UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)*
GLOBAL SPORTS, INC.
--------------------
(Name of Issuer)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
----------------------------------------
(Title of Class of Securities)
37937A 10 7
------------------------------------------------
(CUSIP Number)
RONALD D. FISHER, SOFTBANK INC., 10 LANGLEY ROAD, SUITE 403,
NEWTON CENTRE, MA 02459, (617) 928-9300
--------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
May 1, 2000
-----------------------------------------------
(Date of Event which Requires Filing of this Statement)
If a filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the subject of
this Schedule 13D, and is filing this schedule because of
Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with this statement [ ]. (A
fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than
five percent of the class of securities described in Item 1;
and (2) has filed no amendment subsequent thereto reporting beneficial
ownership of five percent or less of such class.) (See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are
to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing
information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section
18 of the Securities Exchange Act of 1934 ("Act") or
otherwise subject to the liabilities of that section of the Act but shall be
subject to all other provisions of the Act (however, see the Notes).
<PAGE>
- --------------------- ------------------------
CUSIP NO. 37937A 10 7 PAGE 2 OF 20 PAGES
- --------------------- ------------------------
- -------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
SOFTBANK CAPITAL PARTNERS LP
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(A) [ ]
(B) [ ]
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- -------------------------------------------------------------------------------
4. SOURCE OF FUNDS*
WC
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d)OR 2(e) [ ]
- -------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
- -------------------------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF 0
SHARES ----------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 17,790,963
EACH ----------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 0
WITH ----------------------------------------
10. SHARED DISPOSITIVE POWER
9,765,917
- -------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
17,790,963
- -------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
- -------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
79.9%
- -------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON*
PN
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
-2-
<PAGE>
- --------------------- ------------------------
CUSIP NO. 37937A 10 7 PAGE 3 OF 20 PAGES
- --------------------- ------------------------
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
SOFTBANK CAPITAL PARTNERS LLC
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(A) [ ]
(B) [ ]
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS*
AF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d)OR 2(e) [ ]
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
- --------------------------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF 0
SHARES ----------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 17,928,896
EACH ----------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 0
WITH ----------------------------------------
10. SHARED DISPOSITIVE POWER
9,903,850
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
17,928,896
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
80.3%
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON*
00
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
-3-
<PAGE>
- --------------------- ------------------------
CUSIP NO. 37937A 10 7 PAGE 4 OF 20 PAGES
- --------------------- ------------------------
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
SOFTBANK CAPITAL PARTNERS INVESTMENT INC.
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(A) [ ]
(B) [ ]
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS*
AF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d)OR 2(e) [ ]
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
- --------------------------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF 0
SHARES ----------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 17,928,896
EACH ----------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 0
WITH ----------------------------------------
10. SHARED DISPOSITIVE POWER
9,903,850
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
17,928,896
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
80.3%
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
-4-
<PAGE>
- --------------------- ------------------------
CUSIP NO. 37937A 10 7 PAGE 5 OF 20 PAGES
- --------------------- ------------------------
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
SOFTBANK HOLDINGS INC.
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(A) [ ]
(B) [ ]
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS*
AF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d)OR 2(e) [ ]
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
- --------------------------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF 0
SHARES ----------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 17,928,896
EACH ----------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 0
WITH ----------------------------------------
10. SHARED DISPOSITIVE POWER
9,903,850
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
17,928,896
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
80.3%
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON*
HC, CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
-5-
<PAGE>
- --------------------- ------------------------
CUSIP NO. 37937A 10 7 PAGE 6 OF 20 PAGES
- --------------------- ------------------------
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
SOFTBANK CORP.
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(A) [ ]
(B) [ ]
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS*
AF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d)OR 2(e) [ ]
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
JAPAN
- --------------------------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF 0
SHARES ----------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 17,928,896
EACH ----------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 0
WITH ----------------------------------------
10. SHARED DISPOSITIVE POWER
9,903,850
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
17,928,896
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
80.3%
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON*
HC, CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
-6-
<PAGE>
- --------------------- ------------------------
CUSIP NO. 37937A 10 7 PAGE 7 OF 20 PAGES
- --------------------- ------------------------
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
RONALD D. FISHER
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(A) [ ]
(B) [ ]
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS*
AF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d)OR 2(e) [ ]
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
- --------------------------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF 0
SHARES ----------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 17,928,896
EACH ----------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 0
WITH ----------------------------------------
10. SHARED DISPOSITIVE POWER
9,903,850
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
17,928,896
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
80.3%
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
-7-
<PAGE>
- --------------------- ------------------------
CUSIP NO. 37937A 10 7 PAGE 8 OF 20 PAGES
- --------------------- ------------------------
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
CHARLES R. LAX
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(A) [ ]
(B) [ ]
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS*
AF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d)OR 2(e) [ ]
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
- --------------------------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF 0
SHARES ----------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 17,928,896
EACH ----------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 0
WITH ----------------------------------------
10. SHARED DISPOSITIVE POWER
9,903,850
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
17,928,896
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
80.3%
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
-8-
<PAGE>
- --------------------- ------------------------
CUSIP NO. 37937A 10 7 PAGE 9 OF 20 PAGES
- --------------------- ------------------------
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
MASAYOSHI SON
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(A) [ ]
(B) [ ]
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS*
AF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d)OR 2(e) [ ]
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
JAPAN
- --------------------------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF 0
SHARES ----------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 17,928,896
EACH ----------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 0
WITH ----------------------------------------
10. SHARED DISPOSITIVE POWER
9,903,850
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
17,928,896
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
80.3%
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
-9-
<PAGE>
SOFTBANK Capital Partners LP, a Delaware limited partnership ("SB Capital
Partners"), SOFTBANK Capital Partners LLC, a Delaware limited liability company
("SB CP LLC"), SOFTBANK Capital Partners Investment Inc., a Delaware corporation
("SB CPI"), Ronald D. Fisher ("Mr. Fisher") and Charles R. Lax ("Mr. Lax"), both
U.S. citizens, SOFTBANK Holdings Inc., a Delaware corporation ("SBH"), SOFTBANK
Corp., a Japanese corporation ("SOFTBANK"), and Masayoshi Son, a Japanese
citizen ("Mr. Son"), hereby file this Amendment No. 2 to their statement on
Schedule 13D (the "Statement") to report the shares of Common Stock, par value
$0.01 per share (the "Common Stock"), of Global Sports, Inc., a Delaware
corporation (the "Company"), beneficially owned by them. SB Capital Partners, SB
CP LLC, SB CPI, Mr. Fisher, Mr. Lax, SBH, SOFTBANK and Mr. Son are collectively
referred to as the "Reporting Persons."
ITEM 4. PURPOSE OF TRANSACTION.
Item 4 is hereby amended and restated as follows:
The purpose of the acquisition of the shares of Common Stock by the
Reporting Persons described herein was to make an investment in the Company.
Pursuant to the Purchase Agreement, dated as of June 10, 1999 (the
"1999 Purchase Agreement")(attached hereto as Exhibit C), between the Company
and SOFTBANK America ("SOFTBANK America"), SOFTBANK America purchased an
aggregate of 6,153,850 shares of Common Stock from the Company for a purchase
price of $13.00 per share. The total consideration paid by SOFTBANK America to
the Company for the shares was $80,000,050.
In July 1999, SOFTBANK America assigned 6,069,542 shares of the
Company's Common Stock to SB Capital Partners and 84,308 shares of the Company's
Common Stock to Advisors Fund (as defined in Item 5), and all of its rights with
respect to those shares under the Registration Rights Agreement and the 1999
Purchase Agreement, each as described in this Item 4, thus reducing SOFTBANK
America's holdings to zero.
-10-
<PAGE>
Pursuant to the Purchase Agreement, dated as of April 27, 2000 (the
"2000 Purchase Agreement") (attached hereto as Exhibit I), by and among the
Company, SB Capital Partners and Advisors Fund, SB Capital Partners and Advisors
Fund purchased 2,464,250 shares of Common Stock and 35,750 shares of Common
Stock, respectively, on May 1, 2000 for a purchase price of $8.00 per share. In
addition, SB Capital Partners and Advisors Fund were each issued a warrant to
purchase 1,232,125 shares of Common Stock (the "SB Capital Partners Warrant")
(attached hereto as Exhibit L) and 17,875 shares of Common Stock, respectively,
at an exercise price of $10.00 per share. The SB Capital Partners Warrant is
exercisable on and after May 1, 2000 and expires on April 30, 2003.
The 2000 Purchase Agreement provides, among other things, that on and
after the closing date, SOFTBANK Capital Partners and SOFTBANK Capital Advisors,
together, will have the right, (i) (A) so long as the Purchasers and the
SOFTBANK Entities (each as defined therein) collectively own 50% or more of the
Common Stock (on an as if exercised basis) held immediately after consummation
of the Purchase (as defined therein), to designate three (3) members of the
Company's Board of Directors, (B) so long as the Purchasers and the SOFTBANK
Entities collectively own 25% or more of the Common Stock (on an as if exercised
basis) held immediately after consummation of the Purchase, to designate two (2)
members of the Company's Board of Directors, and (C) so long as the Purchasers
and the SOFTBANK Entities collectively own 5% or more of the Common Stock (on an
as if exercised basis) held immediately after consummation of the Purchase, to
designate one (1) member of the Company's Board of Directors (collectively, the
"2000 Board Composition Requirement"); and (ii) so long as the Purchasers and
the SOFTBANK Entities collectively own 35% or more of the Common Stock (on an as
if exercised basis) held immediately after consummation of the Purchase, to
designate one (1) member of each committee of the Company's Board of Directors.
SB Capital Partners and Advisors Fund also are parties to a
Registration Rights Agreement, dated as of June 10, 1999, as amended on May 1,
2000 (the "Registration Rights Agreement")(attached hereto as Exhibit D), with
the Company which grants SB Capital Partners and Advisors Fund "demand" and
"piggy-back"
-11-
<PAGE>
registration rights with respect to the shares of Common Stock purchased
pursuant to the 1999 Purchase Agreement and the 2000 Purchase Agreement.
In conjunction with the execution of the 1999 Purchase Agreement,
SOFTBANK America entered into the Subordinated Loan Agreement, dated as of June
10, 1999 (the "Subordinated Loan Agreement")(attached hereto as Exhibit G), with
the Company pursuant to which, on such date, SOFTBANK America loaned the Company
$15 million. The loan was evidenced in the form of a convertible subordinated
note (the "Convertible Subordinated Note")(attached hereto as Exhibit H).
Interest on the Convertible Subordinated Note accrued on the outstanding
principal amount of the loan at the rate of 4.98% per annum. All unpaid
principal and accrued but unpaid interest due on the Convertible Subordinated
Note was automatically converted into a number of shares of Common Stock equal
to the total amount of unpaid principal and accrued but unpaid interest divided
by $13.00.
Subject to the provisions of the 1999 Purchase Agreement and the 2000
Purchase Agreement, each of SB Capital Partners and Advisors Fund may sell,
transfer, assign or pledge all or any part of the shares they acquire pursuant
to the 1999 Purchase Agreement and 2000 Purchase Agreement to any of their
affiliates or those of SOFTBANK, including, without limitation, any partnership
or other entity of which any direct or indirect subsidiary of SOFTBANK is a
general partner or has investment discretion, or any employees of any of the
foregoing. Neither SOFTBANK Capital Partners nor Advisors Fund have any specific
plans to make such transfers.
Michael G. Rubin, the principal stockholder of the Company holding in
the aggregate approximately 43.2% of the shares of Common Stock outstanding as
of April 27, 2000 ("Rubin") entered into a Voting Agreement, dated as of June
10, 1999 (the "Rubin Voting Agreement")(attached hereto as Exhibit E), in favor
of SOFTBANK America. Pursuant to the Rubin Voting Agreement, Rubin agreed that
he will, at any meeting of stockholders of the Company, or in connection with
any written consent of stockholders of the Company, vote or cause to be voted
all shares of Common Stock then held of record or beneficially owned by him (i)
against any action or agreement that would result in a breach in any respect of
any covenant, representation or warranty or any other obligation or agreement of
the Company under the Purchase Agreement; (ii) in favor of election to the Board
of Directors of the directors which SOFTBANK America is, together, entitled to
designate upon consummation of the
-12-
<PAGE>
Second Purchase and which have been identified by SOFTBANK America as nominees
for such purpose; and (iii) except as otherwise agreed to in writing in
advance by SOFTBANK America against the following actions (other than the Second
Purchase and the transactions contemplated by the Purchase Agreement): (A) a
dissolution of the Company or (B) any material change in the present
capitalization of the Company or any amendment of the Company's certificate of
incorporation or by-laws, in each case, which is intended, or could reasonably
be expected, to impede, delay or adversely affect the transactions contemplated
by the Rubin Voting Agreement and the Purchase Agreement. Rubin also agreed that
he will not enter into any agreement or understanding with any person or entity
the effect of which would be inconsistent or violative of the provisions and
agreements contained in the Rubin Voting Agreement and delivered to SOFTBANK
America an irrevocable proxy to vote all of the shares of Common Stock
beneficially owned by him, together with any shares acquired by him in any
capacity after the date thereof, in the manner and with respect to the matters
set forth in the Rubin Voting Agreement. In addition, Rubin agreed not to take
any action to remove, with or without cause, any director of the Company
designated by SOFTBANK America. Notwithstanding the foregoing, SOFTBANK America
has the right at all times to remove, with or without cause, any or all of the
directors designated by it.
SOFTBANK America, as an inducement and a condition to consummating the
1999 Purchase Agreement, entered into a Voting Agreement, dated as of June 10,
1999 (the "SOFTBANK America Voting Agreement")(attached hereto as Exhibit F), in
favor of Rubin. Pursuant to the SOFTBANK America Voting Agreement, SOFTBANK
America agreed that it will, at any meeting of stockholders of the Company, or
in connection with any written consent of stockholders of the Company, vote or
cause to be voted all shares of Common Stock then held of record or beneficially
owned by it with respect to all directorships other than those which SOFTBANK
America is entitled to designate pursuant to the 1999 Purchase Agreement (i) in
favor of any member of the Board of Directors of the Company who was a member of
the Board prior to the date of the 1999 Purchase Agreement, and any director who
is thereafter chosen to fill any vacancy on the Board of Directors or who is
elected as a director (a "Continuing Director") and who, in either event, is not
a director designated by SOFTBANK America pursuant to the 1999 Purchase
Agreement and in connection with his or her initial assumption of office is
recommended for appointment or election by a majority of the Continuing
Directors then on the Board of Directors, and (ii) against the election of any
directors other than those directors
-13-
<PAGE>
specified in clause (i) of this sentence. In addition, SOFTBANK America agreed
not to take any action to remove, with or without cause, any director of the
Company other than the SOFTBANK America designees.
Rubin entered into a Restated Voting Agreement, dated as of May 1, 2000
(the "2000 Rubin Voting Agreement") (attached hereto, as Exhibit J), in favor of
SB Capital Partners and Advisors Fund, pursuant to which, Rubin agreed that he
will, at any meeting of stockholders of the Company, or in connection with any
written consent of stockholders of the Company, vote or cause to be voted all
shares of Common Stock then held of record or beneficially owned by him (i)
against any action or agreement that would result in a breach in any respect of
any covenant, representation or warranty or any other obligation or agreement of
the Company under the 2000 Purchase Agreement; (ii) in favor of election to the
Board of Directors of the directors which SB Capital Partners and Advisors Fund
are, together, entitled to designate upon consummation of the Purchase (as
defined in the 2000 Purchase Agreement) and which have been identified by SB
Capital Partners and Advisors Fund as nominees for such purpose; and (iii)
except as otherwise agreed to in writing in advance by SB Capital Partners and
Advisors Fund against the following actions (other than the Purchase and the
transactions contemplated by the 2000 Purchase Agreement): (A) a dissolution of
the Company or (B) any material change in the present capitalization of the
Company or any amendment of the Company's certificate of incorporation or
by-laws, in each case, which is intended, or could reasonably be expected, to
impede, delay or adversely affect the Purchase and the transactions contemplated
by the voting agreement and the 2000 Purchase Agreement. The voting agreement
also provides that Rubin agrees that he will not enter into any agreement or
understanding with any person or entity the effect of which would be
inconsistent or violative of the provisions and agreements contained in this
voting agreement and will deliver to SB Capital Partners and Advisors Fund, if
requested, an irrevocable proxy to vote all of the shares of Common Stock
beneficially owned by him, together with any shares acquired by him in any
capacity after the date thereof, in the manner and with respect to the matters
set forth in this voting agreement. In addition, Rubin agreed not to take any
action to remove, with or without cause, any director of the Company designated
by SB Capital Partners and Advisors Fund. Notwithstanding the foregoing, SB
Capital Partners and Advisors Fund have the right at all times to remove, with
or without cause, any or all of the directors designated by SB Capital Partners
and Advisors Fund.
SB Capital Partners and Advisors Fund, as an inducement and a condition
to consummating the 2000 Purchase Agreement, also entered into a restated voting
agreement in favor
-14-
<PAGE>
of Rubin, dated as of May 1, 2000 (the "2000 SOFTBANK Voting Agreement")
(attached hereto as Exhibit K), relating to the election of directors designated
by Rubin. Pursuant to the 2000 SOFTBANK Voting Agreement, SOFTBANK Capital
Partners and Advisors Fund agreed that they will, at any meeting of stockholders
of the Company, or in connection with any written consent of stockholders of the
Company, vote or cause to be voted all shares of Common Stock then held of
record or beneficially owned by them with respect to all directorships other
than those which SOFTBANK Capital Partners and Advisors Fund are entitled to
designate pursuant to the 2000 Purchase Agreement (i) in favor of any member of
the Board of Directors of the Company who was a member of the Board prior to the
date of the 2000 Purchase Agreement, and any director who is thereafter chosen
to fill any vacancy on the Board of Directors or who is elected as a director (a
"Continuing Director") and who, in either event, is not a director designated by
SOFTBANK Capital Partners and Advisors Fund pursuant to the 2000 Purchase
Agreement and in connection with his or her initial assumption of office is
recommended for appointment or election by a majority of the Continuing
Directors then on the Board of Directors, and (ii) against the election of any
directors other than those directors specified in clause (i) of this sentence.
In addition, SOFTBANK Capital Partners and Advisors Fund agreed not to take any
action to remove, with or without cause, any director of the Company other than
the SOFTBANK Capital Partners and Advisors Fund designees.
Other than as described herein, the Reporting Persons have no present
plans or proposals which relate to or would result in: (i) the acquisition by
any person of additional securities of the Company or the disposition of
securities of the Company; (ii) an extraordinary corporate transaction, such as
a merger, reorganization or liquidation, involving the Company or any of its
subsidiaries; (iii) a sale or transfer of a material amount of assets of the
Company or any of its subsidiaries; (iv) any change in the present Board or
management of the Company, including any plans or proposals to change the number
or term of directors or to fill any existing vacancies on the Board; (v) any
material change in the present capitalization or dividend policy of the Company;
(vi) any other material change in the Company's business or corporate structure;
(vii) changes in the Company's certificate of incorporation or by-laws or other
actions which may impede the acquisition of control of the Company by any
persons; (viii) causing a class of securities of the Company to be delisted from
a national securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association;
(ix) a class of equity securities of the Company becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934, as amended; or (x) any action similar to those enumerated
above (collectively, the "Specified Actions"). However, the Reporting Persons
intend to evaluate the proposed investment in the Company on an ongoing basis,
and, depending on their evaluation of the business and prospects of the Company
and other factors that they may deem relevant, the Reporting Persons may
determine to dispose of the securities of the Company or their contractual
rights to acquire such securities, acquire additional securities of the Company
or take other actions if market conditions or other business considerations, in
the judgment of the Reporting Persons, warrant. Such additional acquisitions or
dispositions may be effected through open market purchases or sales, privately
negotiated transactions, tender offers to existing holders or direct negotiation
with the Company. Such further acquisitions, dispositions or other actions may
or may not result in the Specified Actions.
All references to the 1999 Purchase Agreement, the 2000 Purchase
Agreement, the Registration Rights Agreement, the Subordinated Loan Agreement,
the Convertible Subordinated Note, the Rubin Voting Agreement, the SOFTBANK
America Voting Agreement, the 2000 Rubin Voting Agreement, the 2000 SOFTBANK
Voting Agreement and the SB Capital Partners Warrant are qualified in their
entirety by the full text of such agreements, copies of which are attached as
Exhibits hereto and are incorporated by reference herein.
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<PAGE>
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Item 5 is hereby amended and restated as follows:
TOTAL OUTSTANDING SHARES. According to information provided to the
Reporting Persons by the Company, as of April 27, 2000, the total number of
shares of Common Stock outstanding was 18,575,880.
SB CAPITAL PARTNERS. As of the date of filing this Statement, SB
Capital Partners beneficially owns 17,790,963 shares of Common Stock,
representing approximately 79.9% of the Common Stock outstanding.
SB CP LLC. By virtue of being the general partner of both SB Capital
Partners and SOFTBANK Capital Advisors Fund LP, a Delaware limited partnership
("Advisors Fund"), which acquired (i) 84,308 shares of Common Stock initially
sold under the 1999 Purchase Agreement and (ii) 35,750 shares of Common Stock
pursuant to the 2000 Purchase Agreement, SB CP LLC may be deemed a beneficial
owner of a total of 17,928,896 shares of Common Stock consisting of 17,790,963
shares beneficially owned by SB Capital Partners and 137,933 shares beneficially
owned by Advisors Fund or a total of approximately 80.3% of the Common Stock
outstanding.
SB CPI, MR. FISHER AND MR. LAX. By virtue of their joint control over
investment decisions of SB CP LLC, SB CPI, Mr. Fisher and Mr. Lax may be deemed
beneficial owners of 17,928,896 shares of Common Stock beneficially owned by SB
CP LLC, or approximately 80.3% of the Common Stock outstanding.
SBH. By virtue of its ownership of all the outstanding stock of SB CPI,
SBH may be deemed a beneficial owner of the 17,928,896 shares of Common Stock
beneficially owned by SB CPI, or approximately 80.3% of the Common Stock
outstanding.
SOFTBANK. SOFTBANK may be deemed a beneficial owner of the 17,928,896
shares of Common Stock beneficially owned by SBH, its wholly owned subsidiary,
or approximately 80.3% of the Common Stock outstanding.
MR. SON. Mr. Son is the President and Chief Executive Officer of
SOFTBANK and owns an approximately 38.27% interest in SOFTBANK. Accordingly, the
17,928,896 shares of Common Stock beneficially owned by SOFTBANK, representing
approximately 80.3% of the Common Stock outstanding, may be regarded as being
beneficially owned by Mr. Son.
None of the Reporting Persons, nor, to the best knowledge of the
Reporting Persons, any of the person listed on Schedule 1, 2, 3 or 4 hereto, has
effected any
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<PAGE>
transactions in the securities of the Company during the past 60 days other than
those transactions described above.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit A Agreement of Joint Filing, dated as of May 1, 2000,
by and among SB Capital Partners, SB CP LLC, SB CPI, Mr.
Fisher, Mr. Lax, SBH, SOFTBANK, and Mr. Son (previously
filed on May 1, 2000).
Exhibit B Power of Attorney (incorporated by reference to
Exhibit 24 to the Statement on Schedule 13G filed by
SOFTBANK, Son and SOFTBANK Ventures, Inc. on February 18,
1998 with respect to Concentric Network Corporation).
Exhibit C 1999 Purchase Agreement, dated as of June 10, 1999,
between the Company and SOFTBANK America (previously
filed on June 21, 1999).
Exhibit D Registration Rights Agreement, dated as of June 10,
1999, as amended on May 1, 2000, between the Company and
the holders listed on the signature pages thereto.
Exhibit E Voting Agreement, dated as of June 10, 1999, by Michael
G. Rubin in favor of SOFTBANK America (previously filed
on June 21, 1999).
Exhibit F Voting Agreement dated as of June 10, 1999, by
SOFTBANK America, in favor of Michael G. Rubin
(previously filed on June 21, 1999).
Exhibit G Subordinated Loan Agreement, dated as of June 10, 1999,
between SOFTBANK America and the Company (previously
filed on June 21, 1999).
Exhibit H Convertible Subordinated Note, dated as of June 10,
1999, by the Company (previously filed on June 21, 1999).
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<PAGE>
Exhibit I 2000 Purchase Agreement, dated as of April 27, 2000,
between the Company, SB Capital Partners and Advisors
Fund (previously filed on May 1, 2000).
Exhibit J 2000 Rubin Voting Agreement, dated as of May 1, 2000,
between the Company, SB Capital Partners and Advisors
Fund.
Exhibit K 2000 SOFTBANK Voting Agreement, dated as of May 1, 2000,
between the Company, SB Capital Partners and Advisors
Fund.
Exhibit L SOFTBANK Capital Partners Warrant dated as of May 1,
2000.
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<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
May 4, 2000 SOFTBANK CAPITAL PARTNERS LP
By: SOFTBANK CAPITAL PARTNERS LLC,
General Partner
By: /s/ Steven Murray
------------------------
Name: Steven Murray
Title: Administrative Member
SOFTBANK CAPITAL PARTNERS LLC
By: /s/ Steven Murray
-----------------------------
Name: Steven Murray
Title: Administrative Member
SOFTBANK CAPITAL PARTNERS
INVESTMENT INC.
By: /s/ Steven Murray
-----------------------------
Name: Steven Murray
Title: Treasurer
/s/ Ronald D. Fisher
--------------------
RONALD D. FISHER
/s/ Charles R. Lax
------------------
CHARLES R. LAX
SOFTBANK HOLDINGS INC.
By: /s/ Stephen A. Grant
-----------------------------
Name: Stephen A. Grant
Title: Secretary
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<PAGE>
SOFTBANK CORP.
By: /s/ Stephen A. Grant
-----------------------------
Name: Stephen A. Grant
Title: Attorney-in-Fact
MASAYOSHI SON
By: /s/ Stephen A. Grant
-----------------------------
Name: Stephen A. Grant
Title: Attorney-in-Fact
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================================================================================
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
Dated as of May 1, 2000
By and Among
GLOBAL SPORTS, INC.
and
THE HOLDERS LISTED
ON THE SIGNATURE PAGES HEREIN
================================================================================
<PAGE>
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT, dated as of May 1,
2000, by and among Global Sports, Inc., a Delaware corporation (the "Company"),
and the holders of common stock set forth on the signature pages hereto. This
Agreement amends and restates the Registration Rights Agreement, dated as of
June 10, 1999 (the "Prior Agreement"), between the Company and SOFTBANK America
Inc. ("SOFTBANK America").
The Prior Agreement is hereby terminated in its entirety and restated
herein. Such termination and restatement is effective upon execution of this
Agreement by the holders listed on the signature pages hereto.
RECITALS
WHEREAS, the Company and SOFTBANK America entered into the Stock
Purchase Agreement, dated as of June 10, 1999 (the "1999 Purchase Agreement"),
pursuant to which SOFTBANK America acquired 6,153,850 shares of the Company's
Common Stock;
WHEREAS, the SOFTBANK America assigned its 6,153,850 shares of Common
Stock to SOFTBANK Capital Partners LP ("SOFTBANK Capital Partners") and SOFTBANK
Capital Advisors Fund LP ("SOFTBANK Advisors" and, together with SOFTBANK
Capital Partners, "SOFTBANK");
WHEREAS, the Company, SOFTBANK Capital Partners and SOFTBANK Advisors
entered into the Stock Purchase Agreement, dated as of April 27, 2000 (the "2000
Purchase Agreement"), pursuant to which SOFTBANK Capital Partners and SOFTBANK
Advisors acquired, in the aggregate, an additional 2,500,000 shares of Common
Stock;
WHEREAS, the Company and TMCT Ventures, L.P. entered into the Stock
Purchase Agreement, dated as of April 27, 2000 (the "TMCT Purchase Agreement"
and, together with
<PAGE>
the 1999 Purchase Agreement and the 2000 Purchase Agreement, the "Purchase
Agreements"), pursuant to which TMCT Venturs, L.P. acquired 625,000 shares of
Common Stock;
WHEREAS, the Company issued to SOFTBANK Capital Partners and SOFTBANK
Capital Advisors warrants to purchase, in the aggregate, 1,250,000 shares of
Common Stock (the "SOFTBANK Warrants");
WHEREAS, the Company has issued to TMCT Ventures, L.P. a warrant to
purchase 312,500 shares of Common Stock (the "TMCT Warrant" and, together with
the SOFTBANK Warrants, the "Warrants"); and
WHEREAS, this Agreement is being entered into in order to induce
SOFTBANK Capital Partners and SOFTBANK Advisors and TMCT Ventures, L.P. to
purchase additional shares of Common Stock pursuant to the 2000 Purchase
Agreement and TMCT Purchase Agreement, respectively;
NOW, THEREFORE, in consideration of the premises, and of the mutual
covenants, representations, warranties and agreements herein contained, the
parties hereto agree as follows:
1. Certain Definitions.
As used in this Agreement, the following terms shall have the following
respective meanings:
(a) "Closing Date" shall mean the Closing Date specified in the 2000
Purchase Agreement.
(b) "Commission" shall mean the Securities and Exchange Commission, or
any other federal agency at the time administering the Exchange Act or the
Securities Act, whichever is the relevant statute for the particular purpose.
(c) "Common Stock" shall mean the Common Stock, par value $0.01 per
share, of the Company.
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<PAGE>
(d) "Exchange Act" shall mean the Securities Exchange Act of 1934, or
any successor thereto, as the same shall be amended from time to time.
(e) "Existing Registration Agreements" shall mean the agreements set
forth on Schedule 1(e) hereto.
(f) "Holder" shall mean any party hereto (other than the Company) and
each of its respective successive successors and assigns who acquire Registrable
Securities, directly or indirectly, from any such party or from any successive
successor or assign of any such party.
(g) The term "person" shall mean a corporation, association,
partnership, limited liability company, organization, business, individual,
government or political subdivision thereof or governmental agency.
(h) "Registrable Securities" shall mean (i) the Common Stock acquired
by SOFTBANK and TMCT Ventures, L.P. pursuant to the Purchase Agreements, (ii)
the Common Stock issuable upon exercise of the Warrants, and (iii) any
securities issued successively in exchange for or in respect of any of the
foregoing, whether pursuant to a merger or consolidation, as a result of any
successive stock split or reclassification of, or stock dividend on, any of the
foregoing or otherwise; provided, however, that such shares of Common Stock or
securities shall cease to be Registrable Securities when (i) a registration
statement registering such shares of Common Stock or securities, as the case may
be, under the Securities Act has been declared effective and such shares of
Common Stock or securities, as the case may be, have been sold or otherwise
transferred by the Holder thereof pursuant to such effective registration
statement or (ii) such shares of Common Stock or securities, as the case may be,
are sold pursuant to Rule 144 (or any successor provision) promulgated under the
Securities Act under circumstances in which any legend borne by such shares of
Common Stock or securities relating to restrictions on transferability thereof,
under the Securities Act or otherwise, is removed by the Company.
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<PAGE>
(i)"Registration Expenses" shall have the meaning assigned thereto in
Section 4 of this Agreement.
(j)"Rights" shall mean any option, warrant, security, right or other
instrument convertible into or exchangeable or exercisable for, or otherwise
giving the holder thereof the right to acquire, directly or indirectly, any
Common Stock or any other such option, warrant, security, right or instrument,
including any instrument the value of which is measured by reference to the
value of the Common Stock.
(k) "Securities Act" shall mean the Securities Act of 1933, or any
successor thereto, as the same shall be amended from time to time.
(l) "Senior Registration Rights Agreement" shall mean (i) the
Registration Rights Agreement, dated May 12, 1998, among the Company, DMJ
Financial, Inc., James J. Salter, Kenneth J. Finkelstein and certain individuals
and entities specified therein, and (ii) the Registration Rights Agreement,
dated July 27, 1998, between the Company and Jerome F. Sheldon.
2. Registration Under the Securities Act.
(a) Demand Registrations.
(i) Subject to the provisions set forth in this Section 2(a)(i), at any
time from and after the date six (6) months after the Closing Date, any Holder
or Holders may elect, by giving written notice thereof to the Company, to
require the Company to use its reasonable best efforts to register all or a
portion of its Registrable Securities under the Securities Act; provided,
however, that the Company shall be obligated to register the Registrable
Securities upon such election only if the Registrable Securities to be
registered, in the aggregate, total 300,000 or more shares of the
then-outstanding securities of the class or series to which such Registrable
Securities belong; provided, further, that in any event the Company shall be
obligated to register such Registrable Securities upon such
-4-
<PAGE>
election only if the Registrable Securities to be registered have a total market
value (or, if there is no existing public market, a proposed maximum aggregate
offering price to be set forth on the facing page of the applicable registration
statement) of at least $2.4 million. Promptly following such election, the
Company shall (1) give notice to each other Holder of Registrable Securities of
such election, which notice shall set forth the identity of the electing
Holders, and (2) use its reasonable best efforts to cause to be declared or
become effective under the Securities Act a registration statement providing for
the registration of, and the sale in accordance with the intended method or
methods of distribution thereof by the electing Holders of, the Registrable
Securities. The Company shall be required to cause to become effective pursuant
to this Section 2(a) no more than (i) two (2) registration statements pursuant
to demands initiated by TMCT Ventures, L.P. or its successors and assigns and
(ii) three (3) registration statements pursuant to demands initiated by SOFTBANK
or its successors and assigns; provided, the Company shall be required to cause
to become effective no more than one registration statement in any six month
period. Notwithstanding the foregoing, the Company shall not be obligated to
register Registrable Securities upon any election pursuant to this Section
2(a)(i) if (1) fewer than 180 days have elapsed after the effective date of a
registration statement registering newly issued or treasury shares of the
Company's common stock for purposes of a primary offering (as defined in Section
2(b)(i) hereof) on a firm commitment underwritten basis, but only if and to the
extent that (x) the underwriting agreement entered into in connection with any
such offering expressly prohibited registration of Registrable Securities upon
such election and (y) no period referred to in this sentence, and no
postponement referred to in Section 2(a)(iii) hereof, was in effect during the
12 months immediately preceding the commencement of such 180 day period, unless
any Holders having made elections during the previous period or postponement, as
the case may be, shall have had the opportunity to register their Registrable
Securities pursuant to an effective registration statement prior to the current
such period.
-5-
<PAGE>
(ii) In the event of any registration of Registrable Securities
pursuant to Section 2(a)(i) hereof, the Company shall not, without the express
written consent of the Holders of a majority of such Registrable Securities,
cause or permit any other securities of the Company or of any other Person
(whether such securities are to be issued by the Company, are held in the
Company's treasury or are then outstanding and held by other persons) to be
covered by such registration statement or otherwise to be included in such
registration; provided, however, that any other Holder of Registrable Securities
may elect, by giving written notice to such effect to the Company no later than
15 business days after the Company shall have given the notice referred to in
clause (1) of Section 2(a)(i), to have such Holder's Registrable Securities
included in such registration.
(iii) In the event that, following any election pursuant to Section
2(a)(i) hereof but prior to the filing of a registration statement in respect of
such election, (A) the Board of Directors of the Company, in its reasonable
judgment and in good faith, resolves that the filing of such registration
statement and the offering of Registrable Securities pursuant thereto would
materially interfere with any significant acquisition, corporate reorganization
or other similar transaction involving the Company, and (B) the Company gives
the Holders having made such election written notice of such determination
(which notice shall include a copy of such resolution), the Company shall,
notwithstanding the provisions of Section 2(a)(i) hereof, be entitled to
postpone for up to 90 days the filing of any registration statement otherwise
required to be prepared and filed by it pursuant to Section 2(a)(i) hereof;
provided, however, that no such postponement may be effected if any other
postpone ment of a registration pursuant to this Section 2 was in effect during
the 12 months immediately preceding the commencement of such postponement,
unless any Holders having made elections during the previous postponement shall
have had the opportunity to register their Registrable Securities pursuant to an
effective registration statement prior to the current postponement.
-6-
<PAGE>
(b) "Piggy-Back" Registrations.
(i) If, at any time, the Company proposes to register any of its Common
Stock or Rights or any other equity securities under the Securities Act on a
registration statement on Form S-1, Form S-2 or Form S-3 (or an equivalent
general registration form then in effect) for purposes of an offering or sale by
or on behalf of the Company of its Common Stock or Rights or such equity
securities for its own account (a "primary offering"), or upon the request or
for the account of any holder of its Common Stock or Rights or any such equity
securities (a "secondary offering"), or for purposes of a combined primary and
secondary offering (a "combined offering"), then each such time the Company
shall, at least 10 business days prior to the time when any such registration
statement is filed with the Commission, give prompt written notice to the
Holders of its intention to do so. Such notice shall specify, at a minimum, the
number and class of shares, Rights or equity securities so proposed to be
registered, the proposed date of filing of such registration statement, any
proposed means of distribution of such shares, Rights or securities, any
proposed managing underwriter or underwriters of such shares, Rights or
securities and a good faith estimate by the Company of the proposed maximum
offering price thereof, as such price is proposed to appear on the facing page
of such registration statement. Upon the written direction of any Holder or
Holders, given within five business days following the receipt by such Holder of
any such written notice (which direction shall specify the number of Registrable
Securities intended to be disposed of by such Holder and the intended method of
distribution thereof), the Company shall include in such registration statement
any or all of the Registrable Securities then held by such Holder requesting
such registration (a "Selling Shareholder") to the extent necessary to permit
the sale or other disposition of such Registrable Securities as such Holder has
so directed the Company to be so registered. Notwithstanding the foregoing, the
Holders shall not have any right under this Section 2(b) if the registration
proposed to be effected by the Company relates solely to shares of Common Stock,
Rights or other equity securities
-7-
<PAGE>
which are issuable solely to officers or employees of the Company or any
subsidiary thereof pursuant to a bona fide employee stock option, bonus or other
employee benefit plan or as direct consideration in connection with a merger,
exchange offer or acquisition of a business.
(ii) In the event that the Company proposes to register shares of
Common Stock, Rights or other equity securities for purposes of a primary
offering, and any managing underwriter shall advise the Company and the Selling
Shareholders in writing that, in its opinion, the inclusion in the registration
statement of some or all of the Registrable Securities sought to be registered
by such Selling Shareholders creates a substantial risk that the price per unit
the Company will derive from such registration will be materially and adversely
affected or that the number of shares, Rights or securities sought to be
registered (including, in addition to the securities sought to be registered by
the Company, any securities sought to be included in such registration statement
by any other shareholder pursuant to "piggyback" registration rights (a
"Piggyback Shareholder") and those sought to be registered by the Selling
Shareholders) is too large a number to be reasonably sold, then the Company will
include in such registration statement such number of shares, Rights or
securities as the Company, the Piggyback Shareholders and such Selling
Shareholders are so advised can be sold in such offering without such an effect
(the "Primary Maximum Number"), as follows and in the following order of
priority: (A) first, such number of shares, Rights or securities as the Company,
in its reasonable judgment and acting in good faith and in accordance with sound
financial practice, shall have determined, (B) second, if and to the extent that
the number of shares, Rights or securities to be registered under clause (A) is
less than the Primary Maximum Number, shares, Rights or securities of each
Piggyback Shareholder that is exercising "piggyback" registration rights under a
Senior Registration Rights Agreement, and (C) third, if and to the extent that
the number of shares, Rights or securities to be registered under clauses (A)
and (B) is less than the Primary Maximum Number, Registrable Securities of each
Selling Shareholder and shares, Rights or securities
-8-
<PAGE>
of each other Piggyback Shareholder, pro rata, and without any priority as
between the Selling Shareholders and such Piggyback Shareholders, in proportion
to the number sought to be registered by each Selling Shareholder and each such
Piggyback Shareholder relative to the number sought to be registered by all the
Selling Shareholders and all such Piggyback Shareholders, which in the
aggregate, when added to the number of shares, Rights or securities to be
registered under clauses (A) and (B), equals the Primary Maximum Number.
(iii) In the event that the Company proposes to register shares of
Common Stock or other equity securities for purposes of a secondary offering,
upon the request or for the account of any holder thereof pursuant to "demand"
registration rights of such holder (each a "Requesting Shareholder"), and any
managing underwriter shall advise the Requesting Shareholder or Shareholders and
the Selling Shareholders in writing that, in its opinion, the inclusion in the
registration statement of some or all of the shares, Rights or securities sought
to be registered by the Requesting Shareholders and of the Registrable
Securities sought to be registered by the Selling Shareholders creates a
substantial risk that the price per unit that such Requesting Shareholder or
Shareholders and such Selling Shareholders will derive from such registration
will be materially and adversely affected or that the number of shares, Rights
or securities sought to be registered (including any securities sought to be
registered at the instance of the Requesting Shareholder or Shareholders, any
securities sought to be included in such Registration Statement by any Piggyback
Shareholder and those sought to be registered by the Selling Shareholders) is
too large a number to be reasonably sold, the Company will include in such
registration statement such number of shares, Rights or securities as the
Requesting Shareholders and the Selling Shareholders are so advised can
reasonably be sold in such offering, or can be sold without such an effect (the
"Secondary Maximum Number"), as follows and in the following order of priority:
(A) first, such number of shares, Rights or securities as the Requesting
Shareholder shall have requested, (B) second, if and to the extent that the
number
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<PAGE>
of shares, Rights or securities to be registered under clause (A) is less than
the Secondary Maximum Number, shares, Rights or securities of each Piggyback
Shareholder that is exercising "piggyback" registration rights under a Senior
Registration Rights Agreement, and (C) third, if and to the extent that the
number of shares, Rights or securities to be registered under clauses (A) and
(B) is less than the Secondary Maximum Number, Registrable Securities of each
Selling Shareholder and shares, Rights or securities of each other Piggyback
Shareholder, pro rata, and without any priority as between the Selling
Shareholders and each such Piggyback Shareholders, in proportion to the number
sought to be registered by each Selling Shareholder and such Piggyback
Shareholder relative to the number sought to be registered by all the Selling
Shareholders and all such Piggyback Shareholders, which, in the aggregate, when
added to the number of shares, Rights or securities to be registered under
clauses (A) and (B), equals the Secondary Maximum Number.
(iv) In the event that the Company proposes to register shares of
Common Stock, Rights or other equity securities for purposes of a combined
offering, and any managing underwriter shall advise the Company, the Requesting
Shareholder or Shareholders and the Selling Shareholders in writing that, in its
opinion, the inclusion in the registration statement of some or all of the
Registrable Securities sought to be registered by the Selling Shareholders and
any shares, Rights or securities sought to be registered by Piggyback
Shareholders creates a substantial risk that the price per unit the Company
and/or the Requesting Shareholders will derive from such registration will be
materially and adversely affected, then the Company will include in such
registration statement such number of shares, Rights or securities as the
Company, the Requesting Shareholders, the Piggyback Shareholders and the Selling
Shareholders are so advised can be sold in such offering without such an effect
(the "Combined Maximum Number"), as follows and in the following order of
priority: (A) first, such number of shares, Rights or securities as the Company,
in its reasonable judgment and acting in good faith and in accordance with sound
financial practice, shall
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<PAGE>
have determined, and any shares, Rights or securities sought to be registered by
any Requesting Shareholders, (B) second, if and to the extent that the number of
shares, Rights or securities to be registered under clause (A) is less than the
Combined Maximum Number, shares, Rights or securities of each Piggyback
Shareholder that is exercising "piggyback" registration rights under a Senior
Registration Rights Agreement, and (C) third, if and to the extent that the
number of shares, Rights or securities to be registered under clauses (A) and
(B) is less than the Combined Maximum Number, such number of Registrable
Securities of each Selling Shareholder and such number of shares, Rights or
securities of each other Piggyback Shareholder, pro rata, and without any
priority as between the Selling Shareholders and each such Piggyback
Shareholders, in proportion to the number sought to be registered by each
Selling Shareholder and each such Piggyback Shareholder relative to the number
sought to be registered by all the Requesting Shareholders and Selling
Shareholders, which, in the aggregate, when added to the number of shares,
Rights or securities to be registered under clauses (A) and (B), equals the
Combined Maximum Number.
(c) Withdrawals. Any Holder having notified or directed the Company to
include any or all of his or its Registrable Securities in a registration
statement pursuant to Section 2(a) or 2(b) hereof shall have the right to
withdraw such notice or direction with respect to any or all of the Registrable
Securities designated for registration thereby by giving written notice to such
effect to the Company at least five business days prior to the anticipated
effective date of such registration statement. In the event of any such
withdrawal, the Company shall amend such registration statement and take such
other actions as may be necessary so that such Registrable Securities are not
included in the applicable registration and not sold pursuant thereto, and such
Registrable Securities shall continue to be Registrable Securities in accordance
herewith. In the event of any such withdrawal with respect to a direction
pursuant to Section 2(a), the Holders, at their option, may elect (i) to pay the
Registration Expenses (as defined in Section 4 hereof), incurred in connection
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with the registration statement so withdrawn prior to the date such written
notice of withdrawal is given, in which event such direction shall not be deemed
to have utilized one of the three occasions on which Holders may demand
registration pursuant to Section 2(a) or (ii) not to pay such Registration
Expenses, in which event such direction shall be deemed, notwithstanding such
withdrawal, to have utilized one of such occasions. No such withdrawal shall
affect the obligations of the Company with respect to Registrable Securities not
so withdrawn, provided, however, that in the case of a registration pursuant to
Section 2(a) hereof, if such withdrawal shall reduce the total market value of
the Registrable Securities to be registered (or, if applicable, the proposed
maximum aggregate offering price thereof) below $5 million, then the Company
shall, prior to the filing or effectiveness, as appropriate, of such
registration statement, give each Holder of Registrable Securities so to be
registered notice, referring to this Agreement, of such fact and, within ten
business days following the giving of such notice, either the Company or the
Holders of a majority of such Registrable Securities may, by written notice to
each Holder of such Registrable Securities or the Company, as the case may be,
elect that such registration statement not be filed or, if it has theretofore
been filed, that it be withdrawn. During such ten business day period, the
Company shall not file such registration statement or, if it has theretofore
been filed, shall use its reasonable best efforts not to permit it to become
effective. In the event of any election contemplated by the proviso to the next
preceding sentence, no registration statement with respect to Registrable
Securities shall thereafter be filed with the Commission without compliance with
all of the procedures set forth in Section 2(a) hereof.
3. Registration Procedures.
(a) In connection with the Company's obligations with respect to any
registration of Registrable Securities pursuant to Section 2 hereof, the Company
shall use its reasonable best efforts to effect or cause such registration to
permit the sale of the Registrable Securities by the
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Holders thereof in accordance with the intended method or methods of
distribution thereof described in the registration statement relating thereto
and to maintain the effectiveness of such registration statement for a period of
six calendar months after the date of effectiveness of such registration
statement or, if shorter, until the disposition of all of the Registrable
Securities covered by such registration statement is completed. In connection
therewith, the Company shall, as soon as reasonably possible:
(i) prepare and file with the Commission a registration statement with
respect to such registration on any form which may be utilized by the
Company and which shall permit the disposition of the Registrable
Securities in accordance with the intended method or methods thereof, as
specified in writing by the Holders thereof, and use its reasonable best
efforts to cause such registration statement to become effective as soon as
reasonably possible thereafter;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus included
therein as may be necessary to effect and maintain the effectiveness of
such registration statement and as may be required by the applicable rules
and regulations of the Commission and the instructions applicable to the
form of such registration statement, and furnish to the underwriters, if
any, of the Registrable Securities to be registered, the sales or placement
agent, if any, therefor, and a representative of the Holders of Registrable
Securities registered thereby copies of any such supplement or amendment
prior to its being used and/or filed with the Commission;
(iii) comply with the provisions of the Securities Act applicable to
issuers with respect to the disposition of all of the Registrable
Securities covered by such registration statement in accordance with the
intended methods of disposition by the Holders thereof set forth in such
registration statement, in
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any such case for a period of six calendar months after the date of
effectiveness of such registration statement or, if shorter, until such
disposition is completed;
(iv) provide (A) any Holder registering more than 10% of the
Registrable Securities to be registered, (B) the underwriters (which term,
for purposes of this Agreement, shall include a person deemed to be an
underwriter within the meaning of Section 2(11) of the Securities Act), if
any, of the Registrable Securities to be registered, (C) the sales or
placement agent, if any, therefor, (D) counsel for such underwriters or
agent, and (E) counsel for the Holders thereof the opportunity to
participate in the preparation of such registration statement, each
prospectus included therein or filed with the Commission, and each
amendment or supplement thereto;
(v) for a reasonable period prior to the filing of such registration
statement, and throughout the period specified in Section 3(a)(iii) hereof,
make available for inspection by the parties referred to in Section
3(a)(iv), subject to execution and delivery of a confidentiality agreement
in customary form in favor of the Company by the Holders seeking to
exercise such inspection rights, above such financial and other information
and books and records of the Company, and cause the officers, directors,
employees, counsel and independent certified public accountants of the
Company to respond to such inquiries, as shall be reasonably necessary, in
the judgment of the respective counsel referred to in such Section, to
conduct a reasonable investigation within the meaning of Section 11 of the
Securities Act;
(vi) promptly notify the selling Holders of Registrable Securities, the
sales or placement agent, if any, therefor and the managing underwriter or
underwriters, if any, thereof and confirm such advice in writing, (A) when
such registration statement or the prospectus included therein or any
prospectus amendment
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or supplement or post-effective amendment has been filed, and, with respect
to such registration statement or any post-effective amendment, when the
same has become effective, (B) of any comments by the Commission and by the
Blue Sky or securities commissioner or regulator of any state with respect
thereto or any request by the Commission for amendments or supplements to
such registration statement or prospectus or for additional information,
(C) of the issuance by the Commission of any stop order suspending the
effectiveness of such registration statement or the initiation or
threatening of any proceedings for that purpose, (D) if at any time the
representations and warranties of the Company contemplated by Section
3(a)(xv) or Section 5 hereof cease to be true and correct in all material
respects, (E) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose, or (F) at any time when a prospectus is
required to be delivered under the Securities Act, that such registration
statement, prospectus, prospectus supplement or post-effective amendment,
or any document incorporated by reference in any of the foregoing, contains
an untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing;
(vii) use its reasonable best efforts to obtain the withdrawal of any
order suspending the effectiveness of such registration statement or any
post-effective amendment thereto at the earliest practicable date;
(viii) if requested by any managing underwriter or underwriters, any
placement or sales agent or any Holder, promptly incorporate in a
prospectus supplement or post-effective amendment such information as is
required by the applicable rules and regulations of the Commission and as
such managing underwriter or underwriters, such agent or such Holder
specifies
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<PAGE>
should be included therein relating to the terms of the sale of such
Registrable Securities, including, without limitation, information with
respect to the number of Registrable Securities being sold by the Holders
or agent or to any underwriters, the name and description of the Holders,
agent or underwriter, the offering price of such Registrable Securities and
any discount, commission or other compensation payable in respect thereof,
the purchase price being paid therefor by such underwriters and with
respect to any other terms of the offering of the Registrable Securities to
be sold by the Holders or agent or to such underwriters; and make all
required filings of such prospectus supplement or post-effective amendment
promptly after notification of the matters to be incorporated in such
prospectus supplement or post effective amendment;
(ix) furnish (A) to any Holder registering more than ten percent of the
Registrable Securities to be registered in such registration, each
placement or sales agent, if any, therefor, each underwriter, if any,
thereof and the respective counsel referred to in Section 3(a)(iv) an
executed copy of such registration statement, each such amendment and
supplement thereto (in each case including all exhibits thereto and
documents incorporated by reference therein), and (B) to any Holder of
Registrable Securities to be registered in such registration such number of
copies of such registration statement (excluding exhibits thereto and
documents incorporated by reference therein unless specifically so
requested by any Holder, agent or underwriter, as the case may be) and of
the prospectus included in such registration statement (including each
preliminary prospectus), in conformity with the requirements of the
Securities Act, and such other documents, as any such Holder, agent, if
any, and underwriter, if any, may reasonably request in order to facilitate
the offering and disposition of the Registrable Securities owned by any
such Holder, offered or sold by such agent or underwritten by such
underwriter and to permit each Holder, agent and underwriter to satisfy the
prospectus delivery
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<PAGE>
requirements of the Securities Act; and the Company hereby consents to the
use of such prospectus (including such preliminary prospectus) and any
amendment or supplement thereto by each Holder and by any such agent and
underwriter, in each case in the form most recently provided to such party
by the Company, in connection with the offering and sale of the Registrable
Securities covered by the prospectus (including such preliminary
prospectus) or any supplement or amendment thereto;
(x) use its reasonable best efforts to (A) register or qualify the
Registrable Securities to be included in such registration statement under
such securities laws or blue sky laws of such jurisdictions as any Holder
and any placement or sales agent, if any, therefor and underwriter, if any,
thereof shall reasonably request, (B) keep such registrations or
qualifications in effect and comply with such laws so as to permit the
continuance of offers, sales and dealings therein in such jurisdictions for
so long as may be necessary to enable the Holders, agents or underwriters
to complete its distribution of Securities pursuant to such registration
statement and (C) take any and all other actions as may be reasonably
necessary or advisable to enable the Holders, agents, if any, and
underwriters, if any, to consummate the disposition in such jurisdictions
of such Registrable Securities; provided, however, that the Company shall
not be required for any such purpose to (I) qualify as a foreign
corporation in any jurisdiction wherein it would not otherwise be required
to qualify but for the requirements of this Section 3(a)(x) or (II) consent
to general service of process in any such jurisdiction;
(xi) use its reasonable best efforts to obtain the consent or approval
of each governmental agency or authority, whether federal, state or local,
which may be required to effect such registration or the offering or sale
in connection therewith or to enable the Holders to offer, or to consummate
the disposition of, the Registrable Securities;
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<PAGE>
(xii) cooperate with the Holders and the managing underwriters, if any,
to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold, which certificates shall be
printed, lithographed or engraved, or produced by any combination of such
methods, on steel engraved borders if required or appropriate and which
shall not bear any restrictive legends; and, in the case of an underwritten
offering, enable such Registrable Securities to be in such denominations
and registered in such names as the managing underwriters may request at
least two business days prior to any sale of the Registrable Securities;
(xiii) provide a CUSIP number for all Registrable Securities, not later
than the effective date of such registration statement;
(xiv) enter into one or more underwriting agreements, engagement
letters, agency agreements, "best efforts" underwriting agreements or
similar agreements, as appropriate, and take such other actions in
connection therewith as the Holders shall reasonably request in order to
expedite or facilitate the disposition of the Registrable Securities
registered;
(xv) whether or not an agreement of the type referred to in Section
(3)(a)(xiv) hereof is entered into and whether or not any portion of the
offering contemplated by such registration statement is an underwritten
offering or is made through a placement or sales agent or any other entity,
(A) make such representations and warranties to the Holders and the
placement or sales agent, if any, therefor and the underwriters, if any,
thereof in form, substance and scope as are customarily made in connection
with an offering of common stock or other equity securities pursuant to any
appropriate agreement and/or to a registration statement filed on the form
applicable to such registration; (B) use its reasonable best efforts to
obtain an opinion of counsel to the Company in customary form and covering
such matters, of the type
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<PAGE>
customarily covered by such an opinion, as the managing underwriters, if
any, and as the Holders may reasonably request, addressed to the Holders
and the placement or sales agent, if any, therefor and the underwriters, if
any, thereof, and dated the effective date of such registration statement
(and if such registration statement contemplates an underwritten offering
of a part or all of the Registrable Securities, dated the date of the
closing under the underwriting agreement relating thereto); (C) use its
reasonable best efforts obtain a "comfort" letter or letters from the
independent certified public accountants of the Company addressed to the
Holders and the placement or sales agent, if any, therefor and the
underwriters, if any, thereof, dated (I) the effective date of such
registration statement, (II) the effective date of any prospectus
supplement, if any, to the prospectus included in such registration
statement or post-effective amendment to such registration statement which
includes unaudited or audited financial statements as of a date or for a
period subsequent to that of the latest such statements included in such
prospectus and (III) (if such registration statement contemplates an
underwritten offering pursuant to any prospectus supplement to the
prospectus included in such registration statement or post-effective
amendment to such registration statement which includes unaudited or
audited financial statements as of a date or for a period subsequent to
that of the latest such statements included in such prospectus) dated the
date of the closing under the underwriting agreement relating thereto, such
letter or letters to be in customary form and covering such matters of the
type customarily covered by letters of such type; (D) deliver such
documents and certificates, including officers' certificates, as may be
reasonably requested by the Holders and the placement or sales agent, if
any, therefor and the managing underwriters, if any, thereof to evidence
the accuracy of the representations and warranties made pursuant to clause
(A) above or those contained in Section 5(a) hereof and the compliance with
or satisfaction of any agreements or conditions
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<PAGE>
contained in the underwriting agreement or other agreement entered into by
the Company; and (E) undertake such obligations relating to expense
reimbursement, indemnification and contribution as are provided in Section
6 hereof;
(xvi) in the event that (i) any broker-dealer registered under the
Exchange Act shall underwrite any Registrable Securities or participate as
a member of an underwriting syndicate or selling group or "assist in the
distribution" (within the meaning of the Rules of Fair Practice and the
By-Laws of the National Association of Securities Dealers, Inc. ("NASD"))
thereof, whether as a Holder of Registrable Securities or as an
underwriter, a placement or sales agent or a broker or dealer in respect
thereof, or otherwise, or (ii) more than 10% of the net offering proceeds,
not including underwriting compensation, of such distribution is intended
to be paid to any such broker-dealer or "associated or affiliated persons"
of such broker-dealer or "members of the immediate family of such persons"
(each within the meaning of such Rules), the Company shall take reasonable
steps to assist such broker-dealer in complying with the requirements of
such Rules and By-Laws, including, without limitation, by (A) if such Rules
or By-Laws shall so require, engaging a "qualified independent underwriter"
(as defined in such Schedule) to participate in the preparation of the
registration statement relating to such Registrable Securities, to exercise
usual standards of due diligence in respect thereto and, if any portion of
the offering contemplated by such registration statement is an underwritten
offering or is made through a placement or sales agent, to recommend the
price of such Registrable Securities, (B) indemnifying any such qualified
independent underwriter to the extent of the indemnification of
underwriters provided in Section 6 hereof, and (C) providing such
information to such broker-dealer as may be required in order for such
broker-dealer to comply with the requirements of the Rules of Fair Practice
of the NASD;
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<PAGE>
(xvii) comply with all applicable rules and regulations of the
Commission, and make generally available to its securityholders, as soon as
practicable but in any event not later than eighteen months after the
effective date of such registration statement, an earning statement of the
Company and its subsidiaries complying with Section 11(a) of the Securities
Act (including, at the option of the Company, Rule 158 thereunder); and
(xviii) use its reasonable best efforts to list prior to the effective
date of such registration statement, subject to notice of issuance, the
Registrable Securities covered by such registration statement on any
securities exchange on which the Common Stock is then listed or, if the
Common Stock is not then so listed, to have the Registrable Securities
accepted for quotation of trading on the Nasdaq National Market (or a
comparable interdealer quotation system then in effect).
(b) In the event that the Company would be required, pursuant to
Section 3(a)(vi)(F) above, to notify the Holders, the placement or sales agent,
if any, therefor and the managing underwriters, if any, thereof, the Company
shall without delay prepare and furnish to the Holders, to each placement or
sales agent, if any, and to each underwriter, if any, a reasonable number of
copies of a prospectus supplemented or amended so that, as thereafter delivered
to purchasers of Registrable Securities, such prospectus shall not contain 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 in
light of the circumstances then existing. The Holders agree that upon receipt of
any notice from the Company pursuant to Section 3(a)(vi)(F) hereof, they shall
forthwith discontinue the disposition of Registrable Securities pursuant to the
registration statement applicable to such Registrable Securities until they
shall have received copies of such amended or supplemented prospectus, and if so
directed by the Company, the Holders shall deliver to the Company (at the
Company's
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expense) all copies, other than permanent file copies, then in their possession
of the prospectus covering such Registrable Securities at the time of receipt of
such notice.
(c) The Company may require the Holders to furnish to the Company such
information regarding the Holders and their intended method of distribution of
such Registrable Securities as the Company may from time to time reasonably
request in writing, but only to the extent that such information is required in
order to comply with the Securities Act. Each Holder agrees to notify the
Company as promptly as practicable of any inaccuracy or change in information
previously furnished by such Holder to the Company or of the occurrence of any
event in either case as a result of which any prospectus relating to such
registration contains or would contain an untrue statement of a material fact
regarding such Holder or such Holder's intended method of distribution of such
Registrable Securities or omits or would omit to state any material fact
regarding such Holder or its intended method of distribution of such Registrable
Securities required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing, and promptly
to furnish to the Company any additional information required to correct and
update any previously furnished information or required so that such prospectus
shall not contain, with respect to such Holder or the distribution of such
Registrable Securities, 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 in light of the circumstances then existing.
(d) From the time that the Company receives any notice pursuant to
Section 2(a)(i) hereof or, as the case may be, any direction from a Holder in
connection with a secondary offering or a combined offering pursuant to Section
2(b)(i) hereof until the earlier of (i) the date 90 days after the effectiveness
of the registration statement relating thereto or such shorter period of time as
may be recommended by the managing underwriters involved in such offering and
(ii) the date an election is made not to
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file a registration statement with the Commission pursuant to Section 2(c)
hereof, the Company will not offer, issue, sell, agree or commit to issue or
sell, grant any option for the purchase of, file with the Commission a
registration statement relating to any primary, secondary or combined offering
of or solicit any offer to buy any Common Stock or any Rights, other than (A) in
connection with the Registrable Securities to be registered pursuant to such
notice or direction, (B) such Common Stock or other equity securities as were,
at the time of such direction, to be included in such secondary offering or
combined offering, (C) pursuant to an approved employee stock option, stock
purchase plan, or similar benefit program or agreement for the benefit of
employees of, or consultants to, the Company, where the primary purpose is not
to raise additional equity capital for the Company or (D) as direct
consideration for the acquisition of a business in a merger, consolidation or
similar transaction.
4. Registration Expenses.
The Company agrees to bear and to pay or cause to be paid promptly upon
request being made therefor all expenses incident to the Company's performance
of or compliance with this Agreement, including, without limitation, (a) all
Commission and any NASD registration and filing fees and expenses, (b) all fees
and expenses in connection with the qualification of the Securities for offering
and sale under the State securities and blue sky laws, including reasonable fees
and disbursements of counsel for the placement or sales agent or underwriters in
connection with such qualifications, (c) all expenses relating to the
preparation, printing, distribution and reproduction of each registration
statement required to be filed hereunder, each prospectus included therein or
prepared for distribution pursuant hereto, each amendment or supplement to the
foregoing, the certificates representing the Common Stock or other equity
securities to be sold and all other documents relating hereto, (d) messenger and
delivery expenses, (e) fees and expenses of any escrow agent or custodian, (f)
internal expenses of the Company (including, without limitation, all salaries
and expenses of
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the Company's officers and employees performing legal or accounting duties), (g)
fees, disbursements and expenses of counsel and independent certified public
accountants of the Company (including the expenses of any opinions or "comfort"
letters required by or incident to such performance and compliance), (h) fees,
disbursements and expenses (including fees and expenses of counsel) of any
"qualified independent underwriter" engaged pursuant to Section 3(a)(xvi)
hereof, (i) reasonable fees, disbursements and expenses of one counsel for all
of the Holders retained in connection with any particular registration, and
fees, expenses and disbursements of any other persons retained by the Company in
connection with such registration, and (j) all fees and expenses (including,
without limitation, listing and qualification fees) in connection with the
listing or admission to quotation of the Registrable Securities as required by
Section 3(a)(xviii) hereof (collectively, the "Registration Expenses"). To the
extent that any Registration Expenses are incurred, assumed or paid by the
Holder or any placement or sales agent therefor or underwriter thereof, the
Company shall reimburse such person for the full amount of the Registration
Expenses so incurred, assumed or paid promptly after receipt of a request
therefor. Notwithstanding the foregoing, the Holders of Registrable Securities
being registered each shall pay their pro rata share (based on their proportion
of the Registrable Securities being sold by them) of all agency fees and
commissions and all underwriting discounts and commissions attributable to the
sale of the Registrable Securities and the fees and disbursements of any counsel
or other advisors or experts retained by the Holder, other than the counsel and
experts specifically referred to above.
5. Representations and Warranties.
The Company represents and warrants to, and agrees with, each Holder
from time to time of Registrable Securities that:
(a) Each registration statement covering Registrable Securities and
each prospectus (including any preliminary prospectus) contained therein or
furnished
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pursuant to Section 3(a)(ix) hereof and any further amendments or supplements to
any such registration statement or prospectus, when it becomes effective or is
filed with the Commission, as the case may be, and, in the case of an
underwritten offering of Registrable Securities, at the time of the closing
under the underwriting agreement relating thereto will conform in all material
respects to the requirements of the Securities Act and will not contain 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;
and at all times subsequent to the effective date of such registration statement
when a prospectus would be required to be delivered under the Securities Act,
other than from (i) such time as a notice has been given to Holders of
Registrable Securities pursuant to Section 3(a)(vi)(F) hereof until (ii) such
time as the Company furnishes an amended or supplemented prospectus pursuant to
Section 3(b) hereof, each such registration statement, and each prospectus
contained therein or furnished pursuant to Section 3(a)(ix) hereof, as then
amended or supplemented, will conform in all material respects to the
requirements of the Securities Act and will not contain 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 in the light of the
circumstances then existing; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company by a
Holder of Registrable Securities expressly for use therein.
(b) Any documents incorporated by reference in any prospectus referred
to in Section 5(a) hereof, when they become or became effective or are or were
filed with the Commission, as the case may be, as then amended or supplemented,
will conform or conformed in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable, and none of such documents
will contain an untrue statement of a material fact or will omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading;
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provided, however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Company by a Holder of Registrable Securities
expressly for use therein.
(c) The compliance by the Company with all of the provisions of this
Agreement and the consummation of the transactions herein contemplated will not
(i) conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any
subsidiary is a party or by which the Company or any subsidiary is bound or to
which any of the property or assets of the Company or any subsidiary is subject,
or (ii) result in any violation of the provisions of the Certificate of
Incorporation or By-Laws of the Company or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company or any subsidiary or any of their properties except, with respect to
clause (i) or (ii), for such conflicts, breaches, defaults and violations as,
individually and in the aggregate, do not have a material adverse effect on the
financial condition, results of operations, business or prospects of the Company
and its subsidiaries and do not materially hinder or delay the exercise by the
Holders of their rights hereunder; and no consent, approval, authorization,
order, registration or qualification of or with any such court or governmental
agency or body is required for the consummation by the Company of the
transactions contemplated by this Agreement, except the registration under the
Securities Act of the Registrable Securities and such consents, approvals,
authorizations, registrations or qualifications as may be required under State
securities or blue sky laws in connection with the offering and distribution of
the Registrable Securities.
6. Indemnification.
(a) Indemnification by the Company. Upon the registration of any
Registrable Securities pursuant to
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Section 2 hereof, and in consideration of the agreements of the Holders
contained herein, and as an inducement to SOFTBANK and TMCT Ventures, L.P. to
enter into the Purchase Agreements, the Company shall, and it hereby agrees to,
indemnify and hold harmless each Holder, and each person who participates as a
placement or sales agent or as an underwriter in any offering or sale of such
Registrable Securities, against any losses, claims, damages or liabilities,
joint or several, to which any such Holder, agent or underwriter may become
subject, under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any registration statement under which such Registrable Securities
were registered under the Securities Act, or any preliminary or final prospectus
contained therein or furnished by the Company to any such Holder, agent or
underwriter, or any amendment or supplement thereto, or any document
incorporated by reference therein, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading (in
the case of the Registration Statement or any amendment thereto) or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading (in the case of any preliminary or final prospectus or
supplement thereto), and the Company shall, and it hereby agrees to, reimburse
any such Holder, agent and underwriter for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such action or claim; provided, however, that the Company shall not be liable to
any such person in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in such registration
statement, preliminary or final prospectus, amendment or supplement or
incorporated document in reliance upon and in conformity with written
information furnished to the Company by such person expressly for use therein;
provided, further, that the Company shall not be liable to (i) any Holder,
underwriter or placement or sales
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agent under the indemnity agreement in this subsection (a) with respect to any
preliminary prospectus to the extent that any such loss, claim, damage or
liability of such Holder, underwriter or agent, respectively, results from the
fact that such Holder, underwriter or agent sold Registrable Securities to a
person to whom there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the related final prospectus if the Company
has previously furnished on a timely basis to such Holder, underwriter or agent,
respectively, sufficient copies thereof and such prospectus corrects the
statement or omission, or alleged statement or omission, out of which such loss,
claim, damage or liability arises or (ii) any Holder distributing securities
otherwise than in an underwritten offering or through a broker-dealer acting as
placement agent for such Holder, with respect to any preliminary or final
prospectus to the extent that any such loss, claim, damage or liability of such
Holder arises from the fact that such Holder delivered such preliminary or final
prospectus after receipt of any notice from the Company pursuant to Section
3(a)(vi)(F) hereof and the amended or supplemented prospectus furnished pursuant
to Section 3(b) hereof corrects the statement or omission, or alleged statement
or omission, out of which such loss, claim, damage or liability arises.
(b) Indemnification by the Holder and any Agents and Underwriters. The
Company may require, as a condition to including any Registrable Securities in
any registration statement filed pursuant to Section 2 hereof and to entering
into any underwriting agreement with respect thereto, that the Company shall
have received an undertaking from the Holder thereof and from each underwriter
named in any such underwriting agreement, severally and not jointly, to (i)
indemnify and hold harmless the Company, and all other Holders, if any, of
Registrable Securities selling under the same registration statement, against
any losses, claims, damages or liabilities to which the Company or such other
Holders of Registrable Securities may become subject, under the Securities Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement
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or alleged untrue statement of a material fact contained in such registration
statement, or any preliminary or final prospectus contained therein or furnished
by the Company to the Holders, agent or underwriter, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading (in the case of the
Registration Statement or any amendment thereto) or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (in the case of any preliminary or final prospectus or
supplement thereto), in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by the Holder or underwriter expressly for use therein,
and (ii) reimburse the Company for any legal or other expenses reasonably
incurred by the Company in connection with investigating or defending any such
action or claim; provided, however, that no Holder shall be required to
undertake liability under this Section 6(b) for any amounts in excess of the
dollar amount of the proceeds to be received by such Holder from the sale of its
Registrable Securities pursuant to such registration, as reduced by any damages
or other amounts that such Holder was otherwise required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission.
(c) Notices of Claims, Etc. Promptly after receipt by an indemnified
party under subsection (a) or (b) above of written notice of the commencement of
any action, such indemnified party shall, if a claim in respect thereof is to be
made against an indemnifying party pursuant to the indemnification provisions of
or contemplated by this Section 6, notify such indemnifying party in writing of
the commencement of such action; but the omission so to notify the indemnifying
party shall not relieve it from any liability which it may have to any
indemnified party except to the extent the indemnifying party is materially
prejudiced thereby. In case any such action shall be brought against any
indemnified party and it shall notify an
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indemnifying party of the commencement thereof, such indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who may be counsel
to the indemnifying party unless representation of both parties by the same
counsel would be inappropriate due to actual or potential conflicts of interest
between them), and, after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, such indemnifying party
shall not be liable to such indemnified party for any legal expenses of other
counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation.
(d) Contribution. Each party hereto agrees that, if for any reason the
indemnification provisions contemplated by Section 6(a) or Section 6(b) hereof
are unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, claims, damages or liabilities (or actions in respect
thereof) referred to therein, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and the indemnified party in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative fault of such indemnifying party and indemnified party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by such indemnifying party or by
such indemnified party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The parties hereto agree that it would not be just and equitable if contribution
pursuant to
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this Section 6(d) were determined by pro rata allocation (even if the Holders or
any agents or underwriters or all of them were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in this Section 6(d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages, or
liabilities (or actions in respect thereof) referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 6(d), no Holder shall
be required to contribute any amount in excess of the amount by which the dollar
amount of the proceeds received by such Holder from the sale of any Registrable
Securities (after deducting any fees, discounts and commissions applicable
thereto) exceeds the amount of any damages which such Holder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission, and no underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Registrable
Securities underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. 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 guilty of such fraudulent
misrepresentation. The Holders' and any underwriter's obligations in this
Section 6(d) to contribute shall be several in proportion to the number or
amount of Registrable Securities sold or underwritten, as the case may be, by
them and not joint.
(e) The obligations of the Company under this Section 6 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each officer, director and partner of any
Holder, agent or underwriter and each person, if any, who controls any Holder,
agent or underwriter within the
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meaning of the Securities Act; and the obligations of the Holders and any
underwriters contemplated by this Section 6 shall be in addition to any
liability which the Holders or any underwriter may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of the
Company (including any person who, with his consent, is named in any
registration statement as about to become a director of the Company) and to each
person, if any, who controls the Company within the meaning of the Securities
Act.
7. Underwritten Offerings.
(a) Selection of Underwriters. If any of the Registrable Securities
covered by any registration statement filed pursuant to Section 2(a) hereof are
to be sold pursuant to an underwritten offering, the managing underwriter or
underwriters thereof shall be designated by the Company, provided that such
designated managing underwriter or underwriters is or are reasonably acceptable
to the Holders of a majority of the Registrable Securities so to be offered.
(b) Participation by Holders. Each Holder hereby agrees that it may not
participate in any underwritten offering hereunder unless it (i) agrees to sell
its Registrable Securities on the basis provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
8. Rule 144.
The Company covenants to and with each Holder of Registrable Securities
that to the extent it shall be required to do so under the Exchange Act, the
Company shall timely file the reports required to be filed by it under the
Exchange Act or the Securities Act (including, but not limited to, the reports
under Section 13 and 15(d) of the
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Exchange Act referred to in subparagraph (c)(1) of Rule 144 adopted by the
Commission under the Securities Act) and the rules and regulations adopted by
the Commission thereunder, and shall take such further action as any Holder may
reasonably request, all to the extent required from time to time to enable the
Holders to sell Registrable Securities without registration under the Securities
Act within the limitations of the exemption provided by Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission. Upon the request of any
Holder of Registrable Securities, the Company shall deliver to such Holder a
written statement as to whether it has complied with such requirements.
9. Miscellaneous.
(a) No Inconsistent Agreements. The Company covenants and agrees that
it shall not (i) grant registration rights with respect to any class of Common
Stock or any other securities which would be inconsistent with the terms
contained in this Agreement or (ii) enter into or become bound by, or permit any
subsidiary of the Company to enter into or become bound by, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument which
would prohibit, be violated by, conflict with or provide that a default would
arise from, the compliance by the Company with any of the provisions of this
Agreement or the consummation of the transactions herein contemplated, except
for any such prohibitions, violations, conflicts or defaults as, individually
and in the aggregate, would not have a material adverse effect on the financial
condition, results of operations, business or prospects of the Company and its
subsidiaries and would not materially hinder or delay the exercise by the
Holders of their rights hereunder. The Company represents and warrants that it
is not currently a party to any agreement with respect to any of its equity or
debt securities granting any registration rights to any person, other than the
Existing Registration Agreements.
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(b) Specific Performance. The Company acknowledges that it would be
impossible to determine the amount of damages that would result from any breach
by it of any of the provisions of this Agreement and that the remedy at law for
any breach, or threatened breach, of any of such provisions would likely be
inadequate and, accordingly, agrees that each Holder shall, in addition to any
other rights or remedies which it may have, be entitled to seek such equitable
and injunctive relief as may be available from any court of competent
jurisdiction to compel specific performance of, or restrain the Company from
violating any of, such provisions. In connection with any action or proceeding
for injunctive relief, the Company hereby waives the claim or defense that a
remedy at law alone is adequate and agrees, to the maximum extent permitted by
law, to have each provision of this Agreement specifically enforced against it,
without the necessity of posting bond or other security against it.
(c) Illegality. If any term or provision of this Agreement or any
application thereof shall be declared or held invalid, illegal or unenforceable,
in whole or in part, whether generally or in any particular jurisdiction, such
provision shall be deemed amended to the extent, but only to the extent,
necessary to cure such invalidity, illegality or unenforceability, and the
validity, legality and enforceability of the remaining provisions, both
generally and in every other jurisdiction, shall not in any way be affected or
impaired thereby.
(d) Recovery of Litigation Costs. Except as otherwise expressly
provided herein to the contrary, in the event any dispute between the parties to
this Agreement shall result in litigation, arbitration or other proceeding, the
prevailing party shall be entitled to recover from the losing party all
reasonable costs and expenses, including without limitation reasonable
attorneys' fees and disbursements, incurred by the prevailing party in
connection with such litigation or other proceeding and any appeal thereof. Such
costs, expenses, fees and disbursements shall be included in and made a part of
the judgment recovered by the prevailing party, if any.
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(e) Notices. All notices, requests, claims, demands, waivers and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered by hand, when delivered personally or by courier,
three days after being deposited in the mail (registered or certified mail,
postage prepaid, return receipt requested), or when received by facsimile
transmission if promptly confirmed by one of the foregoing means, as follows: If
to the Company, to it at 1075 First Avenue, King of Prussia, Pennsylvania 19406,
Attention: President, facsimile no. (610)265-1730, and if to a Holder, to the
address or facsimile transmission number of such Holder set forth in the
security register or other records of the Company, or to such other address or
facsimile transmission number as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
(f) Parties in Interest. All the terms and provisions of this Agreement
shall be binding upon, shall inure to the benefit of and shall be enforceable by
the parties hereto and their respective successors and assigns, but, except as
set forth in this Section 9(f), no such term or provision is for the benefit of,
or intended to create any obligations to, any other persons. In the event that
any transferee of SOFTBANK, TMCT Ventures, L.P. or any other Holder shall
acquire Registrable Securities, in any manner, whether by gift, bequest,
purchase, operation of law or otherwise, such transferee shall, without any
further writing or action of any kind, be deemed a party hereto for all purposes
and such Registrable Securities shall be held subject to all of the terms of
this Agreement, and by taking and holding such Registrable Securities, such
transferee shall be entitled to receive the benefits of and be conclusively
deemed to have agreed to be bound by and to perform all of the terms and
provisions of this Agreement; provided, however, that no such transferee shall
receive such benefits (or be deemed to have agreed to be bound by and to perform
such terms and provisions) unless, immediately after giving effect to such
transfer, and taking into account any Registrable Securities held by such
transferee prior to such transfer as well as the Registrable
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Securities acquired by such transferee in such transfer, such transferee owns at
least 300,000 shares of Common Stock (appropriately adjusted for any stock
split, reverse stock split or stock dividend) or an equivalent number of
Registrable Securities other than Common Stock. If the Company shall so request,
any such successor, assign or transferee shall agree in writing to acquire and
hold the Registrable Securities subject to all of the terms hereof. Any Holder
effecting a transfer to a transferee that acquires any rights or benefits under
this Agreement as a result of such transfer shall, prior to or promptly after
such transfer is made, give written notice to the Company of such transfer,
specifying the number of Registrable Securities transferred and identifying the
transferee.
(g) Survival. The respective indemnities, agreements, representations,
warranties and each other provision set forth in this Agreement or made pursuant
hereto shall remain in full force and effect regardless of any investigation (or
statement as to the results thereof) made by or on behalf of any Holder, any
director, officer, partner or employee of any Holder, any agent or underwriter
or any director, officer, partner or employee thereof, or any controlling person
of any of the foregoing, and shall survive delivery of and payment for the
Common Stock purchased pursuant to the Purchase Agreements, and delivery of the
Common Stock upon exercise of the Warrants, and the transfer and registration of
Registrable Securities by any Holder.
(h) LAW GOVERNING. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO THE CONFLICT
OF LAWS PROVISIONS THEREOF.
(i) Headings. The descriptive headings of the several Sections and
paragraphs of this Agreement are inserted for convenience only, do not
constitute a part of this Agreement and shall not affect in any way the meaning
or interpretation of this Agreement.
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<PAGE>
(j) Entire Agreement; Amendments. This Agreement and the other writings
referred to herein or delivered pursuant hereto which form a part hereof contain
the entire understanding of the parties with respect to its subject matter. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to its subject matter. This Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively) only by a written
instrument duly executed by the Company and the Holders of more than 50 percent
of the Registrable Securities at the time outstanding. Each Holder of any
Registrable Securities at the time or thereafter outstanding shall be bound by
any amendment or waiver effected pursuant to this Section 9(h), whether or not
any notice, writing or marking indicating such amendment or waiver appears on
such Registrable Securities or is delivered to such Holder. The entry by the
Company into any contract, agreement or understanding that directly or
indirectly gives to any person the right to register, or cause the Company to
register, any securities of the Company under the Securities Act on terms more
favorable to such person than those set forth herein shall require written
approval by the Holders of more than 50 percent of the Registrable Securities at
the time outstanding.
(k) Inspection. For so long as this Agreement shall be in effect, this
Agreement and a complete list of the names and addresses of all the Holders of
Registrable Securities shall be made available for inspection and copying on any
business day by any Holder of Registrable Securities at the offices of the
Company at the address thereof set forth in Section 9(e) above.
(l) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed as of the date first written above.
GLOBAL SPORTS, INC.
By:
---------------------------
Name:
Title:
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SOFTBANK CAPITAL PARTNERS LP
By: Softbank Capital Partners LLC
Its General Partner
By:
---------------------------
Name:
Title:
SOFTBANK CAPITAL ADVISORS FUND LP
By: Softbank Capital Partners LLC
Its General Partner
By:
---------------------------
Name:
Title:
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<PAGE>
TMCT VENTURES, L.P.
By:
---------------------------
Name:
Title:
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RESTATED VOTING AGREEMENT
THIS RESTATED VOTING AGREEMENT is made and entered into as of May 1,
2000 (this "Agreement") between SOFTBANK Capital Partners LP, a Delaware limited
partnership ("SOFTBANK Capital Partners"), SOFTBANK Capital Advisors Fund LP, a
Delaware limited partnership ("SOFTBANK Advisors" and, together with SOFTBANK
America and SOFTBANK Capital Partners, "SOFTBANK"), and Michael G. Rubin (the
"Principal Stockholder"). This Agreement amends and restates the Voting
Agreement dated as of June 10, 1999 (the "Prior Agreement"), between SOFTBANK
America Inc. ("SOFTBANK America") and the Principal Stockholder.
The Prior Agreement is hereby terminated in its entirety and restated
herein. Such termination and restatement is effective upon execution of this
Agreement by the parties listed on the signature page hereto.
RECITALS
WHEREAS, on June 10, 1999, Global Sports, Inc., a Delaware corporation
(the "Company"), and SOFTBANK America entered into a purchase agreement pursuant
to which SOFTBANK America acquired 6,153,850 shares of the Company's common
stock, par value $0.01 per share (the "Common Stock");
WHEREAS, SOFTBANK America subsequently assigned its 6,153,850 shares of
Common Stock of the Company to SOFTBANK Capital Partners and SOFTBANK Advisors;
WHEREAS, on April 27, 2000, the Company, SOFTBANK Capital Partners and
SOFTBANK Advisors entered into a purchase agreement (the "Purchase Agreement"),
pursuant to which SOFTBANK intends to acquire an additional 2,500,000 shares of
the Company's Common Stock; and
WHEREAS, as an inducement and a condition to consummating the Purchase
Agreement, SOFTBANK has required that the Principal Stockholder agree, and the
Principal Stockholder has agreed, to enter into this Agreement.
<PAGE>
NOW, THEREFORE, in consideration of the covenants set forth herein, and
for other good and valuable consideration, intending to be legally bound hereby,
the parties agree as follows:
1. Definitions. For purposes of this Agreement:
(a) "Beneficially Own" or "Beneficial Ownership" with respect to any
securities shall mean having "beneficial ownership" of such securities (as
determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), including pursuant to any agreement, arrangement
or understanding, whether or not in writing. Without duplicative counting of the
same securities by the same holder, securities Beneficially Owned by a Person
shall include securities Beneficially Owned by all other Persons with whom such
Person would constitute a "group" within the meaning of Section 13(d)(3) of the
Exchange Act.
(b) "Person" shall mean an individual, corporation, partnership,
limited liability company, joint venture, association, trust, unincorporated
organization or other entity.
2. Stockholder Meetings.
2.1 Stockholder Votes. The Principal Stockholder agrees that it shall,
at any meeting of stockholders of the Company, however called, or in connection
with any written consent of stockholders of the Company, vote (or cause to be
voted) the shares (if any) of capital stock of the Company (the "Capital Stock")
then held of record or Beneficially Owned by such Principal Stockholder, (i)
against any action or agreement that would result in a breach in any respect of
any covenant, representation or warranty or any other obligation or agreement of
the Company under the Purchase Agreement; (ii) in favor of election to the Board
of Directors of the directors which SOFTBANK is entitled to designate upon
consummation of the Purchase Agreement and which have been identified by
SOFTBANK as nominees for such purpose; and (iii) except as otherwise agreed to
in writing
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in advance by SOFTBANK, against the following actions (other than the Purchase
(as defined in the Purchase Agreement) and the transactions contemplated by the
Purchase Agreement): (A) a dissolution of the Company or (B) any material change
in the present capitalization of the Company or any amendment of the Company's
Certificate of Incorporation or By-laws, in each case, which is intended, or
could reasonably be expected, to impede, delay or adversely affect the Purchase
and the transactions contemplated by this Agreement and the Purchase Agreement.
The Principal Stockholder agrees that it shall not enter into any agreement or
understanding with any Person the effect of which would be inconsistent or
violative of the provisions and agreements contained in this Section 2.
2.2 Irrevocable Proxy. The Principal Stockholder, in furtherance of the
transactions contemplated hereby and by the Purchase Agreement, and in order to
secure the performance by the Principal Stockholder of its duties under this
Agreement, shall, if and when requested by SOFTBANK, promptly execute and
deliver to SOFTBANK an irrevocable proxy, substantially in the form of Exhibit A
hereto, and irrevocably appoint Purchaser or its designees, with full power of
substitution, its attorney, agent and proxy to vote (or cause to be voted) or,
if applicable, to give consent with respect to, all of the shares of Common
Stock Beneficially Owned by such Principal Stockholder, together with any shares
acquired by such Principal Stockholder in any capacity after the date hereof in
the manner, and with respect to the matters, set forth in Section 2.1 hereof.
The Principal Stockholder acknowledges that the proxy executed and delivered by
it shall be coupled with an interest, shall constitute, among other things, an
inducement for SOFTBANK to enter into the Purchase Agreement, shall be
irrevocable and binding on any successor in interest of such Principal
Stockholder and shall not be terminated by operation of law upon the occurrence
of any event, including, without limitation, the death or incapacity of such
Principal Stockholder. Such proxy shall operate to revoke and render void any
prior proxy as to the shares heretofore granted by such Principal Stockholder.
Such proxy shall terminate on the Expiration Date.
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3. Composition and Nomination of Board of Directors.
3.1 Board Composition Requirements. The parties hereto intend that the
Board of Directors of the Company shall consist of seven (7) members. SOFTBANK
shall have the right, (i) (A) so long as SOFTBANK and the SOFTBANK Entities (as
defined in the Purchase Agreement) collectively own 50% or more of the Common
Stock (on an as if exercised basis) held immediately after consummation of the
Purchase (as defined in the Purchase Agreement), to designate three (3) members
of the Company's Board of Directors, (B) so long as SOFTBANK and the SOFTBANK
Entities collectively own 25% or more of the Common Stock (on an as if exercised
basis) held immediately after consummation of the Purchase, to designate two (2)
members of the Company's Board of Directors, and (C) so long as SOFTBANK and the
SOFTBANK Entities collectively own 5% or more of the Common Stock (on an as if
exercised basis) held immediately after consummation of the Purchase, to
designate one (1) member of the Company's Board of Directors (collectively, the
"Board Composition Requirement"); and (ii) so long as SOFTBANK and the SOFTBANK
Entities collectively own 35% or more of the Common Stock (on an as if exercised
basis) held immediately after consummation of the Purchase, to designate one (1)
member of each committee of the Company's Board of Directors. At any meeting of
stockholders at which directors are to be elected and with respect to any
written consent of stockholders of the Company in lieu of meeting relating to
the election of directors, the Principal Stockholder shall vote, or execute and
deliver a written consent with respect to, all shares of Common Stock and any
other voting securities of the Company held of record or Beneficially Owned by
it in favor of a slate of directors meeting the Board Composition Requirement
and nominated as contemplated by Section 3.2 hereof and against any slate of
directors that does not satisfy the Board Composition Requirements or the
nomination procedures contemplated by Section 3.2.
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3.2 Nominating Procedures. In connection with each meeting of
stockholders of the Company at which directors of the Company are to be elected,
the parties hereto shall cause their designees on the Board to nominate a slate
of nominees for director which meets the Board Composition Requirements for so
long as this Agreement remains in effect.
The nominees so selected by the Board of Directors shall be presented
and voted upon at the meeting of stockholders as a slate.
3.3 Removal of Directors. Except as otherwise provided in this Section
3.3, the Principal Stockholder agrees not to take any action to remove, with or
without cause, any director of the Company designated by SOFTBANK.
Notwithstanding the foregoing, SOFTBANK shall at all times have the right to
remove and to cause the Principal Stockholder to remove, with or without cause,
any or all of the directors designated by SOFTBANK.
3.4 Vacancies. If a vacancy is created on the Board of Directors by
reason of the death, disability, removal or resignation of any one of the
directors, the Principal Stockholder shall promptly take all necessary and
appropriate action, including, to the extent it has power to do so, calling a
special meeting of stockholders or executing a written consent of stockholders
in lieu of meeting and voting, or executing and delivering a written consent
with respect to, the shares of Common Stock and any other voting securities of
the Company then held of record or Beneficially Owned in such a manner to ensure
that such vacancy is filled in a manner consistent with the Board Composition
Requirements.
4. Action to Reconstitute Board of Directors. If at any time and for any
reason the Board of Directors shall fail to satisfy the Board Composition
Requirements, then, at the written request of SOFTBANK, the Principal
Stockholder shall, to the extent it has power to do so, cause to be called a
special meeting of the stockholders to be held for the purpose of taking
whatever action may be necessary to
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<PAGE>
ensure that the Board is constituted so as to satisfy the Board Composition
Requirements as promptly as practicable.
5. Certificate of Incorporation and Bylaws. The Principal Stockholder
shall vote all shares of Common Stock and any other voting securities of the
Company then held of record or Beneficially Owned and shall take all other
actions necessary and appropriate (including, without limitation, removing any
director) to ensure that the Company's Certificate of Incorporation and Bylaws
do not at any time conflict with the provisions of this Agreement.
6. No Transfer of Capital Stock. The Principal Stockholder hereby agrees
that during the period ending six (6) months after the date hereof, such
Principal Stockholder shall not sell, transfer or pledge his Capital Stock to
another Person or otherwise engage in any act which would decrease the Principal
Stockholder's percentage of Common Stock ownership on the date hereof
("Dispose"), except if such sale, transfer or pledge is consummated in
accordance with Rule 144 under the Securities Act of 1933, as amended. In
addition, the Principal Stockholder shall not Dispose of his Capital Stock,
except, if the transferee agrees in writing to be bound by the provisions of
this Agreement.
7. Miscellaneous.
7.1 Modification and Waiver. No amendment or modification of the terms
or provisions of this Agreement shall be binding unless the same shall be in
writing and duly executed by the parties hereto. No waiver of any of the
provisions of this Agreement shall be deemed to or shall constitute a waiver of
any other provisions hereof. No delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof.
7.2 Entire Agreement. This Agreement sets forth the entire
understanding of the parties with respect to the subject matter hereof. Any
previous agreement or understandings between the parties regarding the subject
matter hereof are merged into and superseded by this Agreement.
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7.3 Severability. In case any provision in this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
7.4 No Implied Rights. Nothing herein, express or implied, is intended
to or shall be construed to confer upon or give to any person, firm, corporation
or legal entity, other than the parties hereto, any interest, rights, remedies
or other benefits with respect to or in connection with any agreement or
provision contained herein or contemplated hereby.
7.5 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without regard to the conflict
of law provisions thereof.
7.6 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same instrument.
7.7 Successors and Assigns. The provisions hereof shall inure to the
benefit of, and be binding upon, the successors, assigns, heirs, executors and
administrators of the parties hereto.
7.8 Notices. All notices and other communications under this Agreement
shall be in writing, and shall be deemed to have been duly given on the date of
delivery if delivered personally or on the third business day after mailing or
if mailed to the party to whom notice is to be given by first class mail,
registered or certified, postage prepaid, return receipt requested, and
addressed as follows (until any such address is changed by notice duly given):
-7-
<PAGE>
(a) if to SOFTBANK, to:
c/o SOFTBANK Capital Partners LP
10 Langley Road, Suite 403
Newton Center, Massachusetts 02169
Facsimile: (617) 928-9301
Attention: Administrative Member
with a copy to:
Sullivan & Cromwell
1888 Century Park East
21st Floor
lOS Angeles, California 90067-1725
Telephone: (310) 712-6650
Facsimile: (310) 712-8800
Attention: John L. Savva, Esq.
(b) if to the Principal Stockholder, to:
Global Sports, Inc.
1075 First Avenue
King of Prussia, Pennsylvania 19406
Telephone: (610) 265-3229
Facsimile: (610) 265-1730
Attention: Michael G. Rubin
with a copy to:
Blank Rome Comisky & McCauley LLP
One Logan Square
Philadelphia, Pennsylvania 19103
Telephone: (215) 569-5532
Facsimile: (215) 569-5628
Attention: Francis E. Dehel, Esq.
-8-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
SOFTBANK CAPITAL PARTNERS LP
By: SOFTBANK Capital Partners LLC
Its General Partner
By:
------------------------------
Name:
Title:
SOFTBANK CAPITAL ADVISORS FUND LP
By: SOFTBANK Capital Partners LLC
Its General Partner
By:
------------------------------
Name:
Title:
---------------------------------
MICHAEL G. RUBIN
-9-
<PAGE>
EXHIBIT A
Irrevocable Proxy
In order to secure the performance of the duties of the undersigned
pursuant to the Voting Agreement, dated as of May 1, 2000 (the "Voting
Agreement"), between the undersigned, SOFTBANK Capital Partners LP and SOFTBANK
Capital Advisors Fund LP, the undersigned hereby irrevocably appoints Ronald D.
Fisher and Steven Murray, and each of them, the attorneys, agents and proxies,
with full power of substitution in each of them, for the undersigned, and in the
name, place and stead of the undersigned, to vote (or cause to be voted) or, if
applicable, to give consent, in such manners each such attorney, agent and proxy
or his substitute shall in his sole discretion deem proper to record such vote
(or consent) in the manner, and with respect to the matters, set forth in
Section 2 of the Voting Agreement with respect to all shares of Common Stock and
voting securities of Global Sports, Inc., a Delaware corporation (the
"Company"), which the undersigned is or may be entitled to vote at any meeting
of the Company held after the date hereof, whether annual or special and whether
or not an adjourned meeting, or if applicable, to given written consent with
respect thereto. This Proxy is coupled with an interest, shall be irrevocable
and binding on any successor in interest of the undesigned and shall not be
terminated by operation of law upon the occurrence of any event, including,
without limitation, the death or incapacity of the undersigned. This Proxy shall
operate to revoke and render void any prior proxy as to the shares of Common
Stock and voting securities heretofore granted by the undersigned.
-------------------------
Michael G. Rubin
-10-
RESTATED VOTING AGREEMENT
THIS RESTATED VOTING AGREEMENT is made and entered into as of May 1,
2000 (this "Agreement") between SOFTBANK Capital Partners LP, a Delaware limited
partnership ("SOFTBANK Capital Partners"), SOFTBANK Capital Advisors Fund LP, a
Delaware limited partnership ("SOFTBANK Advisors" and, together with SOFTBANK
Capital Partners, "SOFTBANK"), and Michael G. Rubin (the "Principal
Stockholder"). This Agreement amends and restates the Voting Agreement, dated as
of June 10, 1999 (the "Prior Agreement"), between SOFTBANK America Inc.
("SOFTBANK America") and the Principal Stockholder.
The Prior Agreement is hereby terminated in its entirety and restated
herein. Such termination and restatement is effective upon execution of this
Agreement by the parties listed on the signature page hereto.
RECITALS
WHEREAS, on June 10, 1999, Global Sports, Inc., a Delaware corporation
(the "Company"), and SOFTBANK America entered into a purchase agreement,
pursuant to which SOFTBANK America acquired 6,153,850 shares of the Company's
common stock, par value $0.01 per share (the "Common Stock");
WHEREAS, SOFTBANK America subsequently assigned its 6,153,850 shares of
the Company's Common Stock to SOFTBANK Capital Partners and SOFTBANK Advisors;
WHEREAS, on April 27, 2000, the Company, SOFTBANK Capital Partners and
SOFTBANK Advisors entered into a purchase agreement (the "Purchase Agreement"),
pursuant to which SOFTBANK Capital Partners and SOFTBANK Advisors intend to
acquire, in the aggregate, an additional 2,500,000 shares of the Company's
Common Stock; and
WHEREAS, as an inducement and a condition to consummating the Purchase
Agreement, the Principal Stockholder has required that SOFTBANK agree, and
SOFTBANK has agreed, to enter into this Agreement.
NOW, THEREFORE, in consideration of the covenants set forth herein, and
for other good and valuable
<PAGE>
consideration, intending to be legally bound hereby, the parties agree as
follows:
1. Definitions. For purposes of this Agreement:
(a) "Beneficially Own" or "Beneficial Ownership" with respect to any
securities shall mean having "beneficial ownership" of such securities (as
determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), including pursuant to any agreement, arrangement
or understanding, whether or not in writing. Without duplicative counting of the
same securities by the same holder, securities Beneficially Owned by a Person
shall include securities Beneficially Owned by all other Persons with whom such
Person would constitute a "group" within the meaning of Section 13(d)(3) of the
Exchange Act.
(b) "Continuing Director" shall initially mean Michael Rubin, Jeffrey
Rayport and Harvey Lamb, and any director who is thereafter chosen to fill any
vacancy on the Board of Directors or who is elected as a director and who, in
either event, is not a director designated by (i) SOFTBANK pursuant to Section
5.2 of the Purchase Agreement or (ii) TMCT Ventures, L.P. pursuant to Section
5.2 of the Stock Purchase Agreement, dated April 27, 2000, between the Company
and TMCT Ventures, L.p., and in connection with his or her initial assumption of
office is recommended for appointment or election by a majority of the
Continuing Directors then on the Board of Directors.
(c) "Person" shall mean an individual, corporation, partnership,
limited liability company, joint venture, association, trust, unincorporated
organization or other entity.
2. Composition and Nomination of Board of Directors.
2.1 Board Composition Requirements. At any meeting of stockholders at
which directors are to be elected and with respect to any written consent of
stockholders of the Company in lieu of a meeting relating to the election of
directors, SOFTBANK shall vote, or execute and deliver a written consent with
respect to, all shares of Common Stock
-2-
<PAGE>
and any other voting securities of the Company held of record or Beneficially
Owned by it with respect to all directorships other than those which SOFTBANK is
entitled to designate pursuant to Section 5.1 of the Purchase Agreement(the
"SOFTBANK Designees"), (a) in favor of the Continuing Directors at such time and
(b) against the election of any directors other than the Continuing Directors.
2.2 Removal of Directors. Except as otherwise provided in this Section
2.2, SOFTBANK agrees not to take any action to remove, with or without cause,
any director of the Company other than the SOFTBANK Designees. Notwithstanding
the foregoing, the Principal Stockholder shall at all times have the right to
remove and to cause SOFTBANK to remove, with or without cause, any or all of the
directors other than the SOFTBANK Designees.
2.3 Vacancies. If a vacancy in the office of a Continuing Director is
created on the Board of Directors by reason of the death, disability, removal or
resignation of any one of the Continuing Directors, SOFTBANK shall promptly take
all necessary and appropriate action, including voting, or executing and
delivering a written consent with respect to, the shares of Common Stock and any
other voting securities of the Company then held of record or Beneficially Owned
by SOFTBANK in such a manner to ensure that such vacancy is filled with a
Continuing Director.
3. Certificate of Incorporation and Bylaws. SOFTBANK shall vote all shares
of Common Stock and any other voting securities of the Company then held of
record or Beneficially Owned and shall take all other actions necessary and
appropriate (including, without limitation, voting to remove any director) to
ensure that the Company's Certificate of Incorporation and Bylaws do not at any
time conflict with the provisions of this Agreement.
4. Miscellaneous.
4.1 Modification and Waiver. No amendment or modification of the terms
or provisions of this Agreement shall be binding unless the same shall be in
writing and duly executed by the parties hereto. No waiver of any of
-3-
<PAGE>
the provisions of this Agreement shall be deemed to or shall constitute a waiver
of any other provisions hereof. No delay on the part of any party in exercising
any right, power or privilege hereunder shall operate as a waiver thereof.
4.2 Entire Agreement. This Agreement sets forth the entire
understanding of the parties with respect to the subject matter hereof. Any
previous agreement or understandings between the parties regarding the subject
matter hereof are merged into and superseded by this Agreement.
4.3 Severability. In case any provision in this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
4.4 No Implied Rights. Nothing herein, express or implied, is intended
to or shall be construed to confer upon or give to any person, firm, corporation
or legal entity, other than the parties hereto, any interest, rights, remedies
or other benefits with respect to or in connection with any agreement or
provision contained herein or contemplated hereby.
4.5 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without regard to the conflict
of laws provisions thereof.
4.6 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same instrument.
4.7 Successors and Assigns. The provisions hereof shall inure to the
benefit of, and be binding upon, the successors, assigns, heirs, executors and
administrators of the parties hereto.
4.8 Notices. All notices and other communications under this Agreement
shall be in writing, and shall be deemed to have been duly given on the date of
delivery if delivered personally or on the third business
-4-
<PAGE>
day after mailing or if mailed to the party to whom notice is to be given by
first class mail, registered or certified, postage prepaid, return receipt
requested, and addressed as follows (until any such address is changed by notice
duly given):
(a) if to SOFTBANK, to:
c/o SOFTBANK Capital Partners LP
10 Langley Road, Suite 403
Newton Center, Massachusetts 02459
Facsimile No.: (617) 928-9301
Attention: Administrative Member
with a copy to:
Sullivan & Cromwell
1888 Century Park East
21st Floor
Los Angeles, California 90067-1725
Telephone: (310) 712-6650
Telecopier: (310) 712-8800
Attention: John L. Savva, Esq.
(b) if to the Principal Stockholder, to:
Global Sports, Inc.
1075 First Avenue
King of Prussia, Pennsylvania 19406
Telephone: (610) 265-3229
Facsimile: (610) 265-1730
Attention: Michael G. Rubin
with a copy to:
Blank Rome Comisky McCauley LLP
One Logan Square
Philadelphia, Pennsylvania 19103
Telephone: (215) 569-5532
Facsimile: (215) 569-5628
Attention: Francis E. Dehel, Esq.
-5-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
SOFTBANK CAPITAL PARTNERS LP
By: Softbank Capital Partners LLC
Its General Partner
By:
-------------------------------
Name:
Title:
SOFTBANK CAPITAL ADVISORS FUND LP
By: Softbank Capital Partners LLC
Its General Partner
By:
-------------------------------
Name:
Title:
----------------------------------
MICHAEL G. RUBIN
-6-
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED. SUCH SECURITIES AND ANY SECURITIES OR SHARES ISSUED
HEREUNDER MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
AN EXEMPTION THEREFROM UNDER SAID ACT.
No. WC-1 Warrant to Purchase Shares of
Common Stock (subject
to adjustment)
WARRANT TO PURCHASE COMMON STOCK
OF
GLOBAL SPORTS, INC.
VOID AFTER APRIL 30, 2003
This certifies that, for value received, receipt and sufficiency of
which are hereby acknowledged, SOFTBANK Capital Partners LP, or its registered
assigns (the "Holder"), is entitled, subject to the terms and conditions set
forth below, to purchase from Global Sports, Inc., a Delaware corporation (the
"Company"), 1,232,125 (the "Warrant Number") validly issued, fully paid and
nonassessable shares (the "Warrant Shares") of Common Stock of the Company (the
"Common Stock") at a purchase price equal to $10.00 per share (the "Exercise
Price").
The term "Warrant" as used herein shall mean this Warrant, and any
warrants delivered in substitution or exchange therefor as provided herein.
1. Term of Warrant. Subject to the terms and conditions set forth
herein, this Warrant shall be exercisable, in whole or in part, during the term
commencing on May 1, 2000, and ending on April 30, 2003 (the "Exercise Period").
2. Exercise of Warrant. (a) This Warrant may be exercised by the Holder
by (i) the surrender of this Warrant to the Company, with the Notice of Exercise
annexed hereto duly
<PAGE>
completed and executed on behalf of the Holder, at the office of the Company (or
such other office or agency of the Company as it may designate by notice in
writing to the Holder at the address of the Holder appearing on the books of the
Company) during the Exercise Period, (ii) the Holder's execution of such
documents as the Company requires to purchase the Common Stock, and (iii) the
delivery of payment to the Company, for the account of the Company, by cash,
wire transfer of immediately available funds to a bank account specified by the
Company, or by certified or bank cashier's check, of the Exercise Price for the
number of Warrant Shares specified in the Notice of Exercise in lawful money of
the United States of America.
(b) The Company agrees that such Warrant Shares shall be deemed to be
issued to the Holder as the record holder of such Warrant Shares as of the close
of business on the date on which this Warrant shall have been surrendered and
payment made for the Warrant Shares as aforesaid. A stock certificate or
certificates for the Warrant Shares specified in the Notice of Exercise shall be
delivered to the Holder as promptly as practicable, and in any event within ten
(10) days thereafter. If this Warrant shall have been exercised only in part,
the Company shall, at the time of delivery of the stock certificate or
certificates, deliver to the Holder a new Warrant evidencing the rights to
purchase the remaining Warrant Shares, which new Warrant shall in all other
respects be identical with this Warrant. No adjustments shall be made on Warrant
Shares issuable on the exercise of this Warrant for any cash dividends paid or
payable to holders of record of Common Stock prior to the date as of which the
Holder shall be deemed to be the record holder of such Warrant Shares.
3. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. In lieu of any fractional share to which the Holder would otherwise be
entitled, the Company shall make a cash payment equal to the Exercise Price
multiplied by such fraction.
4. Replacement of Warrant. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and substance to the Company
or, in the case of mutilation, on surrender and cancellation of this Warrant,
the Company at its expense shall
2
<PAGE>
execute and deliver, in lieu of this Warrant, a new warrant of like tenor and
amount.
5. Rights of Stockholders. Subject to Section 8 hereof, the Holder
shall not be entitled to vote or receive dividends or be deemed the holder of
Common Stock or any other securities of the Company that may at any time be
issuable on the exercise hereof for any purpose, nor shall anything contained
herein be construed to confer upon the Holder, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action (whether upon any recapitalization,
issuance of stock, reclassification of stock, change of par value, or change of
stock to no par value, consolidation, merger, conveyance, or otherwise) or to
receive notice of meetings, or to receive dividends or subscription rights or
otherwise until the Warrant shall have been exercised as provided herein.
6. Antidilution Provisions. The Exercise Price and the Warrant Number
shall be subject to adjustment from time to time as provided in this Section 6.
(a) In case the Company shall pay or make a dividend or other
distribution on any class of capital stock of the Company in Common Stock, the
Exercise Price in effect immediately prior to the opening of business on the
next Business Day following the date fixed for determination of stockholders
entitled to receive such dividend or other distribution shall be reduced by
multiplying such Exercise Price by a fraction of which the numerator shall be
the number of shares of Common Stock outstanding at the close of business on the
date fixed for such determination and the denominator shall be the sum of such
number of shares and the total number of shares constituting such dividend or
other distribution, such reduction to become effective immediately prior to the
opening of business on the next Business Day following the date fixed for such
determination. For the purposes of this paragraph (a), the number of shares of
Common Stock at any time outstanding shall include shares issuable in respect of
scrip certificates issued in lieu of fractions of shares of Common Stock.
(b) In case the Company shall hereafter issue rights, options or
warrants to all holders of its Common Stock entitling them to subscribe for or
purchase shares of Common Stock (such rights, options or warrants not being
available on an equivalent
3
<PAGE>
basis to Holders of the Warrants upon exercise) at a price per share less than
the Current Market Price (as defined in subsection (i) of this Section 6) of the
Common Stock on the date fixed for the determination of stockholders entitled to
receive such rights, options or warrants (other than pursuant to a dividend
reinvestment plan), (A) the Exercise Price in effect immediately prior to the
opening of business on the next Business Day following the date fixed for such
determination shall be reduced by multiplying the Exercise Price in effect
immediately prior to the close of business on the date fixed for the
determination of holders of Common Stock entitled to receive such rights,
options or warrants by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business on the date fixed
for such determination plus the number of shares of Common Stock which the
aggregate of the offering price of the total number of shares of Common Stock so
offered for subscription or purchase would purchase at such Current Market Price
and the denominator shall be the number of shares of Common Stock outstanding at
the close of business on the date fixed for such determination plus the number
of shares of Common Stock so offered for subscription or purchase, such
reduction to become effective immediately prior to the opening of business on
the next Business Day following the date fixed for such determination. For the
purposes of this clause 6(b), the number of shares of Common Stock at any time
outstanding shall include shares issuable in respect of scrip certificates
issued in lieu of fractions of shares of Common Stock, and (B) if any such
rights, options or warrants expire or terminate without having been exercised or
are exercised for a consideration different from that utilized in the
computation of any adjustment or adjustments on account of such rights, options
or warrants, the Exercise Price with respect to any Warrant not theretofore
exercised shall be readjusted such that the Exercise Price would be the same as
would have resulted had such adjustment been made without regard to the issuance
of such expired or terminated rights, options or warrants or based upon the
actual consideration received upon exercise thereof, as the case may be, which
readjustment shall become effective upon such expiration, termination or
exercise, as applicable; provided, however, that all readjustments in the
Exercise Price based upon any expiration, termination or exercise for a
different consideration of any such right, option or warrant, in the aggregate,
shall not cause the Exercise Price to exceed the Exercise Price immediately
prior to the time such rights, options or warrants were initially issued
(without regard to any other adjustments of such number under this
4
<PAGE>
clause 6(b) that may have been made since the date of the issuance of such
rights, options or warrants).
(c) In case the outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Exercise Price in effect
immediately prior to the opening of business on the next Business Day following
the day upon which such subdivision becomes effective shall be proportionately
reduced, and, conversely, in case outstanding shares of Common Stock shall each
be combined into a smaller number of shares of Common Stock, the Exercise Price
in effect immediately prior to the opening of business on the next Business Day
following the day upon which such combination becomes effective shall be
proportionately increased.
(d) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock evidences of its indebtedness or assets
(including securities, but excluding any rights, options or warrants referred to
in clause (b) of this Section 6, any dividend or distribution paid exclusively
in cash and any dividend referred to in clause (a) of this Section 6), the
Exercise Price shall be adjusted so that the same shall equal the price
determined by multiplying the Exercise Price in effect immediately prior to the
close of business on the date fixed for the determination of stockholders
entitled to receive such distribution by a fraction of which (A) the numerator
shall be the Current Market Price at the close of business on the date fixed for
such determination less the then fair market value of the portion of the assets
or evidences of indebtedness so distributed applicable to one share of Common
Stock (the amount calculated pursuant to this clause (A) being hereinafter
referred to as the "Adjusted Market Price") and (B) the denominator shall be
such Current Market Price, such adjustment to become effective immediately prior
to the opening of business on the next Business Day following the date fixed for
the determination of stockholders entitled to receive such distribution.
(e) The reclassification (including any reclassification upon a
consolidation or merger in which the Company is the continuing corporation, but
not including any transactions for which an adjustment is provided in paragraph
(i) below) of Common Stock into securities other than Common Stock shall be
deemed to involve (A) a distribution of such securities other than Common Stock
to all holders of Common Stock (and the effective date of such reclassification
shall be deemed to be "the date fixed for the determination of
5
<PAGE>
stockholders entitled to receive such distribution" and the "date fixed for such
determination" within the meaning of clause (d) of this Section 6), and (B) a
subdivision or combination, as the case may be, of the number of shares of
Common Stock outstanding immediately prior to such reclassification into the
number of shares of Common Stock outstanding immediately thereafter (and the
effective date of such reclassification shall be deemed to be "the day upon
which such subdivision becomes effective" or "the day upon which such
combination becomes effective", as the case may be, and "the day upon which such
subdivision or combination becomes effective" within the meaning of clause (c)
of this Section 6 above).
(f) The Company may make such reductions in the Exercise Price, in
addition to those required by paragraphs (a), (b), (c), (d) and (e) of this
Section 6, as it considers to be advisable in order that any event treated for
Federal income tax purposes as a dividend of stock or stock rights shall not be
taxable to the recipients.
(g) In case of any consolidation of the Company with, or merger of the
Company into, any other person, any merger of another person into the Company
(other than a merger which does not result in any reclassification, conversion,
exchange or cancellation of outstanding shares of the Common Stock) or any sale
or transfer of all or substantially all of the assets of the Company, at the
election of the Holder of the Warrant represented hereby, the person formed by
such consolidation or resulting from such merger or which acquires such assets,
as the case may be, shall execute and deliver to the Holder a new warrant
certificate, satisfactory in form and substance to the Holder, providing that
the Holder shall have the right thereafter, during the period such Warrant shall
be outstanding, to exercise such Warrant into the kind and amount (if any) of
securities, cash and other property receivable upon such consolidation, merger,
sale of transfer by a holder of the number of shares of Common Stock of the
Company into which such Warrant might have been converted immediately prior to
such consolidation, merger, sale or transfer. If the holders of the Common Stock
may elect from choices the kind or amount of securities, cash and other property
receivable upon such consolidation, merger, sale or transfer, then for the
purpose of this Section 6 the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, sale or transfer shall be
deemed to be the choice specified by the Holder, which specification shall be
made by the Holder by the later of (A) 10 Business Days after Holder is provided
with a
6
<PAGE>
final version of all information required by law or regulation to be furnished
to holders of Common Stock concerning such choice, or if no such information is
required, 10 Business Days after the Company notified the Holder of all material
facts concerning such specification and (B) the last time at which holders of
Common Stock are permitted to make their specification known to the Company. If
the Holder fails to make any specification, the Holder's choice shall be deemed
to be whatever choice is made by a plurality of holders of Common Stock not
affiliated with the Company or the other person to the merger or consolidation.
Such new Warrant shall provide for adjustments which, for events subsequent to
the effective date of such new Warrant, shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 6. The above
provisions of this paragraph (g) shall similarly apply to successive
consolidations, mergers, sales or transfers.
(h) Whenever there shall be any change in the Exercise Price under this
Section 6, then there shall be an adjustment (to the nearest thousandth of a
share) in the Warrant Number, which adjustment shall become effective at the
time such change in the Exercise Price becomes effective and shall be made by
multiplying the Warrant Number in effect immediately before such change in the
Exercise Price by a fraction the numerator of which is the Exercise Price
immediately before such change and the denominator of which is the Exercise
Price immediately after such change.
(i) For the purpose of any computation under clause (b), (d) or (e) of
this Section 6, the current market price per share of Common Stock (the "Current
Market Price") on any day shall be deemed to be the average of the daily closing
prices per share for the ten consecutive Trading Days (as defined below) ending
on the "earlier of the day in question and the day before the Ex Date (as
defined below) with respect to the issuance, payment or distribution or the date
of the expiration of the tender offer requiring such computation. For this
purpose, the term "Ex Date", when used with respect to any issuance or
distribution, shall mean the first date on which the Common Stock trades regular
way on the applicable securities exchange or in the applicable securities market
without the right to receive such issuance or distribution. "Trading Day" means
each Monday, Tuesday, Wednesday, Thursday and Friday, other than any day on
which the Common Stock is not traded on the applicable securities exchange or on
the applicable securities market. The closing price for each day shall be the
reported last sale price regular way or, in case no such reported sale takes
place on
7
<PAGE>
such day, the average of the reported closing bid and asked prices regular way,
in either case on the New York Stock Exchange or, if the Common Stock is not
listed or admitted to trading on such Exchange, on the principal national
securities exchange on which the Common Stock is listed or admitted to trading
or, if not listed or admitted to trading on any national securities exchange, on
the NASDAQ National Market or, if the Common Stock is not listed or admitted to
trading on any national securities exchange or quoted on the NASDAQ National
Market, the average of the closing bid and asked prices in the over-the-counter
market as furnished by any New York Stock Exchange member firm reasonably
selected from time to time by the Board for that purpose. For purposes of
Section 6, the term "Business Day" shall mean any day except a Saturday, Sunday
or any day on which banking institutions are authorized or required to close in
the city of New York, New York.
(j) No adjustment in the Exercise Price shall be required unless such
adjustment (plus any adjustments not previously made by reason of this Section
6(j)) would require an increase or decrease of at least 1% in such Exercise
Price; provided, however, that any adjustments which by reason of this Section
6(j) are not required to be made shall be carried forward and taken into account
in any subsequent adjustment. All calculations under this Section 6(j) shall be
made to the nearest cent or to the nearest 1/100 of a share of Common Stock, as
the case may be. Notwithstanding the foregoing, any adjustment required by this
Section 6(j) shall be made no later than the expiration of the right to exercise
the Warrant or a portion thereof.
(k) Whenever the Exercise Price is adjusted as herein provided:
(A) the Company shall compute the adjusted Exercise Price in accordance
with Section 6 and shall prepare a certificate signed by the treasurer of the
Company setting forth the adjusted Exercise Price and showing in reasonable
detail the facts upon which such adjustment is based, and such certificate shall
forthwith be filed with any transfer agent; and
(B) a notice stating that the Exercise Price has been adjusted and
setting forth the adjusted Exercise Price shall forthwith be required, and as
soon as practicable after it is required, such notice shall be mailed by the
Company to the Holder of the Warrant at its last address as shall appear in the
register required to be kept pursuant to Section 7 hereof.
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(l) In case:
(A) the Company shall declare a dividend or other distribution on its
Common Stock (other than a dividend payable exclusively in cash that would not
cause an adjustment to the Exercise Price to take place pursuant to Section 6
above);
(B) the Company or any of its subsidiaries shall make a tender offer
for the Common Stock;
(C) the Company shall authorize the granting to all Holders of its
Common Stock of rights, options or warrants to subscribe for or purchase any
shares of capital stock of any class;
(D) of any reclassification of the Common Stock (other than a
subdivision or combination of its outstanding shares of Common Stock), or of any
consolidation, merger or share exchange to which the Company is a party and for
which approval of any stockholders of the Company is required, or of the sale or
transfer of all or substantially all of the assets of the Company; or
(E) of the voluntary of involuntary dissolution, liquidation or winding
up of the Company;
then the Company shall cause to be filed with any warrant agent, and shall cause
to be mailed to the Holder of this Warrant at its last address as shall appear
in the register required to be kept for that purpose by Section 7 hereof, at
least 10 days prior to the effective date hereinafter specified, a notice
stating (x) the date on which a record has been taken for the purpose of such
dividend, distribution or grant of rights, options or warrants, or, if record is
not to be taken, the date as of which the identity of the holders of Common
Stock of record entitled to such dividend, distribution, rights, options or
warrants was determined, or (y) the date on which such reclassification,
consolidation, merger, share exchange, sale, transfer, dissolution, liquidation
or winding up is expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities, cash or other property deliverable
upon such reclassification, consolidation, merger, share exchange, sale,
transfer, dissolution, liquidation or winding up. Neither the failure to give
such notice nor any defect therein shall affect the legality or validity of the
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proceedings described in clauses (A) through (E) of this Section 6(n).
7. Transfer of Warrant.
(a) Warrant Register. The Company will maintain a register (the
"Warrant Register") containing the names and addresses of the Holder or Holders.
Any Holder of this Warrant or any portion thereof may change his address as
shown on the Warrant Register or transfer this Warrant in accordance with this
Warrant by written notice to the Company requesting such change. Any notice or
written communication required or permitted to be given to the Holder may be
delivered or given by mail to such Holder as shown on the Warrant Register and
at the address shown on the Warrant Register. Until receipt by the Company of
written notice from the Holder requesting a change of address or the transfer of
this Warrant, the Company may treat the Holder as shown on the Warrant Register
as the absolute owner of this Warrant for all purposes.
(b) Warrant Agent. The Company may, by written notice to the Holder,
appoint an agent for the purpose of maintaining the Warrant Register referred to
in Section 7(a) hereof, issuing the Common Stock or other securities then
issuable upon the exercise of this Warrant, exchanging this Warrant, replacing
this Warrant, or any or all of the foregoing. Thereafter, any such registration,
issuance, exchange, or replacement, as the case may be, shall be made at the
office of such agent.
(c) Transferability and Nonnegotiability of Warrant. This Warrant may
not be transferred or assigned in whole or in part without compliance with all
applicable federal and state securities laws by the transferor and the
transferee (including the delivery of investment representation letters and
legal opinions reasonably satisfactory to the Company, if such are requested by
the Company). Notwithstanding the foregoing, no investment representation letter
or opinion of counsel shall be required for any transfer of this Warrant (or any
portion thereof) or any shares of Common Stock issued upon exercise hereof (i)
in compliance with Rule 144 or Rule 144A of the Securities Act, or (ii) by gift,
will or intestate succession by the Holder to his or her spouse or lineal
descendants or ancestors or any trust for any of the foregoing; provided that in
each of the foregoing cases the transferee agrees in writing to be subject to
the terms of this Warrant. In addition, if the holder of the Warrant (or any
portion thereof) or any Common Stock issued upon exercise hereof delivers to the
Company an
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unqualified opinion of counsel that no subsequent transfer of such Warrant or
Common Stock shall require registration under the Securities Act, the Company
shall, upon such contemplated transfer, promptly deliver new
documents/certificates for such Warrant or Common Stock that do not bear the
legend set forth in Section 7(f)(ii) hereof. Subject to the provisions of this
Warrant with respect to compliance with the Securities Act, title to this
Warrant may be transferred by endorsement (by the Holder executing the
Assignment Form annexed hereto) and delivery in the same manner as a negotiable
instrument transferable by endorsement and delivery.
(d) Holder's Permitted Transfers. Holder may assign, in whole or in
part, its rights and delegate its obligations hereunder; provided that at the
time of transfer, such entity is an affiliate of Holder, including, without
limitation, any partnership or other entity of which an affiliate of Holder is a
general partner or has investment discretion. Any such assignee shall, as a
condition to acquiring such shares of Common Stock issued upon exercise hereof,
agree to be bound by the provisions of this Warrant pursuant to an agreement in
form and substance acceptable to the Company.
(e) Exchange of Warrant Upon a Transfer. On surrender of this Warrant
for transfer, properly endorsed on the Assignment Form and subject to the
provisions of this Warrant with respect to compliance with the Securities Act
and with the limitations on assignments and transfers and contained in this
Section 7, the Company at its expense shall issue, on the order of the Holder, a
new warrant or warrants of like tenor, in the name of the Holder (on payment by
the Holder of any applicable transfer taxes) may direct, for the number of
shares issuable upon exercise hereof.
(f) Compliance with Securities Laws.
(i) The Holder of this Warrant, by acceptance hereof, acknowledges that
this Warrant and the shares of Common Stock to be issued upon exercise hereof
are being acquired solely for the Holder's own account and for investment and
not as a nominee for any other party, and that the Holder will not offer, sell
or otherwise dispose of this Warrant or any shares of Common Stock to be issued
upon exercise hereof except under circumstances that will not result in a
violation of the Securities Act or any applicable state securities laws. Upon
exercise of this Warrant, the Holder shall, if requested by the Company, confirm
in writing, in a form satisfactory to the Company, that (a) the
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Holder is an accredited investor within the meaning of Rule 501 of Regulation D
and (b) the shares of Common Stock so purchased are being acquired solely for
the Holder's own account and for investment and not as a nominee for any other
party and not with a view toward distribution or resale.
(ii) This Warrant and all shares of Common Stock issued upon exercise
hereof shall be stamped or imprinted with a legend in substantially the
following form (in addition to any legend required by state securities laws):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. SUCH SECURITIES AND ANY SECURITIES
OR SHARES ISSUED HEREUNDER MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT.
(iii) The Company agrees to remove promptly, upon the request of the
holder of this Warrant and Securities issuable upon exercise of the Warrant, the
legend set forth in Section 7(e)(ii) hereof from the documents/certificates for
such securities upon full compliance with this Agreement and Rules 144 and 145.
8. Reservation of Stock. The Company covenants that during the term of
this Warrant, the Company will reserve a sufficient number of shares of
authorized and unissued Common Stock to provide for the issuance of Common
Stock, which shall be duly authorized, fully paid and non-assessable, upon the
exercise of this Warrant and, from time to time, will take all steps necessary
to amend its Certificate of Incorporation (the "Restated Certificate") to
provide sufficient reserves of shares of Common Stock issuable upon exercise of
the Warrant. The Company agrees that it will not, by amendment of its
Certificate of Incorporation or through reorganization, consolidation, merger,
dissolution or sale of assets, or by any other voluntary act, avoid or seek to
avoid the observance or performance of any other voluntary act, or avoid or seek
to avoid the observance or performance of any of the covenants, stipulations or
conditions to be observed or performed hereunder by the Company. The Company
further covenants that all shares that may be issued upon the exercise of this
Warrant, upon exercise of this Warrant and payment of the Exercise Price, all as
set forth herein, will be free from all taxes, liens and charges in respect of
the issue thereof (other than taxes in respect of any transfer occurring
contemporaneously or otherwise specified herein). The
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Company agrees that its issuance of this Warrant shall constitute full authority
to its officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for shares of Common Stock upon the
exercise of this Warrant.
9. Notices. Notices under this Warrant to the Company and the Holder
shall be provided in the manner, and to the addresses of the Company and the
Holder, set forth in the Registration Rights Agreement, dated May 1, 2000,
between the Company and the holders listed on the signature pages thereof (the
"Registration Rights Agreement").
10. Amendments. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought.
11. Registration Rights. Upon exercise of this Warrant, the Holder
shall have and be entitled to exercise, together with all other holders of
Registrable Securities possessing registration rights under the Registration
Rights Agreement as may be entered into with purchasers of the Common Stock,
between the Company and the parties who have executed the counterpart signature
pages thereto or are otherwise bound thereby, the rights of registration granted
under Section 2 of the Registration Rights Agreement to Registrable Securities
(with respect to the Warrant Shares issued on exercise of this Warrant). By its
receipt of this Warrant, Holder agrees to be bound by the Registration Rights
Agreement upon exercise of this Warrant as a party thereto.
12. Representations, Warranties and Covenants of the Company.
(a) Due Authorization. All corporate action on the part of the
Company's directors and stockholders necessary for the authorization, execution,
delivery of, and the performance of all obligations of the Company under this
Warrant, the authorization, issuance, reservation for issuance and delivery of
all of the Warrant Shares has been taken or will be taken prior to the exercise
of this Warrant. This Warrant, when executed and delivered, will constitute the
valid and legally binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as may be limited by (i) applicable
bankruptcy, insolvency, reorganization or other laws of general application
relating to or affecting the
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enforcement of creditors' rights generally; and (ii) the effect of rules of law
governing the availability of equitable remedies.
(b) Governmental Consents. No consent, approval, order or authorization
of, or registration, qualification, designation, declaration or filing with, any
federal, state or local governmental authority is required on the part of the
Company in connection with the Company's valid execution, delivery or
performance of this Warrant, the offer, sale or issuance of the Warrant Shares,
or the consummation of any other transaction contemplated on the part of the
Company hereby, except such qualifications or filings under applicable
securities laws as may be required in connection with the transactions
contemplated by this Agreement.
(c) Change of Control. In the event a Change of Control of the Company
occurs prior to the exercise of this Warrant, the Company will cause this
Warrant to be assumed by the surviving entity.
13. Representations and Covenants of Holder. This Warrant has been
entered into by the Company in reliance upon the following representations and
covenants of the Holder which the Holder hereby makes by execution of this
Warrant.
(a) Investment Purpose. The right to acquire the Warrant Shares will be
acquired for investment and not with a view to the sale or distribution of any
part thereof, and the Holder has no present intention of selling or engaging in
any public distribution of the same except pursuant to a registration or
exemption.
(b) Private Issue. The Holder understands (i) that the Warrant Shares
issuable upon exercise of this Warrant are not registered under the Securities
Act or qualified under applicable state securities laws on the ground that the
issuance contemplated by this Warrant will be exempt from the registration and
qualifications requirements thereof, and (ii) that the Company's reliance on
such exemption is predicated on the representations set forth in this Section
13.
(c) Financial Risk. The Holder has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of its investment, and has the ability to bear the economic risks of its
investment.
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(d) Indefinite Holding Period. The Holder understands that it may be
required to hold the Warrant Shares for an indefinite period. The Holder also
understands that any sale of its rights as the Holder to purchase the Warrant
Shares which might be made by it in reliance upon Rule 144 under the Securities
Act may be made only in accordance with the terms and conditions of that Rule.
(e) Accredited Investor. Holder is an "accredited investor" within the
meaning of Rule 501 of Regulation D, as presently in effect.
14. Miscellaneous.
(a) This Warrant shall be governed by and construed in accordance with
Delaware law, without regard to the conflict of laws provisions thereof.
(b) In the event of a dispute with regard to the interpretation of this
Warrant, the prevailing party may collect the cost of reasonable attorney's
fees, litigation expenses or such other expenses as may be incurred in the
enforcement of the prevailing party's rights hereunder.
(c) This Warrant shall be exercisable as provided for herein, except
that in the event that the expiration date of this Warrant shall fall on a
Saturday, Sunday and or United States federally recognized holiday, the
expiration date for this Warrant shall be extended to 5:00 p.m. Eastern standard
time on the business day following such Saturday, Sunday or recognized holiday.
(d) This Warrant may be executed in counterparts each of which is
deemed an original but all of which taken together constitute one instrument.
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IN WITNESS WHEREOF, GLOBAL SPORTS, INC. has caused this Warrant to be
executed by its officers thereunto duly authorized.
Dated: May 1, 2000
GLOBAL SPORTS, INC.
-------------------------
Name:
Title:
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NOTICE OF EXERCISE
To: GLOBAL SPORTS, INC.
(1) The undersigned hereby elects to purchase __________ shares of
Common Stock of Global Sports, Inc., pursuant to the terms of the attached
Warrant, and tenders herewith payment of the purchase price for such shares in
full.
(2) In exercising this Warrant, the undersigned hereby confirms and
acknowledges that the shares of Common Stock to be issued upon exercise are
being acquired solely for the account of the undersigned and not as a nominee
for any other party, or for investment, and that the undersigned will not offer,
sell or otherwise dispose of any such shares of Common Stock except under
circumstances that will not result in a violation of the Securities Act of 1933,
as amended, or any applicable state securities laws.
(3) Please issue a certificate or certificates representing said shares
of Common Stock in the name of the undersigned or in such other name as is
specified below:
-------------------------
(Name)
-------------------------
(Name)
(4) Please issue a new Warrant for the unexercised portion of the
attached Warrant in the name of the undersigned or in such other name as is
specified below:
-------------------------
(Name)
- -------------------- -------------------------
(Date) (Signature)
<PAGE>
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned registered owner of this Warrant
hereby sells, assigns and transfers unto the Assignee named below all of the
rights of the undersigned under the within Warrant, with respect to the number
of shares of Common Stock set forth below:
Name of Assignee Address No. of
- ---------------- ------- Shares
------
and does hereby irrevocably constitute and appoint Attorney
______________________ to make such transfer on the books of GLOBAL SPORTS,
INC., maintained for the purpose, with full power of substitution in the
premises.
The undersigned also represents that, by assignment hereof, the
Assignee acknowledges that this Warrant and the shares of stock to be issued
upon exercise hereof are being acquired for investment and that the Assignee
will not offer, sell or otherwise dispose of this Warrant or any shares of stock
to be issued upon exercise hereof except under circumstances which will not
result in a violation of the Securities Act of 1933, as amended, or any
applicable state securities laws. Further, the Assignee has acknowledged that
upon exercise of this Warrant, the Assignee shall, if requested by the Company,
confirm in writing, in a form satisfactory to the Company, that the shares of
stock so purchased are being acquired for investment and not with a view toward
distribution or resale.
Dated: ________________________
-------------------------
Signature of Holder
