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Leaf agrees to buy Canadian mobile games developer Truly Social Games

Leaf Mobile Inc. agreed to buy Canadian mobile games developer Truly Social Games in a deal worth no more than C$37 million on a cash and debt-free basis.

Leaf will execute the deal in three tranches over a 42-month period, including an incremental contingent consideration period of 36 months, subject to Leaf exercising ownership purchase considerations on additional tranche options alongside the achievement of Truly Social Games' gross revenue and net royalty development milestones on certain game titles.

Leaf will buy the initial 20% ownership interest in Truly Social Games for C$3 million in cash, which will be used to develop four game titles. Leaf will buy an additional 20% of Truly Social Games' shares for Leaf's common shares worth C$4 million, subject to the gross revenue and net royalty development of Truly Social Games in two consecutive months achieving at least C$3 million per month and/or C$500,000 per month, respectively, within a 24-month period, in relation to the game titles. Leaf will buy the remaining 60% of shares for Leaf's shares worth C$15 million, subject to the gross revenue and net royalty development of Truly Social Games in three successive months achieving at least C$5 million per month and/or C$1 million per month, respectively, within a 36-month period, in relation to the game titles.

Leaf retains exclusive rights for all games developed by Truly Social Games under the deal. Concurrent with the completion of the initial purchase, which is due within 90 days from the execution of the letter of intent, a nominee of Leaf shall join Truly Social Games' board.