing summary of the License Agreement and the transactions contemplated thereby does not purport to be a complete description of all the parties’ rights and obligations under the License Agreement and is qualified in its entirety by reference to the License Agreement, a copy of which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.

 

Registration Rights Agreement

 

In connection with the License Agreement, GameSquare and Faze Media entered into a registration rights agreement (the “Registration Rights Agreement”). The Registration Rights Agreement provides, among other things, that within 60 days of the issuance of GameSquare common stock to Faze Media (the “Filing Deadline”), GameSquare shall file with the Securities Exchange Commission (“SEC”) (at the Company’s sole cost and expense) a registration statement registering the resale of such shares of GameSquare common stock, and will use its commercially reasonable efforts to have such registration statement declared effective upon the earlier of (i) five business days after the SEC has notified GameSquare that such registration statement will not be reviewed and (ii) (A) for registration statements filed on Form S-1, within 45 days after the Filing Deadline and (B) for registration statements filed on Form S-3, within 60 days after the Filing Deadline.

 

The foregoing description of the Registration Rights Agreement does not purport to be complete and is qualified in its entirety by the full text of the Registration Rights Agreements, a copy of which is attached hereto as Exhibit 10.2, and is incorporated herein by reference.

 

Item 2.01.

Completion of Acquisition or Disposition of Assets.

 

The information provided in the Introductory Note of this Current Report on Form 8-K is incorporated into this Item 2.01 by reference.

 

Item 7.01.

Regulation FD Disclosure.

 

On May 16, 2024, the Company issued a press release announcing the completion of the transactions discussed in Item 1.01 of this Current Report on Form 8-K. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

 

The information in this Item 7.01, including Exhibit 99.1, is furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liabilities under that section, and shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act or the Exchange Act, regardless of any general incorporation language in such filings. This Current Report on Form 8-K will not be deemed an admission as to the materiality of any information of the information contained in this Item 7.01, including Exhibit 99.1.

 

Item 9.01

Financial Statements and Exhibits

 

(d) Exhibits

 

Exhibit Number		Description
2.1*		Contribution Agreement, dated May 15, 2024, by and among the Company, FaZe Holdings Inc., Faze Media Holdings, LLC and FaZe Media Inc.
10.1*		Trademark and License Agreement, dated May 15, 2024, between the Company and Faze Media, Inc.
10.2		Registration Rights Agreement, dated May 15, 2024, between the Company and Faze Media Inc.
99.1		Press Release, dated May 16, 2024.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

*	Certain of the exhibits and schedules to this exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The Company agrees to furnish supplementally a copy of all omitted exhibits and schedules to the SEC upon its request.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	GAMESQUARE HOLDINGS, INC.
Date: May 16, 2024	By:	/s/ Justin Kenna
	Name:	Justin Kenna
	Title:	Chief Executive Officer and Director

 

 

 

Exhibit 2.1

 

CONTRIBUTION AGREEMENT

 

This CONTRIBUTION AGREEMENT (this “Agreement”) is made and entered into as of May 15, 2024 (the “Effective Time”), by and among GameSquare Holdings, Inc., a Delaware corporation (“GAME”), FaZe Holdings Inc., a Delaware corporation and wholly-owned subsidiary of GAME (“FAZE”), FaZe Media Holdings, LLC, a Delaware limited liability company (the “Game Investor”)and FAZE Media, Inc., a Delaware corporation (the “Company”). Each of GAME, FAZE, the Game Investor and the Company is referred to individually as a “Party” and, collectively, the “Parties.” Capitalized terms used herein but not defined shall have the meanings given in the Certificate of Incorporation of the Company, dated as of May 15, 2024 (the “Charter”).

 

WHEREAS, on March 7, 2024, pursuant to that certain Agreement and Plan of Merger, dated October 19, 2023, by and among FAZE, GAME, and GameSquare Merger Sub I, Inc., a Delaware corporation (“Merger Sub”), Merger Sub merged with and into FAZE with FAZE surviving as a wholly-owned subsidiary of GAME (the “GAME-FAZE Merger Date”);

 

WHEREAS, GAME, FAZE and their respective Subsidiaries (the “GAME Parties”) desire to:

 

(a) contribute, assign, transfer, convey, and deliver to the Company (i) all of the GAME Parties’ right, title, and interest in and to the assets owned or held for use set forth on Schedule A hereto (the “Contributed Assets”), and (ii) solely the Liabilities set forth on Schedule A (the “Assumed Liabilities”) (which the Parties agree that such Contributed Assets and Assumed Liabilities shall be deemed to have an aggregate value of $10,000,000), in each case excluding, subject to the terms and conditions of this Agreement, any and all assets of the GAME Parties that are not Contributed Assets (the “Excluded Assets”) and any and all Liabilities of the GAME Parties or which are otherwise related to the Business that are not Assumed Liabilities, including those liabilities set forth on Schedule A hereto (the “Excluded Liabilities”), and

 

(b) enter into the Master Services Agreement, in exchange for 11,450,000 shares of Series A-1 Preferred Stock, par value $0.0001 (the “Series A-1 Preferred Stock”), or 51% of all the capital stock of the Company outstanding as of the Effective Time (such transaction, the “Asset Contribution”), on the terms and subject to the conditions set forth herein;

 

WHEREAS, contemporaneous with the Asset Contribution, the Company, the Game Investor and Gigamoon Media LLC, a Delaware limited liability company (the “Kalish Investor”), are entering into that certain Preferred Stock Purchase Agreement (the “Purchase Agreement”), dated as of the date hereof, pursuant to which (x) the Kalish Investor is purchasing 11,000,000 shares of Series A-2 Preferred Stock, or 49% of all the capital stock of the Company outstanding as of the date of the Purchase Agreement and (y) each of the Game Investor and the Kalish Investor have the right to purchase additional shares of Preferred Stock on or prior to the second anniversary of the effective date of the Charter;

 

WHEREAS, the Company desires to accept the Asset Contribution from the GAME Parties; and

 

 

WHEREAS, in connection with the Asset Contribution, the Game Investor, the Kalish Investor and the Company are entering into a Stockholders’ Agreement, in substantially the form attached hereto as Exhibit A (the “Stockholders’ Agreement”).

 

NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

 

1. Asset Contribution and Acceptance.

 

1.1 Contribution. Subject to the terms and conditions set forth herein, as of the Effective Time, the GAME Parties hereby contribute, assign, transfer, convey, and deliver to the Company the Contributed Assets and Assumed Liabilities in exchange for 11,450,000 shares of Preferred Stock (the “Shares”), or 51% of all of the capital stock of the Company outstanding as of the Effective Time, to be issued in the name of the Game Investor.

 

1.2 Acceptance. The Company hereby accepts the contribution, assignment, transfer, conveyance, and delivery of all of the GAME Parties’ right, title, and interest in and to the Contributed Assets and assumes and agrees to discharge or perform all of the Assumed Liabilities, in accordance with the terms set forth herein.

 

For the avoidance of doubt, the Contributed Assets and the Assumed Liabilities shall not include the Excluded Assets or Excluded Liabilities and subject to Section 4.2 and Section 4.3, the GAME Parties shall retain (i) all right, title, and interest in and to the Excluded Assets and (ii) all Excluded Liabilities.

 

2. Representations and Warranties of the GAME Parties. The GAME Parties hereby represent and warrant, on a joint and several basis, to the Company as follows:

 

2.1 Organization; Standing and Power; Charter Documents; Subsidiaries.

 

(a) Organization; Standing and Power. Each of the GAME Parties is a corporation, limited liability company, or other legal entity duly organized, validly existing, and in good standing (to the extent that the concept of “good standing” is applicable in the case of any jurisdiction outside the United States) under the Laws of its jurisdiction of organization, and has the requisite corporate, limited liability company, or other organizational, as applicable, power and authority to own, lease, and operate its assets and to carry on its business as now conducted. Each of the GAME Parties is duly qualified or licensed to do business as a foreign corporation, limited liability company, or other legal entity and is in good standing (to the extent that the concept of “good standing” is applicable in the case of any jurisdiction outside the United States) in each jurisdiction where the character of the assets and properties owned, leased, or operated by it or the nature of its business makes such qualification or license necessary, except where the failure to be so qualified or licensed or to be in good standing, would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

 

(b) Subsidiaries. Section 2.1(b)(i) of the Disclosure Letter lists each of the Subsidiaries of GAME as of the date hereof and its place of organization. Section 2.1(b)(ii) of the Disclosure Letter sets forth, for each Subsidiary that is not, directly or indirectly, wholly owned by GAME: (i) the number and type of any capital stock of, or other equity or voting interests in, such Subsidiary that is outstanding as of the date hereof; and (ii) the number and type of shares of capital stock of, or other equity or voting interests in, such Subsidiary that, as of the date hereof, are owned, directly or indirectly, by GAME. All of the outstanding shares of capital stock of, or other equity or voting interests in, each Subsidiary of GAME that is owned directly or indirectly by GAME have been validly issued, were issued free of preemptive rights, are fully paid and non-assessable, and are free and clear of all Liens, including any restriction on the right to vote, sell, or otherwise dispose of such capital stock or other equity or voting interests, except for any Liens: (A) imposed by applicable securities Laws; or (B) arising pursuant to the Charter Documents of any non-wholly owned Subsidiary of GAME. Except for the capital stock of, or other equity or voting interests in, its Subsidiaries, GAME does not own, directly or indirectly, any capital stock of, or other equity or voting interests in, any Person.

 

2.2 Authority; Non-Contravention; Governmental Consents.

 

(a) Authority. Each of the GAME Parties has all requisite corporate power and authority to enter into and to perform its obligations under this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by the GAME Parties and the consummation by the GAME Parties of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of the GAME Parties and no other corporate proceedings on the part of the GAME Parties are necessary to authorize the execution and delivery of this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly executed and delivered by the GAME Parties and, assuming due execution and delivery by the other Parties, constitutes the legal, valid, and binding obligation of the GAME Parties, enforceable against the GAME Parties in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, moratorium, and other similar Laws affecting creditors’ rights generally and by general principles of equity.

 

(b) Non-Contravention. The execution, delivery, and performance of this Agreement by the GAME Parties, and the consummation by the GAME Parties of the transactions contemplated by this Agreement do not and will not: (i) contravene or conflict with, or result in any violation or breach of, the Charter Documents of the GAME Parties or any of their Subsidiaries; (ii) conflict with or violate any Law applicable to the GAME Parties, or any of their respective properties or assets; (iii) result in any breach of or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the GAME Parties’ loss of any benefit or the imposition of any additional payment or other liability under, or alter the rights or obligations of any third party under, or give to any third party any rights of termination, amendment, acceleration, or cancellation, or require any Consent under, any Assigned Contract or Permit to which a GAME Party is a party or otherwise bound as of the date hereof; or (iv) result in the creation of a Lien (other than Permitted Liens) on any of the properties or assets of the GAME Parties.

 

 

(c) Contractual Consents. Except as set forth on Section 2.2(c) of the Disclosure Letter, no Consent under any Assigned Contract or Permit is required to be obtained from, and no GAME Party is or will be required to give any notice to, any Person in connection with the execution, delivery or performance of this Agreement or any of the transactions contemplated hereby. For purposes of this Agreement, including this Section 2.2(c) and Section 2.2(d), a Consent or Permit will be deemed “required” to be obtained, a notice will be deemed “required” to be given and a filing or declaration will be deemed “required” to be made if the failure to obtain such Consent or Permit, give such notice or make such filing or declaration could result in any GAME Party, the Company or the Business: (i) becoming subject to any Liability; (ii) being required to make any payment, issue any securities or deliver anything of value; or (iii) losing or forgoing any right or benefit.

 

(d) Governmental Consents. No consent, approval, order, or authorization of, or registration, declaration, or filing with, or notice to (any of the foregoing being a “Consent”), any supranational, national, state, municipal, local, or foreign government, any instrumentality, subdivision, court, administrative agency or commission, or other governmental authority, or any quasi-governmental or private body exercising any regulatory or other governmental or quasigovernmental authority, including any national securities exchange (a “Governmental Entity”), is required to be obtained or made by the GAME Parties in connection with the execution, delivery, and performance by the GAME Parties of this Agreement or the consummation by the GAME Parties of the transactions contemplated hereby.

 

2.3 SEC Filings; Financial Statements; Sarbanes-Oxley Act Compliance; Undisclosed Liabilities; Off-Balance Sheet Arrangements.

 

(a) SEC Filings. With the exception of the delay resulting from the need to select a new auditor because the previous one failed to adhere to PCAOB Auditing Standards in relation to the Company’s Form 20-F for the fiscal year ended August 31, 2022, and any and all correspondence, amendments, exhibits, supplements related thereto, each of the GAME Parties has timely filed with or furnished to, as applicable, the SEC all registration statements, prospectuses, reports, schedules, forms, statements, and other documents (including exhibits and schedules thereto and all other information incorporated by reference) required to be filed or furnished by it with the SEC since January 1, 2021 (the “SEC Documents”). True, correct, and complete copies of all SEC Documents are publicly available in the Electronic Data Gathering, Analysis, and Retrieval database of the SEC (“EDGAR”). To the extent that any SEC Document available on EDGAR contains redactions pursuant to a request for confidential treatment or otherwise, the GAME Parties have made available to the Company the full text of all such SEC Documents that they have so filed or furnished with the SEC. As of their respective filing dates or, if amended or superseded by a subsequent filing prior to the date hereof, as of the date of the last such amendment or superseding filing (and, in the case of registration statements and proxy statements, on the dates of effectiveness and the dates of the relevant meetings, respectively), each of the SEC Documents complied as to form in all material respects with the applicable requirements of the Securities Act, the Exchange Act, and the Sarbanes-Oxley Act of 2002 (including the rules and regulations promulgated thereunder, the “Sarbanes-Oxley Act”), and the rules and regulations of the SEC thereunder applicable to such SEC Documents. None of the SEC Documents, including any financial statements, schedules, or exhibits included or incorporated by reference therein at the time they were filed (or, if amended or superseded by a subsequent filing prior to the date hereof, as of the date of the last such amendment or superseding filing), contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. To the Knowledge of GAME, none of the SEC Documents is the subject of ongoing SEC review or outstanding SEC investigation and there are no outstanding or unresolved comments received from the SEC with respect to any of the SEC Documents.

 

 

(b) Financial Statements. Section 2.3(b) of the Disclosure Letter sets forth true and complete copies of the Business Pro-Forma Financial Statements. The Business Pro-Forma Financial Statements (i) have been carved-out of and prepared from the books and records of the GAME Parties; (ii) were prepared in accordance with United States generally accepted accounting principles (“GAAP”) applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto); and (iii) fairly presented in all material respects the consolidated financial position and the results of operations and cash flows of the Business as of the respective dates of and for the periods referred to in such financial statements, subject, in the case of unaudited interim financial statements, to normal and year-end audit adjustments and omitted footnotes (but only if the effect of such adjustments or omitted footnotes would not, individually or in the aggregate, be material).

 

(c) Internal Controls. The GAME Parties have established and maintain a system of “internal controls over financial reporting” (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that is sufficient to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements (including the Business Pro-Forma Financial Statements) for external purposes in accordance with GAAP including policies and procedures that: (i) require the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the GAME Parties; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and that receipts and expenditures of the GAME Parties are being made only in accordance with appropriate authorizations of the applicable management and boards of directors of the GAME Parties; and (iii) provide assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the assets of the GAME Parties.

 

(d) Disclosure Controls and Procedures. The GAME Parties’ “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) are designed to ensure that all information (both financial and non-financial) required to be disclosed by the GAME Parties in the reports that they file or submit under the Exchange Act are recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC, and that all such information is accumulated and communicated to the GAME Parties’ management, as applicable, as appropriate to allow timely decisions regarding required disclosure and to make the certifications of the chief executive officer and chief financial officer of the GAME Parties, as applicable, required under the Exchange Act with respect to such reports. None of the GAME Parties nor, to the Knowledge of GAME, the GAME Parties’ independent registered public accounting firm has identified or been made aware of: (i) any significant deficiency or material weakness in the system of internal control over financial reporting utilized by the GAME Parties that has not been subsequently remediated; or (ii) any fraud that involves the GAME Parties’ management or other employees who have a role in the preparation of financial statements or the internal control over financial reporting utilized by the GAME Parties.

 

 

(e) Undisclosed Liabilities. Except as set forth on Section 2.2(e) of the Disclosure Letter, there are no Liabilities with respect to the Business other than Liabilities that: (i) are reflected or reserved against in the Business Pro-Forma Financial Statements (including in the notes thereto); (ii) were incurred since December 31, 2023 (the “Balance Sheet Date”) in the ordinary course of business consistent with past practice; (iii) are incurred in connection with the transactions contemplated by this Agreement; or (iv) would not reasonably be expected to exceed $100,000, individually or in the aggregate.

 

(f) Off-Balance Sheet Arrangements. None of the GAME Parties is a party to, or has any commitment to become a party to, with respect to the Business: (i) any joint venture, off-balance sheet partnership, or any similar Contract or arrangement (including any Contract or arrangement relating to any transaction or relationship between or among the GAME Parties, on the one hand, and any other Person, including any structured finance, special purpose, or limited purpose Person, on the other hand); or (ii) any “off-balance sheet arrangements” (as defined in Item 303(a) of Regulation S-K promulgated by the SEC).

 

(g) Sarbanes-Oxley and Nasdaq Compliance. Each of the principal executive officer and the principal financial officer of the GAME Parties (or each former principal executive officer and each former principal financial officer of the GAME Parties), as applicable, has made all certifications required by Rule 13a-14 or 15d-14 under the Exchange Act and Sections 302 and 906 of the Sarbanes-Oxley Act with respect to the SEC Documents, as applicable, and the statements contained in such certifications are true and accurate in all material respects. For purposes of this Agreement, “principal executive officer” and “principal financial officer” shall have the meanings given to such terms in the Sarbanes-Oxley Act. The GAME Parties are also in compliance with all of the other applicable provisions of the Sarbanes-Oxley Act and the applicable listing and corporate governance rules of Nasdaq.

 

(h) Accounting, Securities, or Other Related Complaints or Reports. With the exception of the Company’s Form 20-F for the fiscal year ended August 31, 2022, since January 1, 2021: (i) none of the GAME Parties nor any director or officer of the GAME Parties has received any oral or written complaint, allegation, assertion, or claim regarding the financial accounting, internal accounting controls, or auditing practices, procedures, methodologies, or methods of the GAME Parties or any oral or written complaint, allegation, assertion, or claim from employees of the GAME Parties regarding questionable financial accounting or auditing matters with respect to the GAME Parties; and (ii) no attorney representing the GAME Parties, whether or not employed by the GAME Parties, has reported credible evidence of any material violation of securities Laws, breach of fiduciary duty, or similar material violation by the GAME Parties, or any of their respective officers, directors, employees, or agents to the board of directors of the GAME Parties, as applicable, or any committee thereof, or to the chief executive officer, chief financial officer, or general counsel of the GAME Parties, as applicable.

 

(i) Accounts Receivable; Accounts Payable. All of the accounts receivable included in the Contributed Assets, including the Accounts Receivable, arose in the ordinary course of business, are carried on the records of the GAME Parties at values determined in accordance with GAAP and are bona fide and collectible in full. No Person has any Lien on any of such accounts receivable, and no request or agreement for deduction or discount has been made with respect to any of such accounts receivable except as fully and adequately reflected in reserves for doubtful accounts set forth in the Interim Balance Sheet. The AP/AR Listing contains a complete and accurate list of each of the Accounts Payable and Accounts Receivable as of May 14, 2024.

 

 

(j) Indebtedness. Section 2.3(j) of the Disclosure Letter sets forth an accurate and complete list of all Assumed Debt as of the date of this Agreement, identifying the name of the creditor or creditors to which such Assumed Debt is owed, the type of instrument under which such Assumed Debt is evidenced or the agreement under which such Assumed Debt was incurred and the aggregate principal amount of such Assumed Debt as of the close of business on the date of this Agreement. No Assumed Debt contains any restriction upon: (i) the prepayment of any of such Assumed Debt; (ii) the incurrence of any other Assumed Debt by any GAME Party; or (iii) the ability of any GAME Party to grant any Lien on any of its assets. No GAME Party is in default with respect to any Assumed Debt and no payment with respect to any Assumed Debt is past due. No GAME Party has received any notice of a default, alleged failure to perform or any offset or counterclaim with respect to any Assumed Debt. Neither the consummation of any of the transactions contemplated by this Agreement nor the execution, delivery or performance of this Agreement will, or could reasonably be expected to, cause or result in a default, breach or acceleration, automatic or otherwise, of any condition, covenant or other term of any Assumed Debt. No GAME Party has guaranteed or otherwise become liable for any Assumed Debt of any other Person.

 

(k) Insider Receivables. No amounts are owed by any Business Associate to any GAME Party.

 

(l) Inventory. A complete and accurate list of the Inventory as of the Balance Sheet Date, is set forth on Section 2.3(l) of the Disclosure Letter. The Inventory as of the date hereof is of a quantity, quality, and mix consistent with past practice and at levels historically maintained by the GAME Parties with regard to the Business, sufficient for the continued operation of the Business in the ordinary course of business immediately after the Effective Time. All such Inventory is owned by the GAME Parties free and clear of all Liens. All Inventory was produced or acquired by the GAME Parties in bona fide, arms-length transactions entered into in the ordinary course of business. No Inventory is held on consignment, or is otherwise subject to any ownership interest of any third party. The Inventory consists, and will consist at Closing, of items of a quality usable or saleable in the ordinary course of business. All Inventory reflected in the Business Pro-Forma Financial Statements has been valued on a basis consistent with the inventory valuation policies and practices of the GAME Parties.

 

(m) Business Plan. The Business plan attached to Section 2.3(m) of the Disclosure Letter is reasonably prepared based on currently available information and does not contain any material misstatements or omissions. The projected revenue and margin for calendar years 2024 and 2025 are reasonable projections based on currently available information and, to the Knowledge of GAME, there are no material facts or circumstances that have not been made available to the Company that would make it improbable that the projections will be met.

 

 

2.4 Absence of Certain Changes or Events.

 

(a) No Material Adverse Effect; Ordinary Course. Since the Balance Sheet Date, there has not been any Material Adverse Effect, and no event has occurred or circumstance has arisen that, in combination with any other events or circumstances, will or would reasonably be expected to have or result in a Material Adverse Effect. Since the Balance Sheet Date, each GAME Party has conducted the Business only in the ordinary course and consistent with past practices, and each GAME Party has, with respect to the Business, the Contributed Assets, the Assumed Liabilities and the Business Associates:

 

(i) used reasonable efforts to: (A) preserve intact its present business organization; (B) keep available the services of its present officers, managerial personnel and key employees and independent contractors; (C) preserve its relationships with customers, suppliers, landlords, creditors and others having business relationships with it; and (D) maintain its assets in their current condition, except for ordinary wear and tear;

 

(ii) repaired, maintained or replaced its equipment in accordance with the normal standards of maintenance applicable in the industry in which it operates;

 

(iii) paid all indebtedness and other accounts payable as they became due; and

 

(iv) prepared and filed or caused to be prepared and filed any Tax Returns that were required to be filed on or prior to the date of this Agreement and paid all Taxes due with respect to such Tax Returns within the time and in the manner required by applicable Legal Requirements.

 

(b) Operational Matters. Since the Balance Sheet Date, no GAME Party has, in connection with the Business, the Contributed Assets, the Assumed Liabilities or the Business Associates:

 

(i) amended or terminated any Material Contract or received any notice or other communication that any other Person has or intends to take any such action;

 

(ii) transferred, granted any license or sublicense of any rights under or with respect to any of its Intellectual Property, other than in the ordinary course of business;

 

(iii) adopted, terminated or amended any Business Employee Plan, made any contribution to any Business Employee Plan (other than regularly scheduled contributions), except as required to comply with applicable Law, increased the compensation or benefits of any Business Associate, made or committed to make any grants of equity or equity-based compensation or granted any new right to severance or termination pay to any Business Associate;

 

(iv) made any oral or written representation or commitment with respect to any aspect of any Business Employee Plan that is not in accordance with the existing written terms and provision of such Business Employee Plan;

 

 

(v) terminated the employment of any employee, other than in the ordinary course of business;

 

(vi) acquired (including by merger, consolidation or the acquisition of any equity interest or assets), leased or licensed or disposed of or sold (whether by merger, consolidation or the sale of an equity interest or assets) any assets, except for fair consideration in the ordinary course of business;

 

(vii) acquired (including by merger, consolidation or the acquisition of any equity interest or assets) or sold (whether by merger, consolidation or the sale of an equity interest or assets), leased or disposed of any assets (whether or not in the ordinary course of business or consistent with past practice) having a fair market value in excess of $25,000 individually or $100,000 in the aggregate;

 

(viii) mortgaged, pledged or subjected to any Lien any of its assets;

 

(ix) made any loans, advances or capital contributions to, or investment in, any other Person, other than loans or investments by any GAME Party to or in any other GAME Party;

 

(x) entered into any joint venture, strategic partnership or alliance;

 

(xi) (A) changed any of its practices or procedures with respect to the collection of accounts receivable or the payment of accounts payable; (B) offered to discount the amount of any account receivable; (C) extended any incentive (whether to an account debtor, an account creditor or any employee or third party responsible for the collection of receivables or the payment of payables) with respect to any account receivable or account payable or the payment or collection thereof; or (D) taken or omitted to take any other action with the intent or effect of accelerating the collection of receivables or delaying the payment of payables;

 

(xii) incurred any indebtedness outside the ordinary course of business;

 

(xiii) cancelled, compromised, waived or released any right or claim other than immaterial rights or claims in the ordinary course of business;

 

(xiv) (A) paid, discharged or satisfied any claim or Liability, other than immaterial Liabilities arising in the ordinary course of business; or (B) cancelled, compromised, waived or released any right or claim, other than immaterial rights or claims in the ordinary course of business;

 

 

(xv) incurred or committed to incur any capital expenditures, capital additions or capital improvements, other than budgeted capital expenditures made in the ordinary course of business;

 

(xvi) (A) made, changed or rescinded any election relating to Taxes; (B) settled or compromised any claim, controversy or Legal Action relating to Taxes; (C) except as required by applicable Law, made any change to (or made a request to any Governmental Entity to change) any of its methods, policies or practices of Tax accounting or methods of reporting income or deductions for Tax purposes; (D) amended, refiled or otherwise revised any previously filed Tax Return, or foregone the right to any amount of refund or rebate of a previously paid Tax; (E) entered into or terminated any Tax agreements with a Governmental Entity; (F) prepared any Tax Return in a manner inconsistent with past practices; (G) consented to an extension or waiver of the statutory limitation period applicable to a claim or assessment in respect of Taxes; (H) entered into a Tax allocation agreement, Tax sharing agreement or Tax indemnity agreement; (I) granted any power of attorney relating to Tax matters; or (J) requested a ruling with respect to Taxes;

 

(xvii) changed any of its methods of accounting or accounting practices in any material respect; or

 

(xviii) authorized, approved, agreed to, made or offered to make any commitment, orally or in writing, to take any actions set forth this Section 2.4.

 

2.5 Taxes.

 

(a) Tax Returns and Payment of Taxes. The GAME Parties have duly and timely filed or caused to be filed (taking into account any valid extensions) all material Tax Returns required to be filed by them. Such Tax Returns are true, complete, and correct in all material respects. None of the GAME Parties is currently the beneficiary of any extension of time within which to file any Tax Return other than extensions of time to file Tax Returns obtained in the ordinary course of business consistent with past practice. All material Taxes due and owing by any GAME Party (whether or not shown on any Tax Return) have been timely paid or, where payment is not yet due, the GAME Parties have made an adequate provision for such Taxes in the financial statements included in the SEC Documents (in accordance with GAAP). The GAME Parties’ most recent financial statements included in the SEC Documents reflect an adequate reserve (in accordance with GAAP) for all material Taxes payable by the GAME Parties through the date of such financial statements. None of the GAME Parties has incurred any material Liability for Taxes since the date of the GAME Parties’ most recent financial statements included in the SEC Documents outside of the ordinary course of business or otherwise inconsistent with past practice.

 

(b) Availability of Tax Returns. The GAME Parties have made available to the Company complete and accurate copies of all federal, state, local, and foreign income, franchise, and other material Tax Returns filed by or on behalf of the GAME Parties for any Tax period ending after December 31, 2021.

 

(c) Withholding. The GAME Parties have withheld and timely paid each material Tax required to have been withheld and paid in connection with amounts paid or owing to any Business Associate, creditor, customer, stockholder, or other party (including, without limitation, withholding of Taxes pursuant to Sections 1441 and 1442 of the Code or similar provisions under any state, local, and foreign Laws), and materially complied with all information reporting and backup withholding provisions of applicable Law.

 

 

(d) Liens. There are no Liens for material Taxes upon the assets of the GAME Parties other than for current Taxes not yet due and payable or for Taxes that are being contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP has been made in the GAME Parties’ most recent financial statements included in the SEC Documents.

 

(e) Tax Deficiencies and Audits. No deficiency for any material amount of Taxes which has been proposed, asserted, or assessed in writing by any taxing authority against the GAME Parties remains unpaid. There are no waivers or extensions of any statute of limitations currently in effect with respect to Taxes of the GAME Parties. There are no audits, suits, proceedings, investigations, claims, examinations, or other administrative or judicial proceedings ongoing or pending with respect to any material Taxes of the GAME Parties.

 

(f) Tax Jurisdictions. No claim has ever been made in writing by any taxing authority in a jurisdiction where the GAME Parties do not file Tax Returns that the GAME Parties are or may be subject to Tax in that jurisdiction.

 

(g) Tax Rulings. None of the GAME Parties has requested or is the subject of or bound by any private letter ruling, technical advice memorandum, or similar ruling or memorandum with any taxing authority with respect to any material Taxes, nor is any such request outstanding.

 

(h) Consolidated Groups, Transferee Liability, and Tax Agreements. None of the GAME Parties: (i) has been a member of a group filing Tax Returns on a consolidated, combined, unitary, or similar basis; (ii) has any material liability for Taxes of any Person (other than the GAME Parties) under Treasury Regulation Section 1.1502-6 (or any comparable provision of local, state, or foreign Law), as a transferee or successor, by Contract, or otherwise; or (iii) is a party to, bound by or has any material liability under any Tax sharing, allocation, or indemnification agreement or arrangement.

 

(i) Change in Accounting Method. None of the GAME Parties has agreed to make, nor is it required to make, any material adjustment under Section 481(a) of the Code or any comparable provision of state, local, or foreign Tax Laws by reason of a change in accounting method or otherwise.

 

(j) Post-Closing Tax Items. The GAME Parties will not be required to include any material item of income in, or exclude any material item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Effective Time as a result of any: (i) “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or foreign income Tax Law) executed on or prior to the Effective Time; (ii) installment sale or open transaction disposition made on or prior to the Effective Time; (iii) prepaid amount received on or prior to the Effective Time; (iv) any income under Section 965(a) of the Code, including as a result of any election under Section 965(h) of the Code with respect thereto; or (v) election under Section 108(i) of the Code.

 

 

(k) Section 355. None of the GAME Parties has been a “distributing corporation” or a “controlled corporation” in connection with a distribution described in Section 355 of the Code.

 

(l) Reportable Transactions. None of the GAME Parties has been a party to, or a material advisor with respect to, a “reportable transaction” within the meaning of Section 67I(c)(1) of the Code and Treasury Regulations Section 1.6011-4(b).

 

2.6 Intellectual Property.

 

(a) Scheduled Business-Owned IP. Section 2.6(a) of the Disclosure Letter sets forth an accurate and complete list, as of the date of this Agreement, of all: (i) Business-Owned IP that is the subject of any issuance, registration, certificate, application, or other filing by, to or with any Governmental Entity or authorized private registrar, including patents, patent applications, trademark registrations and pending applications for registration, copyright registrations and pending applications for registration, and internet domain name registrations; and (ii) material unregistered Business-Owned IP.

 

(b) Right to Use; Title. The GAME Parties are the sole and exclusive legal and beneficial owner of all right, title, and interest in and to the Business-Owned IP, and has the valid and enforceable right to use all other Intellectual Property used in or necessary for the conduct of the Business (“Business IP”), in each case, free and clear of all Liens other than Permitted Liens, except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. Section 2.6(b) of the Disclosure Letter sets forth an accurate and complete list, as of the date of this Agreement, of all Business IP (other than such Business IP required to be set forth in Section 2.6(a) of the Disclosure Letter). No Contracts permitting use of Intellectual Property of any third Person by the GAME Parties will be violated or give rise to a right of termination, modification, acceleration, or cancellation under any provision by (or will require the payment or grant of additional amounts or consideration as a result of) the execution, delivery, or performance of this Agreement or the consummation of the transactions contemplated hereby or thereby, except as has not been and would not be, individually or in the aggregate, material to the GAME Parties, taken as a whole.

 

(c) Validity and Enforceability. The GAME Parties’ rights in the Business-Owned IP are valid, subsisting, and enforceable, except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. The GAME Parties have taken commercially reasonable measures to protect the confidentiality of all Trade Secrets in possession of the GAME Parties, including requiring all Persons who receive access to such Trade Secrets to execute valid, written nondisclosure agreements requiring such individuals to (or such Persons are otherwise obligated by operation of Law to) protect the confidentiality of such Trade Secrets and refrain from using them for purposes other than as authorized by the GAME Parties, except as has not been and would not be, individually or in the aggregate, material to the GAME Parties taken as a whole. To the Knowledge of GAME, there has not been any unauthorized disclosure of or unauthorized access to any Trade Secrets in the possession of the GAME Parties to or by any Person in a manner that has resulted or may reasonably result in the misappropriation of, or loss of Trade Secret or other rights in and to, such Trade Secret, except as has not been and would not be, individually or in the aggregate, material to the GAME Parties taken as a whole.

 

 

(d) Non-Infringement. Except as would not be reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect: (i) the conduct of the businesses of the GAME Parties has not infringed, misappropriated, or otherwise violated, and is not infringing, misappropriating, or otherwise violating, any Intellectual Property of any other Person; and (ii) to the Knowledge of GAME, no third party is infringing upon, violating, or misappropriating any Business IP.

 

(e) IP Legal Actions and Orders. There are no Legal Actions pending or, to the Knowledge of GAME, threatened: (i) alleging any infringement, misappropriation, or violation by the GAME Parties of the Intellectual Property of any Person; or (ii) challenging the validity, enforceability, or ownership of any Business-Owned IP or the GAME Parties’ rights with respect to any Business-Owned IP, in each case except for such Legal Actions that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. The GAME Parties are not subject to any outstanding Order that restricts or impairs the use of any Business-Owned IP, except where compliance with such Order would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

(f) Business IT Systems. Section 2.6(f) of the Disclosure Letter sets forth an accurate and complete list, as of the date of this Agreement, of all the Business IT Systems. In the past three years, there has been no malfunction, failure, continued substandard performance, denial-of-service, or other cyber incident, including any cyberattack, or other impairment of Business IT Systems, in each case except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. The GAME Parties have taken all reasonable best effort steps to safeguard the confidentiality, availability, security, and integrity of Business IT Systems, including implementing and maintaining appropriate backup, disaster recovery, and software and hardware support arrangements, in each case except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. With respect to Business IT Systems used or held for use in the business of the GAME Parties, no such Software (or such IT System) contains any undisclosed or hidden device or feature designed to disrupt, disable, or otherwise impair the functioning of any Software or IT System or any “back door,” “time bomb,” “Trojan horse,” “worm,” “drop dead device,” or other malicious code or routines that permit unauthorized access or the unauthorized disablement or erasure of such or other software or information or data (or any parts thereof) of the GAME Parties or customers of the GAME Parties.

 

(g) Privacy and Data Security. The GAME Parties have complied with all applicable Laws and all internal or publicly posted policies, notices, and statements concerning the collection, use, processing, storage, transfer, and security of personal information in the conduct of the GAME Parties’ businesses, in each case except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. In the past three years, the GAME Parties have not: (i) experienced any actual, alleged, or suspected data breach or other security incident involving personal information in their possession or control; or (ii) been subject to or received any notice of any audit, investigation, complaint, or other Legal Action by any Governmental Entity or other Person concerning the GAME Parties’ collection, use, processing, storage, transfer, or protection of personal information or actual, alleged, or suspected violation of any applicable Law concerning privacy, data security, or data breach notification, and to the Knowledge of GAME, there are no facts or circumstances that could reasonably be expected to give rise to any such Legal Action, in each case except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

 

(h) Invention Assignment. All current and former (since January 1, 2020) employees, directors, officers, consultants, contractors and/or individuals that have contributed to the creation of Intellectual Property on behalf of the GAME Parties have executed an agreement presently assigning all such Intellectual Property to the GAME Parties (or all such rights have vested in the GAME Parties by operation of Law) and, to the Knowledge of GAME, no Person is in breach of any such agreement, except as has not been and would not be, individually or in the aggregate, material to the GAME Parties taken as a whole.

 

(i) Open Source. The GAME Parties’ use and distribution of Open Source Materials, is in material compliance with all Open Source Licenses applicable thereto, except for any non-compliance which would not be material to the GAME Parties, taken as a whole. None of the GAME Parties has used any Open Source Materials in a manner that subjects any Software owned by the GAME Parties or Business-Owned IP to any compulsory copyleft terms.

 

2.7 Compliance; Permits.

 

(a) Compliance. The GAME Parties are and, since January 1, 2020, have been in material compliance with, all Laws or Orders applicable to the GAME Parties or by which the GAME Parties or any of their respective businesses or properties are bound. Since January 1, 2020, no Governmental Entity has issued any notice or notification stating that the GAME Parties are not in compliance with any Law in any material respect.

 

(b) Permits. The GAME Parties hold, to the extent necessary to operate the Business, all permits, licenses, registrations, variances, clearances, Consents, commissions, franchises, exemptions, Orders, authorizations, and approvals from Governmental Entities (collectively, “Permits”). No suspension, cancellation, non-renewal, or adverse modifications of any Permits of the GAME Parties is pending or, to the Knowledge of GAME, threatened. Each of the GAME Parties is and, since January 1, 2020, has been in compliance with the terms of all Permits. Section 2.7(b) of the Disclosure Letter provides an accurate and complete list of all Permits held by each GAME Party related to the Business, and the GAME Parties have made available to the Company accurate and complete copies of all such Permits. Since January 1, 2020, no GAME Party has received any notice or other communication from any Governmental Entity regarding: (i) any actual or possible violation of or failure to comply with any term, condition or requirement of any Permit relating to the Business; or (ii) any actual or possible revocation, withdrawal, suspension, cancellation, termination or modification of any such Permit.

 

2.8 Litigation and Proceedings. Except as set forth in Section 2.8 of the Disclosure Letter as of the date of this Agreement, (a) there is no Legal Action pending or, to the Knowledge of GAME, threatened against the GAME Parties, the Business Associates or any of their respective properties or assets that relates to the Business, (b) to the Knowledge of GAME, there is no investigation or other inquiry pending with any Governmental Entity, against the GAME Parties, the Business Associates or any of their respective properties or assets that relates to the Business and (c) there is no order, writ, assessment, decision, injunction, decree, ruling, or judgment of a Governmental Entity or arbitrator, whether temporary, preliminary, or permanent (“Order”) imposed upon, or, to the Knowledge of GAME, threatened against, the GAME Parties or the Business Associates, nor are any of the properties or assets of the GAME Parties related to the Business bound by or subject to any Order. There are no SEC inquiries or investigations, other governmental inquiries or investigations, or internal investigations pending or, to the Knowledge of GAME, threatened, in each case regarding any accounting practices of the GAME Parties or any malfeasance by any officer or director of the GAME Parties.

 

 

2.9 Brokers’ and Finders’ Fees. None of the GAME Parties has incurred, nor will it incur, directly or indirectly, any liability for investment banker, brokerage, or finders’ fees or agents’ commissions, or any similar charges in connection with this Agreement or any transaction contemplated by this Agreement.

 

2.10 Related Party Transactions. No Related Party: (a) has or has had any interest in any material asset used in or otherwise relating to the Business; or (b) is or has been indebted to any GAME Party, and no GAME Party is indebted (or has committed to make any loan or extend or guarantee credit) to any Related Party in connection with the Business. To the Knowledge of GAME, no Related Party has any direct or indirect ownership interest in or relationship with: (i) any Person with which any GAME Party is affiliated or with which any GAME Party has a business relationship relating to the Business; or (ii) any Person that competes with the Business (other than the ownership of less than 1% of the outstanding publicly traded stock in publicly traded companies that may compete with the Business). Other than standard employee benefit plans generally made available to all employees, to the Knowledge of GAME, no Related Party is or has been, directly or indirectly, a party to or otherwise interested in any Contract that is a Contributed Asset or Assumed Liability. No member of the board of directors (or other similar body) of any of the GAME Parties has ever had a conflict of interest with respect to the GAME Parties in connection with the Business.

 

2.11 Employee Benefit Issues.

 

(a) Schedule. Section 2.11(a) of the Disclosure Letter contains a true and complete list, as of the date hereof, of each plan, program, policy, agreement, collective bargaining agreement, or other arrangement providing for compensation, severance, deferred compensation, performance awards, stock or stock-based awards, health, dental, retirement, life insurance, death, accidental death & dismemberment, disability, fringe, or wellness benefits, or other employee benefits or remuneration of any kind, including each employment, termination, severance, retention, change in control, or consulting or independent contractor plan, program, arrangement, or agreement, in each case whether written or unwritten or otherwise, funded or unfunded, insured or self-insured, including each “employee benefit plan,” within the meaning of Section 3(3) of ERISA, whether or not subject to ERISA (collectively “Benefit Plans”), which is or has been sponsored, maintained, contributed to, or required to be contributed to, by the GAME Parties for the benefit of any Business Associate, or with respect to which the GAME Parties or any ERISA Affiliate has or may have any Liability primarily related to the Business (collectively, the “Business Employee Plans”). Section 2.11(a) of the Disclosure Letter separately identifies each Business Employee Plan that is maintained by a professional employer organization, employer of record or co-employer organization (such entity, a “PEO” and any such Business Employee Plan, a “PEO Plan”).

 

 

(b) Documents. The GAME Parties have made available to the Company correct and complete copies (or, if a plan or arrangement is not written, a written description) of all Business Employee Plans and amendments thereto, and, to the extent applicable: (i) all related trust agreements, funding arrangements, insurance contracts, and service provider agreements now in effect or required in the future as a result of the transactions contemplated by this Agreement or otherwise; (ii) the most recent determination letter received regarding the tax-qualified status of each Business Employee Plan; (iii) the most recent financial statements for each Business Employee Plan; (iv) the Form 5500 Annual Returns/Reports and Schedules for the most recent plan year for each Business Employee Plan; (v) the current summary plan description and any related summary of material modifications and, if applicable, summary of benefits and coverage, for each Business Employee Plan; (vi) all actuarial valuation reports related to any Business Employee Plans; (vii) the most recent nondiscrimination tests performed under the Code; and (viii) all services contracts or other agreements with a PEO.

 

(c) Employee Plan Compliance. (i) Each Business Employee Plan has been established, administered, and maintained in all material respects in accordance with its terms and in material compliance with applicable Laws, including but not limited to ERISA and the Code; (ii) all Business Employee Plans that are intended to be qualified under Section 401(a) of the Code are so qualified and have received timely determination letters from the IRS and no such determination letter has been revoked nor, to the Knowledge of GAME, has any such revocation been threatened, or with respect to a prototype plan, can rely on an opinion letter from the IRS to the prototype plan sponsor, to the effect that such qualified retirement plan and the related trust are exempt from federal income taxes under Sections 401(a) and 501(a), respectively, of the Code, and to the Knowledge of GAME no circumstance exists that is likely to result in the loss of such qualified status under Section 401(a) of the Code; (iii) the GAME Parties, where applicable, have timely made all contributions, benefits, premiums, and other payments required by and due under the terms of each Business Employee Plan and applicable Law and accounting principles, and all benefits accrued under any unfunded Business Employee Plan have been paid, accrued, or otherwise adequately reserved to the extent required by, and in accordance with GAAP; (iv) except to the extent limited by applicable Law, each Business Employee Plan can be amended, terminated, or otherwise discontinued after the Effective Time in accordance with its terms, without material liability the Company or any of its Subsidiaries (other than ordinary administration expenses and in respect of accrued benefits thereunder); (v) there are no investigations, audits, inquiries, enforcement actions, or Legal Actions pending or, to the Knowledge of GAME, threatened by the IRS, U.S. Department of Labor, Health and Human Services, Equal Employment Opportunity Commission, or any similar Governmental Entity with respect to any Business Employee Plan; (vi) there are no material Legal Actions pending, or, to the Knowledge of GAME, threatened with respect to any Business Employee Plan (in each case, other than routine claims for benefits); and (vii) none of the GAME Parties nor, to the Knowledge of GAME, any of its ERISA Affiliates has engaged in a transaction that could subject the GAME Parties or any ERISA Affiliate to a tax or penalty imposed by either Section 4975 of the Code or Section 502(i) of ERISA.

 

 

(d) Plan Liabilities. None of the GAME Parties nor any ERISA Affiliate nor, to the Knowledge of GAME, any PEO, has: (i) incurred or reasonably expects to incur, either directly or indirectly, any liability under Title I or Title IV of ERISA, or related provisions of the Code or foreign Law relating to any Business Employee Plan and nothing has occurred that could reasonably be expected to constitute grounds under Title IV of ERISA to terminate, or appoint a trustee to administer, any Business Employee Plan; (ii) except for payments of premiums to the Pension Benefit Guaranty Corporation (“PBGC”) which have been timely paid in full, not incurred any liability to the PBGC in connection with any Business Employee Plan covering any active, retired, or former employees or directors of the GAME Parties or any ERISA Affiliate, including, without limitation, any liability under Sections 4069 or 4212(c) of ERISA or any penalty imposed under Section 4071 of ERISA, or ceased operations at any facility, or withdrawn from any such Business Employee Plan in a manner that could subject it to liability under Sections 4062, 4063 or 4064 of ERISA; (iii) failed to satisfy the health plan compliance requirements under the Affordable Care Act, including the employer mandate under Section 4980H of the Code and related information reporting requirements; (iv) failed to comply with Section 601 through 608 of ERISA and Section 4980B of the Code, regarding the health plan continuation coverage requirements under COBRA; or (v) failed to comply with the privacy, security, and breach notification requirements under HIPAA. No complete or partial termination of any Business Employee Plan has occurred or is expected to occur.

 

(e) Certain Business Employee Plans. With respect to each Business Employee Plan:

 

(i) no such plan is a “multiemployer plan” within the meaning of Section 3(37) of ERISA, a “multiple employer plan” within the meaning of Section 413(c) of the Code or a “multiple employer welfare arrangement” within the meaning of Section 3(40)(A) of ERISA (except for a PEO Plan), and none of the GAME Parties nor any of its ERISA Affiliates has now or at any time within the previous six years contributed to, sponsored, maintained, or had any liability or obligation in respect of any such multiemployer plan, multiple employer plan or multiple employer welfare arrangement, other than the payment and/or remittance of premiums and/or required contributions on behalf of enrolled Business Associates in the case of a PEO Plan;

 

(ii) no Legal Action has been initiated by the PBGC to terminate any such Business Employee Plan or to appoint a trustee for any such Business Employee Plan;

 

(iii) no Business Employee Plan is subject to the minimum funding standards of Section 302 of ERISA or Sections 412, 418(b), or 430 of the Code, and none of the assets of the GAME Parties or any ERISA Affiliate is, or may reasonably be expected to become, the subject of any lien arising under Section 303 of ERISA or Sections 430 or 436 of the Code. Except as set forth in Section 2.11(e) of the Disclosure Letter, no such plan is subject to the minimum funding standards of Section 302 of ERISA or Sections 412, 418(b), or 430 of the Code, and no plan listed in Section 2.11(e) of the Disclosure Letter has failed to satisfy the minimum funding standards of Section 302 of ERISA or Sections 412, 418(b), or 430 of the Code, and none of the assets of the GAME Parties or any ERISA Affiliate is, or may reasonably be expected to become, the subject of any lien arising under Section 303 of ERISA or Sections 430 or 436 of the Code; and

 

(iv) no “reportable event,” as defined in Section 4043 of ERISA, has occurred, or is reasonably expected to occur, with respect to any such Business Employee Plan.

 

 

(f) No Post-Employment Obligations. No Business Employee Plan provides post-termination or retiree health benefits to any person for any reason, except as may be required by COBRA or other applicable Law, and none of the GAME Parties nor any ERISA Affiliate has any Liability to provide post-termination or retiree health benefits to any person or ever represented, promised, or contracted to any Business Associate (either individually or to Business Associates as a group) or any other person that such Business Associate(s) or other person would be provided with post-termination or retiree health benefits, except to the extent required by COBRA or other applicable Law.

 

(g) Potential Governmental or Lawsuit Liability. Other than routine claims for benefits: (i) there are no pending or, to the Knowledge of GAME, threatened claims by or on behalf of any participant in any Business Employee Plan, or otherwise involving any Business Employee Plan or the assets of any Business Employee Plan; and (ii) no Business Employee Plan is presently or has within the three years prior to the date hereof, been the subject of an examination or audit by a Governmental Entity or is the subject of an application or filing under, or is a participant in, an amnesty, voluntary compliance, self-correction, or similar program sponsored by any Governmental Entity.

 

(h) Section 409A Compliance. Each Business Employee Plan that is subject to Section 409A of the Code has been operated in compliance with such section and all applicable regulatory guidance (including, without limitation, proposed regulations, notices, rulings, and final regulations).

 

(i) Health Plan Compliance. Each of the GAME Parties complies in all material respects with the applicable requirements under ERISA and the Code, including COBRA, HIPAA, and the Affordable Care Act, and other federal requirements for employer-sponsored health plans, and any corresponding requirements under state statutes, with respect to each Business Employee Plan that is a group health plan within the meaning of Section 733(a) of ERISA, Section 5000(b)(1) of the Code, or such state statute.

 

(j) Effect of Transaction. Neither the execution or delivery of this Agreement, nor the consummation of the transactions contemplated by this Agreement will (either alone or in combination with any other event): (i) entitle any current or former director, employee, contractor, or consultant of the GAME Parties to severance pay or any other payment; (ii) accelerate the timing of payment, funding, or vesting, or increase the amount of compensation due to any such individual; (iii) limit or restrict the right of the GAME Parties to merge, amend, or terminate any Business Employee Plan (other than a PEO Plan) or to withdraw participation from a PEO Plan; or (iv) increase the amount payable or result in any other material obligation pursuant to any Business Employee Plan. No amount that could be received (whether in cash or property or the vesting of any property) as a result of the consummation of the transactions contemplated by this Agreement by any employee, director, or other service provider of the GAME Parties under any Business Employee Plan or otherwise would not be deductible by reason of Section 280G of the Code nor would be subject to an excise tax under Section 4999 of the Code.

 

 

(k) Employment Law Matters. The GAME Parties: (i) have been during the past three years in compliance with all applicable Laws and agreements regarding hiring, employment, termination of employment, plant closing and mass layoff, employment discrimination, harassment, retaliation, and reasonable accommodation, leaves of absence, terms and conditions of employment, wages and hours of work, employee classification, employee health and safety, use of genetic information, leasing and supply of temporary and contingent staff, engagement of independent contractors, including proper classification of same, payroll taxes, and immigration with respect to Business Associate and contingent workers; and (ii) have been during the past three years in compliance with all applicable Laws relating to the relations between it and any labor organization, trade union, work council, or other body representing Business Associates, except, in the case of clauses (i) and (ii) immediately above, where the failure to be in compliance with the foregoing would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

(l) Labor. None of the GAME Parties is party to, or subject to, any collective bargaining agreement or other agreement with any labor organization, work council, or trade union with respect to any of its or their operations. No material work stoppage, slowdown, or labor strike against the GAME Parties with respect to employees who are employed within the United States is pending, threatened, or has occurred in the last two years, and, to the Knowledge of GAME, no material work stoppage, slowdown, or labor strike against the GAME Parties with respect to employees who are employed outside the United States is pending, threatened, or has occurred in the last two years. None of the Business Associates is represented by a labor organization, work council, or trade union and, to the Knowledge of GAME, there is no organizing activity, Legal Action, election petition, union card signing or other union activity, or union corporate campaigns of or by any labor organization, trade union, or work council directed at the GAME Parties, or any Business Associates. There are no Legal Actions, government investigations, or labor grievances pending, or, to the Knowledge of GAME, threatened relating to any employment related matter involving any Business Associates or applicant, including, but not limited to, charges of unlawful discrimination, retaliation or harassment, failure to provide reasonable accommodation, denial of a leave of absence, failure to provide compensation or benefits, unfair labor practices, or other alleged violations of Law, except for any of the foregoing which would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

2.12 Real Property and Personal Property Matters; Sufficiency of Assets.

 

(a) Leased Real Estate. Section 2.12(a) of the Disclosure Letter contains a true and complete list of all Leases (including all amendments, extensions, renewals, guaranties, and other agreements with respect thereto) as of the date hereof for each such Leased Real Estate (including the date and name of the parties to such Lease document). The GAME Parties have delivered to the Company a true and complete copy of each such Lease. Except as set forth on Section 2.12(a) of the Disclosure Letter, with respect to each of the Leases: (i) such Lease is legal, valid, binding, enforceable, and in full force and effect; (ii) none of the GAME Parties nor, to the Knowledge of GAME, any other party to the Lease, is in breach or default under such Lease, and no event has occurred or circumstance exists which, with or without notice, lapse of time, or both, would constitute a breach or default under such Lease; (iii) the GAME Parties’ possession and quiet enjoyment of the Leased Real Estate under such Lease has not been disturbed, and to the Knowledge of GAME, there are no disputes with respect to such Lease; and (iv) there are no Liens on the estate created by such Lease other than Permitted Liens. None of the GAME Parties has assigned, pledged, mortgaged, hypothecated, or otherwise transferred any Lease or any interest therein nor have the GAME Parties subleased, licensed, or otherwise granted any Person (other than another wholly owned Subsidiary of the GAME Parties) a right to use or occupy such Leased Real Estate or any portion thereof.

 

 

(b) Real Estate Used in the Business. The Leased Real Estate identified in Section 2.12(b) of the Disclosure Letter comprise all of the real property used or intended to be used in, or otherwise related to, the Business.

 

(c) Personal Property. The list of Business Personal Property set forth on Section 2.12(c) of the Disclosure Letter is complete and accurate in all respects. The GAME Parties are in possession of and have good, valid and marketable title to, or valid leasehold interests in or valid rights under contract to use, all Business Personal Property. The Business Personal Property constitutes all personal property necessary or useful to conduct the Business as currently conducted, as they are currently planned by the GAME Parties to be conducted and as conducted in the past 12 months. None of the Business Personal Property is owned by any other Person without a valid and enforceable right of the GAME Parties to use and possess such Business Personal Property, which right will remain valid and enforceable following the Effective Time. None of the Business Personal Property is subject to any Lien, other than Permitted Liens. All Business Personal Property: (i) is in good operating condition and repair (ordinary wear and tear excepted) and is adequate for the conduct of the Business as currently conducted by the GAME Parties and as they are currently planned by the GAME Parties to be conducted; (ii) is available for immediate use in the business and operation of the GAME Parties as currently conducted, and will be available for the immediate use in the Business by the Company immediately following the Effective Time; and (iii) permits each GAME Party to operate in accordance with applicable Law. Section 2.12(c) of the Disclosure Letter identifies all assets that are material to the Business that are being leased to any GAME Party. No Affiliate of any GAME Party, other than the GAME Parties, owns, leases or holds any Business Personal Property.

 

(d) Customer Information. The GAME Parties collectively have sole and exclusive ownership of, free and clear of any Liens, or have the valid right to use in the Business as currently conducted, all customer lists, customer contact information, customer correspondence and customer licensing and purchasing histories relating to current and former customers of the Business for which any GAME Party has retained records. No Person other than a GAME Party possesses any licenses, claims or rights with respect to the use of any such customer information.

 

(e) Sufficiency of Assets. The Contributed Assets, collectively, are sufficient for the continued conduct of the Business after the Effective Time in substantially the same manner as currently conducted, intended to be conducted and as conducted in the past 12 months and constitute all of the rights, property, and assets necessary or useful to conduct the Business as currently conducted and intended to be conducted. None of the Excluded Assets are material to the Business. No Affiliate of any GAME Party owns or holds for use any tangible or intangible assets or properties used in or necessary for the conduct of the Business, other than assets or properties that constitute Contributed Assets and will be transferred by the GAME Parties to the Company at the Effective Time.

 

(f) All Assets Scheduled. The Disclosure Letter contains a complete and accurate list of all of the GAME Parties’ right, title, and interest in and to all of the assets primarily related to the Business, whether tangible or intangible (each such asset required to be listed on the Disclosure Letter, a “Business Asset”).

 

 

(g) eSports. All of the eSports teams, groups, associations or other organizations owned, purported to be owned or otherwise associated with any of the GAME Parties and all eSports athletes that play for, represent or are otherwise associated with any of the GAME Parties or their eSports teams, in each case, within the past twelve (12) months, as of immediately prior to the GAME-FAZE Merger Date and as of immediately prior to the Effective Time, are set forth on Section 2.12(g) of the Disclosure Letter.

 

2.13 Environmental Matters. Except for such matters as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect:

 

(a) Compliance with Environmental Laws. The GAME Parties are, and have been, in compliance with all Environmental Laws, which compliance includes the possession, maintenance of, compliance with, or application for, all Permits required under applicable Environmental Laws for the operation of the Business.

 

(b) No Legal Actions or Orders. None of the GAME Parties has received written notice of and there is no Legal Action pending, or to the Knowledge of GAME, threatened against the GAME Parties, alleging any Liability or responsibility under or non-compliance with any Environmental Law or seeking to impose any financial responsibility for any investigation, cleanup, removal, containment, or any other remediation or compliance under any Environmental Law. None of the GAME Parties is subject to any Order, settlement agreement, or other written agreement by or with any Governmental Entity or third party imposing any material Liability or obligation with respect to any of the foregoing.

 

(c) No Assumption of Environmental Law Liabilities. None of the GAME Parties has expressly assumed or retained any Liabilities under any applicable Environmental Laws of any other Person, including in any acquisition or divestiture of any property or business.

 

2.14 Material Contracts

 

(a) Material Contracts. For purposes of this Agreement, “Material Contract” shall mean all of the Business Contracts required to be listed in Section 2.6(a) of the Disclosure Letter, all Business Employee Plans and the following (whether or not disclosed on the Disclosure Letter) to which the GAME Parties are a party or any of the respective assets relating to the Business are bound (excluding any Leases):

 

(i) each Business Contract with any Person relating to the supply of any products or services to any of the GAME Parties and, together with all other Business Contracts involving such Person or any of such Person’s Affiliates, providing for payments by any one or more GAME Parties, individually or in the aggregate, in excess of $100,000 in any fiscal year;

 

 

(ii) each Business Contract with any Person that contemplates or involves: (A) the payment or delivery of cash or other consideration by any GAME Party in an amount or having a value in excess of $100,000 individually or in the aggregate when taken together with all other Business Contracts involving such Person or any of such Person’s Affiliates; or (B) the performance of services having a value in excess of $100,000 individually or in the aggregate when taken together with all other Business Contracts involving such Person or any of such Person’s Affiliates;

 

(iii) any employment or consulting Contract (in each case with respect to which the GAME Parties have continuing obligations as of the date hereof) with any current or former (A) officer or director of the GAME Parties or (B) Business Associate to which: (I) benefits would vest or amounts would become payable or the terms of which would otherwise be altered by virtue of the consummation of any of the transactions contemplated by this Agreement (whether alone or upon the occurrence or existence of any additional or subsequent event or circumstance); (II) any GAME Party is or may become obligated to make any severance, termination, retention, gross-up or similar payment to any Business Associate; or (III) any GAME Party is or may become obligated to make any bonus, incentive compensation or similar payment (other than in respect of ordinary course salary or wages) to any Business Associate;

 

(iv) any Business Contract providing for indemnification or any guaranty by any GAME Party other than any Contract providing for indemnification of customers or other Persons pursuant to Business Contracts entered into in the ordinary course of business;

 

(v) any Contract that purports to limit the right of the GAME Parties (A) to engage in any line of business, (B) compete with any Person or solicit or hire any employee, consultant, contractor, client, customer or supplier, (C) operate in any geographical location, (D) to develop or distribute any Intellectual Property (other than restrictions set forth in such Business Contract with respect to any Intellectual Property that is licensed to a GAME Party under such Business Contract); (E) to make use of any Business IP; or (F) to acquire any product or other asset or any services from any other Person, sell any product or other asset to or perform any services for any other Person, or transact business or deal in any other manner with any other Person;

 

(vi) each Business Contract that: (A) provides for a “sole source” or “requirements” or similar relationship; (B) requires any GAME Party to accept orders for products or services of the Business; (C) provides for required price reductions for products or services of the Business during the term of the Business Contract; (D) limits any GAME Party’s right or ability to increase prices for products or services of the Business for any period of more than 12 months; (E) contains any “most favored nation” or “most favored customer” or similar provision; or (F) contains any preferential supply or capacity commitment obligation;

 

(vii) any Business Contract relating to any transaction in which any GAME Party (or any Subsidiary of a GAME Party) merged or was consolidated with any other Person, acquired any securities or assets of another Person or otherwise acquired the rights to any products or services of the Business or any Business IP;

 

(viii) any Business Contract relating to the disposition or acquisition, directly or indirectly (by merger, sale of stock, sale of assets, or otherwise), by the GAME Parties after the date of this Agreement of assets, including Intellectual Property, or capital stock or other equity interests of any Person;

 

 

(ix) any Business Contract that grants any right of first refusal, right of first offer, or similar right with respect to any material assets, rights, or properties of the GAME Parties;

 

(x) each Business Contract relating to any partnership, joint venture, limited liability company agreement, strategic alliance, profit sharing or similar Contract relating to the formation, creation, operation, management, or control of any material joint venture, partnership, or limited liability company;

 

(xi) any mortgages, indentures, guarantees, loans, or credit agreements, security agreements, or other Business Contracts, in each case relating to indebtedness or Liabilities, whether as borrower or lender, or imposing a Lien on any of the assets of the GAME Parties;

 

(xii) any employee collective bargaining agreement or other Business Contract with any labor union;

 

(xiii) any Business IP Agreement, other than licenses for shrinkwrap, clickwrap, or other similar commercially available off-the-shelf software that has not been modified or customized by a third party for the GAME Parties;

 

(xiv) each Business Contract with (A) a Talent, (B) Top Vendor, (C) Top Customer and (D) a creator, whether or not such creators have existing written agreements with a GAME Party;

 

(xv) any Contract involving the GAME Parties relating to licensing, sponsorship, projects, events and other related Business Contracts;

 

(xvi) any Contract between the GAME Parties, on the one hand, and a Related Party, on the other hand;

 

(xvii) each outstanding power of attorney executed by or on behalf of any GAME Party in connection with the Business; and

 

(xviii) any Contract which is not otherwise described in clauses (i) - (xvii) above that is material to the GAME Parties, taken as a whole.

 

(b) Schedule of Material Contracts; Documents. Section 2.14(b) of the Disclosure Letter sets forth a true and complete list as of the date hereof of all Material Contracts. The Material Contracts constitute all of the Business Contracts. The GAME Parties have made available to the Company correct and complete copies of all Material Contracts, including any amendments thereto.

 

 

(c) No Breach. (i) All the Material Contracts are legal, valid, and binding on the GAME Parties, as applicable, enforceable against them in accordance with their terms, and is in full force and effect; (ii) none of the GAME Parties nor, to the Knowledge of GAME, any third party has violated any provision of, or failed to perform any obligation required under the provisions of, any Material Contract; and (iii) none of the GAME Parties nor, to the Knowledge of GAME, any third party is in breach or default, or has received written notice of breach or default, of any Material Contract. No event has occurred that, with notice or lapse of time or both, would constitute such a breach or default pursuant to any Material Contract by any of the GAME Parties, or, to the Knowledge of GAME, any other party thereto, and, as of the date of this Agreement, none of the GAME Parties has received written notice of the foregoing or from the counterparty to any Material Contract (or, to the Knowledge of GAME, any of such counterparty’s Affiliates) regarding an intent to terminate, cancel, or modify any Material Contract (whether as a result of a change of control or otherwise).

 

2.15 Insurance. All insurance policies maintained by the GAME Parties are in full force and effect and provide insurance in such amounts and against such risks as the GAME Parties reasonably have determined to be prudent, taking into account the industries in which the GAME Parties operate, and as is sufficient to comply with applicable Law. None of the GAME Parties is in breach or default, and none of the GAME Parties has taken any action or failed to take any action which, with notice or the lapse of time, would constitute such a breach or default, or permit termination or modification of, any of such insurance policies. To the Knowledge of GAME: (i) no insurer of any such policy has been declared insolvent or placed in receivership, conservatorship, or liquidation; and (ii) no notice of cancellation or termination, other than pursuant to the expiration of a term in accordance with the terms thereof, has been received with respect to any such policy.

 

2.16 Anti-Corruption Matters. Since January 1, 2020, none of the GAME Parties or any director, officer or, to the Knowledge of GAME, employee or agent of the GAME Parties has: (i) used any funds for unlawful contributions, gifts, entertainment, or other unlawful payments relating to an act by any Governmental Entity; (ii) made any unlawful payment to any foreign or domestic government official or employee or to any foreign or domestic political party or campaign or violated any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (iii) made any other unlawful payment under any applicable Law relating to anti-corruption, bribery, or similar matters. Since January 1, 2020, none of the GAME Parties has disclosed to any Governmental Entity that it violated or may have violated any Law relating to anti-corruption, bribery, or similar matters. To the Knowledge of GAME, no Governmental Entity is investigating, examining, or reviewing the GAME Parties’ compliance with any applicable provisions of any Law relating to anticorruption, bribery, or similar matters.

 

2.17 Talents.

 

(a) Section 2.17(a) of the Disclosure Letter sets forth, as of the date of this Agreement, all of the talents of the GAME Parties collectively (the “Talents”).

 

(b) Except as set forth in Section 2.17(b) of the Disclosure Letter, none of the Talents has, as of the date of this Agreement, informed the GAME Parties in writing that it will, or, threatened to terminate, cancel, or materially limit or materially and adversely modify any of its existing business with the GAME Parties (other than due to the expiration of an existing contractual arrangement), and, to the Knowledge of GAME, none of the Talents is, as of the date of this Agreement, otherwise involved in or threatening any material claim, action, suit, audit, examination, assessment, arbitration, mediation or inquiry, or any proceeding or investigation against the GAME Parties or any of their respective businesses.

 

 

2.18 Vendors; Customers.

 

(a) Section 2.18(a) of the Disclosure Letter sets forth, as of the date of this Agreement, the top 20 vendors (other than Talents) of the GAME Parties with respect to the Business, based on the aggregate dollar value of the GAME Parties’ transaction volume with such counterparty during the trailing twelve months for the period ending December 31, 2023 (the “Top Vendors”) together with the amount paid to each Top Vendor. Section 2.18(a) of the Disclosure Letter sets forth, as of the date of this Agreement, the top 20 customers of the GAME Parties with respect to the Business, based on the aggregate amounts paid to the GAME Parties during the trailing twelve months for the period ending December 31, 2023 (the “Top Customer”) together with the amount received from each Top Customer.

 

(b) Except as set forth in Section 2.18(b) of the Disclosure Letter, none of the Top Vendors or Top Customer has, as of the date of this Agreement, informed any of the GAME Parties in writing that it will, or threatened to terminate, cancel, or materially limit or materially and adversely modify any of its existing business or terms with the GAME Parties (other than due to the expiration of an existing contractual arrangement), and, to the Knowledge of GAME, none of the Top Vendors or Top Customers is, as of the date of this Agreement, otherwise involved in or threatening any material Action against the GAME Parties or any of their respective businesses. To the Knowledge of GAME, there are no supply or allocation issues with respect to any of the suppliers to any of the GAME Parties.

 

2.19 Full Disclosure. This Agreement (including the Disclosure Letter) does not: (i) contain any representation or warranty that is false or misleading with respect to any material fact; or (ii) omit to state any material fact necessary in order to make the representations or warranties contained and to be contained herein and therein (in the light of the circumstances under which such representations or warranties were or will be made or provided) not false or misleading.

 

3. Representations and Warranties of the Company. The Company hereby represents and warrants to each of the other Parties as follows:

 

3.1 Organization. It is a Delaware corporation, validly existing and in good standing under the laws of the State of Delaware.

 

3.2 Authority. It has all requisite corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder, and to consummate the transactions contemplated hereby. The execution, delivery, and performance by the Company of this Agreement and the consummation by the Company of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action, and no other proceedings on the Company’s part are necessary to authorize the execution, delivery, and performance of this Agreement. This Agreement has been duly and validly executed and delivered by the Company and (assuming due authorization, execution and delivery by the other Parties) constitutes the legal, valid, and binding obligation of the Company, enforceable against the Company in accordance with its terms.

 

 

3.3 Non-Contravention. The execution, delivery, and performance of this Agreement by the Company, and the consummation by the Company of the transactions contemplated by this Agreement do not and will not: (i) contravene or conflict with, or result in any violation or breach of, the Charter Documents of the Company or any of its Subsidiaries; or (ii) conflict with or violate any Law applicable to the Company.

 

3.4 Governmental Consents. No consent, approval, order, or authorization of, or registration, declaration, or filing with, or notice to (any of the foregoing being a “Consent”), any supranational, national, state, municipal, local, or foreign government, any instrumentality, subdivision, court, administrative agency or commission, or other governmental authority, or any quasi-governmental or private body exercising any regulatory or other governmental or quasigovernmental authority, including any national securities exchange (a “Governmental Entity”), is required to be obtained or made by the Company in connection with the execution, delivery, and performance by the Company of this Agreement or the consummation by the Company of the transactions contemplated hereby.

 

3.5 Valid Issuance of Shares. The Shares, when issued, sold and delivered in accordance with the terms and for the consideration set forth in this Agreement, will be validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under this Agreement, the Charter, and the Stockholders’ Agreement, applicable state and federal securities laws and liens or encumbrances created by or imposed by the Game Investor. Assuming the accuracy of the representations of the GAME Parties in Section 2 of this Agreement, the Shares will be issued in compliance with all applicable federal and state securities laws. The Common Stock issuable upon conversion of the Shares has been duly reserved for issuance, and upon issuance in accordance with the terms of the Charter, will be validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under this Agreement, the Charter, and the Stockholders’ Agreement, applicable federal and state securities laws and liens or encumbrances created by or imposed by the Game Investor. Assuming the accuracy of the representations of the GAME Parties in Section 2 of this Agreement, the Common Stock issuable upon conversion of the Shares will be issued in compliance with all applicable federal and state securities laws.

 

3.6 Company Activities. The Company was incorporated on May 2, 2024 solely for the purpose of entering into this Agreement, the Ancillary Documents and consummating the transactions contemplated hereby and thereby and has not engaged in any activities or business, other than those incident or related to or incurred in connection with its incorporation or the negotiation, preparation or execution of this Agreement or any Ancillary Documents, the performance of its covenants or agreements in this Agreement or any Ancillary Document or the consummation of the transactions contemplated hereby or thereby. The Company does not have any indebtedness for borrowed money.

 

 

4. Covenants.

 

4.1 Obligations of the GAME Parties. The GAME Parties will take all action necessary to cause each of its Affiliates to perform its obligations under this Agreement and to consummate the Asset Contribution on the terms and conditions set forth in this Agreement.

 

4.2 Assignment of Contracts and Rights.

 

(a) Notwithstanding any other provision of this Agreement to the contrary, this Agreement shall not constitute an agreement to assign, transfer, sublease, license or novate any Contributed Assets or Assumed Liability if an attempted assignment, transfer, sublease, license or novation thereof would, without the consent, authorization, filing with, notification to or granting or issuance of any order, waiver or permit by, any relevant Person (including any Governmental Entity) (each, an “Approval”) (i) constitute a breach or other contravention of Law or of any Assigned Contract, or (ii) be ineffective, void or voidable, unless and until such Approval is obtained. Prior to and, subject to the terms of this Section 4.2, following the Effective Time, the GAME Parties and the Company shall cooperate to obtain the Approval of any required third party for the assignment and assumption of all such Contributed Assets and Assumed Liabilities to the Company. The GAME Parties shall not, in connection with seeking and obtaining any Approval, waive any rights under any Assigned Contract or otherwise amend or alter any terms of any Assigned Contract without the Company’s prior written consent.

 

(b) If, at the Effective Time, any Approval is not obtained, or if an attempted transfer or assignment thereof would be ineffective or a violation of Law, the GAME Parties and the Company shall cooperate in a mutually agreeable arrangement under which the Company would, in compliance with applicable Law, obtain the claims, rights and benefits and assume the obligations and bear the economic burdens associated with the applicable Contributed Asset or Assumed Liability in accordance with this Agreement, including subcontracting, sublicensing or subleasing to the Company or such Affiliate, or under which the GAME Parties or their applicable Affiliates would use commercially reasonable efforts to enforce, at the request and for the benefit of the Company, any and all of its rights against a third party thereto associated with such Contributed Assets or Assumed Liabilities and (i) the GAME Parties and their respective Affiliates would promptly pay to the Company when received all monies received by them under any Contributed Assets or any claim or right or any benefit arising thereunder and (ii) the Company will promptly pay, perform or discharge when due any Assumed Liabilities arising thereunder. Without limiting the foregoing, the GAME Parties shall, and shall cause their respective Affiliates to, hold such Contributed Assets (or such claim, right or benefit arising thereunder) for the sole use and benefit (or economic burden) of the Company and its Affiliates and shall take such actions as are reasonably requested by the Company in order to place the Company and the Company’s Affiliates in substantially the same position as if such Contributed Assets or Assumed Liabilities (or such claim, right or benefit arising thereunder) had been transferred, assigned or sublet, as applicable, to the Company or its applicable Affiliate at the Effective Time. Once such Approval is obtained, the GAME Parties shall, or shall cause their applicable Affiliates to, assign, transfer or sublease, as applicable, such Contributed Assets or Assumed Liabilities to the Company for no additional consideration.

 

 

4.3 Further Assurances; Certain Matters.

 

(a) Further Assurances. From and after the Effective Time, subject to the terms and conditions of this Agreement, each Party shall, and shall cause its Affiliates to, execute and deliver all such documents and instruments and take all such further other actions, as may reasonably be necessary or advisable, to carry out the purposes and intents of this Agreement.

 

(b) Post-Closing Transfer of Assets or Liabilities to the Company. From and after the Effective Time, if any Business Asset, item required to be disclosed in Section 2.12(g) of the Disclosure Letter or Assumed Liability is either (i) found to have been retained by any of the GAME Parties or any of their Affiliates in error, either directly or indirectly, or (ii) retained by any of the GAME Parties and designated by the Company as a Contributed Asset prior to or after the Closing (whether such Business Asset was known or unknown to the Company or any other party as of the Effective Time), the GAME Parties or their respective Affiliates shall promptly, in the case of clause (i), notify the Company thereof, and, subject to the Company’s written consent, shall transfer, or cause to be transferred, as soon as reasonably practicable such Contributed Asset or Assumed Liability to the Company or an Affiliate designated by the Company for no consideration and at no cost to the Company or such Affiliate. For the avoidance of doubt, no Business Asset or Liability shall be transferred by the GAME Parties or their respective Affiliates to the Company without the prior written consent of the Company, which may be withheld in the Company’s sole discretion.

 

(c) Post-Closing Transfer of Assets or Liabilities to the GAME Parties. From and after the Effective Time, if any right, property or asset not constituting a Contributed Asset or Assumed Liability is found to have been transferred to the Company (or an Affiliate of the Company) in error or any AP Excess is transferred to the Company (or an Affiliate of the Company), either directly or indirectly, the Company shall promptly notify GAME thereof and shall transfer, or cause to be transferred, as soon as reasonably practicable such right, property or asset or AP Excess to GAME or an Affiliate designated by GAME (and GAME or such Affiliate shall accept and assume such Excluded Asset) for no consideration and at no cost to the Company. In furtherance of the foregoing, the Parties shall, and shall cause their appropriate Affiliates to, execute such documents or instruments of conveyance or assumption and take such further acts as are reasonably necessary or desirable to effect the transfer of any such right, property or asset or AP Excess, in each case such that each Party and its Affiliates are put into the same economic position as if such action had been taken at the Effective Time.

 

4.4 Public Announcements. From and after the date of this Agreement, except as expressly contemplated by this Agreement, the GAME Parties shall not, and shall cause their respective Affiliates not to, issue or make any press release or public statement regarding (or otherwise disclose to any Person the existence or terms of) this Agreement or any of the transactions contemplated herein, without the Company’s prior written consent.

 

 

4.5 Non-Competition; Non-Solicit.

 

(a) Non-Competition. In order to protect the GAME Parties’ and the Kalish Investor’s significant investment and the value of the Company’s goodwill and going concern value (as the same will be constituted after the Effective Time in the Company), for a period from the Effective Time through the later of (i) the five year anniversary of the Effective Time and (ii) two years after GAME and its Affiliates no longer (A) own, directly or indirectly, any shares of capital stock in the Company and (B) have any rights to appoint a director or observer to the Company’s board of directors (the “Restricted Period”), the GAME Parties and all Affiliates thereof shall not (i) anywhere in the United States of America and (ii) any other country or jurisdiction in which the GAME Parties, the Company or their respective Affiliates operate or have conducted business in within the then prior twelve (12) months, either directly or indirectly, on the GAME Parties’ own behalf or in conjunction with or for the benefit of any other party and shall not cause or permit any Affiliate to: (i) own, operate, manage, or control any interest in any Competing Business, (ii) engage in or assist another Person to engage in, or prepare to engage in (whether directly or indirectly) any Competing Business, (iii) act as an operator, employee, contractor, consultant, investor, officer, director, partner, member, joint venturer of, agent or representative of, or otherwise act on behalf of, any Person engaged in any Competing Business; (iv) lend credit or money to, or guarantee any indebtedness of, or otherwise provide financial assistance to, or render any managerial, marketing, or other advice or assistance to, any Person for the purpose of establishing or operating any Competing Business; (v) create any business plan or marketing material or financial data or projection with respect to, seek or obtain investment for, or otherwise arrange or set up any Competing Business, or (vi) render any material services or provide any products to, do business with, or accept business from, any Person engaged in any Competing Business. Notwithstanding any provision contained in this Section 4.5 to the contrary, nothing in this Section 4.5 shall prohibit the GAME Parties or any of their respective Affiliates from: (i) ownership of securities in the Company, including the securities of the Company contemplated to be issued hereby, (ii) other activities with the Company following the Effective Time, including without limitation, contracts or other commercial activities entered into by the Company and the GAME Parties and/or their respective Affiliates, including any and all agreements and activities contemplated by this Agreement, (iii) performing any services for the benefit of the Company (or any Affiliate thereof) as an employee, advisor, independent contractor or in any other capacity and (iv) owning not more than one percent (1%) of the securities of any publicly traded entity so long as none of the GAME Parties or any of their respective Affiliates has any active governance, management, oversight or other participation in the business of such entity.

 

(b) Non-Solicitation. The GAME Parties on behalf of themselves and their respective Affiliates, agree that, during the Restricted Period, without the prior written consent of the Company, the GAME Parties and each of their respective Affiliates shall not, directly or indirectly:

 

(i) contact, approach or solicit for the purpose of offering employment to or hiring (whether as an employee, consultant, agent, independent contractor or otherwise), or actually hire, any employee, consultant, agent, independent contractor or otherwise who is currently employed or engaged by, or was employed or engaged within the last twelve month period by any GAME Party, the Company or any Affiliate thereof with respect to the Business as presently conducted, presently planned to be conducted, or has been conducted within the past twelve (12) months by any GAME Party, the Company or any Affiliate thereof; provided, however, that the GAME Parties and their respective Affiliates shall not be prohibited from general solicitations for employment not directly targeting the Company, its Affiliates or the foregoing’s employees; and/or

 

 

(ii) (A) solicit, attempt to induce or perform services for any customer, client, partner, agent or other business relation of either the GAME Parties, the Company or any Affiliate thereof with respect to the Business as presently conducted, presently planned to be conducted, or has been conducted within the past twelve (12) months by either the GAME Parties (or any Person who was a customer, client, partner, agent or other business relation of either the GAME Parties, the Company or any Affiliate thereof with respect to the Business in the three (3) year period prior to the date hereof) or any Person with whom the GAME Parties, the Company or any Affiliate thereof, was involved in making a proposal to provide products or services during the three (3) year period immediately preceding the date hereof (collectively, “Customers”), into any business relationship relating to the Business or which is reasonably likely to harm either the Company or any of their Affiliates, (B) solicit, encourage, aid, influence or attempt to influence any Customer to terminate, cease doing business with or adversely amend or modify such Customer’s relationship with the Company or any of its Affiliates or (C) disparage either the Company or any of its Affiliates, officers, directors, principals, managers, employees or agents.

 

(c) Remedies. The GAME Parties and their respective Affiliates acknowledge and agree that in the event of a breach by it of any of the provisions of this Section 4.5, monetary damages shall not constitute a sufficient remedy and in the event of any such breach, the Company and/or its successors or assigns may, in addition to other rights and remedies existing in their favor, apply to any court of law or equity of competent jurisdiction for specific performance and/or injunctive or other relief in order to enforce or prevent any violations of the provisions hereof, in each case, without the requirement of posting a bond or proving actual damages.

 

(d) Enforcement. If the final judgment of a court of competent jurisdiction declares that any term or provision of this Section 4.5 is invalid or unenforceable, the Parties agree that the court making the determination of invalidity or unenforceability shall have the power to reduce the scope, duration, or area of the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified after the expiration of the time within which the judgment may be appealed.

 

(e) Acknowledgment. The GAME Parties and their respective Affiliates acknowledge and agree that: (i) the restrictions contained in this Section 4.5 are reasonable in all respects (including with respect to the subject matter, time period and geographical area) and are necessary to protect the Company’s (and its Affiliates’) interest in, and value of, the Business (including the goodwill inherent therein), and (ii) the Company would not have consummated the transactions contemplated hereby without the restrictions contained in this Section 4.5.

 

4.6 LA County Taxes. The GAME Parties shall diligently and timely resolve any outstanding dispute with respect to taxes owed to Los Angeles County, California (including the county tax liens with file numbers 20221087413 and 20230801043) (the “LA County Tax Liens”) and pay any amount dues thereunder, in any event, no later than 10 days after the date of this Agreement. The GAME Parties shall take any and all actions required to remove and terminate the LA County Tax Liens. The GAME Parties shall keep the board of directors of the Company reasonably appraised of any actions taken (or omissions) related to the LA County Tax Liens, including any communications between the GAME Parties or the Company, on the one hand, and the Los Angeles County and its representatives or related Governmental Entities, on the other hand.

 

 

5. Indemnification

 

5.1 Survival. The representations, warranties, covenants and agreements made by the GAME Parties and the Company in this Agreement and the rights of the Indemnitees to be indemnified, compensated and reimbursed with respect to any breach of or inaccuracy in any of such representations, warranties, covenants and agreements shall survive the Effective Time indefinitely.

 

5.2 Indemnification by the GAME Parties. The GAME Parties shall indemnify, defend and hold harmless the Company, its Affiliates, and their respective officers, directors, agents, employees representatives and permitted successors and assigns (each a “Company Indemnitee” and collectively, the “Company Indemnitees”) from and against, and shall compensate and reimburse each of the Company Indemnitees for, any and all Damages, including reasonable attorneys’ fees, which are actually incurred by any of the Company Indemnitees or to which any of the Company Indemnitees may otherwise become subject at any time (regardless of whether or not such Damages relate to any third party claim) and which arise directly or indirectly from or as a direct or indirect result of: (a) any breach of the representations and warranties of the GAME Parties set forth in Section 2 of this Agreement, (b) any breach of the covenants of the GAME Parties in this Agreement, (c) the conduct of the GAME Parties’ business or ownership, use, condition, possession or operation of the Business or any of the GAME Parties’ assets on or before the Effective Time, including the conduct of such business or operation or ownership, use, condition, possession or operation of any such assets, directly or indirectly, by one or more Affiliates of the GAME Parties on or before the Effective Time, (d) any Taxes related to the Contributed Assets with respect to the Pre-Closing Tax Period, including with respect to any county tax liens (including the LA County Tax Liens) or taxes of Los Angeles County (including penalties and interest) and any successor liability (of the Company or otherwise), (e) any Excluded Assets, (f) any Excluded Liabilities, including the AP Excess and (g) any actions taken by any Company Indemnitee or otherwise in connection with terminating the LA County Tax Liens and any related matters.

 

5.3 Indemnification by the Company. The Company shall indemnify, defend and hold harmless the GAME Parties and their respective Affiliates, officers, directors, agents, employees representatives and permitted successors and assigns (each a “GAME Party Indemnitee” and collectively, the “GAME Party Indemnitees” and, together with the Company Indemnitees, the “Indemnitees”) from and against, and shall compensate and reimburse each of the GAME Party Indemnitees for, any and all Damages, including reasonable attorneys’ fees, which are actually incurred by any of the GAME Party Indemnitees or to which any of the GAME Party Indemnitees may otherwise become subject at any time (regardless of whether or not such Damages relate to any third party claim) and which arise directly or indirectly from or as a direct or indirect result of: (a) any breach of the representations and warranties of the Company set forth in Section 3 of this Agreement, (b) any breach of the covenants of the Company in this Agreement, (c) the conduct of the Company’s business or ownership, use, condition, possession or operation of the Business or any of the Company’s assets after the Effective Time, including the conduct of such business or operation or ownership, use, condition, possession or operation of any such assets, directly or indirectly, by one or more Affiliates of the Company after the Effective Time, and (d) any Assumed Liabilities.

 

 

6. Conditions.

 

6.1 Conditions to Obligations of the GAME Parties. The obligations of the GAME Parties to effect the transactions contemplated by this Agreement are subject to the satisfaction or waiver (where permissible pursuant to applicable Law) by the GAME Parties on or prior to the Effective Time of the following conditions:

 

(a) Representations and Warranties. The representations and warranties of the Company contained in Section 3 shall be true and correct in all respects as of the Effective Time.

 

(b) Performance. The Company shall have performed and complied with all covenants, agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by the Company in all respects on or before the Effective Time.

 

(c) Stockholders’ Agreement. The Company and the other stockholders of the Company named as parties thereto shall have executed and delivered the Stockholders’ Agreement.

 

(d) Kalish Stock Purchase Agreement. At or contemporaneously with the Effective Time, the closing of the transactions contemplated by that certain Preferred Stock Purchase Agreement, dated as of the date hereof, by and between the Company and the Kalish (the “Kalish Purchase Agreement”) Investor shall occur.

 

(e) Charter. The Company shall have filed the Charter in the form of Exhibit B attached to this Agreement with the Secretary of State of Delaware on or prior to the Effective Time, which shall continue to be in full force and effect as of the Effective Time.

 

6.2 Conditions to Obligation of the Company. The obligations of the Company to effect the transactions contemplated by this Agreement are subject to the satisfaction or waiver (where permissible pursuant to applicable Law) by the Company on or prior to the Effective Time of the following conditions:

 

(a) Representations and Warranties. The representations and warranties of the GAME Parties contained in Section 2 shall be true and correct in all respects as of the Effective Time.

 

(b) Performance. The GAME Parties shall have performed and complied with all covenants, agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by the GAME Parties in all respects on or before the Effective Time.

 

(c) Material Adverse Effect. Since the date of this Agreement, there shall not have been any Material Adverse Effect or any event, change, or effect that would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

 

(d) Stockholders’ Agreement. The Game Investor and the other stockholders of the Company named as parties thereto shall have executed and delivered the Stockholders’ Agreement.

 

7. Miscellaneous.

 

7.1 Definitions. For purposes of this Agreement, the following terms will have the following meanings when used herein with initial capital letters:

 

“Accounts Payable” means the aggregate accounts payable under the AP/AR Contracts as of the Effective Time. For the avoidance of doubt, an Accounts Payable listed in the AP/AR Listing shall not be contributed to the Company unless such Accounts Payable arises out of an Assigned Contract.

 

“Accounts Receivable” means the aggregate accounts receivable under the AP/AR Contracts as of the Effective Time. For the avoidance of doubt, an Accounts Receivable listed in the AP/AR Listing shall not be contributed to the Company unless such Accounts Receivable arises out of an Assigned Contract.

 

“Affiliate” means, with respect to any Person, any other Person controlling, controlled by or under common control with such Person. For purposes of this definition and the Agreement, the term “control” (and correlative terms) means the power, whether by contract, equity ownership or otherwise, to direct the policies or management of a Person. The term “Affiliate” shall be deemed to include current and future “Affiliates.”

 

“Ancillary Documents” means the Company’s Charter Documents, the Kalish Purchase Agreement, the Stockholders’ Agreement, the License Agreement, the Master Services Agreement, and the Equity Incentive Plan, in each case, including the exhibits, schedules and annexes thereto.

 

“AP/AR Contract” means each of the Assigned Contracts whose customer or vendor of the applicable Game Party thereunder is listed on the AP/AR Listing. For the avoidance of doubt, an Accounts Payable or Accounts Receivable listed in the AP/AR Listing shall not be contributed to the Company unless such Accounts Payable or Accounts Receivable arises out of an Assigned Contract.

 

“AP/AR Listing” means the accounts payable and accounts receivable listing set forth on Schedule B, setting forth each of the accounts payable and accounts receivable under each AP/AR Contract as of May 14, 2024.

 

“Assigned Contract” means all Contracts set forth on Schedule 2.12(b) and Schedule 2.14(b) (other than Schedule 2.14(b)(xi) and Schedule 2.14(b)(ii)(10)). For the avoidance of doubt, with respect to any Contract constituting a master services agreement (or similar master agreement), references to “Contract” shall include references to any statements of work or purchase orders agreed pursuant to such master services agreement (or similar master agreement).

 

 

“Assumed Debt” means all of the following, to the extent primarily related to the Business that is assumed by the Company (or any Affiliate thereof) at the Effective Time, whether issued to, extended to, applicable to, incurred by, or a contractual obligation of, the GAME Parties, without duplication: (a) all obligations under Assigned Contracts which shall have been or must be, in accordance with GAAP, recorded as capital leases in respect of which the GAME Parties are liable as lessee; (b) all customer advances, customer deposits, prepayments of accounts receivable, and Deferred Revenue of the Business; (c) all outstanding earned but unpaid advance trade credits and rebate obligations payable to customers of the Business; (d) any accrued and unpaid interest or change of control, prepayment premiums or penalties, acceleration or similar payments in respect of the items specified in the foregoing clauses (a) through (c) becoming due as a result of the transactions contemplated by this Agreement pursuant to the terms thereof. Notwithstanding the foregoing, “Assumed Debt” does not include GAME Transaction Expenses, or trade payables (other than as specified in clause (c) above) and accrued expenses arising in the ordinary course of business.

 

“Business” means the business of media and entertainment as conducted, proposed to be conducted, or has been conducted within the past twelve (12) months by FAZE, as of immediately prior to the GAME-FAZE Merger Date and as of immediately prior to the Effective Time, including (a) FAZE’s brand, (b) the creation, hosting and distribution of digital content, programming, design merchandise and related consumer products, (c) talent agency, (d) licensing, sponsorship, projects, events and other related gaming activities, and (e) all the business of FAZE other than professional eSports teams and athletes.

 

“Business Associate” means any current or former officer, other employee, independent contractor, consultant, director or other service provider of any GAME Party employed in, engaged by or assigned to the Business from time to time.

 

“Business Contract” means any Contract relating to or used in the Business: (a) to which any GAME Party is or has been a party; (b) by which any GAME Party or any of its assets is or may become bound or under which any GAME Party has, or may become subject to, any obligation; or (c) under which any GAME Party has or may acquire any right or interest, including each Business IP Agreement.

 

“Business Day” means any day other than: (a) a Saturday, Sunday or a federal holiday; or (b) a day on which commercial banks in New York, NY are authorized or required to be closed.

 

“Business IP Agreements” means all licenses, sublicenses, consent to use agreements, settlements, coexistence agreements, covenants not to sue, waivers, releases, permissions, and other Contracts, whether written or oral, relating to Intellectual Property and used in the Business.

 

“Business IT Systems” means all software, computer hardware, servers, networks, platforms, peripherals, and similar or related items of automated, computerized, or other information technology networks and systems (including telecommunications networks and systems for voice, data, and video) owned, leased, licensed, or used (including through cloud-based or other third party service providers) by the Business.

 

 

“Business-Owned IP” means all Intellectual Property owned by the GAME Parties primarily related to the Business.

 

“Business Personal Property” means all of the machinery, equipment, machinery, testing facilities, fixtures, hardware, tools, motor vehicles, instruments, furniture, furnishings, leasehold improvements, office equipment, supplies, plant, spare parts and other tangible personal property owned, leased or used, or purported to be owned, leased or used, by any GAME Party in the Business.

 

“Business Pro-Forma Financial Statements” means the pro forma combined balance sheet as of December 31, 2023 and the related unaudited pro forma combined statement of operations and cash flows of the Business for the fiscal year December 31, 2023.

 

“Charter Documents” means: (a) with respect to a corporation, the charter, articles or certificate of incorporation, as applicable, and bylaws thereof; (b) with respect to a limited liability company, the certificate of formation or organization, as applicable, and the operating or limited liability company agreement, as applicable, thereof; (c) with respect to a partnership, the certificate of formation and the partnership agreement; and (d) with respect to any other Person the organizational, constituent and/or governing documents and/or instruments of such Person.

 

“Competing Business” means a business that is directly or indirectly competitive with the Business.

 

“Contracts” means any contracts, agreements, licenses, notes, bonds, mortgages, indentures, leases, or other binding instruments or binding commitments, whether written or unwritten.

 

“Damages” means and includes any loss, damage, injury, Liability, claim, demand, settlement, judgment, award, fine, penalty, tax, fee, charge, cost or expense.

 

“Deferred Revenue” means short-term and long-term deferred revenue, as determined in accordance with GAAP.

 

“Disclosure Letter” means the disclosure letter, dated as of the date of this Agreement and delivered by GAME to the Company concurrently with the execution of this Agreement.

 

“Environmental Laws” means any applicable Law, and any Order or binding agreement with any Governmental Entity: (a) relating to pollution (or the cleanup thereof) or the protection of natural resources, endangered or threatened species, human health or safety, or the environment (including ambient air, soil, surface water or groundwater, or subsurface strata); or (b) concerning the presence of, exposure to, or the management, manufacture, use, containment, storage, recycling, reclamation, reuse, treatment, generation, discharge, transportation, processing, production, disposal or remediation of any Hazardous Materials. The term “Environmental Law” includes, without limitation, the following (including their implementing regulations and any state analogs): the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §§ 9601 et seq.; the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976, as amended by the Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. §§ 6901 et seq.; the Federal Water Pollution Control Act of 1972, as amended by the Clean Water Act of 1977, 33 U.S.C. §§ 1251 et seq.; the Toxic Substances Control Act of 1976, as amended, 15 U.S.C. §§ 2601 et seq.; the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. §§ 11001 et seq.; the Clean Air Act of 1966, as amended by the Clean Air Act Amendments of 1990, 42 U.S.C. §§ 7401 et seq.; and the Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. §§ 651 et seq.

 

 

“Equity Incentive Plan” means the 2024 Equity Incentive Plan of the Company, as amended, restated, or modified from time to time.

 

“ERISA Affiliate” means all employers, trades, or businesses (whether or not incorporated) that would be treated together with the GAME Parties as a “single employer” within the meaning of Section 414 of the Code.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Expense” means any fee, cost, expense, payment, expenditure or Liability.

 

“GAME Transaction Expenses” means any Expense, whether incurred prior to the date of this Agreement, prior to the Effective Time or at or after the Effective Time (and whether or not invoiced prior to the Effective Time), incurred or borne by or on behalf of the GAME Parties and their respective Affiliates or the Business, or to or for which the GAME Parties and their respective Affiliates or the Business are or become subject or liable, in connection with any of the transactions contemplated by this Agreement that is unpaid immediately prior to the Effective Time or arises at or after the Effective Time, including: (a) any Expense that is payable by the GAME Parties or their respective Affiliates to legal counsel or to any financial advisor, investment banker, consultant, broker, accountant or other Person that performed services for or provided advice to the GAME Parties or their respective Affiliates or any Representative of the GAME Parties or their respective Affiliates, or who is otherwise entitled to any compensation or payment from the GAME Parties or their respective Affiliates, in connection with any of the transactions contemplated by this Agreement; (b) any Expense that arises, or is triggered or becomes due or payable, as a result of the consummation (whether alone or in combination with any other event or circumstance) of any of the transactions contemplated by this Agreement, including any stay bonus, change-in-control payment, severance Expense or other sum that may become payable pursuant to any “single trigger” or “double trigger” severance arrangement, bonus, vacation, paid time off or similar incentive or retention payment (including the employer portion of any employment or payroll Taxes related thereto regardless of when due, including any Taxes deferred pursuant to the CARES Act); (c) any Expense incurred by or on behalf of the GAME Parties or their respective Affiliates in connection with or relating to this Agreement or any of the transactions contemplated herein or the process resulting in such transactions that the GAME Parties or their respective Affiliates are or will be obligated to pay or reimburse before, at or after the Effective Time; and (d) any Expense incurred to obtain any Approval or other third party Consent under, or to terminate, any Contract or from any Governmental Entity as a result of or in connection with any of the transactions contemplated by this Agreement.

 

 

“Intellectual Property” means any and all rights, title, and interest in or to intellectual or industrial property, throughout the world, including all U.S. and foreign: (a) patents, published or unpublished patent applications (and any patents that will be issued as a result of those patent applications), provisional patent applications and similar filings, invention disclosures, and industrial designs, and all related continuations, continuations-in-part, divisionals, reissues, re-examinations, substitutions, extensions or counterparts and foreign equivalents thereof, (b) registered and unregistered trademarks, logos, service marks, certification marks, trade dress and trade names, brand names, business names, slogans, pending applications therefor, and internet domain names, and other similar designations of source or indicia or origin, together with the goodwill of the Company or any of its Subsidiaries or their respective businesses symbolized by or associated with any of the foregoing, (c) registered and unregistered copyrights, and applications for registration of copyright, including such corresponding rights in Software, content, and other works of authorship, (d) Software, (e) rights of personality, privacy, and publicity, including to the extent in name, handle, nickname, number, image, likeness, voice, and other personal attributes and in social media usernames, accounts, and hashtags, and (f) trade secrets, confidential information and other proprietary rights or information including know-how, unpatented inventions, processes, models and methodologies, formulae, technology, technical or research data, customer or end-user lists, business plans, database rights, in each case that derive independent economic value from not being generally known by the public and not being readily ascertainable by other Persons (the foregoing items in clause (f), collectively “Trade Secrets”).

 

“Inventory” means the inventory, wherever located, including raw materials, work or construction in process, demo and evaluation inventory, finished products and inventoriable supplies or components, and non-capital spare parts used or held for use in the operation of the Business, and owned by any GAME Party or held by vendors to the Business, and any rights to the warranties received from suppliers and any related claims, credits, rights of recovery, and set-off with respect to such Inventory.

 

“Knowledge” or to the “Knowledge of GAME” means the actual knowledge of Justin Kenna, Richard Bengston, Thomas Oliveira and Yousef Abdelfattah, or if a prudent individual in such individual’s position could reasonably be expected to have discovered or otherwise become aware of such fact or other matter under the circumstances by virtue of conducting a reasonable investigation.

 

“Laws” means any federal, state, local, municipal, foreign, multi-national or other laws, common law, statutes, constitutions, ordinances, rules, regulations, codes, Orders, or legally enforceable requirements enacted, issued, adopted, promulgated, enforced, ordered, or applied by any Governmental Entity.

 

“Lease” means all leases, subleases, licenses, concessions, and other agreements (written or oral) related to the Business under which the GAME Parties hold any Leased Real Estate, including the right to all security deposits and other amounts and instruments deposited by or on behalf of the GAME Parties thereunder.

 

“Leased Real Estate” means all leasehold or subleasehold estates and other rights to use or occupy any land, buildings, structures, improvements, fixtures, or other interest in real property.

 

 

“Legal Action” means any legal, administrative, arbitral, or other proceedings, suits, actions, investigations, examinations, claims, audits, hearings, charges, complaints, indictments, litigations, or examinations.

 

“Liability” means any liability, indebtedness, or obligation of any kind (whether accrued, absolute, contingent, matured, unmatured, determined, determinable, or otherwise, and whether or not required to be recorded or reflected on a balance sheet under GAAP).

 

“License Agreement” means that certain Trademark License Agreement, dated as of the date hereof, by and between the Company and GAME.

 

“Liens” means, with respect to any property or asset, all pledges, liens, mortgages, charges, encumbrances, hypothecations, options, rights of first refusal, rights of first offer, and security interests of any kind or nature whatsoever.

 

“Master Services Agreements” means that certain Master Services Agreement, dated as of the date hereof, by and between the Company and GAME.

 

“Material Adverse Effect” means any event, circumstance, development, occurrence, fact, condition, effect, or change (each, an “Effect”) that (i) would prevent, delay or impair the consummation of the transactions contemplated by this Agreement or (ii) is, or would reasonably be expected to become, individually or in the aggregate, materially adverse to the Business, results of operations, condition (financial or otherwise), or assets of the Business, taken as a whole; provided, however, that a Material Adverse Effect shall not be deemed to include any Effect (alone or in combination) arising out of, relating to, or resulting from: (a) changes generally affecting the economy, financial or securities markets, or political conditions; (b) any changes in applicable Law or GAAP or other applicable accounting standards, including interpretations thereof, (c) any outbreak or escalation of war or any act of terrorism, or military actions, or the escalation thereof; (d) natural disasters, weather conditions, epidemics, pandemics, or disease outbreaks (including the COVID-19 virus)/public health emergencies (as declared by the World Health Organization or the Health and Human Services Secretary of the United States), or other force majeure events; (e) general conditions in the industry in which the Business operates; (f) any failure, in and of itself, by the GAME Parties to meet any internal or published projections, forecasts, estimates, or predictions in respect of revenues, earnings, or other financial or operating metrics for the Business for any period (it being understood that any Effect underlying such failure may be deemed to constitute, or be taken into account in determining whether there has been or would reasonably be expected to become, a Material Adverse Effect, to the extent permitted by this definition and not otherwise excepted by another clause of this proviso); or (g) actions taken as required or specifically permitted by the Agreement or actions or omissions taken with the Company’s consent; provided further, however, that any Effect referred to in clauses (a), (b), (c), (d), or (e) immediately above shall be taken into account in determining whether a Material Adverse Effect has occurred or would reasonably be expected to occur if it has a disproportionate effect on the Business, taken as a whole, compared to other participants in the industries in which the Business operates (in which case, only the incremental disproportionate adverse effect may be taken into account in determining whether a Material Adverse Effect has occurred).

 

 

“Open Source License” means any license meeting the Open Source Definition (as promulgated by the Open Source Initiative) or the Free Software Definition (as promulgated by the Free Software Foundation), or any substantially similar license, including any license approved by the Open Source Initiative or any Creative Commons License, and including compulsory copyleft terms.

 

“Open Source Materials” means any software subject to an Open Source License.

 

“Permitted Liens” means: (a) statutory Liens for current Taxes or other governmental charges not yet due and payable or the amount or validity of which is being contested in good faith (provided appropriate accruals or reserves required pursuant to GAAP have been made in respect thereof); (b) mechanics’, carriers’, workers’, repairers’, and similar statutory Liens arising or incurred in the ordinary course of business for amounts which are not delinquent or which are being contested by appropriate proceedings (provided appropriate accruals or reserves required pursuant to GAAP have been made in respect thereof); (c) zoning, entitlement, building, and other land use regulations imposed by Governmental Entities having jurisdiction over such Person’s owned or leased real property, which are not violated in any material respect by the current use and operation of such real property; (d) covenants, conditions, restrictions, easements, and other similar non-monetary matters of record affecting title to such Person’s owned or leased real property, which do not materially impair the occupancy or use of such real property for the purposes for which it is currently used in connection with such Person’s businesses; (e) any right of way or easement related to public roads and highways, which do not materially impair the occupancy or use of such real property for the purposes for which it is currently used in connection with such Person’s businesses; (f) any non-exclusive license to any Intellectual Property entered into in the ordinary course; and (g) Liens arising under workers’ compensation, unemployment insurance, social security, retirement, and similar legislation.

 

“Person” means any individual, corporation, limited or general partnership, limited liability company, limited liability partnership, trust, association, joint venture, Governmental Entity, or other entity or group (which term will include a “group” as such term is defined in Section 13(d)(3) of the Exchange Act).

 

“Pre-Closing Tax Period” means any taxable period ending on or before the Effective Time and that portion of any Straddle Period beginning before and ending on and including the Effective Time.

 

“Related Party” means any: (a) officer or director of either the GAME Parties, or 5% or greater stockholder of GAME; (b) Business Associate; (c) member of the immediate family of any such officer, director, stockholder or Business Associate; (d) Affiliate of any Person referred to in clause “(a),” “(b)” or “(c)” of this sentence; or (e) trust or other Person (other than any GAME Party) in which any one of the Persons referred to in clauses “(a),” “(b),” “(c)” or “(d)” above holds (or in which more than one of such Persons collectively hold), beneficially or otherwise, a material voting, proprietary, financial or equity interest.

 

“Representative” means a Person’s directors, officers, employees, investment bankers, attorneys, accountants, consultants, or other agents or advisors.

 

 

“Retained Businesses” means the businesses of the GAME Parties other than the Business.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Straddle Period” means any taxable period that includes but does not end on the Effective Time.

 

“Subsidiary” of a Person means any other Person of which at least a majority of the securities or ownership interests having by their terms ordinary voting power to elect a majority of the board of directors or other persons performing similar functions is directly or indirectly owned or controlled by such Person and/or by one or more of its Subsidiaries.

 

“Taxes” means all federal, state, local, foreign and other income, gross receipts, sales, use, production, ad valorem, transfer, franchise, registration, profits, license, lease, service, service use, withholding, payroll, employment, unemployment, estimated, excise, severance, environmental, stamp, occupation, premium, property (real or personal), real property gains, windfall profits, customs, duties or other taxes, fees, assessments, or charges of any kind whatsoever, together with any interest, additions or penalties with respect thereto and any interest in respect of such additions or penalties.

 

“Tax Returns” means any return, declaration, report, claim for refund, information return or statement, or other document relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

 

“Transferred Employee” means each employee of the Business set forth on Schedule C who actually commences employment with the Company upon or following the Effective Time, subject to the terms of the Master Services Agreement.

 

7.2 Fees and Expenses. Subject to Section 5, and except as set forth in this Agreement, including Section 7.3, each Party shall bear and pay all fees, costs and expenses that have been incurred or that are incurred in the future by such Party in connection with the transactions contemplated by this Agreement, including all fees, costs and expenses incurred by such party in connection with or by virtue of: (a) the investigation and review conducted by the Company and its Representatives with respect to the Business (and the furnishing of information to the Company and its Representatives in connection with such investigation and review); (b) the negotiation, preparation and review of this Agreement (including the Disclosure Schedule) and all agreements, certificates, opinions and other instruments and documents delivered or to be delivered in connection with the transactions contemplated by this Agreement; (c) the preparation and submission of any filing or notice required to be made or given in connection with any of the transactions contemplated by this Agreement and the obtaining of any Consent required to be obtained in connection with any of such transactions.

 

7.3 Attorneys’ Fees. If any action, suit or other legal proceeding relating to this Agreement or the enforcement of any provision of this Agreement is brought by one Party against any other Party, the prevailing Party shall be entitled to recover reasonable attorneys’ fees, costs and disbursements (in addition to any other relief to which the prevailing Party may be entitled).

 

 

7.4 Notices. Any notice or other communication required or permitted to be delivered to any Party under this Agreement shall be in writing and shall be deemed properly delivered, given and received: (a) if delivered by hand, when delivered; (b) if sent on a Business Day by e-mail transmission before 5:00 p.m. (recipient’s time) on the day sent by e-mail transmission and receipt is confirmed by a non-automated response, on the date on which receipt is confirmed; (c) if sent by e-mail transmission on a day other than a Business Day and receipt is confirmed by a non-automated response, or if sent by e-mail transmission on a Business Day after 5:00 p.m. (recipient’s time) and receipt is confirmed by a non-automated response, on the Business Day following the date on which receipt is confirmed; (d) if sent by registered, certified or first class mail, the third Business Day after being sent; and (e) if sent by overnight delivery via a national courier service, two Business Days after being delivered to such courier. All notices and other communications hereunder shall be delivered to the address or e-mail address set forth beneath the name of such party below (or to such other address or e-mail address as such party shall have specified in a written notice given to the other parties hereto):

 

If to the Company:

 

FaZe Media, Inc.

 

[  ]

Attn: Matthew Kalish, Secretary

Email:

 

with a copy (which shall not constitute notice or such other communication) to:

 

Pillsbury Winthrop Shaw Pittman LLP

31 W 52^nd Street, 29^th Floor

New York, NY 10019

Attn: Stephen B. Amdur

Email: stephen.amdur@pillsburylaw.com

 

If to any GAME Party:

 

GameSquare Holdings, Inc.

6775 Cowboys Way, Suite 1335

Frisco, TX 75034

Attention: Justin Kenna, CEO

Email: justin@gamesquare.com

 

with a copy (which shall not constitute notice or such other communication) to:

 

Baker Hostetler LLP

1900 Avenue of the Starts, Suite 2700

Los Angeles, CA 90067

Attention: Alan A. Lanis, Jr., Esq.

Email: jrlanis@bakerlaw.com

 

 

7.5 Entire Agreement. This Agreement, together with the Charter, Stockholders’ Agreement, and the other agreements being entered into in connection with the transactions contemplated hereby and thereby, constitutes the sole and entire agreement of the Parties with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings, representations, and warranties and agreements, both written and oral, with respect to such subject matter.

 

7.6 Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the Parties hereto and their respective successors and permitted assigns. No Party may assign its rights or obligations hereunder without the prior written consent of the other Parties, which consent shall not be unreasonably withheld or delayed. Any attempted assignment without such consent shall be null and void.

 

7.7 Severability. In the event that any provision of this Agreement, or the application of any such provision to any Person or set of circumstances, shall be determined to be invalid, unlawful, void or unenforceable to any extent, the remainder of this Agreement, and the application of such provision to Persons or circumstances other than those as to which it is determined to be invalid, unlawful, void or unenforceable, shall not be impaired or otherwise affected and shall continue to be valid and enforceable to the fullest extent permitted by applicable Law.

 

7.8 No Third Party Beneficiaries. Except for (a) Section 5, which may be enforced by the applicable Indemnitees as set forth in Section 5, and (b) the Kalish Investor who is an express third party beneficiary entitled to enforce the Company’s rights under this Agreement (whether in the Kalish Investor’s name or the Company’s name), including asserting any claims or commencing any action, suit or other legal proceeding the Company may have under this Agreement, this Agreement is for the sole benefit of the Parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other person any legal or equitable right, benefit, or remedy of any nature whatsoever under or by reason of this Agreement.

 

7.9 Amendment and Modification; Waiver. This Agreement may only be amended, modified, or supplemented by an agreement in writing signed by each of the Parties. No waiver by either Party of any of the provisions hereof shall be effective, unless explicitly set forth in writing and signed by each Party so waiving. Except as otherwise set forth in this Agreement, no failure to exercise, or delay in exercising, any right, remedy, power, or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power, or privilege.

 

7.10 Governing Law; Submission to Jurisdiction.

 

(a) Governing Law. This Agreement shall be governed by and construed and interpreted in accordance with the laws of the state of Delaware irrespective of the choice of laws principles of the state of Delaware, as to all matters, including matters of validity, construction, effect, enforceability, performance and remedies and in respect of the statute of limitations or any other limitations period applicable to any claim, controversy or dispute.

 

 

(b) Venue. Any action, suit or other legal proceeding relating to this Agreement (including the enforcement of any provision of this Agreement), including an action, suit or other legal proceeding based upon fraud, intentional misrepresentation or willful misconduct, shall be brought or otherwise commenced exclusively in any state or federal court located in the State of Delaware. Each party to this Agreement: (i) expressly and irrevocably consents and submits to the jurisdiction of each state and federal court located in the State of Delaware (and each appellate court located in the State of Delaware) in connection with any such action, suit or legal proceeding; (ii) agrees that each state and federal court located in the State of Delaware shall be deemed to be a convenient forum; and (iii) agrees not to assert (by way of motion, as a defense or otherwise), in any such action, suit or legal proceeding commenced in any state or federal court located in the State of Delaware, any claim that such party is not subject personally to the jurisdiction of such court, that such action, suit or legal proceeding has been brought in an inconvenient forum, that the venue of such action, suit or legal proceeding is improper or that this Agreement or the subject matter of this Agreement may not be enforced in or by such court. The Parties agree that the mailing by certified or registered mail, return receipt requested, of any process required by any such court shall constitute valid and lawful service of process against them, without necessity for service by any other means provided by statute or rule of court.

 

(c) Waiver of Jury Trial. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY ACTION RELATED TO OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

7.11 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail, or other means of electronic transmission (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

 

7.12 Construction. Unless otherwise expressly provided, for purposes of this Agreement, the following rules of interpretation shall apply:

 

(a) All references to statutory provisions shall be construed as meaning and including references to (i) any statutory modification, consolidation or re-enactment made after the date of this Agreement and for the time being in force; (ii) all statutory instruments or orders made pursuant to a statutory provision; and (iii) any statutory provision of which these statutory provisions are a consolidation, re-enactment or modification;

 

(b) Words denoting the singular shall include the plural (and vice versa) and words denoting any gender shall include all genders and the neuter;

 

 

(c) Headings, subheadings, titles, subtitles to Articles, Sections, sub-sections, clauses and paragraphs are for information only, and shall not form part of the operative provisions of this Agreement or the annexures hereto and shall be ignored in construing the same;

 

(d) References to recitals, Sections, Articles, clauses, schedules or exhibits are, unless the context otherwise requires, references to recitals, Sections, articles, clauses, schedules and exhibits to this Agreement;

 

(e) The word “including” shall mean including, without limitation, and the words “include” and “includes” shall have corresponding meanings and such words shall not be construed to limit any general statement that they follow to the specific or similar items or matters immediately following them;

 

(f) The term “hereof,” “herein,” “hereto,” “hereunder,” or similar expressions used in this Agreement mean and refer to this Agreement as a whole and not to any particular Section in this Agreement unless the context otherwise requires;

 

(g) All references to Contracts include (subject to all relevant approvals) a reference to that Contract as amended or supplemented from time to time;

 

(h) Any references in this Agreement to “dollars” or “$” shall be to U.S. dollars. Except as otherwise provided in this Agreement, for purposes of translating an amount denominated in a currency other than dollars into dollars as of a specified date, such amount shall be determined using the average closing rate for exchanges between such currency and dollars quoted by the Wall Street Journal (U.S. Edition) for the trading day immediately preceding such date. Notwithstanding the foregoing, for purposes of determining the amount of Damages suffered or incurred by an Indemnitee in connection with any claim under Section 5, any amount in respect of such claim, to the extent in a currency other than dollars, shall be converted from the applicable currency to dollars using the average closing rate for exchanges between such currency and dollars quoted by the Wall Street Journal (U.S. Edition) for the day that is two trading days prior to the date on which the related claim is resolved (through mutual agreement, arbitration or otherwise);

 

(i) Any capitalized term used but not defined in a Schedule or Exhibit to this Agreement shall have the meaning set forth in this Agreement; and

 

(j) Any reference to a document having been “made available” or “provided” to the Company means uploaded and made available to the Company and its Representatives in the “FaZe Media” online data room hosted by Dropbox, Inc. in connection with the transactions contemplated by this Agreement at least three (3) Business Days prior to the date hereof.

 

[signature page follows]

 

 

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.

 

	GAMESQUARE HOLDINGS INC.
	By:	/s/ Justin Kenna
	Name:	Justin Kenna
	Title:	CEO
	FAZE MEDIA HOLDINGS, LLC
	By:	/s/ Justin Kenna
	Name:	Justin Kenna
	Title:	President
	FAZE HOLDINGS INC.
	By:	/s/ Justin Kenna
	Name:	Justin Kenna
	Title:	President
	FAZE MEDIA, INC.
	By:	/s/ Matthew Kalish
	Name:	Matthew Kalish
	Title:	Secretary

 

[Signature Page to Contribution Agreement]

 

 

Schedule A

Contributed Assets, Assumed Liabilities and Excluded Liabilities

 

 

Schedule B

AP/AR Listing

 

 

Schedule C

Transferred Employee Census

 

 

Exhibit A

 

Form of Stockholders’ Agreement

 

 

Exhibit B

 

Form of Charter

 

 

 

Exhibit 10.1

 

Trademark License Agreement

 

This Trademark License Agreement (“Agreement”), effective as of May 15, 2024 (“Effective Date”), is by and between FaZe Media, Inc., a Delaware corporation (“Faze Media”) and GameSquare Holdings, Inc., a Delaware corporation (“GAME”) (collectively, the “Parties,” or each, individually, a “Party”).

 

WHEREAS, pursuant to that certain Contribution Agreement, dated as of the date hereof, by and among GAME, FaZe Holdings Inc., a Delaware corporation and wholly-owned subsidiary of GAME, FaZe Media Holdings, LLC, a Delaware limited liability company, and Faze Media, Faze Media attained and became the sole and exclusive owner of certain trademarks and copyrights consisting for purposes of this Agreement of (i) the United States trademark for “FAZE CLAN”, U.S. Trademark Application Serial Nos. 87/332787, 87/335175, and 87/335668 and U.S. Trademark Registration No. 4,906,907 and applicable applications and registrations for the same trademark in other jurisdictions, (ii) the United States trademark for “Faze”, U.S. Trademark Application Serial No. 88/644931 and U.S. Trademark Registration Nos. 5,748,189 and 4,550,118 and applicable applications and registrations for the same trademark in other jurisdictions, (iii) the United States trademark for a stylized FaZe Clan logo, U.S. Trademark Application Serial No. 87/335254 and U.S. Trademark Registration Nos. 5,353,806 and 4,421,862 and applicable applications and registrations for the same trademark in other jurisdictions (the “Faze Clan Logo”), and any registered or unregistered copyrights associated with the foregoing (collectively, the “Licensed Marks”); and

 

WHEREAS, GAME wishes to obtain, and Faze Media is willing to grant to GAME, an exclusive license to use the Licensed Marks specifically for the purposes of competitive team play within eSports that are owned and operated by GAME and for the existing ancillary revenue streams from eSports set forth on Schedule A (collectively, the “Field of Use”) on the terms and conditions set out in this Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

 

1. License.

 

(a) Grant. Subject to this Agreement’s terms and conditions, Faze Media hereby grants to GAME during the Term (as defined below) an exclusive, worldwide, non-transferable (except as provided in Section 11), royalty-free, non-sublicensable (except as provided in Section 1(b)) license to use the Licensed Marks within the Field of Use. For the purposes of this Agreement, ‘Field of Use’ shall include the naming and branding of approved eSports competition teams (e.g., ATLANTA Faze in Call of Duty) and active athletes on those competition teams (e.g., FaZe EpikWhale). No license or rights are granted to GAME by implication, estoppel, or otherwise, other than as expressly granted by Faze Media under this Section.

 

 

(b) Sublicensing. GAME acknowledges its right, as granted under Section 1(a) of this Agreement, to sublicense the Licensed Marks to professional eSports teams and competition athletes owned or operated by GAME or any of its wholly-owned subsidiaries, in addition to the sublicensing rights specified below. Upon providing prior written notice to Faze Media, GAME may extend sublicenses under the license conferred in Section 1(a) to: (i) any wholly-owned subsidiary of GAME; and (ii) manufacturers, distributors, and other contractors exclusively to facilitate the provision of services to GAME or to act on behalf of GAME; provided, that in no event shall GAME or any of its subsidiaries be entitled to receive any payment from a third-party for sublicensing the license conferred in Section 1(a) other than as set forth in that certain Side Letter by and between the Gigamoon Media LLC, a Delaware limited liability company (the “Kalish Investor”), and GAME. All such sublicenses must adhere to the following conditions: (A) Be formally documented in writing and comply with the terms and conditions of this Agreement; (B) Explicitly prohibit further sublicensing or assignment to any third party; and (C) Automatically expire upon the termination of this Agreement as specified in Section 9(b), or, in the case of a wholly-owned subsidiary, on the date said subsidiary ceases to be wholly owned by GAME. GAME is responsible for ensuring that all sublicensees adhere to the terms and conditions of this Agreement. Any action or failure to act by a sublicensee that constitutes a material breach of this Agreement, if carried out by GAME, shall be considered a material breach by GAME.

 

2. Use of the Licensed Marks.

 

(a) Compliance. GAME shall ensure that all uses of the Licensed Marks by GAME and its sublicensees, including in all advertising, marketing, and promotional materials related to the Licensed Marks, strictly adhere to the following conditions:

 

(i) Adherence to Faze Media’s Brand Standards: All uses of the Licensed Marks must conform to Faze Media’s guidelines on the form, manner of presentation, and use of notice symbols and legends associated with the Licensed Marks. This includes compliance with Faze Media’s specifications regarding the Licensed Marks’ design, distribution, and sale, ensuring that such use maintains the quality and reputation symbolized by the Licensed Marks as of the Effective Date.

 

(ii) Approval Rights for Specific Use: GAME shall submit for Faze Media’s prior written approval, a detailed list of professional eSports teams and competition athletes intending to use the Faze branding, including specifics on how the Faze name, marks, and logos will be displayed. This submission must cover all intended uses, including but not limited to uniforms, promotional materials, and merchandise associated with the team or athlete.

 

(iii) Suitability and Brand Protection: GAME is responsible for ensuring that all professional eSports teams and competition athletes associated with the Faze branding meet Faze Media’s standards for suitability to protect the brand’s integrity. This includes obtaining Faze Media’s express approval for each individual athlete using the “Faze” gamer tag, with Faze Media retaining the right to withhold approval based on suitability concerns (e.g., preventing use by individuals whose conduct or background could harm the Faze brand).

 

 

(iv) Revenue Generating Use Restrictions: GAME agrees that any revenue-generating use of the Faze brand, including merchandising and products, will be strictly limited to items directly related to the approved competition team or athlete. GAME may not use the Faze branding for the sale of merchandise or products not directly associated with the approved team or athlete, ensuring that all such uses are directly connected to the promotion of the Faze-affiliated team or athlete and receive Faze Media’s prior written approval.

 

(v) Compliance with Laws and Regulations: All uses of the Licensed Marks by GAME and its sublicensees must comply with all applicable laws and regulations.

 

(b) Inspections and Approvals. So Faze Media can ensure GAME’s compliance with Section 2(a), GAME shall permit, and shall require its sublicensees to permit, at Faze Media’s request (or its authorized representative), but no more than three times each calendar year, GAME shall submit to Faze Media, at GAME’s cost, representative samples, or representative photographs or descriptions thereof, of any materials or items then published, released or in distribution reflecting the Licensed Marks.

 

3. Ownership and Protection of Licensed Marks.

 

(a) Acknowledgment. GAME acknowledges and agrees that, as between the Parties, (i) Faze Media owns and will retain all right, title, and interest in and to the Licensed Marks; and (ii) all use by GAME or any sublicensees of the Licensed Marks under this Agreement, and all goodwill accruing therefrom, will inure solely to the benefit of Faze Media. GAME shall not dispute or challenge, or assist any person or entity in disputing or challenging, Faze Media’s rights in and to the Licensed Marks or the Licensed Marks’s validity.

 

(b) Registration and Maintenance. Faze Media has the sole right, in its discretion and at its expense, to file, prosecute, and maintain all applications and registrations for the Licensed Marks. GAME shall provide, at the request of Faze Media and at Faze Media’s expense, all necessary assistance with such filing, maintenance, and prosecution.

 

(c) Enforcement. GAME shall promptly notify Faze Media in writing of any actual, suspected, or threatened infringement, dilution, or other conflicting use of the Licensed Marks by any third party of which it becomes aware. Faze Media has the sole right, in its discretion, to bring any action or proceeding with respect to any such infringement, dilution, or other conflict and to control the conduct of, and retain any monetary recovery resulting from, any such action or proceeding (including any settlement). GAME shall provide Faze Media with all assistance that Faze Media may reasonably request, at Faze Media’s expense, in connection with any such action or proceeding.

 

 

4. Fees and Payment Schedule.

 

(a) License Fee. GAME shall pay Faze Media an annual license fee (“License Fee”) as outlined below for the rights and licenses granted under this Agreement:

 

(i) For each year of the Initial Term (as defined below): GAME shall issue to Faze Media that number of shares of GAME’s common stock, par value $0.0001 (the “Common Stock”), equal to the quotient of (x) the product of 2.5% multiplied by Faze Esports gross revenues earned in each applicable fiscal year divided by (y) the Applicable Share Price for such fiscal year.

 

(ii) For each year of any applicable Renewal Term (as defined below): GAME shall issue to Faze Media that number of shares of Common Stock equal to the quotient of (x) the product of 2.75% (reflecting a 10% increase from the Initial Term) multiplied by Faze Esports gross revenues earned in each applicable fiscal year divided by (y) the Applicable Share Price for such fiscal year.

 

(b) Timing of Payment; Pro Ration. The License Fee for each fiscal year shall be paid no later than five (5) business days following the deadline to file, GAME’s Annual Report on Form 10-K with the U.S. Securities and Exchange Commission for such fiscal year. The amount of the License Fee shall be calculated based on the number of days that this Agreement was in effect during such fiscal year and the number of days elapsed.

 

(c) Definitions. For purposes of this Agreement:

 

(i) “Applicable Share Price” means, with respect to a fiscal year the average of the VWAP for each trading day of such fiscal year.

 

(ii) “VWAP” means, for the Common Stock as of any trading day, the dollar volume-weighted average price for the Common Stock on the Nasdaq Capital Market (or such other nationally recognized securities exchange), as reported by Bloomberg or such other source as the Parties may mutually agree.

 

5. Registration Rights. GAME and Faze Media shall comply with, and Faze Media shall be entitled to the benefits of, the provisions of the Registration Rights Agreement, substantially in the form attached hereto as Exhibit A, governing and providing for, among other matters, registration rights with respect to the Common Stock (the “Registration Rights”). Any breach of the Registration Rights by GAME shall be deemed to be a material breach of this Agreement.

 

6. Confidentiality. Each Party acknowledges that in connection with this Agreement it may gain access to information that is treated as confidential by the other Party, including information about the other Party’s business operations and strategies, goods and services, customers, pricing, marketing, and other sensitive and proprietary information (“Confidential Information”). Each Party shall not disclose or use any Confidential Information of the other Party for any purpose other than as reasonably necessary to exercise its rights or perform its obligations under this Agreement; provided that each Party may disclose Confidential Information to the limited extent required to comply with the order of a court or other governmental body, or as otherwise necessary to comply with applicable law, provided that the Party making the disclosure pursuant to the order shall first have given written notice to the other Party and made a reasonable effort to obtain a protective order.

 

 

7. Representations and Warranties.

 

(a) Mutual Representations. Each Party represents and warrants to the other Party that, as of the Effective Date: (i) it is duly organized, validly existing, and in good standing under the laws of the state or jurisdiction of its organization; (ii) it has the full right, power, and authority to enter into and perform its obligations under this Agreement; (iii) the execution of this Agreement by its representative whose signature is set forth at the end hereof has been duly authorized by all necessary corporate action of such Party; and (iv) when executed and delivered by such Party, this Agreement will constitute the legal, valid, and binding obligation of that Party, enforceable against that Party in accordance with its terms.

 

(b) GAME Representations. GAME represents and warrants that it has obtained all approvals, licenses, and certifications necessary to exercise its rights and perform its obligations under this Agreement.

 

(c) EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION 6, Faze MEDIA EXPRESSLY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE, IN CONNECTION WITH THIS AGREEMENT AND THE LICENSED MARKS, INCLUDING ANY WARRANTIES OF TITLE, NON-INFRINGEMENT, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE.

 

8. Indemnification.

 

(a) By Faze Media. Faze Media shall indemnify, defend, and hold harmless GAME and GAME’s affiliates, officers, directors, employees, agents, successors, and assigns (each, a “GAME Indemnified Party”) against all losses, liabilities, claims, damages, actions, fines, penalties, expenses, or costs (including court costs and reasonable attorneys’ fees) (“Losses”) arising out of or in connection with any third-party claim, suit, action, or proceeding (“Third-Party Claim”) relating to Faze Media’s breach of this Agreement.

 

(b) By GAME. GAME shall indemnify, defend, and hold harmless Faze Media and Faze Media’s affiliates, officers, directors, employees, agents, successors, and assigns (each, a “Faze Media Indemnified Party”) against all Losses arising out of or in connection with any Third-Party Claim relating to: (i) GAME’s breach of this Agreement; or (ii) use of any Licensed Marks by GAME or any sublicensee under this Agreement, including any product liability claim and any claim of infringement, dilution, or other violation of any intellectual property rights relating to the manufacture, promotion, advertising, distribution of the Licensed Marks by GAME or any sublicensee but excluding any claim based solely on infringement, dilution, or other violation of any third-party trademark rights relating to the use of any Licensed Marks by GAME or any sublicensee in accordance with this Agreement.

 

 

(c) Indemnification Procedure. A GAME Indemnified Party or Faze Media Indemnified Party (each, as applicable, an “Indemnified Party”) shall promptly notify the Party from whom it is seeking indemnification (“Indemnifying Party”) in writing of any Third-Party Claim for which it is entitled to indemnification under this Section. The Indemnifying Party shall control the investigation and defense of such Third-Party Claim, at the Indemnifying Party’s expense. The Indemnified Party shall provide all assistance reasonably requested by the Indemnifying Party, at the Indemnifying Party’s expense. The Indemnifying Party shall not settle any such Third-Party Claim in a manner that adversely affects the rights of the Indemnified Party without the Indemnified Party’s prior written consent. The Indemnified Party may participate in and observe the proceedings with counsel of its choice at its own cost and expense.

 

9. Limitation of Liability. EXCEPT FOR A PARTY’S LIABILITY FOR INDEMNIFICATION UNDER SECTION 7 OR BREACH OF CONFIDENTIALITY UNDER SECTION 5 OR A PARTY’S GROSSLY NEGLIGENT ACTS OR OMISSIONS OR WILLFUL MISCONDUCT, NEITHER PARTY WILL BE LIABLE TO THE OTHER PARTY FOR ANY LOSS OF USE, REVENUE, OR PROFIT OR FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, EXEMPLARY, SPECIAL, OR PUNITIVE DAMAGES RELATING TO THIS AGREEMENT OR USE OF THE LICENSED MARKS HEREUNDER, WHETHER ARISING OUT OF BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE), OR OTHERWISE, REGARDLESS OF WHETHER SUCH DAMAGE WAS FORESEEABLE AND WHETHER SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

 

10. Term and Termination.

 

(a) Term. Subject to earlier termination as provided for in Section 9(b), the term of this Agreement shall be for a period of 5 years from the Effective Date (“Initial Term”) and this Agreement shall automatically renew for successive additional terms of five (5) years (each, a “Renewal Term”).

 

(b) Termination.

 

(i) Either Party may terminate this Agreement on written notice to the other Party if the other Party materially breaches this Agreement and fails to cure such breach within 30 days after receiving written notice of such breach from the non-breaching Party.

 

(ii) Faze Media may terminate this Agreement on written notice to GAME if:

 

(A) a person or entity, directly or indirectly, in a single transaction or series of related transactions, acquires control of GAME or all or substantially all of the assets of GAME, or GAME is merged with or into another entity;

 

(B) the shares of Common Stock are delisted from the Nasdaq Capital Market and the shares of Common Stock are not relisted or quoted on a national securities exchange as defined under the Securities Exchange Act of 1934; or

 

 

(C) GAME files any petition or action for relief under any bankruptcy, reorganization, insolvency or moratorium law or any other law for the relief of, or relating to, debtors, now or hereafter in effect, or makes any assignment for the benefit of creditors or takes any corporate action in furtherance of any of the foregoing or an involuntary petition is filed against GAME (unless such petition is dismissed or discharged within ninety (90) days under any bankruptcy statute now or hereafter in effect, or a custodian, receiver, trustee, assignee for the benefit of creditors (or other similar official) is appointed to take possession, custody or control of any property of GAME.

 

(c) Effect of Termination. Upon the expiration or termination of this Agreement or any Sell-Off Period expressly permitted under Section 9(d) all rights and licenses granted under this Agreement and all sublicenses granted by GAME will terminate. Expiration or termination of this Agreement will not relieve the Parties of any obligations accruing before the effective date of expiration or termination. The Parties’ rights and obligations and any right, obligation, or required performance of the Parties under this Agreement that, by its express terms or nature and context is intended to survive termination or expiration of this Agreement, will survive any such termination or expiration.

 

(d) Sell-Off Period. Following the date of expiration or termination of this Agreement (excluding termination by Faze Media pursuant to Section 9(b)), GAME and any sublicensees shall have the right, for a period of one year from such termination or expiration date (the “Sell-Off Period”), to continue selling any products that were created prior to the date of termination or expiration and that incorporate the Licensed Marks. This right is subject to the condition that such products must have been in GAME’s or its sublicensees’ inventory, or in the process of manufacture, as of the date of expiration or termination. All sales during the Sell-Off Period shall be conducted in accordance with the terms and conditions of this Agreement.

 

11. Assignment. GAME may not assign or otherwise transfer any of its rights, or delegate or otherwise transfer any of its obligations, under this Agreement, in each case whether voluntarily, involuntarily, by operation of law, or otherwise, without Faze Media’s prior written consent, which consent Faze Media may not unreasonably withhold or delay, except that GAME may make such an assignment, delegation, or other transfer, in whole or in part, without the Faze Media’s consent: (a) to an affiliate; or (b) in connection with the transfer or sale of all or substantially all of the business or assets of GAME relating to this Agreement. No delegation or other transfer will relieve GAME of any of its obligations or performance under this Agreement. Any purported assignment, delegation, or transfer in violation of this Section is void. This Agreement is binding upon and inures to the benefit of the Parties and their respective permitted successors and assigns.

 

 

12. General Provisions.

 

(a) Further Assurances. Each Party shall, upon the reasonable request, and at the sole cost and expense, of the other Party, promptly execute such documents and take such further actions as may be necessary to give full effect to the terms of this Agreement.

 

(b) Independent Contractors. The relationship between the Parties is that of independent contractors. Nothing contained in this Agreement creates any agency, partnership, joint venture, or other form of joint enterprise, employment, or fiduciary relationship between the Parties, and neither Party has authority to contract for or bind the other Party in any manner whatsoever.

 

(c) Notices. All correspondence or notices required or permitted to be given under this Agreement must be in writing, in English, and addressed to the other Party at its address set out below (or to any other address that the receiving Party may designate from time to time). Each Party shall deliver all notices by personal delivery, nationally recognized overnight courier (with all fees prepaid), facsimile or email (with confirmation of transmission), or certified or registered mail (in each case, return receipt requested, postage prepaid). Except as otherwise provided in this Agreement, a notice is effective only (i) upon receipt by the receiving Party and (ii) if the Party giving the notice has complied with the requirements of this Section. Such communications must be sent to the respective Parties at the following addresses (or at such other address for a Party as specified in a notice given in accordance with this Section):

 

	If to Faze Media:	[  ] Email: Attention: Matthew Kalish, Secretary
	If to GAME:	c/o GameSquare Holdings, Inc. 6775 Cowboys Way, Ste. 1335 Frisco, Texas 75034 Email: justin@gamesquare.com Attention: Chief Executive Officer

 

(d) Entire Agreement. This Agreement, including and together with any related exhibits and schedules, constitutes the sole and entire agreement of Faze Media and GAME with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings, agreements, representations, and warranties, both written and oral, regarding such subject matter.

 

(e) No Third-Party Beneficiaries. Except for the right of Indemnified Parties to enforce their indemnification rights under Section 7 and (b) the Kalish Investor who is an express third party beneficiary entitled to enforce Faze Media’s rights under this Agreement (whether in the Kalish Investor’s name or Faze Media’s name), including asserting any claims or commencing any action, suit or other legal proceeding Faze Media may have under this Agreement for material breaches, provided that the Kalish Investor acknowledges and agrees that in advance of undertaking any of the foregoing it shall (i) exhaust all non-legal approaches to curing such material breach and (ii) provide advance written notice to the Boards of Directors of Faze Media and GAME of its intent to enforce Faze Media’s rights hereunder, this Agreement solely benefits the Parties and their respective permitted successors and assigns, and nothing in this Agreement, express or implied, confers on any other person any legal or equitable right, benefit, or remedy of any nature whatsoever under or by reason of this Agreement.

 

 

(f) Amendment; Waiver. No amendment to this Agreement will be effective unless it is in writing and signed by both Parties. No waiver by any Party of any of the provisions hereof will be effective unless explicitly set forth in writing and signed by the waiving Party. Except as otherwise set forth in this Agreement, no failure to exercise, or delay in exercising, any rights, remedy, power, or privilege arising from this Agreement will operate or be construed as a waiver thereof; nor will any single or partial exercise of any right, remedy, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power, or privilege.

 

(g) Severability. If any term or provision of this Agreement is invalid, illegal, or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability will not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction.

 

(h) Governing Law. This Agreement, all relations between or among the Parties, and any and all disputes between or among the Parties, whether any such dispute sounds in law, equity or otherwise, is to be exclusively construed in accordance with or governed by (as applicable) the law of the State of New York without recourse to New York (or any other) choice of law or conflicts of law principles.

 

(i) Equitable Relief. Each Party acknowledges that a breach by the other Party of this Agreement may cause the non-breaching Party irreparable harm, for which an award of damages would not be adequate compensation and, in the event of such a breach or threatened breach, the non-breaching Party will be entitled to equitable relief, including in the form of a restraining order, orders for preliminary or permanent injunction, specific performance, and any other relief that may be available from any court, and the Parties hereby waive any requirement for the securing or posting of any bond or the showing of actual monetary damages in connection with such relief. These remedies are not exclusive but are in addition to all other remedies available under this Agreement at law or in equity, subject to any express exclusions or limitations in this Agreement to the contrary.

 

(j) Counterparts. This Agreement may be executed in counterparts, each of which is deemed an original, but all of which together are deemed to be one and the same agreement.

 

[signature page follows]

 

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the Effective Date by their respective officers thereunto duly authorized.

 

	FAZE MEDIA, INC.
	By	/s/ Matthew Kalish
	Name:	Matthew Kalish
	Title:	Secretary
	GAMESQUARE HOLDINGS, INC.
	By	/s/ Justin Kenna
	Name:	Justin Kenna
	Title:	CEO

 

[Signature Page to Trademark License Agreement]

 

 

SCHEDULE A
Existing Ancillary Revenue Streams

 

 

EXHIBIT A
Form of Registration Rights Agreement

 

 

 

Exhibit 10.2

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights Agreement (this “Agreement”), dated as of May 15, 2024, is by and between FaZe Media, Inc., a Delaware limited liability company (“FaZe Media”), and GameSquare Holdings, Inc., a Delaware corporation (“Game”).

 

WHEREAS, Game and FaZe Media have entered into that certain Trademark License Agreement, dated as of the date hereof (the “License Agreement”), pursuant to which Game may issue to FaZe Media newly issued shares (the “Shares”) of Game’s common stock, par value $0.0001 per share (“Common Stock”) in exchange for services provided to Game by FaZe Media thereunder.

 

WHEREAS, pursuant to the terms of, and in consideration for FaZe Media entering into, the License Agreement, and to induce FaZe Media to execute and deliver the License Agreement, Game has agreed to provide FaZe Media with certain registration rights with respect to the Registrable Securities (as defined herein) as set forth herein.

 

NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements contained herein and in the License Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, intending to be legally bound hereby, Game and FaZe Media hereby agree as follows:

 

Section 1 Definitions

 

(a) Definitions. As used in this Exhibit:

 

“Basis Price” means, with respect to a share of Common Stock held by FaZe Media, the Applicable Share Price (as defined in the License Agreement), as and when issued, of such share of Common Stock.

 

“Closing Sale Price” means, for the Common Stock as of any date, the last closing trade price for the Common Stock on the Eligible Market then listed or quoted on, as reported by Bloomberg, or, if the Eligible Market then listed or quoted on, as the case may be, begins to operate on an extended hours basis and does not designate the closing trade price for the Common Stock, then the last trade price for the Common Stock prior to 4:00 p.m., New York City time, as reported by Bloomberg, or, if the foregoing do not apply, the last trade price for the Common Stock in the over-the-counter market on the electronic bulletin board for the Common Stock as reported by Bloomberg, or, if no last trade price is reported for the Common Stock by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported by OTC Markets Group Inc. All such determinations shall be appropriately adjusted for any stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions during such period.

 

“Eligible Market” means The Nasdaq Global Market, The Nasdaq Capital Market, the New York Stock Exchange or the NYSE American (or any nationally recognized successor to any of the foregoing).

 

“Exchange Act” means the Securities and Exchange Act of 1934, as amended.

 

 

“Extension Period” has the meaning ascribed to such term in Section 4(a)(i).

 

“Game Director” has the meaning given in the Stockholders’ Agreement. For the avoidance of doubt, any consents required from a Game Director hereunder shall only be required for so long as the Game Investor is entitled to appoint the Game Director pursuant to the Stockholders’ Agreement.

 

“Game Investor” means FaZe Media Holdings, LLC, a Delaware limited liability company.

 

“Initial Notice” has the meaning ascribed to such term in Section 3(a).

 

“Kalish Director” has the meaning given in the Stockholders’ Agreement. For the avoidance of doubt, any consents required from a Kalish Director hereunder shall only be required for so long as the Kalish Investor is entitled to appoint the Kalish Director pursuant to the Stockholders’ Agreement.

 

“Kalish Investor” means Gigamoon Media LLC, a Delaware limited liability company.

 

“Laws” means any federal, state, local, municipal, foreign, multi-national or other laws, common law, statutes, constitutions, ordinances, rules, regulations, codes, orders, or legally enforceable requirements enacted, issued, adopted, promulgated, enforced, ordered, or applied by supranational, national, state, municipal, local, or foreign government, any instrumentality, subdivision, court, administrative agency or commission, or other governmental authority, or any quasi-governmental or private body exercising any regulatory or other governmental or quasi-governmental authority, including any national securities exchange.

 

“Major Investor” has the meaning ascribed to such term in the Stockholders’ Agreement.

 

“Marketed Underwritten Shelf Take-Down” has the meaning ascribed to such term in Section 2(b).

 

“Non-Marketed Shelf Take-Down” means a Shelf Take-Down that does not constitute a Marketed Underwritten Shelf Take-Down and that does not involve an Underwritten Offering, provided that a Non-Marketed Shelf Take-Down shall not cause Game to incur any material expenses (other than those solely in connection with keeping the disclosure in the Registration Statement for such Non-Marketed Shelf Take-Down current in the ordinary course) or to take any other material actions to facilitate such Non-Marketed Shelf Take-Down, including but not limited to having Game or its executives or directors execute any transaction documents related to such Non-Marketed Shelf Take-Down (except for any customary documents in satisfaction of transfer agent requirements), provide any comfort letters, or conduct any due diligence, and, provided further, that any such Non-Marketed Shelf Take-Down shall only take place during an open window period and shall not cause Game to impose a trading blackout or require Game to suspend its repurchase program (if any) or otherwise subject Game to any regulatory requirements not in the ordinary course.

 

 

“Piggyback Registration” has the meaning ascribed to such term in Section 3(a).

 

“Prospectus” means the prospectus included in any Registration Statement, including any preliminary prospectus, and any such prospectus as amended or supplemented by any prospectus supplement, including any such prospectus supplement with respect to the terms of the offering of any portion of the securities covered by a Registration Statement, and by all other amendments and supplements to a prospectus, including post-effective amendments and freewriting prospectuses and in each case including all material incorporated by reference therein.

 

“Red Herring Prospectus” has the meaning ascribed to such term in Section 3(a).

 

“Registrable Securities” shall mean all shares of Common Stock held by FaZe Media following the date hereof pursuant to and in accordance with the License Agreement (and, for the avoidance of doubt, shall exclude any shares of Common Stock acquired by FaZe Media in the open market, whenever acquired); provided that any Registrable Securities shall cease to be Registrable Securities when (a) a Registration Statement with respect to the sale of such Registrable Securities has been declared effective under the Securities Act and such Registrable Securities have been offered and sold pursuant to such Registration Statement, (b) such Registrable Securities have been disposed of pursuant to Rule 144, or (c) such Registrable Securities may be sold pursuant to Rule 144 without any limitation as to manner of sale restrictions or volume limitations or (d) such Registrable Securities shall have been otherwise transferred and new certificates for them not bearing a legend restricting further transfer under the Securities Act shall have been delivered by Game; and provided, further, that any securities that have ceased to be Registrable Securities shall not thereafter become Registrable Securities and any security that is issued or distributed in respect of securities that have ceased to be Registrable Securities is not a Registrable Security.

 

“Registration Statement” means a registration statement filed by Game with the SEC, including the Prospectus included in such registration statement.

 

“Registration Statement Effectiveness Deadline” has the meaning ascribed to such term in Section 2(a).

 

“Registration Statement Filing Deadline” has the meaning ascribed to such term in Section 2(a).

 

“SEC” means the United States Securities and Exchange Commission.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Shelf Registration” has the meaning ascribed to such term in Section 2(a).

 

“Shelf Take-Down” has the meaning ascribed to such term in Section 2(b).

 

“Shelf Take-Down Request” has the meaning ascribed to such term in Section 2(c).

 

“Trading Plan” has the meaning ascribed to such term in Section 5(a)(ii).

 

 

“Underwritten Offering” means a sale of shares of Common Stock to an underwriter for reoffering to the public.

 

“Underwritten Shelf Take-Down” has the meaning ascribed to such term in Section 2(b).

 

“Underwritten Shelf Take-Down Notice” has the meaning ascribed to such term in Section 2(b).

 

Any capitalized terms used but not defined herein have the meanings given to such terms in the Stockholders’ Agreement by and among FaZe Media and the and the Persons set forth on Exhibit A and Exhibit B thereto, dated as of May 15, 2024 (the “Stockholders’ Agreement”).

 

Section 2 Shelf Registration Rights.

 

(a) Shelf Registration Statement. Within 60 days of the date of any issuance of Common Stock to FaZe Media pursuant to the terms of the License Agreement (each, a “Registration Statement Filing Deadline”), Game shall file a Registration Statement on (a) Form S-3ASR (or any successor form thereto), or (b) if Game is not qualified for the use of Form S-3ASR (or any successor form thereto), on Form S-3 (or any successor form thereto), or (c) if Game is not qualified for the use of Form S-3 (or any successor form thereto), on Form S-1 (or any successor form thereto) covering resales of Registrable Securities then held by FaZe Media on a delayed or continuous basis in accordance with Rule 415 under the Securities Act (each, a “Shelf Registration”). Game will use commercially reasonable efforts to cause such Registration Statement to be declared effective by earliest permitted of (a) by 4:00 pm Eastern time on the fifth (5th) business day after the date of the written notification by the SEC that the Registration Statement will not be subject to SEC review or (b) with respect to a Registration Statement filed on Form S-3, within forty-five (45) days of the Registration Statement Filing Deadline or, with respect to a Registration Statement filed on Form S-1, within sixty (60) days of the Registration Statement Filing Deadline, as applicable, in each case if the Registration Statement is reviewed by the SEC, provided that Game shall submit an acceleration request for effectiveness of the Registration Statement within two (2) business day of the notification by the SEC that the SEC has no further comments on the Registration Statement and shall use commercially reasonable efforts to cause such Registration Statement to become effective within 48 hours of the submission of the acceleration request (each, a “Registration Statement Effectiveness Deadline”), including, without limitation, filing a Prospectus, prospectus supplement, post-effective amendments, appropriate qualification under applicable blue sky or other state securities laws and appropriate compliance with the applicable regulations promulgated under the Securities Act. In addition, at any time that the Registration Statement for a Shelf Registration is not in effect or will expire within 90 days, Game shall use commercially reasonable efforts to file a shelf Registration Statement on (a) Form S-3ASR (or any successor form thereto), or (b) if Game is not qualified for the use of Form S-3ASR (or any successor form thereto), on Form S-3 (or any successor form thereto), or (c) if Game is not qualified for the use of Form S-3 (or any successor form thereto), on Form S-1 (or any successor form thereto), covering resales of the Registrable Securities by FaZe Media pursuant to a Shelf Registration. In either case, the Registration Statement may include the “shelf” registration of offers and sales of securities to be issued by Game which do not relate to a specific offering or take-down.

 

 

(b) Shelf Take-Downs. Subject to the provisions of this Section 2 and Section 5, at any time and from time to time after the applicable Registration Statement Effectiveness Deadline, FaZe Media may initiate an offering or sale of all or part of such Registrable Securities pursuant to the Registration Statement referred to in the immediately preceding Section 2(a) (a “Shelf Take-Down”); provided that FaZe Media may only request three Shelf Take-Downs in any rolling 12-month basis (provided that such limits shall include all Underwritten Shelf Take-Downs and Marketed Underwritten Shelf Take-Downs, but shall not apply to any Non-Marketed Shelf Take-Downs). If FaZe Media elects in a written request delivered to Game (an “Underwritten Shelf Take-Down Notice”), a Shelf Take-Down may be in the form of an Underwritten Offering (an “Underwritten Shelf Take-Down”) and, if necessary, Game shall file and effect an amendment or supplement to its Shelf Registration for such purpose as soon as reasonably practicable and taking into account financial statement staleness rules. FaZe Media shall indicate in such Underwritten Shelf Take-Down Notice whether it intends for such Underwritten Shelf Take-Down to involve a block trade or a customary “road show” (including an “electronic road show”) or other marketing effort by the underwriters (a “Marketed Underwritten Shelf Take-Down”). If FaZe Media desires to effect a Non-Marketed Shelf Take-Down, FaZe Media shall so indicate in a written request delivered to Game no later than two Business Days prior to the expected date of such Non-Marketed Shelf Take-Down, which request shall include (i) the total number of Registrable Securities expected to be offered and sold in such Non-Marketed Shelf Take-Down, (ii) the expected plan of distribution of such Non-Marketed Shelf Take-Down and (iii) the action or actions required (including the timing thereof) in connection with such Non-Marketed Shelf Take-Down, and, if necessary, Game shall file and effect an amendment or supplement to its Shelf Registration for such purpose as soon as practicable and in any event within two Business Days; provided that each of the foregoing periods shall be extended to the extent required to satisfy financial statement staleness rules and subject to Section 4(a)(i) (subject to any lock-up restrictions), including, without limitation, filing a Prospectus, prospectus supplement, post-effective amendments, appropriate qualification under applicable blue sky or other state securities laws and appropriate compliance with the applicable regulations promulgated under the Securities Act.

 

(c) Withdrawal of Take-Down Requests. FaZe Media may withdraw a request for a Shelf Take-Down (a “Shelf Take-Down Request”) upon written notice to Game and the underwriter(s) of their intention to withdraw from such Shelf Take-Down at any time prior to the filing of the Prospectus relating to the Shelf Take-Down Request. For the avoidance of doubt, a Shelf Take-Down which does not result in an effective registration under the Securities Act or a Shelf Take-Down Request that is withdrawn prior to the filing of the requested Registration Statement, prospectus, or prospectus supplement, if applicable, shall not be counted as a Shelf Take-Down for purposes of the limits in Section 2(b).

 

(d) Registration Statement Duration. Subject to Section 4, Game shall use its commercially reasonable efforts to keep any Registration Statement filed pursuant to Section 2(a) or in response to a Shelf Take-Down Request effective until the earlier of the date on which (x) FaZe Media disposes of all the Registrable Securities pursuant to the Registration Statement or (y) the shares under the Shelf Registration are no longer considered Registrable Securities, subject to Section 4(a)(i), provided that if there is a pending Shelf Take-Down, Game will keep the Registration Statement effective until the distribution which is the subject of such pending Shelf Take-Down is complete.

 

 

(e) Selection of Underwriters. In the case of an Underwritten Offering that is the subject of a Shelf Take-Down Request, FaZe Media shall select the underwriter(s) (including the roles thereof); provided that such selection is reasonably acceptable to Game.

 

Section 3 Piggyback Registration Rights.

 

(a) Participation. Subject to Section 3(b) and Section 5, if Game proposes to file a Registration Statement or Prospectus for an offering on its own behalf or for any stockholder of Game other than FaZe Media (other than (i) a registration relating solely to an employee benefit plan or employee stock plan, a dividend reinvestment plan, or a merger or a consolidation, (ii) a registration incidental to an issuance of debt securities under Rule 144A, (iii) a registration on Form S-4 or any successor form, (iv) a registration on Form S-8 or any successor form, or (v) a “shelf” Registration Statement with respect to securities to be issued by Game which does not relate to a specific offering or take-down), with respect to an offering (for its own account or otherwise, and including any registration pursuant to Section 2) that includes any shares of Common Stock, then Game shall give written notice which may be delivered electronically (the “Initial Notice”) to FaZe Media at least 20 days prior to the date on which Game reasonably anticipates that the preliminary prospectus to be used in connection with such offering by Game will be filed with the SEC (the “Red Herring Prospectus”), and, subject to Section 3(d), FaZe Media shall be entitled to include in such Registration Statement the Registrable Securities held by them (subject to any lock-up restrictions). The Initial Notice shall offer FaZe Media the right, subject to Section 3(b) and Section 3(d) to register (such registration, a “Piggyback Registration”) such number of shares of Registrable Securities as FaZe Media may request and shall set forth (A) the anticipated effective date of such Registration Statement and (B) the aggregate number of Registrable Securities that is proposed to be included in such Registration Statement. Subject to Section 3(b), Section 3(d) and Section 4, Game shall include in such Registration Statement such Registrable Securities for which it has received written requests to register from FaZe Media within five (5) days after the Initial Notice has been given.

 

(b) Piggyback Registration Withdrawal. FaZe Media may withdraw from a Piggyback Registration for any or no reason whatsoever upon written notice to Game and the underwriter(s) of its intention to withdraw from such Piggyback Registration at least one (1) Business Day prior to the filing of the Red Herring Prospectus with respect to such Piggyback Registration, or, if agreed to by Game, prior to the effectiveness of the Registration Statement filed with the SEC with respect to such Piggyback Registration.

 

(c) Game Control. Game may decline to file a Registration Statement subject to Section 3(a) after giving the Initial Notice, or withdraw any such Registration Statement after filing but prior to the effectiveness of such Registration Statement; provided that Game shall notify FaZe Media of any such action in writing or electronically within 5 days of Game’s decision to take any such action; provided, further, that Game shall bear all reasonable and documented out-of-pocket expenses incurred by FaZe Media or otherwise in connection with such unfilled or withdrawn Registration Statement, up to a maximum of $75,000 for FaZe Media, and FaZe Media shall not be deemed to have made a Shelf Take-Down Request with respect to the unfilled or withdrawn Registration Statement. Except as provided in Section 2(e), Game shall have sole discretion to select any and all underwriters that may participate in any Underwritten Offering.

 

 

(d) Underwriters’ Cutback. Notwithstanding the foregoing, if a registration pursuant to this Section 3 involves an Underwritten Offering and Game, after consultation with the underwriter(s) determines, in its sole discretion, that the total or kind of securities that FaZe Media intends to include in such offering would be reasonably likely to adversely affect the price, timing or distribution of the securities offered in such offering, then the number of securities proposed to be included in such registration shall be allocated among Game and FaZe Media, such that the number of securities that each such Person shall be entitled to sell in the Underwritten Offering shall be pro rata based upon the number of Registrable Securities requested to be registered by each of Game and FaZe Media in connection with such registration, unless FaZe Media provides its prior written consent otherwise.

 

Section 4 General Procedures.

 

(a) Registration Postponement; Suspension of Sales.

 

(i) If prior to the applicable Registration Statement Filing Deadline or prior to the applicable Registration Statement Effectiveness Deadline pursuant to Section 2(a), or after the receipt by Game of a Shelf Take-Down Request, Game furnishes to FaZe Media a copy of a resolution of the board of directors of Game (the “Game Board”) (certified by the secretary of Game) stating that in the good faith judgment of the Game Board it would be materially adverse to Game for a Registration Statement (or an Underwritten Shelf Take-Down or a Non-Marketed Shelf Take-Down) to be filed or effected on or before the date such filing, effectiveness, or take-downs would otherwise be required hereunder, Game shall have the right to defer such filing, effectiveness, or take-downs for a period of not more than sixty (60) days after the applicable Registration Statement Filing Deadline or the date such effectiveness or take-downs would otherwise be required hereunder (provided that such sixty (60) day period may be extended to a period of up to ninety (90) days to the extent such suspension is due to an SEC review or investigation, or ongoing negotiations or discussions regarding a material merger, acquisition or other similar transaction and the requirements for such deferral set forth in this sentence continue to be satisfied. If Game furnishes to FaZe Media a copy of a resolution of the Game Board (certified by the secretary of Game) stating that in the good faith judgment of the Game Board it would be materially adverse to Game to continue to permit the use of any prospectus contained in any Shelf Registration, Game shall be entitled to defer such submission, filing or effectiveness of, or suspend the use of, such prospectus for a reasonable period of time not to exceed (i) sixty (60) days in succession (provided that such consecutive sixty (60) day period may be extended to a period of up to ninety (90) days in succession to the extent such suspension is due to an SEC review or investigation, or ongoing negotiations or discussions regarding a material merger, acquisition or other similar transaction and the requirements for such suspension set forth in this sentence continue to be satisfied (the “Extension Period”)) or (ii) ninety (90) days in the aggregate in any rolling twelve (12) month period if the Extension Period has not been triggered or (iii) one hundred twenty (120) days in the aggregate in any rolling twelve month period if the Extension Period has been triggered.

 

 

(ii) Game shall not be permitted to take the actions set forth in Section 4(a)(i) more than once in any 365-day period (except that Game shall be able to use this right more than two times in any 12-month period if Game is exercising such right (a) in connection with a Non-Marketed Shelf Take-Down or (b) during the 14-day period prior to Game’s regularly scheduled quarterly earnings announcement date or the 20-day period prior to Game’s regularly scheduled annual earnings announcement date, as applicable). If Game shall so postpone the filing of a Prospectus related to a Shelf Take-Down Request, FaZe Media may withdraw its Shelf Take-Down Request by so advising Game in writing or electronically, and such withdrawal shall not be counted as a Shelf Take-Down Request for purposes of the Shelf Take-Down Request limits set forth in Section 2(b). In addition, if Game receives a Shelf Take-Down Request and Game is then in the process of preparing to register Common Stock in connection with a primary offering, Game shall inform FaZe Media of Game’s intent to engage in a primary offering and, subject to Section 3, may require FaZe Media to withdraw such Shelf Take-Down Request for a period of up to 90 days so that Game may complete its offering, and such withdrawal shall not be counted as a Shelf Take-Down Request for purposes of the Shelf Take-Down Request limits set forth in Section 2(b). In the event that Game ceases to pursue a primary offering, it shall promptly inform FaZe Media in writing or electronically and FaZe Media shall be permitted to submit a new Shelf Take-Down Request. For the avoidance of doubt, FaZe Media shall have the right to participate in Game’s primary offering as provided in Section 3 (and notwithstanding anything to the contrary in Section 3, FaZe Media shall have the right to piggyback on Game’s primary offering, subject to Section 3(b) and Section 3(d)).

 

(b) Participation in Underwritten Offerings. FaZe Media may not participate in any Underwritten Offering hereunder unless such FaZe Media agrees to sell such FaZe Media securities on the basis provided in any customary underwriting arrangements approved by Game and provides the questionnaires, powers of attorney, customary indemnities, underwriting agreements, and other documents (including lock-up agreements) required for such underwriting arrangements, and FaZe Media agrees to take any other actions required by law in connection with this Agreement and the transactions contemplated hereby. Game agrees that in connection with any Underwritten Offering it similarly will agree to customary underwriting arrangements and complete the customary due diligence and provide customary comfort letters and opinion letters and other certificates and other documentation (including lock-up agreements) required for such underwriting arrangements, and Game agrees to take any other actions required by law in connection with this Agreement and the transactions contemplated hereby. Nothing in this Section 4(b) shall be construed to create any additional rights regarding the piggyback registration of Registrable Securities in FaZe Media otherwise than as set forth herein.

 

(c) Expenses. As between Game and FaZe Media, Game will pay all registration fees and other expenses in connection with each registration of Registrable Securities requested pursuant to Section 2 and this Section 4; provided that FaZe Media shall pay all applicable underwriting fees, discounts and similar charges and that FaZe Media shall be entitled to a single counsel (at Game’s expense (such expenses to be covered must be reasonable and documented)) to be selected by FaZe Media, and to be reasonably satisfactory to Game.

 

 

(d) Cooperation. With respect to any registration of Registrable Securities, Game shall use its commercially reasonable efforts to: (i) prepare and file with the SEC such amendments (including, without limitation, post-effective amendments) and supplements (including, without limitation, prospectus supplements) to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement; (ii) comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by such registration statement until such time as all of such Registrable Securities shall have been disposed of in accordance with the intended methods of disposition by FaZe Media as set forth in such registration statement, and in the case of amendments and supplements to any registration statement on Form S-1 or prospectus related thereto which are required to be filed pursuant to this Agreement by reason of Game filing a report on Form 8-K, Form 10-Q or Form 10-K or any analogous report under the Exchange Act, Game shall have incorporated such report by reference into such registration statement and prospectus, if applicable, or shall file such amendments or supplements to the registration statement or prospectus with the SEC on the same day on which the Exchange Act report is filed which created the requirement for Game to amend or supplement such registration statement or prospectus, for the purpose of including or incorporating such report into such registration statement and prospectus, and for such period of time thereafter as such Prospectus (including, without limitation, any supplement thereto) (or in lieu thereof, the notice referred to in Rule 173(a) under the Securities Act) is required by the Securities Act to be delivered in connection with resales of Registrable Securities, and which such documents will be subject to the reasonable review and comment of FaZe Media and its counsel; (iii) provide an electronic copy via PDF of prospectuses, including any preliminary prospectuses, and other documents incident thereto, including any amendment of or supplement to the prospectus, as FaZe Media may from time to time reasonably request; (iv) notify FaZe Media (to the extent selling Registrable Securities covered by such registration statement) in writing or electronically at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading or incomplete in light of the circumstances then existing, and following such notification promptly prepare and furnish to FaZe Media an electronic copy via PDF of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such shares, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading or incomplete in light of the circumstances then existing; (v) take such actions as shall be reasonably requested by FaZe Media or the lead managing underwriter of an underwritten offering to facilitate such offering, including without limitation, making customary road show presentations and, in a customary manner, holding meetings with and making calls to potential investors; and (vi) facilitate the preparation and delivery of certificates representing Registrable Securities to be delivered pursuant to a Registration Statement, which certificates, subject to any lock-up restrictions or legends for affiliates (as defined under securities laws) required under applicable Law or as reasonably required to facilitate compliance with applicable contractual provisions, shall be free of all restrictive legends indicating that the Registrable Securities are unregistered or unqualified for resale under the Securities Act, Exchange Act or other applicable securities laws, and to enable such Registrable Securities to be in such denominations and registered in such names as each holder or the underwriter or managing underwriter of an underwritten offering of Registrable Securities, if any, may reasonably request in writing, and in connection therewith, if required by Game’s transfer agent, Game will, after the effective date of the Registration Statement, cause an opinion of counsel as to the effectiveness of the Registration Statement to be delivered to and maintained with its transfer agent, together with any other authorizations, certificates and directions required by the transfer agent which authorize and direct the transfer agent to issue such Registrable Securities, subject to any lock-up restrictions or legends for affiliates (as defined under securities laws) required under applicable Law or as reasonably required to facilitate compliance with applicable contractual provisions, without any such legend upon sale by the holder or the underwriter or managing underwriter of an underwritten offering of Registrable Securities, if any, of such Registrable Securities under the Registration Statement. FaZe Media shall furnish to Game all customary information and documents as Game may reasonably request for purposes of disclosure in a Registration Statement, and if such Registration Statement is reviewed by the SEC, as requested by Game to address and resolve the comments of the SEC.

 

 

Section 5 Sale of Common Stock.

 

(a) Subject to applicable Law, no Registrable Securities shall be sold by FaZe Media without the prior written consent of the Game Director and the Kalish Director; provided, that the consent of the Game Director shall not be required to effectuate the sale of Registrable Securities pursuant to and in accordance with this Agreement:

 

(i) if, with respect to a share of Common Stock, the Closing Sale Price is ever less than 20% of the Basis Price for such share of Common Stock, for a period of 30 or more consecutive days;

 

(ii) in connection with the establishment of a trading plan (a “Trading Plan”) pursuant to Rule 10b5-1 promulgated under the Exchange Act (including the sale of Registrable Securities pursuant to such Trading Plan), the terms of which require FaZe Media to sell some or all of the Registrable Securities held by FaZe Media if the price per share of Common Stock is at least 5% greater or less than the Basis Price of such share of Common Stock;

 

(iii) if Game or any other Game Party breaches any of its obligations under this Agreement or any other Transaction Agreement;

 

(iv) to sell shares of Common Stock to cover any tax obligations of FaZe Media in connection with the vesting, payment or delivery of shares of Common Stock pursuant to the License Agreement; or

 

(v) following any sale of equity or equity-linked securities in FaZe Media.

 

(b) Notwithstanding anything set forth in this Agreement to the contrary, (i) if as a result of any applicable Law (including any applicable gambling Laws), the Kalish Investor reasonably believes, after consultation with legal counsel, that the sale of Registrable Securities held by FaZe Media would be desirable to ensure compliance with any Laws applicable to the Kalish Investor or FaZe Media, FaZe Media shall be required to sell such shares of Common Stock as requested by the Kalish Investor, on the terms indicated by the Kalish Investor, and (ii) the Kalish Director shall have the right, but not the obligation, to establish a Trading Plan in accordance with the terms of Section 5(a)(ii), acting for and on behalf of FaZe Media, without the prior written consent of the Game Director.

 

 

(c) For the avoidance of doubt, any action permitted to be taken pursuant to this Section 5 without the written consent of the Game Director may be taken by FaZe Media at the direction of the Kalish Director without any further corporate action of FaZe Media, including the approval of the board of directors of FaZe Media.

 

Section 6 Indemnification.

 

(a) Indemnification by Game. Game agrees to indemnify and hold harmless, to the full extent permitted by law, FaZe Media, its officers, managers, employees, representatives and Affiliates, against any losses, claims, damages, liabilities and expenses caused by any untrue or alleged untrue statement of a material fact contained in any Registration Statement or Prospectus or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same may be caused by or contained in any information furnished in writing or electronically to Game by FaZe Media from and after the Game Investor is no longer a Major Investor for use therein; provided, however, that Game shall not be liable in any such case to the extent that any such loss, claim, damage, liability or expense is caused by any untrue or alleged untrue statement of a material fact contained in any Registration Statement or Prospectus or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, to the extent that such untrue statement or omission was caused by or contained in any information furnished in writing or electronically to Game by FaZe Media from and after the Game Investor is no longer a Major Investor expressly for use therein and has not been corrected in a subsequent writing prior to or concurrently with the sale of the securities to the Person asserting such loss, claim, damage, liability or expense.

 

(b) Indemnification by FaZe Media. Solely from and after the Game Investor is no longer a Major Investor, FaZe Media agrees to indemnify and hold harmless, to the full extent permitted by law, Game, its directors, officers, employees and representatives and each Person who controls Game (within the meaning of the Securities Act) against any losses, claims, damages or liabilities and expenses caused by any untrue or alleged untrue statement of a material fact contained in any Registration Statement or Prospectus or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, to the extent that such untrue statement or omission was caused by or contained in any information furnished in writing or electronically to Game by FaZe Media at such time when Game was not a Major Investor expressly for use therein and has not been corrected in a subsequent writing prior to or concurrently with the sale of the securities to the Person asserting such loss, claim, damage, liability or expense. In no event shall the liability of FaZe Media hereunder be greater in amount than the dollar amount of the proceeds received by FaZe Media from and after the Game Investor is no longer a Major Investor upon the sale of the securities giving rise to such indemnification obligation (except in the event of liability for fraud by FaZe Media). Game and FaZe Media shall be entitled to receive indemnities from underwriters, selling brokers, dealer managers and similar securities industry professionals participating in the distribution, to the same extent as provided above with respect to information so furnished in writing or electronically by such Persons specifically for inclusion in any Registration Statement or Prospectus.

 

 

(c) Conduct of Indemnification Proceedings. Any Person entitled to indemnification hereunder will (i) give prompt (but in any event within thirty (30) days after such Person has actual knowledge of the facts constituting the basis for indemnification) written notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party; provided, however, that any delay or failure to so notify the indemnifying party shall relieve the indemnifying party of its obligations hereunder only to the extent, if at all, that it is actually prejudiced by reason of such delay or failure; provided, further, however, that any Person entitled to indemnification hereunder shall have the right to select and employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such Person unless (A) the indemnifying party has agreed in writing or electronically to pay such fees or expenses, (B) the indemnifying party shall have failed to assume the defense of such claim within a reasonable time after receipt of notice of such claim from the Person entitled to indemnification hereunder and employ counsel reasonably satisfactory to such Person or (C) in the reasonable judgment of any such Person, based upon advice of counsel, a conflict of interest may exist between such Person and the indemnifying party with respect to such claims (in which case, if the Person notifies the indemnifying party in writing or electronically that such Person elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such claim on behalf of such Person). If such defense is not assumed by the indemnifying party, the indemnifying party will not be subject to any liability for any settlement made without its consent (but such consent will not be unreasonably withheld). An indemnified party shall not have any obligation to consent to any settlement involving the imposition of equitable remedies or involving the imposition of any material obligations on such indemnified party other than financial obligations for which such indemnified party will be indemnified hereunder. No indemnified party will have any obligation to consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation. Whenever the indemnified party or the indemnifying party receives a firm offer to settle a claim for which indemnification is sought hereunder, it shall promptly notify the other of such offer. If the indemnifying party refuses to accept such offer within twenty (20) Business Days after receipt of such offer (or of notice thereof), such claim shall continue to be contested and, if such claim is within the scope of the indemnifying party’s indemnity contained herein, the indemnified party shall be indemnified pursuant to the terms hereof. If the indemnifying party notifies the indemnified party in writing or electronically that the indemnifying party desires to accept such offer, but the indemnified party refuses to accept such offer within twenty (20) Business Days after receipt of such notice, the indemnified party may continue to contest such claim and, in such event, the total maximum liability of the indemnifying party to indemnify or otherwise reimburse the indemnified party hereunder with respect to such claim shall be limited to and shall not exceed the amount of such offer, plus reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees and disbursements) to the date of notice that the indemnifying party desires to accept such offer; provided that this sentence shall not apply to any settlement of any claim involving the imposition of equitable remedies, to any settlement imposing any material obligations on such indemnified party other than financial obligations for which such indemnified party will be indemnified hereunder, or to any settlement that does not include an unconditional release of such indemnified party from all liability on claims that are the subject matter of such claim or proceeding. An indemnifying party who is not entitled to, or elects not to, assume the defense or a claim will not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim in any one jurisdiction, unless in the written opinion of counsel to the indemnified party, reasonably satisfactory to the indemnifying party, use of one counsel would be expected to give rise to a conflict of interest between such indemnified party and any other of such indemnified parties with respect to such claim, in which event the indemnifying party shall be obligated to pay the fees and expenses of each additional counsel.

 

 

(d) Other Indemnification. Indemnification similar to that specified in this Section 7 (with appropriate modifications) shall be given by Game and FaZe Media with respect to any required registration or other qualification of securities under federal or state law or regulation of governmental authority other than the Securities Act.

 

(e) Contribution. If for any reason the indemnification provided for in Section 7(a) and Section 7(b) is unavailable to an indemnified party or insufficient to hold such indemnified party harmless as contemplated by Section 7(a) and Section 7(b), then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect not only the relative benefits received by the indemnified party and the indemnifying party, but also the relative fault of the indemnified party and the indemnifying party, as well as any other relevant equitable considerations; provided that FaZe Media shall be required to contribute in an amount greater than the dollar amount of the proceeds received by FaZe media with respect to the sale of any securities hereunder. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not itself guilty of such fraudulent misrepresentation.

 

Section 7 Reports Under the Exchange Act. With a view to making available to FaZe Media the benefits of Rule 144, Game agrees to:

 

(a) use its reasonable best efforts to make and keep public information available, as those terms are understood and defined in Rule 144;

 

(b) use its reasonable best efforts to file with the Commission in a timely manner all reports and other documents required of Game under the Securities Act and the Exchange Act so long as Game remains subject to such requirements (it being understood that nothing herein shall limit any of Game’s obligations under the License Agreement) and the filing of such reports and other documents is required for the applicable provisions of Rule 144;

 

(c) furnish to FaZe Media so long as FaZe Media owns Registrable Securities, promptly upon request, (i) a written statement by Game, if true, that it has complied with the reporting, submission and posting requirements of Rule 144 and the Exchange Act, (ii) a copy of the most recent annual or quarterly report of Game and such other reports and documents so filed by Game with the Commission if such reports are not publicly available via EDGAR, and (iii) such other information as may be reasonably requested to permit FaZe Media to sell such securities pursuant to Rule 144 without registration; and

 

 

(d) take such additional action as is reasonably requested by FaZe Media to enable FaZe Media to sell the Registrable Securities pursuant to Rule 144, including, without limitation, delivering all such legal opinions, consents, certificates, resolutions and instructions to Game’s transfer agent as may be reasonably requested from time to time by FaZe Media and otherwise fully cooperate with FaZe Media and FaZe Media’s broker to effect such sale of securities pursuant to Rule 144.

 

Section 8 Assignment of Registration Rights. Neither Game nor FaZe Media shall assign this Agreement or any of their respective rights or obligations hereunder; provided, that any transaction, whether by merger, reorganization, restructuring, consolidation, financing or otherwise, whereby Game remains the surviving entity immediately after such transaction shall not be deemed an assignment.

 

Section 9 Amendment or Waiver. No provision of this Agreement may be (i) amended other than by a written instrument signed by both parties hereto or (ii) waived other than in a written instrument signed by the party against whom enforcement of such waiver is sought. Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver thereof.

 

Section 10 Limitations on Subsequent Registration Rights. From and after the date of this Agreement, Game shall not, without the prior written consent of FaZe Media, enter into any agreement with any holder or prospective holder of any securities of Game that would provide to such holder or prospective holder the right to include securities in any registration that would adversely affect FaZe Media’s rights under Section 2 or Section 3.

 

Section 11 Termination. This Agreement shall terminate in its entirety upon the date on which both the License Agreement is terminated and FaZe Media shall have sold all the Registrable Securities; provided, that the provisions of Section 7, Section 10 and Section 12 shall remain in full force and effect.

 

Section 12 Miscellaneous.

 

(a) Any notice or other communication required or permitted to be delivered to any party under this Agreement shall be in writing and shall be deemed properly delivered, given and received: (a) if delivered by hand, when delivered; (b) if sent on a Business Day by e-mail transmission before 5:00 p.m. (recipient’s time) on the day sent by e-mail transmission and receipt is confirmed by a non-automated response, on the date on which receipt is confirmed; (c) if sent by e-mail transmission on a day other than a Business Day and receipt is confirmed by a non-automated response, or if sent by e-mail transmission on a Business Day after 5:00 p.m. (recipient’s time) and receipt is confirmed by a non-automated response, on the Business Day following the date on which receipt is confirmed; (d) if sent by registered, certified or first class mail, the third Business Day after being sent; and (e) if sent by overnight delivery via a national courier service, two Business Days after being delivered to such courier. All notices and other communications hereunder shall be delivered to the address or e-mail address set forth beneath the name of such party below (or to such other address or e-mail address as such party shall have specified in a written notice given to the other parties hereto):

 

If to Game:

 

GameSquare Holdings, Inc.
6775 Cowboys Way, Suite 1335
Frisco, TX 75034
Attention:	Justin Kenna, CEO
Email:	justin@gamesquare.com

 

 

with a copy (which shall not constitute notice or such other communication) to:

 

Baker Hostetler LLP
1900 Avenue of the Starts, Suite 2700
Los Angeles, CA 90067
Attention:	Alan A. Lanis, Jr., Esq.
Email:	jrlanis@bakerlaw.com

 

If to FaZe Media:

 

FaZe Media, Inc.
[  ]
[  ]
Attn:	Matthew Kalish, Secretary
Email:

 

with a copy (which shall not constitute notice or such other communication) to:

 

Pillsbury Winthrop Shaw Pittman LLP
31 W 52nd Street
New York, NY 10019
Attn:	Stephen B. Amdur
Email:	stephen.amdur@pillsburylaw.com

 

(b) Game and FaZe Media acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that either party shall be entitled to an injunction or injunctions to prevent or cure breaches of the provisions of this Agreement by the other party and to enforce specifically the terms and provisions hereof (without the necessity of showing economic loss and without any bond or other security being required), this being in addition to any other remedy to which either party may be entitled by law or equity.

 

 

(c) All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

(d) The Transaction Agreements set forth the entire agreement and understanding of the parties solely with respect to the subject matter thereof and supersedes all prior and contemporaneous agreements, negotiations and understandings between the parties, both oral and written, solely with respect to such matters. There are no promises, undertakings, representations or warranties by either party relative to the subject matter hereof not expressly set forth in the Transaction Agreements. Notwithstanding anything in this Agreement to the contrary and without implication that the contrary would otherwise be true, nothing contained in this Agreement shall limit, modify or affect in any manner whatsoever any of Game’s obligations under the License Agreement.

 

(e) This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors. This Agreement is not for the benefit of, nor may any provision hereof be enforced by, any Person, other than the parties hereto, their respective successors and the Persons referred to in Section 5, Section 7 and Section 12 hereof (and in such case, solely for the purposes set forth therein); provided, that the Kalish Investor is an express third party beneficiary entitled to enforce FaZe Media’s rights under this Agreement (whether in the Kalish Investor’s name or FaZe Media’s name), including asserting any claims or commencing any action, suit or other legal proceeding FaZe Media may have under this Agreement.

 

(f) The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine, neuter, singular and plural forms thereof. The terms “including,” “includes,” “include” and words of like import shall be construed broadly as if followed by the words “without limitation.” The terms “herein,” “hereunder,” “hereof” and words of like import refer to this entire Agreement instead of just the provision in which they are found.

 

(g) This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a facsimile signature or signature delivered by e-mail in a “.pdf” format data file, including any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com, www.echosign.adobe.com, etc., shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original signature.

 

(h) Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

(i) The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent and no rules of strict construction will be applied against any party.

 

[signature page follows]

 

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the Effective Date by their respective officers thereunto duly authorized.

 

	FAZE MEDIA, INC.
	By	/s/ Matthew Kalish
	Name:	Matthew Kalish
	Title:	Secretary
	GAMESQUARE HOLDINGS, INC.
	By	/s/ Justin Kenna
	Name:	Justin Kenna
	Title:	CEO

 

 

 

Exhibit 99.1

 

GameSquare Announces Formation of FaZe Media, a Creator-led IP and Media Company, led by CEO FaZe Banks and Backed by $11 Million Investment from Matt Kalish

 

FRISCO, TX / May 16, 2024 / GameSquare Holdings, Inc. (NASDAQ: GAME), (“GameSquare”, or the “Company”), after recently completing the acquisition of FaZe Clan on March 8, 2024, today announces the formation of FaZe Media. This new company combines the FaZe creator talent roster and non-esports assets into a creator-led IP and internet media company under the leadership of CEO FaZe Banks, an original FaZe Clan founder. In addition, FaZe Media has closed $11 million in new investment capital from Matt Kalish, who will also become a board member of FaZe Media. GameSquare will provide certain corporate and agency services to FaZe Media as part of the agreement.

 

FaZe Media is focused on building on the value of the FaZe brand IP and returning creative control of the brand to its founding leaders who made the FaZe brand an internet media juggernaut. Refreshing the roster of creator talent and developing compelling content with the internet’s favorite personalities will enable FaZe Media to become a valuable media company within the creator economy. FaZe Media will seek to expand the licensing and sponsorship opportunities for the FaZe brand across many categories, as well as deliver product, merchandise, in real life, online events and more under the FaZe brand.

 

When FaZe Clan relaunched the brand on April 27, 2024, it experienced unprecedented engagement across social media platforms and was the #1 trending topic on X (formerly Twitter) in the U.S. In addition, FaZe Clan’s search interest was the strongest the brand has experienced on YouTube since May 2020, and on Google since May 2019, and was estimated to have over 350 million social media impressions. The internet and gaming community is captivated by FaZe Banks’ return and steps he has taken to relaunch the brand and refresh the talent roster. With this successful relaunch, FaZe Clan welcomes its newest members FaZe Max, FaZe Silky, FaZe Jason, and FaZe Lacy, who will join a freshly curated roster of key talent and creators.

 

Justin Kenna, CEO of GameSquare stated, “Since completing the acquisition of FaZe Clan, we have focused on returning FaZe’s founders to reboot their brand and reestablish its authenticity. We are thrilled to better capitalize this business for growth with $11 million in new capital from Matt, and to strengthen the FaZe Media board with his addition. Matt deeply believes in the power of founder and creator-led organizations and shares the vision to return FaZe back to its roots by empowering its creators.”

 

FaZe Media’s CEO, FaZe Banks stated, “Grateful for the opportunity at a genuine reset with FaZe Clan. Anyone that’s actually tapped in can agree, this was long overdue. We’ve prioritized pretty much exclusively on creating a fun environment that we (as FaZe members) can find passion in, be excited about, look forward to. Do things we find interesting, exploring opportunities in content we feel are important/ relevant to our culture/ community. Partnering with Matt Kalish & GameSquare has proven paramount in this vision coming to fruition. Slowly, but surely. Exciting.”

 

Matt Kalish, Board Member, FaZe Media stated, “My investment in FaZe Media and decision to join its board is a vote of confidence in the leadership and generational creative talent of CEO FaZe Banks, as well as that of FaZe’s founders and creator roster. I believe this team, with the support of GameSquare’s capabilities and infrastructure, can relaunch the FaZe brand and restore it to the gaming and internet culture juggernaut the founders had originally created.”

 

 

Transaction Details

 

FaZe Media is a new, operating subsidiary of GameSquare with the Company owning 51% of FaZe Media and Kalish owning the remaining 49%. FaZe Media will focus on developing a creator-led internet media company. FaZe Banks is the CEO of FaZe Media, with Kalish and Kenna serving on the board and in governance roles. GameSquare will continue to own 100% of the esports competition assets under FaZe Esports.

 

About GameSquare Holdings, Inc.

 

GameSquare’s (NASDAQ: GAME) mission is to revolutionize the way brands and game publishers connect with hard-to-reach Gen Z, Gen Alpha, and Millennial audiences. Our next generation media, entertainment, and technology capabilities drive compelling outcomes for creators and maximize our brand partners’ return on investment. Through our purpose-built platform, we provide award winning marketing and creative services, offer leading data and analytics solutions, and amplify awareness through FaZe Clan, one of the most prominent and influential gaming organizations in the world. With an audience reach of 1 billion digitally native consumers across our media network and roster of creators, we are reshaping the landscape of digital media and immersive entertainment. GameSquare’s largest investors are Dallas Cowboys owner Jerry Jones and the Goff family.

 

To learn more, visit www.gamesquare.com.

 

Forward-Looking Information

 

This news release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of the applicable securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate, among other things, to: the Company’s and FaZe Media’s future performance, revenue, growth and profitability; and the Company’s and FaZe Media’s ability to execute their business plans. These forward-looking statements are provided only to provide information currently available to us and are not intended to serve as and must not be relied on by any investor as, a guarantee, assurance or definitive statement of fact or probability. Forward-looking statements are necessarily based upon a number of estimates and assumptions which include, but are not limited to: the Company’s and FaZe Media’s ability to grow their business and being able to execute on their business plans, the Company being able to complete and successfully integrate acquisitions, the Company being able to recognize and capitalize on opportunities and the Company continuing to attract qualified personnel to supports its development requirements. These assumptions, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: the Company’s ability to achieve its objectives, the Company successfully executing its growth strategy, the ability of the Company to obtain future financings or complete offerings on acceptable terms, failure to leverage the Company’s portfolio across entertainment and media platforms, dependence on the Company’s key personnel and general business, economic, competitive, political and social uncertainties including impact of the COVID-19 pandemic and any variants. These risk factors are not intended to represent a complete list of the factors that could affect the Company which are discussed in the Company’s most recent MD&A. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. GameSquare assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.

 

Corporate Contact

 

Lou Schwartz, President

Phone: (216) 464-6400

Email: ir@gamesquare.com

 

Investor Relations

 

Andrew Berger

Phone: (216) 464-6400

Email: ir@gamesquare.com

 

Media Relations

 

Chelsey Northern / The Untold

Phone: (254) 855-4028

Email: pr@gamesquare.com

 

 

v3.24.1.1.u2

Cover	May 15, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	May 15, 2024
Entity File Number	001-39389
Entity Registrant Name	GameSquare Holdings, Inc.
Entity Central Index Key	0001714562
Entity Tax Identification Number	99-1946435
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	6775 Cowboys Way
Entity Address, Address Line Two	Ste. 1335
Entity Address, City or Town	Frisco
Entity Address, State or Province	TX
Entity Address, Country	US
Entity Address, Postal Zip Code	75034
City Area Code	(216)
Local Phone Number	464-6400
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.0001 par value per share
Trading Symbol	GAME
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false

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