-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WRWLjWGK4XIk5UZ89juvL/nFYxQ2XAsZ+nkjNDj4BhxWA9MOSaGXwGnYqHXt/m0O +ncD3L6YLD3uULrnqDTCkw== 0000891836-99-000442.txt : 19990623 0000891836-99-000442.hdr.sgml : 19990623 ACCESSION NUMBER: 0000891836-99-000442 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 9 FILED AS OF DATE: 19990621 GROUP MEMBERS: MASAYOSHI SON GROUP MEMBERS: SOFTBALL AMERICA INC. GROUP MEMBERS: SOFTBANK CORP. GROUP MEMBERS: SOFTBANK HOLDINGS INC ET AL GROUP MEMBERS: SOFTBANK HOLDINGS INC. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: GLOBAL SPORTS INC CENTRAL INDEX KEY: 0000828750 STANDARD INDUSTRIAL CLASSIFICATION: RUBBER & PLASTICS FOOTWEAR [3021] IRS NUMBER: 042958132 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-40244 FILM NUMBER: 99649628 BUSINESS ADDRESS: STREET 1: 555 S HENDERSON ROAD SUITE B STREET 2: RTE 3 INDUSTRIAL PARK CITY: KING OF PRUSSIA STATE: PA ZIP: 19406 BUSINESS PHONE: 6103372200 MAIL ADDRESS: STREET 1: 555 S HENDERSON RD CITY: KING OF PRUSSIA STATE: PA ZIP: 19406 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: SOFTBANK HOLDINGS INC ET AL CENTRAL INDEX KEY: 0001009417 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 10 LANGLEY ROAD SUITE 403 CITY: NEWTON CENTER STATE: MA ZIP: 02159 SC 13D 1 SCHEDULE 13D, GLOBAL SPORTS, INC. :--------------------------: : OMB APPROVAL : :--------------------------: :OMB Number: 3235-0145: :Expires: December 31, 1997: SECURITIES AND EXCHANGE COMMISSION :Estimated average burden : WASHINGTON, D.C. 20549 :hours per form ..... 14.90: :--------------------------: SCHEDULE 13D (RULE 13D-101) UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. ______________)* 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 JOHN L. SAVVA, ESQ. FRANCIS JACOBS SULLIVAN & CROMWELL SOFTBANK AMERICA INC. 1888 CENTURY PARK EAST, SUITE 2100 300 DELAWARE AVENUE, SUITE 900 LOS ANGELES, CA 90067 WILMINGTON, DE 19801 (310) 712-6600 (302) 552-3104 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) JUNE 10, 1999 ----------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of ss.ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box |_|. NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See ss. 240.13d-7 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). SEC 1746(12-91) SCHEDULE 13D - --------------------- ------------------ CUSIP NO. 37937A 10 7 PAGE 2 OF 16 PAGES - --------------------- ------------------ - ------------------------------------------------------------------------------- 1. NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY). SOFTBANK AMERICA INC. - -------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) |_| (SEE INSTRUCTIONS) (B) |_| - ------------------------------------------------------------------------------- 3. SEC USE ONLY - ------------------------------------------------------------------------------- 4. SOURCE OF FUNDS (SEE INSTRUCTIONS) WC - ------------------------------------------------------------------------------- 5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |_| - ------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE - ------------------------------------------------------------------------------- NUMBER OF 7. SOLE VOTING POWER SHARES 0 BENEFICIALLY -------------------------------------------------------------- OWNED BY 8. SHARED VOTING POWER EACH 8,039,086 REPORTING -------------------------------------------------------------- PERSON 9. SOLE DISPOSITIVE POWER WITH 0 -------------------------------------------------------------- 10. SHARED DISPOSITIVE POWER 0 -------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 8,039,086 - ------------------------------------------------------------------------------- 12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) |_| - ------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 66.1% - ------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) CO - ------------------------------------------------------------------------------- SCHEDULE 13D - --------------------- ------------------ CUSIP NO. 783756 10 9 PAGE 3 OF 16 PAGES - --------------------- ------------------ - ------------------------------------------------------------------------------- 1. NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY). SOFTBANK HOLDINGS INC. - -------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) |_| (SEE INSTRUCTIONS) (B) |_| - ------------------------------------------------------------------------------- 3. SEC USE ONLY - ------------------------------------------------------------------------------- 4. SOURCE OF FUNDS (SEE INSTRUCTIONS) AF - ------------------------------------------------------------------------------- 5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |_| - ------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE - ------------------------------------------------------------------------------- NUMBER OF 7. SOLE VOTING POWER SHARES 0 BENEFICIALLY -------------------------------------------------------------- OWNED BY 8. SHARED VOTING POWER EACH 8,039,086 REPORTING -------------------------------------------------------------- PERSON 9. SOLE DISPOSITIVE POWER WITH 0 -------------------------------------------------------------- 10. SHARED DISPOSITIVE POWER 0 -------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 8,039,086 - ------------------------------------------------------------------------------- 12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) |_| - ------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 66.1% - ------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) HC, CO - ------------------------------------------------------------------------------- SCHEDULE 13D - --------------------- ------------------ CUSIP NO. 783756 10 9 PAGE 4 OF 16 PAGES - --------------------- ------------------ - ------------------------------------------------------------------------------- 1. NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY). SOFTBANK CORP. - -------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) |_| (SEE INSTRUCTIONS) (B) |_| - ------------------------------------------------------------------------------- 3. SEC USE ONLY - ------------------------------------------------------------------------------- 4. SOURCE OF FUNDS (SEE INSTRUCTIONS) AF - ------------------------------------------------------------------------------- 5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |_| - ------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION JAPAN - ------------------------------------------------------------------------------- NUMBER OF 7. SOLE VOTING POWER SHARES 0 BENEFICIALLY -------------------------------------------------------------- OWNED BY 8. SHARED VOTING POWER EACH 8,039,086 REPORTING -------------------------------------------------------------- PERSON 9. SOLE DISPOSITIVE POWER WITH 0 -------------------------------------------------------------- 10. SHARED DISPOSITIVE POWER 0 -------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 8,039,086 - ------------------------------------------------------------------------------- 12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) |_| - ------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 66.1% - ------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) HC, CO - ------------------------------------------------------------------------------- SCHEDULE 13D - --------------------- ------------------ CUSIP NO. 783756 10 9 PAGE 5 OF 16 PAGES - --------------------- ------------------ - ------------------------------------------------------------------------------- 1. NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY). MASAYOSHI SON - -------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) |_| (SEE INSTRUCTIONS) (B) |_| - ------------------------------------------------------------------------------- 3. SEC USE ONLY - ------------------------------------------------------------------------------- 4. SOURCE OF FUNDS (SEE INSTRUCTIONS) AF - ------------------------------------------------------------------------------- 5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |_| - ------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION JAPAN - ------------------------------------------------------------------------------- NUMBER OF 7. SOLE VOTING POWER SHARES 0 BENEFICIALLY -------------------------------------------------------------- OWNED BY 8. SHARED VOTING POWER EACH 8,039,086 REPORTING -------------------------------------------------------------- PERSON 9. SOLE DISPOSITIVE POWER WITH 0 -------------------------------------------------------------- 10. SHARED DISPOSITIVE POWER 0 -------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 8,039,086 - ------------------------------------------------------------------------------- 12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) |_| - ------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 66.1% - ------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) IN - ------------------------------------------------------------------------------- SCHEDULE 13D - --------------------- ------------------ CUSIP NO. 37937A 10 7 PAGE 6 OF 16 PAGES - --------------------- ------------------ ITEM 1. SECURITY AND ISSUER. This statement on Schedule 13D (the "Statement") relates to the common stock, par value $0.01 per share (the "Common Stock"), of Global Sports, Inc., a Delaware corporation (the "Company"). The principal executive offices of the Company are located at 555 South Henderson Road, King of Prussia, Pennsylvania 19406. ITEM 2. IDENTITY AND BACKGROUND. This Statement is filed by SOFTBANK America Inc. ("SOFTBANK America"), SOFTBANK Holdings Inc. ("SOFTBANK Holdings"), SOFTBANK Corp. ("SOFTBANK") and Masayoshi Son ("Son" and, together with SOFTBANK America, SOFTBANK Holdings and SOFTBANK, the "Reporting Persons"). (A), (B), (C) AND (F). The principal business offices of SOFTBANK America are located at 300 Delaware Avenue, Suite 900, Wilmington, Delaware 19801. The principal business offices of SOFTBANK Holdings are located at 10 Langley Road, Suite 403, Newton Center, Massachusetts 02159. The principal business offices of SOFTBANK are located at 24-1, Nihonbashi-Hakozakicho, Chuo-ku, Tokyo 103-8501, Japan. Son's business address is c/o SOFTBANK Corp., 24-1, Nihonbashi-Hakozakicho, Chuo-Ku, Tokyo 103-8501, Japan. SOFTBANK America and SOFTBANK Holdings are Delaware corporations wholly-owned by SOFTBANK. Their principal business is to serve as holding companies for SOFTBANK's operations and investments. SOFTBANK is a corporation organized under the laws of Japan, and its principal businesses include the provision of information and distribution services and infrastructure for the digital information industry, the distribution of computer network products and the publication of Japanese computer technology magazines. Son, a Japanese citizen, is President, Chief Executive Officer and a director of SOFTBANK. Son owns, directly and indirectly, an approximate 43.3% interest in SOFTBANK. (D) AND (E). During the last five years, neither the Reporting Persons nor, to the best knowledge of the Reporting Persons, any of the persons listed in Schedule 1, 2 or 3 hereto, (i) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) has been a party to any civil proceeding of a judicial or administrative body of competent jurisdiction, and is or was, as a result of such proceeding, subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws, or finding any violation with respect to such laws. SCHEDULE 13D - --------------------- ------------------ CUSIP NO. 37937A 10 7 PAGE 7 OF 16 PAGES - --------------------- ------------------ ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. The purchases of the shares of Common Stock to be purchased by SOFTBANK America as reported herein shall be for an amount totaling approximately $80 million and will be funded by available working capital of SOFTBANK America. See also Item 4. ITEM 4. PURPOSE OF TRANSACTION. The Reporting Persons intend to acquire an approximate 30% interest in the Company for the purpose of investment only. Pursuant to the Purchase Agreement, dated as of June 10, 1999 (the "Purchase Agreement")(attached hereto as Exhibit C), between the Company and SOFTBANK America, SOFTBANK America agreed to purchase an aggregate of 6,153,850 shares of Common Stock from the Company for a purchase price of $13.00 per share. The Reporting Persons anticipate that an initial closing (the "First Closing") will take place in July 1999 after which time SOFTBANK America will have acquired 2,432,692 shares of Common Stock. A second closing (the "Second Closing") will take place on the latest to occur of (i) the first business day following the date on which the last to be fulfilled or waived of the conditions to the Second Closing set forth in the Purchase Agreement takes place, (ii) such other date as is mutually agreed to by the Company and SOFTBANK America or (iii) the date of the First Closing. After the Second Closing, SOFTBANK America will have acquired an additional 3,721,158 shares of Common Stock of the Company increasing SOFTBANK America's holdings to 6,153,850 shares. The total consideration to be paid by SOFTBANK America to the Company for the shares is $80,000,050. The purchase price for the shares to be purchased at the First Closing will be paid by automatic conversion of the Convertible Subordinated Note (defined below) in the principal amount of $15,000,000 and by wire transfer in immediately available funds of an amount equal to the product of (i) the difference equal to (A) the number of shares to be purchased by SOFTBANK America at the First Closing (as set forth in the Schedule of Purchases attached to the Purchase Agreement) minus (B) the number of shares issuable upon conversion of the Convertible Subordinated Note, times (ii) $13.00. The purchase price of the shares to be purchased at the Second Closing will be paid by wire transfer of $48,375,054. The Purchase Agreement provides, among other things, that on and after the First Closing, SOFTBANK America will have the right to designate (i) a number of members of the Company's Board of Directors equal to the product of (A) the total number of authorized directors and (B) the aggregate Proportionate Share of SOFTBANK America and the SOFTBANK Entities (as defined in the Purchase Agreement), rounded up to the nearest whole number, but not to exceed two directors (the "Board Composition Requirement"), and (ii) so long as SOFTBANK America and the SOFTBANK Entities collectively own 50% or more of the shares purchased pursuant to the Purchase Agreement, one director to be a member of each committee of the Company's Board of Directors. "Proportionate Share," as defined in the Purchase Agreement, means, with respect to each Securityholder (as defined in the Purchase Agreement), a fraction the numerator of which is the total number of shares of Common Stock owned and the number of shares of Common Stock issuable upon exercise of Rights (as defined in the Purchase Agreement) owned by such Securityholder, and the SCHEDULE 13D - --------------------- ------------------ CUSIP NO. 37937A 10 7 PAGE 8 OF 16 PAGES - --------------------- ------------------ denominator of which is the total number of shares of Common Stock outstanding plus the number of shares of Common Stock issuable upon exercise of all Rights outstanding. The Purchase Agreement contains a covenant by the Company to seek stockholder approval of an amendment of the Company's certificate of incorporation to increase the authorized number of shares of Common Stock. SOFTBANK America also entered into a Registration Rights Agreement, dated June 10, 1999 (the "Registration Rights Agreement")(attached hereto as Exhibit D), with the Company which grants SOFTBANK America "demand" and "piggy-back" registration rights with respect to the shares of Common Stock purchased pursuant to the Purchase Agreement. In conjunction with the execution of the 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 accrues on the outstanding principal amount of the loan at the rate of 4.98% per annum. Upon the First Closing, all unpaid principal and accrued but unpaid interest due on the Convertible Subordinated Note will automatically convert 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 adjustment under certain circumstances. Subject to Section 5.2(a) of the Purchase Agreement, SOFTBANK America may sell, transfer, assign or pledge all or any part of the shares it purchases pursuant to the Purchase Agreement to any affiliates of SOFTBANK America or 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 (any such person or entity being herein referred to as a "SOFTBANK Entity"). SOFTBANK America anticipates that some or all of the shares of Common Stock to be purchased pursuant to the agreements described herein will be transferred to a SOFTBANK Entity. Other than as described in this Statement, 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 SCHEDULE 13D - --------------------- ------------------ CUSIP NO. 37937A 10 7 PAGE 9 OF 16 PAGES - --------------------- ------------------ (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 their contractual rights to acquire such shares or acquire additional shares or take other actions if market conditions or other business considerations, in the judgment of the Reporting Persons, warrant. Such additional acquisitions may be effected through open market purchases, 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 Purchase Agreement, the Registration Rights Agreement, the Subordinated Loan Agreement and the Convertible Subordinated Note 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. See also Item 6. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. SOFTBANK America is a wholly-owned subsidiary of SOFTBANK Holdings, which in turn is a wholly-owned subsidiary of SOFTBANK. Son is the President and Chief Executive Officer of SOFTBANK and owns an approximate 43.3% interest in SOFTBANK. Accordingly, securities owned by SOFTBANK America may be regarded as being beneficially owned by SOFTBANK Holdings; securities owned by SOFTBANK Holdings may be regarded as being beneficially owned by SOFTBANK; and securities owned by SOFTBANK may be regarded as being beneficially owned by Son. (A) AND (B). SOFTBANK AMERICA. By virtue of the Rubin Voting Agreement described in Item 6, SOFTBANK America may be deemed to beneficially own 8,039,086 shares of Common Stock inasmuch as the holder thereof has granted representatives of SOFTBANK America an irrevocable proxy to vote such shares as described in Item 4; accordingly, SOFTBANK America may be deemed to have shared voting power with respect to such 8,039,086 shares of Common Stock. As a result of the foregoing, SOFTBANK America may be deemed to be the beneficial owner of an aggregate of 8,039,086 shares of Common Stock, comprising 66.1% of the Common Stock (based on the number of shares of Common Stock outstanding as of June 10, 1999, as represented by the Company pursuant to the Purchase Agreement, and calculated as provided by Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act")). SOFTBANK HOLDINGS. As the sole equityholder of SOFTBANK America, SOFTBANK Holdings may be deemed to be the beneficial owner of an aggregate of 8,039,086 shares of Common Stock, comprising 66.1% of the Common Stock (based on the number of shares of Common Stock outstanding as of June 10, 1999, as represented by the Company in the Purchase Agreement, and calculated as provided by Rule 13d-3 under the Exchange Act) and may be deemed to have shared voting power with respect to such 8,039,086 shares of Common Stock. SCHEDULE 13D - --------------------- ------------------- CUSIP NO. 37937A 10 7 PAGE 10 OF 16 PAGES - --------------------- ------------------- SOFTBANK; SON. As the parent of SOFTBANK Holdings and SOFTBANK America and the direct and indirect owner of an approximate 43.3% interest of SOFTBANK, respectively, SOFTBANK and Son may each be deemed to be the beneficial owner of an aggregate of 8,039,086 shares of Common Stock, comprising 66.1% of the Common Stock (based on the number of shares of Common Stock outstanding as of June 10, 1999, as represented by the Company in the Purchase Agreement, and calculated as provided by Rule 13d-3 under the Exchange Act), and may be deemed to have shared voting power with respect to such 8,039,086 shares of Common Stock. (C) None of the Reporting Persons, nor, to the best knowledge of the Reporting Persons, any of the persons listed on Schedule 1, 2 or 3 hereto, has engaged in any transactions in the securities of the Company during the past 60 days other than those transactions described above. (D) AND (E). Not applicable. None of the Reporting Persons has the right to vote or dispose of any of the shares that it may acquire pursuant to the Purchase Agreement, except as provided in the SOFTBANK America Voting Agreement and the Rubin Voting Agreement, unless and until the transactions contemplated thereby are consummated. Such transactions are subject to conditions precedent, and there can be no assurance that such transactions will be consummated. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Michael G. Rubin, the principal stockholder of the Company holding in the aggregate approximately 66.1% of the shares of Common Stock outstanding as of June 10, 1999 ("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) in favor of the purchase of shares of Common Stock to be purchased at the Second Closing pursuant to the Purchase Agreement (the "Second Purchase"); (ii) in favor of the amendment of the Company's certificate of incorporation to increase the authorized number of shares of Common Stock; (iii) 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; (iv) in favor of election to the Board of Directors of the directors which SOFTBANK America is entitled to designate upon consummation of the Second Purchase and which have been identified by SOFTBANK America as nominees for such purpose; and (v) 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 Second Purchase and the transactions SCHEDULE 13D - --------------------- ------------------ CUSIP NO. 37937A 10 7 PAGE 11 OF 16 PAGES - --------------------- ------------------ 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 SOFTBANK America. SOFTBANK America 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 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 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 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 America agreed not to take any action to remove, with or without cause, any director of the Company other than the SOFTBANK America designees. On June 21, 1999, SOFTBANK America, Global Sports and Rubin entered into a sideletter agreement (the "Sideletter Agreement") pursuant to which the parties agreed that, notwithstanding any provision to the contrary in the Purchase Agreement, if the First Closing has occurred prior to July 13, 1999, (1) SOFTBANK America will not have the right to designate new members to Global Sports' Board of Directors until the earlier of (a) the completion and adjournment of Global Sports' next annual meeting of stockholders and (b) 5:00 p.m. P.S.T., on July 13, 1999 (such earlier time being the "Effective Time"); (2) Rubin will not be obligated to vote in favor of the members of the Global Sports Board of Directors to be designated by SOFTBANK America to satisfy the Board Composition Requirement until the Effective Time; (3) Rubin will not be required to vote against any slate of directors up for election to Global Sports' Board of Directors until the Effective Time; and (4) the failure by Rubin or Global Sports to cause the Board Composition Requirement to be satisfied by the First Closing Date will not, by itself, excuse SOFTBANK from consummating the First Purchase. Except as described in this Statement, none of the Reporting Persons, nor to the best knowledge of the Reporting Persons, any of the persons listed on Schedule 1, 2 or 3 hereto, has any contract, arrangement, understanding or relationship with any other person with respect to any securities of the Company, including, but not limited to transfer or voting of any of the securities, finder's fees, joint ventures, loan or option arrangements, put or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies. All references to the Rubin Voting Agreement, the SOFTBANK America Voting Agreement and the Sideletter Agreement 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. The descriptions of the Purchase Agreement, the Registration Rights Agreement, the Subordinated Loan Agreement and the Convertible Subordinated Note in Item 4 are hereby incorporated herein by reference. See also Item 4. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. Exhibit A Agreement of Joint Filing, dated as of June 17, 1999, by and among SOFTBANK Holdings, SOFTBANK America, SOFTBANK and Son. SCHEDULE 13D - --------------------- ------------------ CUSIP NO. 37937A 10 7 PAGE 12 OF 16 PAGES - --------------------- ------------------ 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 Purchase Agreement, dated as of June 10, 1999, between the Company and SOFTBANK America. Exhibit D Registration Rights Agreement, dated as of June 10, 1999, between SOFTBANK America and the Company. Exhibit E Voting Agreement, dated as of June 10, 1999, by Michael G. Rubin, in favor of SOFTBANK America. Exhibit F Voting Agreement dated as of June 10, 1999, by SOFTBANK America, in favor of Michael G. Rubin. Exhibit G Subordinated Loan Agreement, dated as of June 10, 1999, between SOFTBANK America and the Company. Exhibit H Convertible Subordinated Note, dated as of June 10, 1999, by the Company. Exhibit I Sideletter Agreement, dated as of June 21, 1999, by and between SOFTBANK America, Global Sports and Rubin. SCHEDULE 13D - --------------------- ------------------ CUSIP NO. 37937A 10 7 PAGE 13 OF 16 PAGES - --------------------- ------------------ 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. June 21, 1999 SOFTBANK AMERICA INC. By: /s/ Stephen A. Grant ------------------------------ Name: Stephen A. Grant Title: Attorney-in-Fact SOFTBANK HOLDINGS INC. By: /s/ Stephen A. Grant ------------------------------ Name: Stephen A. Grant Title: Attorney-in-Fact 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 SCHEDULE 13D - --------------------- ------------------ CUSIP NO. 37937A 10 7 PAGE 14 OF 16 PAGES - --------------------- ------------------ SCHEDULE 1 DIRECTORS AND EXECUTIVE OFFICERS OF SOFTBANK AMERICA The business address for each of the individuals listed below, except Masayoshi Son, Yoshitaka Kitao and Hitoshi Hasegawa, is 10 Langley Road, Suite 403, Newton Center, Massachusetts 02159. The business address for Masayoshi Son, Yoshitaka Kitao and Hitoshi Hasegawa is 24-1, Nihonbashi-Hakozakicho, Chuo-ku, Tokyo 103-8501, Japan. All directors and executive officers listed below are United States citizens, except Masayoshi Son, Yoshitaka Kitao and Hitoshi Hasegawa, each a citizen of Japan.
NAME POSITION PRESENT AND PRINCIPAL OCCUPATION - ---- -------- -------------------------------- Masayoshi Son Chairman and Director President and Chief Executive Officer of SOFTBANK Ronald D. Fisher Vice Chairman and Director Vice Chairman of SOFTBANK Holdings Yoshitaka Kitao Director Executive Vice President and Chief Financial Officer of SOFTBANK Steven Murray Treasurer Treasurer of SOFTBANK Holdings Hitoshi Hasegawa Secretary Counsel of SOFTBANK
SCHEDULE 13D - --------------------- ------------------- CUSIP NO. 37937A 10 7 PAGE 15 OF 16 PAGES - --------------------- ------------------- SCHEDULE 2 DIRECTORS AND EXECUTIVE OFFICERS OF SOFTBANK HOLDINGS The business address for each of the individuals listed below, except Masayoshi Son, Yoshitaka Kitao and Stephen A. Grant, is 10 Langley Road, Suite 403, Newton Center, Massachusetts 02159. The business address for Masayoshi Son and Yoshitaka Kitao is 24-1, Nihonbashi-Hakozakicho, Chuo-ku, Tokyo 103-8501, Japan. The business address for Stephen A. Grant is 125 Broad Street, New York, New York 10004. All directors and executive officers listed below are United States citizens, except Masayoshi Son and Yoshitaka Kitao, each a citizen of Japan.
NAME POSITION PRESENT AND PRINCIPAL OCCUPATION - ---- -------- -------------------------------- Masayoshi Son Chairman and Director President and Chief Executive Officer of SOFTBANK Ronald D. Fisher Vice Chairman and Director Vice Chairman of SOFTBANK Holdings Yoshitaka Kitao Director Executive Vice President and Chief Financial Officer of SOFTBANK Gary Rieschel Senior Vice President Executive Managing Director of STV LLC Stephen A. Grant Secretary Partner, Sullivan & Cromwell. Thomas L. Wright Vice President and Treasurer Treasurer of Ziff-Davis Inc. Louis Demarco Vice President-Tax Vice President-Tax of SOFTBANK Holdings Charles R. Lax Vice President Managing Director of STV
SCHEDULE 13D - --------------------- ------------------ CUSIP NO. 37937A 10 7 PAGE 16 OF 16 PAGES - --------------------- ------------------ SCHEDULE 3 DIRECTORS AND EXECUTIVE OFFICERS OF SOFTBANK CORP. The business address for each of the individuals listed below, except Ronald D. Fisher, is 24-1, Nihonbashi-Hakozakicho, Chuo-ku, Tokyo 103-8501, Japan. The business address for Ronald D. Fisher is 10 Langley Road, Suite 403, Newton Center, Massachusetts 02159. Each of the individuals listed below is a Japanese citizen, except for Ronald D. Fisher, a citizen of the United States.
NAME POSITION PRESENT AND PRINCIPAL OCCUPATION - ---- -------- -------------------------------- Masayoshi Son President, Chief Executive and President and Chief Executive Officer of SOFTBANK Director Ken Miyauchi Executive Vice President, Software Executive Vice President and director of SOFTBANK & Network Products Division, and Director Norikazu Ishikawa Executive Vice President, Human Executive Vice President of SOFTBANK Resources and General Affairs Division, and Director Yoshitaka Kitao Executive Vice President, Chief Executive Vice President and Chief Financial Officer of Financial Officer and Director SOFTBANK Makoto Okazaki Executive Vice President, Publishing Executive Vice President of SOFTBANK Division, and Director Takashi Eguchi Director President and Chief Executive Officer of PASONA SOFTBANK Inc. Ronald D. Fisher Director Vice Chairman of SOFTBANK Holdings Katsura Sato Full-Time Corporate Auditor Full-Time Corporate Auditor of SOFTBANK Saburo Kobayashi Corporate Auditor Corporate Auditor of SOFTBANK Hidekazu Kubokawa Corporate Auditor Corporate Auditor of SOFTBANK Masahiro Inoue Director President and Chief Executive Officer of Yahoo Japan Corporation Eric Hippeau Director Chairman and Chief Executive Officer of Ziff-Davis, Inc. Mitsuo Sano Full-Time Corporate Auditor Full-Time Corporate Auditor of SOFTBANK
EX-99.A 2 AGREEMENT OF JOINT FILING, DATED JUNE 17, 1999 EXHIBIT A AGREEMENT OF JOINT FILING In accordance with Rule 13d-1(k) under the Securities and Exchange Act of 1934, as amended, the undersigned hereby agree to the joint filing on behalf of each of them of a Statement on Schedule 13D, and any amendments thereto, with respect to the Common Stock, par value $0.01 per share, of Global Sports, Inc. and that this Agreement be included as an Exhibit to such filing. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to constitute one and the same Agreement. IN WITNESS WHEREOF, each of the undersigned hereby executes this Agreement as of June 17, 1999. SOFTBANK AMERICA INC. By: /s/ Stephen A. Grant ------------------------------ Name: Stephen A. Grant Title: Attorney-in-Fact SOFTBANK HOLDINGS INC. By: /s/ Stephen A. Grant ------------------------------ Name: Stephen A. Grant Title: Attorney-in-Fact 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 EX-99.C 3 STOCK PURCHASE AGREEMENT EXHIBIT C STOCK PURCHASE AGREEMENT THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made and entered into as of June 10, 1999, between Global Sports, Inc., a Delaware corporation (the "Company"), and SOFTBANK America Inc., a Delaware corporation (the "Purchaser"). ARTICLE I AUTHORIZATION AND SALE OF STOCK Section 1.1 SALE OF THE SHARES. Subject to the terms and conditions hereof, at the Closings (as defined in Section 2.1 hereof), the Company shall issue and sell to the Purchaser, and the Purchaser shall purchase from the Company, the total number of shares (collectively, the "Shares") of common stock, par value $0.01 per share ("Common Stock"), of the Company specified on the Schedule of Purchases attached hereto as Exhibit A, at a purchase price per Share equal to $13.00, for an aggregate purchase price of $80,000,050 in cash in immediately available funds. ARTICLE II CLOSING DATE; DELIVERY Section 2.1 CLOSINGS AND LOCATION. The purchase and sale of the Shares hereunder shall take place at two closings (individually, a "Closing" and, collectively, the "Closings") at the offices of Sullivan & Cromwell, 1888 Century Park East, Los Angeles, California 90067, at 10:00 a.m., California time, on the dates hereinafter specified. Section 2.2 FIRST CLOSING. The Closing of the purchase and sale of the Shares designated for issuance at the first Closing (the "First Purchase") as set forth on the Schedule of Purchases (the "First Closing") shall be held on the later to occur of (i) July 15, 1999 or, if earlier, such date as SOFTBANK Capital Partners, L.P. ("SOFTBANK Capital Partners") is formed as a Delaware limited partnership and -1- has consummated the first closing with investors therein, (ii) the first business day following the date on which the last to be fulfilled or waived of the conditions to the First Closing set forth in Sections 6.1 and 6.2 hereof have been fulfilled or waived in accordance with this Agreement or (iii) such other date as is mutually agreed to by the Company and the Purchaser. The date of the First Closing is hereinafter referred to as the "First Closing Date." Section 2.3 SECOND CLOSING. The Closing of the purchase and sale of the Shares designated for issuance at the second Closing (the "Second Purchase") as set forth on the Schedule of Purchases (the "Second Closing") shall be held on the latest to occur of (i) the first business day following the date on which the last to be fulfilled or waived of the conditions to the Second Closing set forth in Sections 6.1 and 6.2 hereof have been fulfilled or waived in accordance with this Agreement, (ii) such other date as is mutually agreed to by the Company and the Purchaser or (iii) the First Closing Date. The date of the Second Closing is hereinafter referred to as the "Second Closing Date," and the First Closing Date and the Second Closing Date are hereinafter collectively referred to as the "Closing Dates." Section 2.4 DELIVERY. Subject to the terms and conditions of this Agreement, at each Closing, the Company shall deliver to the Purchaser a stock certificate or certificates representing the Shares to be purchased by the Purchaser at such Closing, registered in the name of the Purchaser or its assigns, against payment of the purchase price therefor. The purchase price of the Shares to be purchased at the First Closing shall be paid by automatic conversion of the Convertible Subordinated Note (as defined in the Subordinated Loan Agreement between the Company and the Purchaser dated as of the date hereof) in the principal amount of $15.0 million, dated the date hereof, issued by the Company in favor of the Purchaser in accordance with its terms in exchange for the number of shares issuable upon such conversion as provided therein (the "Conversion Number") and by wire transfer in immediately available funds to an account designated in writing by the Company of an -2- amount equal to the product (i) the difference equal to (A) the number of Shares to be purchased by the Purchaser at such Closing minus (B) the Conversion Number times (ii) $13.00. The purchase price of the Shares to be purchased at the Second Closing shall be paid by wire transfer of $48,375,054 in immediately available funds to an account designated in writing by the Company for such purpose. Section 2.5 CONSUMMATION OF CLOSING. All acts, deliveries and confirmations comprising each Closing regardless of chronological sequence shall be deemed to occur contemporaneously and simultaneously upon the occurrence of the last act, delivery or confirmation of such Closing and none of such acts, deliveries or confirmations shall be effective unless and until the last of same shall have occurred. ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY The Company hereby represents and warrants to the Purchaser as follows: Section 3.1 ORGANIZATION. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power to own, lease and operate its property and to carry on its business as now being conducted and is duly qualified to do business and is in good standing in each jurisdiction where it is required to be so qualified and in good standing, except for any such jurisdiction in which the failure to be so qualified and in good standing would not, individually or in the aggregate, have a material adverse effect on the business, financial condition, results of operations or prospects of the Company (a "Material Adverse Effect"). Section 3.2 SUBSIDIARIES. Each of the Company's subsidiaries is a corporation duly organized, validly existing in good standing under the laws of the jurisdiction -3- of its organization, and is duly qualified to do business and in good standing in the jurisdictions where it is required to be so qualified and is in good standing, except for any such jurisdiction in which the failure to be so qualified and in good standing would not, individually or in the aggregate, have a Material Adverse Effect. Section 3.3 VALID ISSUANCE OF COMMON STOCK. The Shares, when issued and paid for in accordance with this Agreement, will be duly authorized, validly issued, fully paid and non-assessable. Section 3.4 AUTHORITY; NO CONFLICT; REQUIRED FILINGS AND CONSENTS. (a) The Company has all requisite corporate power and authority to enter into this Agreement, the Registration Rights Agreement in the form attached hereto as Exhibit B (the "Registration Rights Agreement"), the Subordinated Loan Agreement between the Company and the Purchaser dated as of the date hereof (the "Loan Agreement") and the Convertible Subordinated Note and to consummate the transactions contemplated by this Agreement and the Registration Rights Agreement, the Loan Agreement and the Convertible Subordinated Note. This Agreement, the Loan Agreement, the Convertible Subordinated Note and the Registration Rights Agreement have been duly authorized, executed and delivered by the Company and constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles; provided, however, that it is understood that pursuant to the regulations of the National Association of Securities Dealers, Inc. (the "NASD Rules"), stockholder approval of the consummation of the Second Purchase is required prior to such consummation. (b) The execution and delivery by the Company of this Agreement, the Registration Rights Agreement, the Loan Agreement and the Convertible Subordinated Note does not, -4- and consummation of the transactions contemplated by this Agreement, the Registration Rights Agreement, the Loan Agreement and the Convertible Subordinated Note will not, (i) conflict with, or result in any violation or breach of any provision of, the Certificate of Incorporation or Bylaws of the Company, (ii) result in any violation or breach of, or constitute (with or without notice or lapse of time, or both) a default (or give rise to a right of termination, cancellation or acceleration of any obligation or loss of any material benefit) under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, lease, contract or other agreement, instrument or obligation to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries, properties or assets may be bound, or (iii) conflict with or violate any permit, concession, franchise, license, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to the Company or any of its subsidiaries, properties or assets (provided, with respect to clauses (ii) and (iii), with respect to the Shares to be purchased at the Second Closing, that stockholder approval of such purchase is obtained in conformity with the NASD Rules prior to the Second Closing), except in the case of (ii) and (iii) for any such violations, defaults, breaches, terminations, cancellations, accelerations, losses or conflicts which would not, individually or in the aggregate, have a Material Adverse Effect, and would not materially burden or delay the consummation of the transactions contemplated hereby. (c) No consent, approval, order or authorization of, or registration, declaration or filing with, any court, administrative agency or commission or other governmental authority or instrumentality (a "Governmental Entity") is required by or with respect to the Company in connection with the execution and delivery of this Agreement, the Registration Rights Agreement, the Loan Agreement and the Convertible Subordinated Note or the consummation of the transactions contemplated hereby or thereby, except for (i) the filing of a Form D under the Securities Act of 1933, as amended (the "Securities Act"), (ii) such filings as may be required under applicable state securities laws or the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as -5- amended (the "HSR Act"), and (iii) such other consents, authorizations, filings, approvals and registrations which, if not obtained or made, would not, individually or in the aggregate, have a Material Adverse Effect on the Company and would not materially burden or delay the consummation of the transactions contemplated hereby. Section 3.5 CAPITALIZATION. (a) The authorized capital stock of the Company as of the date hereof consists of (i) 20,000,000 shares of Common Stock, of which 12,163,619 shares are issued and outstanding, and (ii) 1,000,000 shares of Preferred Stock, $0.01 par value per share, of which 10,000 shares are issued or outstanding. (b) The authorized capital stock of the Company as of the Second Closing Date and immediately prior to the Second Closing shall be as set forth in Section 3.5(a) hereof, subject, however, to (i) an increase in the authorized number of shares of Common Stock to 30,000,000, which is contemplated to occur following the Annual Meeting (as defined in Section 5.6 hereof), (ii) the prior sale and issuance of the Shares to be issued and sold at the First Closing, (ii) the grant of options to purchase shares of Common Stock under the Company's employee stock option plans and the exercise of options outstanding as of the date hereof and (iii) any other issuance of the Company's capital stock, or securities convertible into such capital stock, as may be approved by the Purchaser. (c) Other than (i) as disclosed in the Company Commission Reports (as defined below) or in documents incorporated by reference therein, (ii) stock options and employee stock purchases following the date of the most recent Company Commission Report under the Company's stock option, stock incentive and stock purchase plans described in the Company Commission Reports and (iii) as disclosed on Schedule 3.5(c) hereto, there are no outstanding options, warrants or commitments of any kind to which the Company is a party or by which it is bound obligating the Company to -6- issue, deliver or sell any shares of capital stock of the Company. Section 3.6 COMMISSION FILINGS; FINANCIAL STATEMENTS. (a) The Company has filed with the Securities and Exchange Commission (the "Commission") and made available to the Purchaser and its representatives all forms, reports and documents filed by the Company with the Commission since December 31, 1998 (collectively, the "Company Commission Reports"). The Company Commission Reports (i) at the time filed, complied in all material respects with the applicable requirements of the Securities Act and the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as applicable, and (ii) did not at the time they were filed (or if amended or superseded by a filing prior to the date of this Agreement, then on the date of such amending or superseding filing) contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. (b) Each of the financial statements (including, in each case, any related notes) contained in the Company Commission Reports complied as to form in all material respects with the applicable published rules and regulations of the Commission with respect thereto, was prepared in accordance with generally accepted accounting principles applied on a consistent basis throughout the periods involved (except as may be indicated in the notes to such financial statements or, in the case of unaudited statements, as permitted by Form 10-Q of the Commission) and include all adjustments, consisting only of normal accounting adjustments, that the Company reasonably considers necessary for a fair presentation of its financial position at the respective dates and the results of its operations and cash flows for the periods indicated. Except as disclosed in the Company Commission Reports filed with the Commission prior to the date hereof, since December 31, 1998, taking into account the cumulative effect of all -7- developments and events since such date, there has not been any development or event, or series of developments or events, that would reasonably be expected to have a Material Adverse Effect. Section 3.7 COMPLIANCE WITH LAWS. Each of the Company and its subsidiaries has complied with, is not in violation of, and has not received any notices of violation with respect to, any federal, state or local statute, law or regulation with respect to the conduct of its business, or the ownership or operation of its business, including but not limited to statutes, laws or regulations relating to the protection of the environment or concerning the handling, storage, disposal or discharge of toxic materials, except for failures to comply or violations which would not, individually or in the aggregate, have a Material Adverse Effect on the Company. Section 3.8 STOCKHOLDERS' CONSENT. No consent or approval of the stockholders of the Company is required or necessary for the Company to enter into this Agreement, the Registration Rights Agreement, the Loan Agreement and the Convertible Subordinated Note or to consummate the First Purchase. Except for the requirement pursuant to the NASD Rules that the Second Purchase be approved by the stockholders of the Company prior to the consummation thereof, and approval of the Charter Amendment (as defined in Section 5.6 hereof), no approval of the stockholders of the Company is required for the Company to consummate the Second Purchase. Section 3.9 LITIGATION. Except as otherwise disclosed as of the date of this Agreement in the Company Commission Reports, (i) there is no private or governmental action, suit, proceeding, claim, arbitration or investigation pending before any agency, court or tribunal, foreign or domestic, or, to the knowledge of the Company, threatened against the Company or any of its subsidiaries or properties or any of its officers or directors (in their capacities as such), which, if determined adversely to the Company, would, individually or in the aggregate, have a Material Adverse Effect, and (ii) there is no judgment, -8- decree or order against the Company or any of its subsidiaries, or, to the knowledge of the Company, against any of its respective directors or officers (in their capacities as such) relating to the business of the Company or any of its subsidiaries, the existence of which would have a Material Adverse Effect. Section 3.10 INTELLECTUAL PROPERTY. Except as disclosed in the Company Commission Reports, each of the Company and its subsidiaries (i) owns or possesses adequate licenses or other rights to use all patents, trademarks, service marks, trade names, copyrights, technology, software, know-how and trade secrets (collectively, "Intellectual Property") necessary to conduct the business now conducted by the Company and its subsidiaries and (ii) either owns or possesses, or can acquire on commercially reasonable terms, adequate licenses or other rights to use all Intellectual Property necessary to conduct the business proposed to be conducted by the Company and its subsidiaries. Except as disclosed in the Company Commission Reports, neither the Company nor any of its subsidiaries has received any notice of infringement of or conflict with (and knows of no such infringement of or conflict with) asserted rights of others with respect to any Intellectual Property; and, to the Company's knowledge, the discoveries, inventions, products, services or processes used in the business of the Company and its subsidiaries do not infringe or conflict with any right or patent of any third party, or any discovery, invention, product or process which is the subject of a patent application filed by any third party. Section 3.11 CHANGE OF CONTROL BENEFITS. Except as set forth on Schedule 3.11, there exist no provisions contained in any employment or severance agreement or benefit plan of the Company which provide for the payment, accrual or acceleration of any benefit to any person as a result of the consummation of the transactions contemplated hereby. Section 3.12 FINDER'S FEES. The Company has retained no finder or broker in connection with the transactions contemplated by this Agreement and hereby agrees to -9- indemnify and to hold the Purchaser harmless from any liability for commission or compensation in the nature of a finder's fee to any broker or other person or firm (and the costs and expenses of defending against such liability or asserted liability) for which the Company, or any of its employees or representatives acting on behalf of the Company, is or may be responsible as a result of the transactions contemplated hereby. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASER The Purchaser hereby represents and warrants to the Company as follows: Section 4.1 ORGANIZATION. The Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Section 4.2 AUTHORITY. (a) The Purchaser has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement and the consummation of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate action on the part of the Purchaser. This Agreement has been duly executed and delivered by the Purchaser and constitutes a valid and legally binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. (b) No consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Entity is required by or with respect to the Purchaser in connection with the execution and delivery of -10- this Agreement or the consummation of the transactions contemplated hereby, except for (i) the filing of a notification and report form under the HSR Act, compliance with the rules and regulations thereunder and satisfaction of the applicable waiting period thereunder, (ii) the filing of a Form D under the Securities Act, (iii) such filings as may be required under applicable state securities laws and (iv) such other consents, authorizations, filings, approvals and registrations which, if not obtained or made, would not materially burden or delay the consummation of the transactions contemplated hereby. Section 4.3 PURCHASE ENTIRELY FOR OWN ACCOUNT. The Shares will be acquired solely for investment purposes, for the Purchaser's own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof; provided, however, that, notwithstanding the foregoing, it is understood and acknowledged that prior to, on or following the First Closing Date, (i) the Purchaser may transfer all or a portion of the Shares purchased by it hereunder to SOFTBANK Capital Partners or (ii) the Purchaser may assign its rights to purchase any or all of the Shares to be purchased by it hereunder to SOFTBANK Capital Partners, in which event such Shares will be purchased by SOFTBANK Capital Partners. The Purchaser has not been formed for the specific purpose of acquiring the Shares. Section 4.4 INVESTMENT EXPERIENCE. Purchaser is an "accredited investor" as defined in Rule 501(a) under the Securities Act. Purchaser has had an opportunity to ask questions and receive answers regarding the Company's business affairs and financial condition and believes it has acquired sufficient information about the Company to reach an informed decision to purchase the Shares. Purchaser has such business and financial experience as is required to give it the capacity to protect its own interests in connection with the purchase of the Shares. Section 4.5 RESTRICTED SECURITIES. The Purchaser understands that the Shares are characterized as "restricted securities" under the Securities Act inasmuch as they are being acquired from the Company in a transaction not -11- involving a public offering and that Purchaser must hold the Shares indefinitely unless the sale thereof is registered under the Securities Act and qualified under state securities laws, or an exemption from such registration and qualification requirements is available. The Purchaser further acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for the Shares, and on requirements relating to the Company which are outside of the Purchaser's control. Section 4.6 LEGENDS. The Purchaser understands that the Shares, and any securities issued in respect thereof or exchange therefor, may bear one or all of the following legends until such time, if any, as the Shares or such securities (i) are sold in compliance with Rule 144 under the Securities Act (or a comparable successor provision) or in a transaction registered under the Securities Act or (ii) may be resold pursuant to Rule 144(k) under the Securities Act (or a comparable successor provision): "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN APPLICABLE EXEMPTION THEREFROM AND IN COMPLIANCE WITH THE TERMS OF THE STOCK PURCHASE AGREEMENT, DATED AS OF JUNE 10, 1999, WITH THE COMPANY, A COPY OF WHICH IS AVAILABLE FROM THE COMPANY ON REQUEST." Section 4.7 FINDER'S FEES. The Purchaser has not retained any finder or broker in connection with the transactions contemplated by this Agreement and hereby agrees to indemnify and to hold the Company harmless from any liability for any commission or compensation in the nature of a finder's fee to any broker or other person or firm (and the costs and expenses of defending against such liability or asserted liability) for which the Purchaser, or any of its employees or representatives acting on behalf of -12- the Purchaser, is or may be responsible as a result of the transactions contemplated hereby. ARTICLE V COVENANTS Section 5.1 HSR ACT FILINGS. (a) The Purchaser shall make all filings required under the HSR Act relating to the transactions contemplated by this Agreement and shall use commercially reasonably efforts to cause any such required filings to be made promptly after the date hereof. (b) The Company shall make all filings required under the HSR Act relating to the transactions contemplated by this Agreement and shall use commercially reasonable efforts to cause any such required filings to be made promptly after the date hereof. (c) The parties will each use commercially reasonable efforts to promptly furnish, or, cause to be furnished, any information that may be required by the Federal Trade Commission (the "FTC") or the Department of Justice (the "DOJ") under the HSR Act in order for the requisite approvals for the purchase and sale of the Shares and the consummation of the related transactions contemplated by this Agreement to be obtained or any applicable waiting periods to be terminated or expire; provided, however, that in the event the FTC or the DOJ issues a "second request" in connection with any such filing, the parties hereto will consult with each other in good faith regarding appropriate further action, which shall be taken only to the extent agreed upon by all of the parties. Section 5.2 TRANSFER RESTRICTIONS. (a) The Purchaser shall not, directly or indirectly, sell, transfer, assign, pledge or otherwise dispose of any interest in any of the Shares acquired -13- hereunder for a period of one (1) year following the First Closing Date (the "Holding Period"); provided, however, that such agreement shall not be deemed to limit the Purchaser's right to consummate a merger or other corporate transaction involving a change of control of the Purchaser as a result of which Shares may be deemed to be transferred by operation of law to a successor in interest of the Purchaser; provided, further, that, notwithstanding anything in this Section 5.2(a) to the contrary, but subject to Section 5.2(b), the Purchaser shall be permitted to sell, transfer, assign or pledge all or any part of the Shares to any affiliates of Purchaser or SOFTBANK Corp., a Japanese corporation, including, without limitation, SOFTBANK Capital Partners and any other partnership or other entity of which any direct or indirect subsidiary of SOFTBANK Corp. is a general partner or has investment discretion, or any employees of any of the foregoing (any such person or entity being herein referred to as a "SOFTBANK Entity"). The Purchaser shall not sell or transfer the Shares or any interest therein except in compliance with the Securities Act, applicable state securities laws and this Agreement. (b) Prior to, and as a condition to, any transfer referred to in the second proviso to the first sentence of Section 5.2(a), the transferee shall agree in writing, for the benefit of the Company, to be bound by the transfer restrictions set forth in this Section 5.2. Section 5.3 BOARD OF DIRECTORS. On and after the First Closing Date, the Purchaser shall have the right to designate (i) a number of members of the Company's Board of Directors equal to the product of (A) the total number of authorized directors and (B) the aggregate Proportionate Share (as defined below) of the Purchaser and the SOFTBANK Entities on the Company's Board of Directors, rounded up to the nearest whole number, but not to exceed two directors (the "Board Composition Requirement"), and (ii) so long as the Purchaser and the SOFTBANK Entities collectively own 50% or more of the Shares theretofore purchased hereunder, the Purchaser shall have the right to designate one director to be a member of each committee of the Company's Board of Directors. -14- Section 5.4 PREEMPTIVE RIGHTS. (a) If the Company proposes to issue, grant or sell Common Stock or Rights, the Company shall first give to the Purchaser (so long as the Purchaser owns at least 500,000 Shares) and any transferee of Shares from the Purchaser then owning at least 500,000 Shares (appropriately adjusted for any stock split, reverse stock split or stock dividend), except for any transferee that acquires such Shares in a public offering registered under the Securities Act or in a transaction on the open market effected pursuant to Rule 144 under the Securities Act, (each a "Securityholder") written notice setting forth in reasonable detail the price and other terms on which such shares of Common Stock or Rights are proposed to be issued or sold, the terms of any such Rights and the amount thereof proposed to be issued, granted or sold. Each Securityholder shall thereafter have the preemptive right, exercisable by written notice to the Company no later than twenty (20) days after the Company's notice is given, to purchase the number of such shares of Common Stock or Rights set forth in the Securityholder's notice (but in no event more than the Securityholder's Proportionate Share (as defined below) thereof, as of the date of the Company's notice), at the price and on the other terms set forth in the Company's notice. Any notice by a Securityholder exercising the right to purchase shares of Common Stock or Rights pursuant to this Section 5.4 shall constitute an irrevocable commitment to purchase from the Company the shares of Common Stock or Rights specified in such notice, subject to the maximum set forth in the preceding sentence. If all the Securityholders exercise their preemptive rights set forth in this Section 5.4(a) to the full extent of their Proportionate Share or if for any other reason the Company shall not issue, grant or sell shares of Common Stock or Rights to persons other than Securityholders, then the closing of the purchase of shares of Common Stock or Rights by Securityholders shall take place on such date, no less than ten (10) and no more than thirty (30) days after the expiration of the 20-day period referred to above, as the Company may select, and the Company shall notify the Securityholders of such closing at least seven (7) days prior thereto. If all persons entitled -15- thereto do not exercise their preemptive rights to the full extent of their Proportionate Share and, as contemplated by Section 5.4(b), the Company shall issue, grant or sell shares of Common Stock or Rights to persons other than Securityholders, then the closing of the purchase of shares of Common Stock or Rights shall take place at the same time as the closing of such issuance, grant or sale. (b) If all persons entitled thereto do not exercise their preemptive rights to the full extent of their Proportionate Share, the Company shall use its good faith and commercially reasonable efforts to issue, grant or sell the remaining subject shares of Common Stock or Rights on the terms set forth in its notice to Securityholders, unless the Company is advised by its financial advisors that the remaining number or amount is too small to be reasonably sold. From the expiration of the 20-day period first referred to in Section 5.4(a) and for a period of 90 days thereafter, the Company may offer, issue, grant and sell to any person or entity shares of Common Stock or Rights having the terms set forth in the Company's notice relating to such shares of Common Stock or Rights at a price and on other terms no less favorable to the Company, and including no less cash, than those set forth in such notice (without deduction for reasonable underwriting, sales agency and similar fees payable in connection therewith); provided, however, that the Company may not issue, grant or sell shares of Common Stock or Rights in an amount greater than the amount set forth in such notice minus the amount purchased or committed to be purchased by Securityholders rights. (c) The provisions of this Section 5.4 shall not apply to the following issuances of securities: (i) pursuant to an approved stock option plan, 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, (ii) the issuance of Rights, or Common Stock issuable upon exercise of Rights, granted to retailers or lessors engaged in bona fide business transactions with the Company, where the primary purpose is not to raise -16- additional equity capital for the Company, (iii) as direct consideration for the acquisition by the Company of another business entity or the merger of any business entity with or into the Company, (iv) in connection with a stock dividend, (v) upon the exercise of warrants or options, or upon the conversion of convertible securities, outstanding on the date hereof or as to which Securityholders have been previously offered the right to participate as contemplated hereby or (vi) in an underwritten public offering registered under the Securities Act if the managing underwriters advise the Securityholders in writing that the purchase of shares of Common Stock pursuant to the preemptive rights afforded by this Section 5.4 would materially and adversely affect the marketing of the offering. (d) For purposes of this Section 5.4, the following terms shall have the corresponding meanings set forth herein: "Proportionate Share" means, with respect to each Securityholder, a fraction the numerator of which is the total number of shares of Common Stock owned and the number of shares of Common Stock issuable upon exercise of Rights owned by such Securityholder, and the denominator of which is the total number of shares of Common Stock outstanding plus the number of shares of Common Stock issuable upon exercise of all Rights outstanding. "Right" means 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, from the Company any Common Stock or any other such option, warrant, security, right or instrument, including any instrument issued by the Company or any subsidiary thereof the value of which is measured by reference to the value of the Common Stock. Section 5.5 ALTERNATIVE TRANSACTIONS. The Company covenants that prior to the earlier of (i) the Second Closing Date and (ii) the date 90 days after the date hereof, (A) neither the Company nor any of its officers, -17- directors, advisors, agents or any other person or entity acting on behalf of any or all of them (collectively, "Representatives") shall, directly or indirectly, initiate, solicit, induce, support, encourage (including, without limitation by providing non-public information), agree to, or enter into any alternative proposal, negotiation or transaction for an investment in or sale of newly-issued equity interests in or voting securities of the Company (an "Alternative Transaction") and (B) in the event the Company receives any proposal for an Alternative Transaction, the Company shall promptly notify the Purchaser of the receipt of such proposal; provided, however, that this Section 5.5 shall not restrict the Company's ability to incur bona fide indebtedness that is not convertible into or exchangeable for any equity security of the Company; provided, further, that, notwithstanding this Section 5.5, the Company may issue or sell in a transaction pursuant to a bona fide offer from a third party (x) its Common Stock at a price per share of not less than $13.00 (the "Minimum Price") and (y) convertible debt securities or convertible preferred securities at a conversion price per share not less than the Minimum Price, in each case (x) and (y) provided that the Purchaser is previously offered in writing the opportunity to purchase such securities on the same terms as, or on terms more favorable to the Purchaser than, those offered by such third party (it being understood that (i) such written offer to the Purchaser shall identify the third party offeror and describe with specificity the terms of the transaction proposed to be consummated with such third party and (ii) the Purchaser shall exercise such right of first refusal within 2 business days after receipt of such notice). In the event of a stock split, reverse stock split or stock dividend involving the Company, the Minimum Price shall be appropriately adjusted. Section 5.6 MEETING OF THE COMPANY STOCKHOLDERS. The Company shall take all customary actions in accordance with applicable law and its Certificate of Incorporation and By-Laws to seek stockholder approval by the holders of a majority of the outstanding shares of Common Stock at the annual meeting of stockholders to be held on or before July 13, 1999 (the "Annual Meeting") (i) of the Second -18- Purchase as contemplated hereby, (ii) of an amendment to the Company's certificate of incorporation increasing the authorized number of shares of Common Stock to 30,000,000 (the "Charter Amendment") and (iii) of election of a Board of Directors meeting the Board Composition Requirements (calculated in a manner that gives effect to the purchase of the Shares to be purchased at the Second Closing). The Board of Directors of the Company shall recommend such approval, and the Company shall solicit such approval in accordance with its customary practices. No amendment or supplement to the proxy statement soliciting proxies in connection with such Annual Meeting shall be filed or made by the Company without prior consultation with the Purchaser and its counsel. Section 5.7 PUBLICITY. The Company and the Purchaser shall consult with each other prior to issuing any press releases or otherwise making public statements with respect to the transactions contemplated hereby and prior to making any filings with any federal or state governmental or regulatory agency or any self-regulatory organization with respect thereto. Section 5.8 LIMITATION ON OWNERSHIP OF COMMON STOCK. Commencing on the First Closing Date and prior to the fifth anniversary thereof, the Purchaser shall not acquire beneficial ownership of any Common Stock or any Rights (except, in any case, by way of stock dividends, stock splits or other distributions or offerings made available to holders of Common Stock generally) without the written consent of the Company, if the effect of such acquisition would be to increase the Purchaser's Proportionate Share to greater than 35%; provided, however, that: (i) Nothing herein shall prevent the Purchaser from acquiring Common Stock or Rights if it is publicly disclosed or the Purchaser otherwise learns that any person or persons acting together that would constitute a "group" for purposes of Section 13(d) of the Exchange Act (a "Group") has acquired or proposes to acquire, immediately or at some later date, beneficial ownership (within the meaning of Rule 13(d)-3 under the Exchange Act) of Common Stock -19- which results or would result in such person or Group (other than Michael G. Rubin, any member of Mr. Rubin's immediate family or any trust of which the beneficiaries are Mr. Rubin and/or members of his immediate family) benefi- cially owning Common Stock in excess of the maximum number of shares of Common Stock the Purchaser is then permitted to acquire hereunder; provided that the number of additional shares of Common Stock acquired by the Purchaser pursuant to this paragraph (i) when added to the Common Stock then beneficially owned by the Purchaser shall not exceed the number of shares of Common Stock beneficially owned or proposed to be beneficially owned by such other person or Group; (ii) Nothing herein shall prevent the Purchaser from acquiring Common Stock or Rights, without regard to the limitations of this Section, if a tender or exchange offer is made as evidenced by the filing with the Securities and Exchange Commission of a Statement on Schedule 14D-1 (or any successor schedule or form promulgated or adopted for such purpose) and the actual dissemination of tender offer materials to securityholders by any person or Group (not including the Company or the Purchaser) which offers to purchase or exchange for cash or other consideration Common Stock which, if added to the Common Stock (if any) already owned by such person or Group would result in such person or Group beneficially owning Common Stock representing more than 30% of the then outstanding Common Stock; and (iii) The Purchaser shall not be obligated to dispose of any Common Stock if the Purchaser's Proportionate Share is increased as a result of (a) any actions taken by the Purchaser which are permitted under paragraph (i) or (ii) of this Section 5.8, (b) a recapitalization of the Company or (c) a repurchase of any shares of Common Stock by the Company or any other action taken by the Company or its affiliates or associates. Section 5.9 FULFILLMENT OF CONDITIONS. Each of the Company and the Purchaser shall use reasonable efforts to perform, comply with and fulfill all obligations, covenants and conditions required by this Agreement to be performed, -20- complied with or fulfilled on its part prior to or at the Closing Dates. Section 5.10 FURTHER ASSURANCES. The Company shall use its reasonable efforts at any time and from time to time prior to, at and after the Closings to execute and deliver to the Purchaser such further documents and instruments and to take all such further actions as the Purchaser reasonably may request in order to convey and transfer the Shares to the Purchaser and to consummate the transactions contemplated by this Agreement and the Registration Rights Agreement. ARTICLE VI CONDITIONS TO CLOSING Section 6.1 CONDITIONS TO THE PURCHASER'S OBLIGATIONS. The obligation of the Purchaser to purchase the Shares at each Closing is subject to the fulfillment on or prior to the relevant Closing Date of the following conditions: (a) REPRESENTATIONS AND WARRANTIES CORRECT; PERFORMANCE OF OBLIGATIONS. The representations and warranties made by the Company in Article III hereof shall be true and correct in all material respects as of the date of this Agreement and as of such Closing Date (except with respect to representations and warranties made as of a specific time, which shall be true in all material respects as of such time, and except for representations and warranties containing a materiality qualification, which must be true in all respects) with the same effect as though such representations and warranties had been made at and as of such Closing Date, provided, however, that the representation set forth in Section 3.5(c) shall be deemed true in all material respects as of such Closing Date so long as the Company updates Schedule 3.5(c) as of such Closing Date; and the Company shall have performed all obligations herein required to be performed by it on or prior to such Closing Date in all material respects (except with respect to obligations containing a materiality qualification, which must be performed in all respects). -21- (b) REGISTRATION RIGHTS AGREEMENT. The Company shall have duly executed and delivered the Registration Rights Agreement. (c) VOTING AGREEMENT. Michael G. Rubin shall have duly executed and delivered the Voting Agreement in the form attached hereto as Exhibit C. (d) BOARD COMPOSITION. A Board of Directors meeting the Board Composition Requirement applicable after giving effect to the purchase of the Shares to be purchased at such Closing shall have been duly established and in place. (e) STOCKHOLDER APPROVAL. With respect to the Second Closing, stockholders of the Company holding a majority of the outstanding shares of Common Stock shall have approved the Second Purchase and the Charter Amendment as provided herein. (f) COMPLIANCE CERTIFICATE. The President of the Company shall deliver to the Purchaser at such Closing a certificate certifying that the conditions specified in Section 6.1(a) have been fulfilled. (g) OPINION OF COMPANY'S COUNSEL. The Purchaser shall have received from Blank, Rome, Comisky & McCauley LLP, counsel to the Company, an opinion addressed to the Purchaser, dated such Closing Date, reasonably satisfactory in form and substance to Sullivan & Cromwell, counsel to the Purchaser. (h) NO INJUNCTION, ORDER, ETC. There shall be no injunction, order or decree of any nature of any court or government authority of competent jurisdiction that is in effect that restrains or prohibits the consummation of the transactions contemplated hereby. (i) WAITING PERIOD. Any waiting period applicable to the sale of the Shares under the HSR Act shall have expired or been terminated. -22- Section 6.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The Company's obligation to issue and sell the Shares at each Closing is subject to the fulfillment on or prior to the relevant Closing Date of the following conditions: (a) REPRESENTATIONS AND WARRANTIES CORRECT; PERFORMANCE OF OBLIGATIONS. The representations and warranties of the Purchaser in Article IV hereof shall be true and correct in all material respects as of the date of this Agreement and as of such Closing Date (except with respect to representations and warranties made as of a specific time, which shall be true in all material respects as of such time, and except for representations and warranties containing a materiality qualification, which must be true in all respects) with the same effect as though such representations and warranties had been made at and as of such Closing Date; and the Purchaser shall have performed all obligations herein required to be performed by it on or prior to such Closing Date in all material respects (except with respect to covenants containing a materiality qualification, which must be performed in all respects). (b) REGISTRATION RIGHTS AGREEMENT. The Purchaser shall have duly executed and delivered the Registration Rights Agreement. (c) VOTING AGREEMENT. The Purchaser shall have duly executed and delivered the Voting Agreement in the form attached hereto as Exhibit D. (d) STOCKHOLDER APPROVAL. With respect to the Second Closing, stockholders of the Company holding a majority of the outstanding shares of Common Stock shall have approved the Second Purchase and the Charter Amendment as provided herein. (e) NO INJUNCTION, ORDER, ETC. There shall be no injunction, order or decree of any nature of any court or government authority of competent jurisdiction that is in effect that restrains or prohibits the consummation of the transactions contemplated hereby. -23- (f) WAITING PERIOD. Any waiting period applicable to the sale of the Shares under the HSR Act shall have expired or been terminated. ARTICLE VII INDEMNIFICATION Section 7.1 INDEMNIFICATION. Each of the Company and the Purchaser (an "Indemnifying Party") covenants and agrees to indemnify and hold the other (the "Indemnified Party") harmless from and against, and to reimburse the Indemnified Party for, any claim for any losses, damages, liabilities or expenses, including reasonable counsel fees (collectively "Damages") incurred by such Indemnified Party by reason of or arising from (i) any misrepresentation or breach of any representation or warranty of such Indemnifying Party contained in this Agreement or in any instrument delivered hereunder or (ii) any failure by such Indemnifying Party to perform any obligation or covenant required to be performed by it under any provision of this Agreement. ARTICLE VIII MISCELLANEOUS Section 8.1 GOVERNING LAW. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware. Section 8.2 SURVIVAL. The representations, warranties, covenants and agreements made herein shall survive the closing of the transactions contemplated hereby. Section 8.3 SUCCESSORS AND ASSIGNS. Except as expressly provided herein, the rights and obligations hereunder may not be assigned or delegated by the Purchaser or the Company without the prior written consent of the other; provided, however, that Purchaser may assign, in whole or in part, its rights and delegate its obligation, hereunder (including, without limitation, the right to purchase any or all of the Shares and the obligation to pay -24- all or any portion of the Purchase Price for the Shares) to any SOFTBANK Entity; provided, further, that any such delegation by the Purchaser of its obligations shall not relieve Purchaser of liability to the Company that it would otherwise have in the event such obligations are not performed. The provisions hereof shall inure to the benefit of, and be binding upon, the successors and permitted assigns of the parties hereto. Section 8.4 ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the full and entire understanding and agreement among the parties with regard to the subject matter hereof. Any term of 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 with the written consent of the Company and the Purchaser. Section 8.5 NOTICES AND OTHER COMMUNICATIONS. Every notice or other communication required or contemplated by this Agreement by either party shall be delivered either by (i) personal delivery, (ii) postage prepaid return receipt requested by registered or certified mail, (iii) overnight courier, such as Federal Express or UPS, or (iv) facsimile with a confirmation copy sent simultaneously by postage prepaid, return receipt requested, registered or certified mail, in each case addressed to the Company or the Purchaser as the case may be at the following address: To the Company: Global Sports, Inc. 555 South Henderson Road King of Prussia, Pennsylvania 19406 Telephone: (610) 768-0900 Facsimile: (610) 768-0753 Attn: Michael G. Rubin -25- With a copy to: Blank Rome Comisky & McCauley LLP One Logan Square Philadelphia, Pennsylvania 19103 Attn: Arthur Miller, Esq. Telephone: (215) 569-5544 Facsimile: (215) 569-5628 To the Purchaser: SOFTBANK Holdings Inc. 10 Langley Road, Suite 403 Newton Center, MA 02159 Attn: Ronald D. Fisher Facsimile: (617) 928-9301 SOFTBANK America Inc. 300 Delaware Avenue, Suite 900 Wilmington, Delaware 19801 Attn: Francis Jacobs Facsimile: (302) 552-3128 With a copy to: Sullivan & Cromwell 1888 Century Park East Suite 2100 Los Angeles, CA 90067 Attn: John L. Savva, Esq. Facsimile: (310) 712-8800 or at such other address as the intended recipient previously shall have designated by written notice given in like manner to the other party. Notice by registered or certified mail shall be effective on the date it is officially recorded as delivered to the intended recipient by return receipt or equivalent, and in the absence of such record of delivery, the effective date shall be presumed to have been the fifth (5th) business day after it was deposited in the mail. All notices delivered in person or sent by courier shall be deemed to have been delivered to and received by the addressee and shall be effective on the date of personal delivery; notices delivered by facsimile with simultaneous confirmation copy by registered or -26- certified mail shall be deemed delivered to and received by the addressee and effective on the date sent. Notice not given in writing shall be effective only if acknowledged in writing by a duly authorized representative of the party to whom it was given. Section 8.6 DELAYS OR OMISSIONS. No delay or omission to exercise any right, power or remedy accruing to any person or entity hereunder shall impair any such right, power or remedy nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any person or entity hereunder of any breach or default under this Agreement, or any waiver on the part of any such person or entity of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies either under this Agreement, or by law or otherwise shall be cumulative and not alternative. Section 8.7 SEVERABILITY. In case any provision of 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. Section 8.8 COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. Execution and delivery of this Agreement by exchange of facsimile copies bearing the facsimile signature of a party hereto shall constitute a valid and binding execution and delivery of this Agreement by such party. Section 8.9 ATTORNEYS' FEES. If any action or proceeding shall be commenced to enforce this Agreement or any right arising in connection with this Agreement, the prevailing party in such action or proceeding shall be -27- entitled to recover from the other party the reasonable attorneys' fees, costs and expenses incurred by such prevailing party in connection with such action or proceeding. -28- IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first above written. GLOBAL SPORTS, INC. By:____________________________ Name: Title: SOFTBANK AMERICA INC. By:____________________________ Name: Title: -29- EXHIBIT A SCHEDULE OF PURCHASES BY PURCHASER FIRST CLOSING SHARES PURCHASED 2,432,692 PURCHASE PRICE $31,624,996 SECOND CLOSING SHARES PURCHASED 3,721,158 PURCHASE PRICE $48,375,054 TOTAL SHARES PURCHASED 6,153,850 TOTAL PURCHASE PRICE $80,000,050 -30- EXHIBIT B REGISTRATION RIGHTS AGREEMENT -31- EXHIBIT C VOTING AGREEMENT -32- EX-99.D 4 REGISTRATION RIGHTS AGMT., AS OF JUNE 10, 1999 EXHIBIT D ================================================================================ REGISTRATION RIGHTS AGREEMENT Dated as of June 10, 1999 By and Among GLOBAL SPORTS, INC. and SOFTBANK AMERICA INC. ================================================================================ REGISTRATION RIGHTS AGREEMENT REGISTRATION RIGHTS AGREEMENT, dated as of June 10, 1999, by and among Global Sports, Inc., a Delaware corporation (the "Company"), and SOFTBANK America Inc., a Delaware corporation ("SOFTBANK America"). RECITALS WHEREAS, the Company and SOFTBANK America have entered into the Stock Purchase Agreement, dated as of June 10, 1999 (the "Purchase Agreement"), providing for, among other things, the sale by the Company and the purchase by SOFTBANK America or its designees of an aggregate of 6,153,850 shares of Common Stock; and WHEREAS, this Agreement is being entered into in order to induce SOFTBANK America to purchase the Common Stock pursuant to the Purchase Agreement; 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 First Closing Date specified in the 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. -1- (c) "Common Stock" shall mean the Common Stock, par value $0.01 per share, of the Company purchased by SOFTBANK America pursuant to the Purchase Agreement. (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 the Common Stock; and 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 -2- thereof, under the Securities Act or otherwise, is removed by the Company. (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) At any time from and after the date 12 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, constitute 5% or more of the then-outstanding securities of the class or series to which such Registrable Securities belong; provided, further, that -3- in any event the Company shall be obligated to register such Registrable Securities upon such 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 $5 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 three registration statements in the aggregate and 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. (ii) In the event of any registration of Registrable Securities pursuant to Section 2(a)(i) hereof, -4- 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, in which case such Holder shall be treated for all purposes hereunder as having made a demand for registration pursuant to this Section 2(a). (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 postponement 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. -5- (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 -6- 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 -7- 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 -8- 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 -9- 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 -10- 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 -11- 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 -12- 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 -13- 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 -14- 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 -15- 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; -16- (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 -17- 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 -18- 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; -19- (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 -20- 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 -21- 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 -22- 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 -23- 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; -24- 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 -25- Section 2 hereof, and in consideration of the agreements of the Holders contained herein, and as an inducement to SOFTBANK America to enter into the Purchase Agreement, 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 agent under the indemnity agreement in -26- 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 or alleged untrue statement of a material fact contained in -27- 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 indemnifying party of the commencement thereof, such -28- 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 this Section 6(d) were determined by pro rata allocation -29- (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 meaning of the Securities Act; and the obligations of the -30- 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 Exchange Act referred to in subparagraph (c)(1) of Rule 144 -31- 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. (b) Specific Performance. The Company acknowledges that it would be impossible to determine the -32- 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. -33- (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 555 South Henderson Road, King of Prussia, Pennsylvania 19406, Attention: President, facsimile no. (610)768-0753, 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 America 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 Securities acquired by such transferee in -34- such transfer, such transferee owns at least 500,000 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 Agreement and the transfer and registration of Registrable Securities by any Holder. (h) LAW GOVERNING. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN WITH THE LAWS OF THE STATE OF DELAWARE (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. (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 -35- 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. -36- 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: SOFTBANK AMERICA INC. By:________________________________ Address: 300 Delaware Avenue, Suite 900 Wilmington, Delaware 19801 Fax No.: (302) 552-3128 -37- EX-99.E 5 RUBIN VOTING AGREEMENT EXHIBIT E VOTING AGREEMENT THIS VOTING AGREEMENT is made and entered into as of June 10, 1999 (this "Agreement") between SOFTBANK America Inc., a Delaware corporation ("SOFTBANK" or the "Purchaser"), and Michael G. Rubin (the "Principal Stockholder"). RECITALS WHEREAS, on June 10, 1999, Global Sports, Inc., a Delaware corporation (the "Company"), and SOFTBANK entered into a Purchase Agreement (the "Purchase Agreement"), pursuant to which SOFTBANK intends to acquire 6,153,850 shares of the Company's Common Stock, par value $0.01 per share (the "Common Stock"); and WHEREAS, as an inducement and a condition to consummating the Purchase Agreement, the Purchaser has required that the Principal Stockholder agree, and the Principal Stockholder has agreed, to enter into this Agreement. 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. -1- (b) "Person" shall mean an individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization or other entity. 2. The Second Purchase. 2.1 Approval of the Second Purchase. During the period commencing on the date hereof and continuing until the earlier to occur of (i) consummation of the Second Closing (as defined in the Purchase Agreement) or (ii) the 90th day after the date of the Purchase Agreement (such earlier date, the "Expiration Date"), 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) in favor of the purchase of shares of Common Stock to be purchased at the Second Closing pursuant to the Purchase Agreement (the "Second Purchase"); (ii) in favor of the amendment of the Certificate of Incorporation of the Company to increase the authorized number of shares of Common Stock to 30,000,000; (iii) 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; (iv) in favor of election to the Board of Directors of the directors which SOFTBANK is entitled to designate upon consummation of the Second Purchase (as defined in the Purchase Agreement) and which have been identified by SOFTBANK as nominees for such purpose; and (v) except as otherwise agreed to in writing in advance by the Purchaser, 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 -2- adversely affect the Second 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 the Purchaser 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 the Purchaser 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. 3. Composition and Nomination of Board of Directors. 3.1 Board Composition Requirements. The parties hereto intend that SOFTBANK shall have the right to designate (i) a number of members of the Company's Board of Directors equal to the product of (A) the total number of -3- authorized directors and (B) the aggregate Proportionate Share (as defined in the Purchase Agreement) of the Purchaser and the SOFTBANK Entities (as defined in the Purchase Agreement) on the Company's Board of Directors, rounded up to the nearest whole number, but not to exceed two directors (the "Board Composition Requirement"), and (ii) so long as the Purchaser and the SOFTBANK Entities collectively own 50% or more of the Shares theretofore purchased hereunder, the Purchaser shall have the right to designate one director to be a 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. 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 -4- 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 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 Common Stock. From the date hereof until the Expiration Date, the Principal Stockholder shall not sell, transfer or pledge his Common 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, except, in each such case, if -5- 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. 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. 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. -6- 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): (a) if to SOFTBANK, to: SOFTBANK AMERICA Inc. 300 Delaware Avenue, Suite 900 Wilmington, Delaware 19801 Facsimile: (302) 552-3128 Attention: Frances Jacobs SOFTBANK Holdings Inc. 10 Langley Road, Suite 403 Newton Center, Massachusetts 02169 Facsimile: (617) 928-9301 Attention: Ronald Fisher .Vice Chairman 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: -7- Global Sports, Inc. 555 South Henderson Road King of Prussia, Pennsylvania 19406 Telephone: (610) 768-0900 Facsimile: (610) 768-0753 Attention: Michael G. Rubin with a copy to: Blank Rome Comisky & McCauley LLP One Logan Square Philadelphia, Pennsylvania 19103 Telephone: (215) 569-5544 Facsimile: (215) 569-5628 Attention: Arthur Miller, Esq. -8- IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written. SOFTBANK AMERICA INC. By:___________________________________ Name: Title: ______________________________________ MICHAEL G. RUBIN -9- EXHIBIT A Irrevocable Proxy In order to secure the performance of the duties of the undersigned pursuant to the Voting Agreement, dated as of June 10, 1999 (the "Voting Agreement"), between the undersigned and SOFTBANK America Inc., 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. This Proxy shall terminate upon the Expiration Date (as defined in the Voting Agreement). ___________________________ Michael G. Rubin -10- EX-99.F 6 SBA VOTING AGREEMENT EXHIBIT F VOTING AGREEMENT THIS VOTING AGREEMENT is made and entered into as of June 10, 1999 (this "Agreement") between SOFTBANK America Inc., a Delaware corporation ("SOFTBANK" or the "Purchaser"), and Michael G. Rubin (the "Principal Stockholder"). RECITALS WHEREAS, on June 10, 1999, Global Sports, Inc., a Delaware corporation (the "Company"), and SOFTBANK entered into a Purchase Agreement (the "Purchase Agreement"), pursuant to which SOFTBANK intends to acquire 6,153,850 shares of the Company's Common Stock, par value $0.01 per share (the "Common Stock"); and WHEREAS, as an inducement and a condition to consummating the Purchase Agreement, the Principal Stockholder has required that the Purchaser agree, and the Purchaser has agreed, to enter into this Agreement. 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. -1- (b) "Continuing Director" shall mean any member of the Board of Directors of the Corporation who was a member of the Board prior to the date of the 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 and who, in either event, is not a director designated by SOFTBANK pursuant to Section 5.3 of the 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. (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, the Purchaser 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 with respect to all directorships other than those which the Purchaser is entitled to designate pursuant to Section 5.3 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, the Purchaser 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 the Purchaser to remove, with or without cause, any or all of the directors other than the SOFTBANK Designees. -2- 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, the Purchaser 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 the Purchaser in such a manner to ensure that such vacancy is filled with a Continuing Director. 3. Certificate of Incorporation and Bylaws. The Purchaser 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 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 -3- 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. 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 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): -4- (a) if to SOFTBANK, to: SOFTBANK AMERICA Inc. 300 Delaware Avenue, Suite 900 Wilmington, Delaware 19801 Facsimile No.: (302) 552-3128 Attn: Frances Jacobs SOFTBANK Holdings Inc. 10 Langley Road, Suite 403 Newton Center, Massachusetts 02169 Facsimile No.: (617) 928-9301 Attention: Ronald Fisher Vice Chairman 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. 555 South Henderson Road King of Prussia, Pennsylvania 19406 Telephone: (610) 768-0900 Facsimile: (610) 768-0753 Attention: Michael G. Rubin -5- with a copy to: Blank Rome Comisky McCauley LLP One Logan Square Philadelphia, Pennsylvania 19103 Telephone: (215) 569-5544 Facsimile: (215) 569-5628 Attention: Arthur Miller, Esq. -6- IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written. SOFTBANK AMERICA INC. By:________________________________ Name: Title: ___________________________________ MICHAEL G. RUBIN -7- EX-99.G 7 SUBORDINATED LOAN AGREEMENT EXHIBIT G SUBORDINATED LOAN AGREEMENT THIS LOAN AGREEMENT (this "Agreement") is made effective as of the 10th day of June, 1999 (the "EFFECTIVE DATE"), by and between Global Sports, Inc., a Delaware corporation (the "COMPANY") , and SOFTBANK America Inc., a Delaware corporation ("LENDER"). RECITALS WHEREAS, on the date hereof, the Company and Lender are entering into a Stock Purchase Agreement (the "Purchase Agreement"), pursuant to which the Company intends to sell and Lender intends to acquire 6,153,850 shares of the Company's Common Stock, par value $.01 per share (the "Share Acquisition"). WHEREAS, the Company and Lender wish to enter into this Agreement to fund the Company's operations until the closing of the Share Acquisition. IN WITNESS WHEREOF, the parties agree as follows: 1. THE LOAN. Subject to the terms and conditions of this Agreement, Lender agrees to lend to the Company, and the Company agrees to borrow from Lender, funds in an aggregate principal amount of Fifteen Million Dollars ($15,000,000) (the "LOAN"), in one installment. The Loan shall be made on the date hereof. Interest shall accrue on the Loan from the date hereof. Lender will transmit the Loan via wire transfer of immediately available funds to the following account: Account No.: 323-266193, Bank Name: The Chase Manhattan Bank; ABA No.: 021000021; or pursuant to such other instructions as may have been provided in writing by the Company, and the Company will accept the Loan pursuant to the terms of this Agreement. 2. THE CONVERTIBLE SUBORDINATED NOTE. The Loan will be evidenced by, and repaid with interest in accordance with, an interest-bearing promissory note in the form of Exhibit A (the "CONVERTIBLE SUBORDINATED NOTE"), duly completed and dated as of the date of the Loan and delivered to Lender at or prior to the time of the Loan. 3. INTEREST AND PAYMENTS. Interest shall accrue and be paid to Lender on the outstanding and unpaid principal amount of the Loan at the rate of 4.98% per annum, computed on the basis of the actual number of days elapsed and a year of 360 days consisting of twelve 30 day months. Payments of principal and interest will be made to Lender in the manner specified in the Convertible Subordinated Note. 4. CONDITIONS TO FUNDING OF LOAN. The obligation of the Lender to make the Loan is subject to the fulfillment on or prior to the time of funding of the Loan of the following conditions: (a) The representations and warranties made by the Company in Article III of the Purchase Agreement shall be true and correct in all material respects as of such time (except -1- with respect to representations and warranties made as of a specific time, which shall be true in all material respects as of such time, and except for representations and warranties containing a materiality qualification, which must be true in all respects) with the same effect as though such representations and warranties had been made at and as of such time; and the Company shall have performed all obligations herein required to be performed by it on or prior to such time in all material respects (except with respect to obligations containing a materiality qualification, which must be performed in all respects). (b) The Company shall have duly executed and delivered the Purchase Agreement and the Convertible Subordinated Note. (c) The Company shall have duly executed and delivered the Registration Rights Agreement (as defined in the Purchase Agreement). (d) Michael G. Rubin shall have duly executed and delivered the Voting Agreement in the form attached hereto as Exhibit C to the Purchase Agreement. (e) If the Purchase Agreement is executed and delivered on a date prior to the date the Loan is funded, the President of the Company shall deliver to the Lender on the date of funding a certificate certifying that the conditions specified in Section 3(a) have been fulfilled. (f) The Lender shall have received from Blank, Rome, Comisky & McCauley LLP, counsel to the Company, an opinion addressed to the Lender, dated the date of such funding, reasonably satisfactory in form and substance to Sullivan & Cromwell, counsel to the Lender. 5. EVENTS OF DEFAULT. The occurrence of any of the following events will be an "Event of Default" hereunder: (a) Voluntary Bankruptcy or Insolvency Proceedings. The Company shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian of itself or of all or a substantial part of its property, (ii) make a general assignment for the benefit of its or any of its creditors, (iii) commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or consent to any such relief or to the appointment of or taking possession of its property by any official in an involuntary case or other proceeding commenced against it, or (iv) take any action for the purpose of effecting any of the foregoing; or (b) Involuntary Bankruptcy or Insolvency Proceedings. Proceedings for the appointment of a receiver, trustee, liquidator or custodian of the Company or of all or a substantial part of the property thereof, or an involuntary case or other proceedings seeking liquidation, reorganization or other relief with respect to the Company or the debts thereof under any bankruptcy, -2- insolvency or other similar law now or hereafter in effect shall be commenced and an order for relief entered or such proceeding shall not be dismissed or discharged within sixty (60) days of commencement. (c) Cross Default. The Company fails to pay or discharge any obligation in excess of $1,000,000 when due, whether by scheduled maturity, required prepayment, acceleration, or otherwise). (d) Judgment. Rendering of a final judgment or judgments (not subject to appeal) against the Company or any of its subsidiaries in an aggregate amount in excess of $1,000,000 which remains unstayed, in effect and unpaid for a period of 60 consecutive days thereafter. (e) Conversion Default. With respect to outstanding obligations under the Convertible Subordinated Note, any breach by the Company with respect to its obligations to issue shares of Common Stock upon conversion of the Convertible Subordinated Note pursuant to Section 3 thereof. 6. RIGHTS OF THE LENDER UPON DEFAULT. Upon the occurrence or existence of an Event of Default specified in Section 5(a) or (b), immediately and without notice, all outstanding obligations payable by the Company hereunder and under the Convertible Subordinated Note shall automatically become immediately due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived. Upon the occurrence or existence of an Event of Default as specified in Sections 5(c), (d) or (e), the Lender may declare the outstanding obligations hereunder and under the Convertible Subordinated Note immediately due and payable by written notice to the Company and upon any such declaration such obligations shall become immediately due and payable. 7. SUCCESSORS AND ASSIGNS. This Agreement and the Convertible Subordinated Note shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of the parties. 8. WAIVER AND AMENDMENT. Any provision of this Agreement may be amended, waived or modified upon the written consent of the Company and the Lender. 9. ASSIGNMENT. Neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned, by operation of law or otherwise, in whole or in part, by the Company or the Holder without the prior written consent of the other party except (i) in the case of the Company, in connection with an assignment in whole to a successor corporation to the Company, provided that such successor corporation acquires, by purchase of assets, merger or otherwise, all or substantially all of the Company's property and assets, and (ii) in the case of Lender to any affiliates of Lender or SOFTBANK Corp., a Japanese corporation, including, -3- without limitation, any partnership or other entity of which any direct or indirect subsidiary of SOFTBANK Corp. is a general partner or has investment discretion, or any employees of any of the foregoing. 10. ADDRESSES FOR NOTICES, ETC. Any notices and other communications required or permitted under this Agreement shall be effective if in writing and delivered personally or sent by telecopier, Federal Express or registered or certified mail, postage prepaid, addressed as follows: If to Lender, to: SOFTBANK Holdings Inc. 10 Langley Road, Suite 403 Newton Center, MA 02159 Attn: Ronald D. Fisher Facsimile: (617) 928-9301 SOFTBANK America Inc. 300 Delaware Avenue, Suite 900 Wilmington, Delaware 19801 Attn: Francis Jacobs Facsimile: (302) 552-3128 with a copy to: Sullivan & Cromwell 1888 Century Park East Los Angeles, California 90067 Telephone: (310) 712-6650 Telecopier: (310) 712-8800 Attention: John L. Savva, Esq. If to the Company, to: Global Sports, Inc. 555 South Henderson Road King of Prussia, Pennsylvania 19103 Telephone: (610) 768-0900 Telecopier: (610) 768-0753 Attention: Michael G. Rubin with a copy to: Blank Rome Comisky & McCauley LLP One Logan Square Philadelphia, Pennsylvania 19103 Telephone: (215) 569-5544 Telecopier: (215) 569-5628 Attention: Arthur Miller, Esq. -4- Unless otherwise specified herein, such notices or other communications shall be deemed effective (a) on the date delivered, if delivered personally, (b) two business days after being sent, if sent by Federal Express or other commercial overnight delivery service, (c) one business day after being sent, if sent by telecopier with confirmation of good transmission and receipt, and (d) three business days after being sent, if sent by registered or certified mail. Each of the parties hereto shall be entitled to specify another address by giving notice as aforesaid to each of the other parties hereto. 11. SEVERABILITY. The holding of any provision of this Agreement to be invalid or unenforceable by a court of competent jurisdiction shall not affect any other provisions and the other provisions of this Convertible Subordinated Note shall remain in full force and effect. 12. GOVERNING LAW. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware. -5- IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first above written. GLOBAL SPORTS, INC., a Delaware corporation By:_______________________ Title:____________________ SOFTBANK AMERICA INC., a Delaware corporation By:_______________________ Title:____________________ -6- EX-99.H 8 CONVERTIBLE SUBORDINATED NOTE EXHIBIT H THIS NOTE AND THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN EXEMPTION FROM REGISTRATION. PAYMENT OF THIS NOTE AND ACCRUED INTEREST HEREON IS EXPRESSLY SUBJECT TO THE TERMS AND CONDITIONS OF THE SUBORDINATION AGREEMENT REFERRED TO IN THIS NOTE. GLOBAL SPORTS, INC. CONVERTIBLE SUBORDINATED NOTE NOTE NO. 1999A-I $15,000,000.00 June 10, 1999 King of Prussia, Pennsylvania FOR VALUE RECEIVED, Global Sports, Inc., a Delaware corporation (the "COMPANY"), promises to pay to SOFTBANK America Inc. ("SOFTBANK), or its assigns (each of SOFTBANK and any such assign, a "Holder"), the principal sum of $15,000,000.00, or such lesser amount as shall then equal the outstanding principal amount hereof, together with interest from the date of this Convertible Subordinated Note on the unpaid principal balance at a rate equal to 4.98% per annum, computed on the basis of the actual number of days elapsed and a year of 360 days consisting of twelve 30-day months. Unless this Convertible Subordinated Note is earlier converted in accordance with Section 3 hereof, all unpaid principal, together with any then unpaid and accrued interest and other amounts payable hereunder, shall be due and payable on the earlier of (i) September 30, 1999 (the "Maturity Date"), or (ii) the acceleration of the maturity thereof in accordance with Section 4 of the Subordinated Loan Agreement dated June 10, 1999 (the "SUBORDINATED LOAN AGREEMENT") between the Company and SOFTBANK America. This Convertible Subordinated Note shall be governed by, and be subject to, the terms of the Subordinated Loan Agreement, all of which provisions are hereby incorporated herein by reference. The following is a statement of the rights of the Holder and the conditions to which this Convertible Subordinated Note is subject, and to which the Holder hereof, by the acceptance of this Convertible Subordinated Note, agrees: 1. DEFINITIONS. As used in this Convertible Subordinated Note, the following capitalized terms have the following meanings: (a) The "COMPANY" includes the corporation initially executing this Convertible Subordinated Note and any Person that shall succeed to or assume the obligations of the Company under this Convertible Subordinated Note. (b) "HOLDER" shall mean the Person specified in the introductory paragraph of this Convertible Subordinated Note or any Person who shall at the time be the registered holder of this Convertible Subordinated Note. -1- (c) "PERSON" shall mean and include an individual, a partnership, a corporation (including a business trust), a joint stock company, a limited liability company, an unincorporated association, a joint venture or any other entity or a governmental authority. 2. INTEREST. Accrued interest on this Convertible Subordinated Note shall be payable at such time as the outstanding principal amount hereof shall be paid in full; provided however, that in the event this Convertible Subordinated Note is not previously converted and the principal amount hereof is not repaid in full on the Maturity Date, accrued but unpaid interest on this Convertible Subordinated Note shall thereafter be paid in cash on the Maturity Date, the last business day of each calendar month thereafter and on such date as the outstanding principal amount hereof shall be paid in full. 3. CONVERSION. (a) Common Stock Financing. Upon the First Closing, as defined in the Purchase Agreement between the Company and SOFTBANK of even date herewith (the "Purchase Agreement"), all principal and accrued interest due on this Convertible Subordinated Note shall automatically convert into a number of shares of Common Stock (the "CONVERSION NUMBER") determined by dividing all of the unpaid principal and accrued but unpaid interest on this Convertible Subordinated Note as of the First Closing Date (as defined in the Purchase Agreement) by $13.00, subject to appropriate adjustment in the event of stock splits, stock dividends, recapitalization and similar events (as so adjusted, the "CONVERSION PRICE"). The cancellation of this Convertible Subordinated Note in connection with such conversion shall be deemed to be payment in full of the purchase price of a number of shares equal to the Conversion Number purchased pursuant to the Purchase Agreement. (b) Optional Conversion. At any time after September 1, 1999, and whether before or after the Maturity Date, the Holder may, at its option, by written notice to the Company, convert this Convertible Subordinated Note into a number of shares of Common Stock equal to (i) the unpaid principal and accrued but unpaid interest as of the date such conversion becomes effective divided by (ii) the Conversion Price. Promptly following receipt of such notice, the Company shall take or use its reasonable best efforts to cause to be taken such actions as may be necessary to permit such conversion to be effected as promptly as reasonably practicable thereafter, including, without limitation, making such filings as may be required to be made by the Company or its affiliates under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. The Company shall at all times reserve and keep available, free from preemptive rights, out of its authorized but unissued Common Stock, for the purpose of effecting the conversion of this Convertible Subordinated Note, the full number of shares of Common Stock then issuable upon the conversion of this Convertible Subordinated Note. (c) Issuance of Securities on Conversion. Concurrent with the conversion of this Convertible Subordinated Note, the Company will cause to be issued in the name of, and delivered to, the Holder, a certificate or certificates representing the number of shares of the Common Stock to which the Holder shall be entitled on such conversion. No fractional shares will be issued on conversion of this Convertible Subordinated Note and in lieu thereof the Holder shall be entitled to payment in cash of the amount of the Convertible Subordinated Note not converted into shares. (d) Termination of Rights. All rights with respect to this Convertible Subordinated Note shall terminate upon the issuance of shares of Common Stock upon conversion of this Convertible -2- Subordinated Note, whether or not this Convertible Subordinated Note has been surrendered. Notwithstanding the foregoing, the Holder agrees to surrender this Convertible Subordinated Note to the Company for cancellation as soon as is practicable following conversion of this Convertible Subordinated Note. 4. SUCCESSORS AND ASSIGNS. Subject to the restrictions on transfer described in Section 6 below, the rights and obligations of the Company and the Holder shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of the parties. 5. WAIVER AND AMENDMENT. Any provision of this Convertible Subordinated Note may be amended, waived or modified upon the written consent of the Company and SOFTBANK. 6. ASSIGNMENT. Neither this Convertible Subordinated Note nor any of the rights, interests or obligations hereunder may be assigned, by operation of law or otherwise, in whole or in part, by the Company or the Holder without the prior written consent of the other party except (i) in the case of the Company, in connection with an assignment in whole to a successor corporation to the Company, provided that such successor corporation acquires, by purchase of assets, merger or otherwise, all or substantially all of the Company's property and assets, and (ii) in the case of Holder to any affiliates of Holder or SOFTBANK Corp., a Japanese corporation, including, without limitation, any partnership or other entity of which any direct or indirect subsidiary of SOFTBANK Corp. is a general partner or has investment discretion, or any employees of any of the foregoing. 7. SUBORDINATION. The Company and each Holder, by its acceptance hereof, agree that the payment of the principal amount evidenced by this Note and all accrued interest thereon is hereby expressly made subordinate and junior in right of payment to the prior indefeasible payment in full of all obligations, liabilities and indebtedness now and hereafter owing by the Company to Foothill Capital Corporation ("FOOTHILL") to the extent and subject to the terms and conditions set forth in that certain Subordination Agreement, dated on or about the date hereof, executed by and among the Company, SOFTBANK and Foothill. 8. ADDRESSES FOR NOTICES, ETC. Any notices and other communications required or permitted under this Agreement shall be effective if in writing and delivered personally or sent by telecopier, Federal Express or registered or certified mail, postage prepaid, addressed as follows: -3- If to the Holder, to: SOFTBANK Holdings Inc. 10 Langley Road, Suite 403 Newton Center, MA 02159 Attention: Ronald D. Fisher Facsimile: (617) 928-9301 SOFTBANK America Inc. 300 Delaware Avenue, Suite 900 Wilmington, Delaware 19801 Attention: Francis Jacobs Facsimile: (302) 552-3128 with a copy to: Sullivan & Cromwell 1888 Century Park East Suite 2100 Los Angeles, California 90067 Telephone: (310) 712-6650 Telecopier: (310) 712-8800 Attention: John L. Savva, Esq. If to the Company, to: Global Sports, Inc. 555 South Henderson Road King of Prussia, Pennsylvania 19406 Telephone: (610) 768-0900 Telecopier: (610) 768-0753 Attention: Michael G. Rubin with a copy to: Blank Rome Comisky & McCauley LLP One Logan Square Philadelphia, Pennsylvania 19103 Telephone: (215) 569-5544 Telecopier: (215) 569-5628 Attention: Arthur Miller, Esq. Unless otherwise specified herein, such notices or other communications shall be deemed effective (a) on the date delivered, if delivered personally, (b) two business days after being sent, if sent by Federal Express or other commercial overnight delivery service, (c) one business day after being sent, if sent by telecopier with confirmation of good transmission and receipt, and (d) three business days after being sent, if sent by registered or certified mail. Each of the parties hereto shall be entitled to specify another address by giving notice as aforesaid to each of the other parties hereto. 9. PAYMENT. Except in the event this Convertible Subordinated Note is converted into Common Stock as provided herein, payment shall be made in lawful tender of the United States. -4- 10. SEVERABILITY. The holding of any provision of this Convertible Subordinated Note to be invalid or unenforceable by a court of competent jurisdiction shall not affect any other provisions and the other provisions of this Convertible Subordinated Note shall remain in full force and effect. 11. GOVERNING LAW. This Convertible Subordinated Note shall be governed by and construed and enforced in accordance with the laws of the State of Delaware. -5- IN WITNESS WHEREOF, the Company has caused this Convertible Subordinated Note to be issued as of the date first written above. GLOBAL SPORTS, INC. a Delaware corporation By:_________________________________ Title:______________________________ -6- EX-99.I 9 GLOBAL CONSENT LETTER SOFTBANK America Inc. 300 Delaware Avenue Suite 900 Wilmington, Delaware 19801 June 21, 1999 Via Facsimile - ------------- Global Sports, Inc. 555 South Henderson Road King of Prussia, Pennsylvania 19406 Attention: Michael G. Rubin Dear Mr. Rubin: Notwithstanding any provision to the contrary in the Stock Purchase Agreement, dated as of June 10, 1999 (the "Purchase Agreement"), between SOFTBANK America Inc. ("SOFTBANK") and Global Sports, Inc. ("Global Sports") or the Voting Agreement, dated as of June 10, 1999 (the "Voting Agreement"), between SOFTBANK and Michael G. Rubin ("Rubin"), SOFTBANK, Rubin and Global Sports hereby agree that if the First Closing has occurred prior to July 13, 1999 (i) SOFTBANK shall not have the right to designate new members to Global Sports' Board of Directors until the earlier of (a) the completion or adjournment of Global Sports' next annual meeting of stockholders and (b) 5:00 p.m., P.S.T., on July 13, 1999 (such earlier time, the "Effective Time"); (ii) Rubin shall not be obligated to vote in favor of the members of the Global Sports' Board of Directors to be designated by SOFTBANK to satisfy the Board Composition Requirement until the Effective Time; (iii) Rubin shall not be required to vote against any slate of directors up for election to Global Sports' Board of Directors until the Effective Time; and (iv) the failure by Rubin or Global Sports to cause the Board Composition Requirement to be satisfied by the First Closing Date shall not, by itself, excuse SOFTBANK from consummating the First Purchase. Global Sports, Inc. -2- Except as otherwise specifically provided herein, the obligations of Global Sports set forth in the Purchase Agreement and the obligations of Rubin set forth in the Voting Agreement shall continue in full force and effect without modification. Global Sports, Inc. -3- Capitalized terms used herein and not defined herein shall have the respective meanings set forth in the Purchase Agreement. Please acknowlege your agreement with these terms by signing below. Very Truly Yours, SOFTBANK AMERICA INC. By: __________________ Name: Title: Acknowledged and Agreed: GLOBAL SPORTS, INC. By: _____________________ Name: Title: _____________________ MICHAEL G. RUBIN -----END PRIVACY-ENHANCED MESSAGE-----