EXHIBIT 99.3
REGISTRATION RIGHTS AGREEMENT
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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
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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.
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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
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Purchase Agreement.
(b) "Commission" shall mean the Securities and Exchange Commission, or any
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other federal agency at the time administering the Exchange Act or the
Securities Act, whichever is the relevant statute for the particular purpose.
(c) "Common Stock" shall mean the Common Stock, par value $0.01 per share,
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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
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successor thereto, as the same shall be amended from time to time.
(e) "Existing Registration Agreements" shall mean the agreements set forth
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on Schedule 1(e) hereto.
(f) "Holder" shall mean any party hereto (other than the Company) and each
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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,
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limited liability company, organization, business, individual, government or
political subdivision thereof or governmental agency.
(h) "Registrable Securities" shall mean the Common Stock; and any
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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
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securities shall cease to be Registrable Securities when (i) a registration
statement registering such shares of Common Stock or securities, as the case may
be, under the Securities Act has been declared effective and such shares of
Common Stock or securities, as the case may be, have been sold or otherwise
transferred by the Holder thereof pursuant to such effective registration
statement or (ii) such shares of Common Stock or securities, as the case may be,
are sold pursuant to Rule 144 (or any successor provision) promulgated under the
Securities Act under circumstances in which any legend borne by such shares of
Common Stock or securities relating to restrictions on transferability thereof,
under the Securities Act or otherwise, is removed by the Company.
(i) "Registration Expenses" shall have the meaning assigned thereto in
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Section 4 of this Agreement.
(j) "Rights" shall mean any option, warrant, security, right or other
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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
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successor thereto, as the same shall be amended from time to time.
(l) "Senior Registration Rights Agreement" shall mean (i) the Registration
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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.
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(a) Demand Registrations.
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(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
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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 in any event the Company shall be obligated to register
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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.
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(ii) In the event of any registration of Registrable Securities
pursuant to Section 2(a)(i) hereof, the Company shall not, without the express
written consent of the Holders of a majority of such Registrable Securities,
cause or permit any other securities of the Company or of any other Person
(whether such securities are to be issued by the Company, are held in the
Company's treasury or are then outstanding and held by other persons) to be
covered by such registration statement or otherwise to be included in such
registration; provided, however, that any other Holder of Registrable Securities
may elect, by giving written notice to such effect to the Company no later than
15 business days after the Company shall have given the notice referred to in
clause (1) of Section 2(a)(i), to have such Holder's Registrable Securities
included in such registration, 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
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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.
(b) "Piggy-Back" Registrations.
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(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
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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 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
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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 of each
other Piggyback Shareholder, pro rata, and without any priority as between the
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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 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
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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
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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 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
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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
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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
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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 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
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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
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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.
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(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 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
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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 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;
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(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 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 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
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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 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
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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;
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(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;
(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 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
-12-
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 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
-13-
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;
(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 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
-14-
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 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
-15-
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 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 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
-16-
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; 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
-17-
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 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
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
-18-
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 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.
-19-
(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 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 (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
-20-
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 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
-21-
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 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 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,
-22-
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.
(e) Notices. All notices, requests, claims, demands, waivers and
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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
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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 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 ACCORDANCE 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
----------------------------
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writings referred to herein or delivered pursuant hereto which form a part
hereof contain the entire understanding of the parties with respect to its
subject matter. This Agreement supersedes all prior agreements and
understandings between the parties with respect to its subject matter. This
Agreement may be amended and the observance of any term of this Agreement may be
waived (either generally or in a particular instance and either retroactively or
prospectively) only by a written instrument duly executed by the Company and the
Holders of more than 50 percent of the Registrable Securities at the time
outstanding. Each Holder of any Registrable Securities at the time or
thereafter outstanding shall be bound by any amendment or waiver effected
pursuant to this Section 9(h), whether or not any notice, writing or marking
indicating such amendment or waiver appears on such Registrable Securities or is
delivered to such Holder. The entry by the Company into any contract, agreement
or understanding that directly or indirectly gives to any person the right to
register, or cause the Company to register, any securities of the Company under
the Securities Act on terms more favorable to such person than those set forth
herein shall require written approval by the Holders of more than 50 percent of
the Registrable Securities at the time outstanding.
(k) Inspection. For so long as this Agreement shall be in effect,
----------
this Agreement and a complete list of the names and addresses of all the Holders
of Registrable Securities shall be made available for inspection and copying on
any business day by any Holder of Registrable Securities at the offices of the
Company at the address thereof set forth in Section 9(e) above.
(l) Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed as of the date first written above.
GLOBAL SPORTS, INC.
By:/s/ Michael G. Rubin
________________________________
Name: Michael G. Rubin
Title: Chairman and Chief Executive Officer
SOFTBANK AMERICA INC.
By:/s/ Steven J. Murray
________________________________
Address: 300 Delaware Avenue,
Suite 900
Wilmington, Delaware 19801
Fax No.: (302) 552-3128
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