EXECUTION COPY
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of July 20, 2001 by and among Global Sports, Inc., a Delaware
corporation (the "Company"), Michael G. Rubin ("Rubin"), and Interactive
Technology Holdings, LLC, a Delaware limited liability company (the
"Purchaser").
RECITALS
WHEREAS, the Company has authorized the sale and issuance of an aggregate
of 3,000,000 shares (the "Company Shares") of the Company's common stock, par
value $0.01 per share (the "Common Stock"); and
WHEREAS, the Company desires to sell and issue the Company Shares to the
Purchaser, and the Purchaser desires to purchase the Company Shares from the
Company, all on the terms and conditions set forth herein; and
WHEREAS, Rubin desires to sell to the Purchaser, and the Purchaser desires
to purchase from Rubin, 1,000,000 shares (the "Rubin Shares" and, together with
the Company Shares, the "Shares") of Common Stock, all on the terms and
conditions set forth herein; and
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises hereinafter set forth, the parties hereto, intending to be legally
bound, hereby agree as follows:
ARTICLE I
AUTHORIZATION AND SALE OF STOCK
Section 1.1 SALE OF THE COMPANY SHARES. Subject to the terms and
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conditions hereof, at the Closing (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 Company Shares for an aggregate purchase price of
$30,000,000 (the "Company Purchase Price"). The Company Shares shall have the
rights, preferences, privileges and restrictions set forth in the Company's
Certificate of Incorporation.
Section 1.2 SALE OF THE RUBIN SHARES. Subject to the terms and conditions
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hereof, at the Closing, Rubin shall sell to the Purchaser, and the Purchaser
shall purchase from Rubin, the Rubin Shares for an aggregate purchase price of
$10,000,000 (the "Rubin Purchase Price"). The Rubin Shares shall have the
rights, preferences, privileges and restrictions set forth in the Company's
Certificate of Incorporation.
ARTICLE II
CLOSING DATE; DELIVERY
Section 2.1 CLOSING AND LOCATION. The purchase and sale of the Shares
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hereunder shall take place at a closing (the "Closing") at the offices of
Drinker Biddle & Reath LLP, One Logan Square, Philadelphia, Pennsylvania 19103,
at 10:00 a.m., Philadelphia, Pennsylvania time, on the third business day
following the date on which the last to be fulfilled or waived of the conditions
to the Closing set forth in Sections 7.1 and 7.2 hereof have been fulfilled or
waived in accordance with this Agreement or such other date as is mutually
agreed to by the Company, Rubin and the Purchaser (as the case may be, the
"Closing Date").
Section 2.2 DELIVERY. Subject to the terms and conditions of this
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Agreement, at the Closing, (i) the Company shall deliver to the Purchaser a
stock certificate or certificates representing the Company Shares, registered in
the name of the Purchaser or its assigns, against payment of the Company
Purchase Price therefor; (ii) Rubin shall deliver to the Purchaser a stock
certificate or certificates representing the Rubin Shares in appropriate form
for transfer to the Purchaser or its assigns, duly endorsed in blank or
accompanied by stock powers duly executed in blank, against payment of the Rubin
Purchase Price therefor; and (iii) the Purchaser shall deliver (A) to the
Company, the Company Purchase Price by wire transfer of immediately available
funds to an account designated in writing by the Company, and (B) to Rubin, the
Rubin Purchase Price by wire transfer of immediately available funds to an
account designated in writing by Rubin.
Section 2.3 CONSUMMATION OF CLOSING. All acts, deliveries and
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confirmations comprising the Closing regardless of chronological sequence shall
be deemed to occur contemporaneously and simultaneously upon the occurrence of
the last act, delivery or confirmation of the 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 RUBIN
Rubin hereby represents and warrants to the Purchaser as follows:
Section 3.1 AUTHORITY; NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
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(a) This Agreement has been duly executed and delivered by Rubin
and constitutes the valid and legally binding obligation of Rubin, enforceable
against Rubin 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.
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(b) The execution and delivery by Rubin of this Agreement, the
sale of the Rubin Shares, and consummation of the transactions contemplated by
this Agreement will not (i) 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 Rubin is a party or by which Rubin may be bound, or (ii)
conflict with or violate any permit, concession, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to Rubin,
except in the case of (i) and (ii) for any such violations, defaults, breaches,
terminations, cancellations, accelerations, losses or conflicts which would not,
individually or in the aggregate, 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 Rubin in connection with the
execution and delivery of this Agreement, the sale of the Rubin Shares, or the
consummation of the transactions contemplated hereby, except for (i) such
filings as may be required under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended (the "HSR Act"), and (ii) such other consents,
authorizations, filings, approvals and registrations which, if not obtained or
made, would not, individually or in the aggregate, materially burden or delay
the consummation of the transactions contemplated hereby.
Section 3.2 OWNERSHIP OF THE RUBIN SHARES. Rubin owns beneficially and of
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record, and has good and valid title to, the Rubin Shares, free and clear of any
liens or encumbrances. There are no shareholder or other agreements affecting
the right of Rubin to convey the Rubin Shares to the Purchaser or any other
right of Rubin with respect to the Rubin Shares (other than certain restrictions
in certain voting agreements between Rubin and each of the Softbank Entities (as
defined in Section 7.1(b) hereof), RCV (as defined in Section 7.1(b) hereof) and
the Purchaser), and Rubin has the absolute right, authority, power and capacity
to sell, assign and transfer the Rubin Shares to the Purchaser, free and clear
of any liens or encumbrances. At the Closing, Rubin will transfer to the
Purchaser all right, title and interest in and to the Rubin Shares, free and
clear of any liens or encumbrances other than those created as a result of any
action by the Purchaser; provided, however, that the Rubin Shares may be subject
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to restrictions on transfer under applicable securities laws or under this
Agreement or the Registration Rights Agreement (as defined in Section 4.4(a)
hereof). The rights, preferences, privileges and restrictions of the Rubin
Shares are as stated in the Company's Certificate of Incorporation. The sale of
the Rubin Shares are not and will not be subject to any preemptive rights or
rights of first refusal applicable to Rubin that have not been properly waived
or complied with.
Section 3.3 FINDER'S FEES. Rubin has retained no finder or broker in
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connection with the transactions contemplated by this Agreement and hereby
agrees to indemnify and to hold the Purchaser and the Company 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
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defending against such liability or asserted liability) for which Rubin, or any
representatives acting on behalf of Rubin, is or may be responsible as a result
of the transactions contemplated hereby.
Section 3.4 OFFERING VALID. Assuming the accuracy of the representations
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and warranties of the Purchaser contained in Sections 5.3 and 5.4 hereof, the
offer and sale of the Rubin Shares will be exempt from the registration
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
and will have been registered or qualified or are exempt from registration and
qualification under the registration, permit or qualification requirements of
all other applicable securities laws. Neither Rubin nor any agent on his behalf
has solicited or will solicit any offers to sell or has offered to sell or will
offer to sell all or any part of the Rubin Shares to any person or persons so as
to bring the sale of such securities by Rubin within the registration provisions
of the Securities Act or any other applicable securities laws.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Purchaser as follows:
Section 4.1 ORGANIZATION. The Company is a corporation duly organized,
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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 4.2 SUBSIDIARIES. Each of the Company's subsidiaries is a
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corporation duly organized, validly existing in good standing under the laws of
the jurisdiction 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 4.3 VALID ISSUANCE OF COMPANY SHARES. The Company Shares, when
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issued and paid for in accordance with this Agreement, will be (a) duly
authorized, validly issued, fully paid and non-assessable, and (b) free of any
liens or encumbrances other than as a result of any action by the Purchaser;
provided, however, that the Company Shares may be subject to restrictions on
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transfer under applicable securities laws or under this Agreement or the
Registration Rights Agreement. The rights, preferences, privileges and
restrictions of the Company Shares are as stated in the Company's Certificate of
Incorporation. The sale of the Company Shares are not and will not be subject
to any preemptive rights or rights of first refusal applicable to the Company
that have not been properly waived or complied with.
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Section 4.4 AUTHORITY; NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
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(a) The Company has all requisite corporate power and authority to
enter into, execute and deliver this Agreement and the Second Amendment to the
Second Amended and Restated Registration Rights Agreement (the "Registration
Rights Agreement") in the form attached hereto as Exhibit A (the "Registration
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Right Agreement Amendment"), to issue and sell the Company Shares, and to
consummate the transactions contemplated by this Agreement. This Agreement and
the Registration Rights Agreement Amendment 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.
(b) The execution and delivery by the Company of this Agreement
and the Registration Rights Agreement Amendment, the issuance and sale of the
Company Shares, and consummation of the transactions contemplated by this
Agreement 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, 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 Governmental Entity is required by
or with respect to the Company in connection with the execution and delivery of
this Agreement and the Registration Rights Agreement Amendment, the issuance and
sale of the Company Shares, or the consummation of the transactions contemplated
hereby, except for (i) the filing of a Form D under the Securities Act, (ii)
such filings as may be required under applicable state securities laws or 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.
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Section 4.5 CAPITALIZATION.
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(a) The authorized capital stock of the Company as of the date
hereof consists of (i) 90,000,000 shares of Common Stock and (ii) 5,000,000
shares of Preferred Stock, $0.01 par value per share. Schedule 4.5(a) sets forth
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a true and complete list as of July 17, 2001 of the total number of all
outstanding shares of the Company's capital stock and all options, warrant and
other rights to acquire shares of the Company's capital stock held by employees
and directors, on the one hand, and by all other persons, on the other hand, and
from July 17, 2001 until the date hereof, there have been no changes in the
total number of outstanding shares of the Company's capital stock and options,
warrants or other rights to acquire shares of the Company's capital stock other
than as a result of the issuance of shares of the Company's capital stock upon
the exercise or conversion of any option, warrant or other right set forth on
Schedule 4.5(a). All issued and outstanding shares of Common Stock and Preferred
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Stock have been duly authorized and validly issued, are fully paid and non-
assessable and were issued in compliance with all applicable laws concerning the
issuance of securities.
(b) 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 4.5(b) hereto, there are no outstanding options, warrants,
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rights (including conversion or preemptive rights, anti-dilution rights and
rights of first refusal), agreements or commitments of any kind to which the
Company is a party or by which the Company is bound relating to the issuance,
conversion, registration, voting, sale or transfer of any equity interests or
other securities of the Company or obligating the Company to purchase or redeem
any such equity interests or other securities of the Company.
Section 4.6 COMMISSION FILINGS; FINANCIAL STATEMENTS.
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(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, 2000 (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
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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, 2000, taking
into account the cumulative effect of all 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 4.7 COMPLIANCE WITH LAWS. Each of the Company and its
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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 4.8 STOCKHOLDERS' CONSENT. No consent or approval of the
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stockholders of the Company is required or necessary for the Company to enter
into this Agreement and the Registration Rights Agreement Amendment or to
consummate the transactions contemplated hereby.
Section 4.9 LITIGATION. Except as otherwise disclosed as of the date of
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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, 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 4.10 INTELLECTUAL PROPERTY. Except as disclosed in the Company
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Commission Reports or as set forth on Schedule 4.10, each of the Company and its
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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
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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 4.11 SPECIAL BENEFITS. There exist no provisions contained in any
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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 4.12 FINDER'S FEES. The Company has retained no finder or broker in
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connection with the transactions contemplated by this Agreement and hereby
agrees to 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.
Section 4.13 OFFERING VALID. Assuming the accuracy of the representations
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and warranties of the Purchaser contained in Sections 5.3 and 5.4 hereof, the
offer, sale and issuance of the Company Shares will be exempt from the
registration requirements of the Securities Act, and will have been registered
or qualified or are exempt from registration and qualification under the
registration, permit or qualification requirements of all other applicable
securities laws. Neither the Company nor any agent on its behalf has solicited
or will solicit any offers to sell or has offered to sell or will offer to sell
all or any part of the Company Shares to any person or persons so as to bring
the sale of such securities by the Company within the registration provisions of
the Securities Act or any other applicable securities laws.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Company and Rubin as follows:
Section 5.1 ORGANIZATION. The Purchaser is a limited liability company
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duly organized, validly existing and in good standing under the laws of the
State of Delaware.
Section 5.2 AUTHORITY.
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(a) The Purchaser has all requisite 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 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
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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 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 an amended Schedule 13D
and a Form 4 under the Exchange Act, and (iii) 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 5.3 PURCHASE ENTIRELY FOR OWN ACCOUNT. The Shares will be
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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. The Purchaser has not been formed for the specific purpose of
acquiring the Shares. It is understood that transfers by the Purchaser of
Shares to one or more members of the Purchaser Group (as defined in Section 9.3)
shall not be deemed to be inconsistent with this Section 5.3, and the Purchaser
shall be permitted to make such transfers from time to time without restriction,
so long as any such transfer complies with the Securities Act and any applicable
state securities laws.
Section 5.4 INVESTMENT EXPERIENCE. The Purchaser is an "accredited
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investor" as defined in Rule 501(a)(3) under the Securities Act. The 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. The 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 5.5 RESTRICTED SECURITIES. The Purchaser understands that the
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Shares are characterized as "restricted securities" under the Securities Act
inasmuch as they are being acquired in a transaction not involving a public
offering and that the 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 5.6 LEGENDS. The Purchaser understands that the Shares, and any
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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
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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 JULY 20, 2001, WITH THE COMPANY AND MICHAEL G. RUBIN, A COPY OF
WHICH IS AVAILABLE FROM THE COMPANY ON REQUEST."
Section 5.7 FINDER'S FEES. The Purchaser has not retained any finder or
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broker in connection with the transactions contemplated by this Agreement and
hereby agrees to indemnify and to hold the Company and Rubin 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 the Purchaser, is or may be
responsible as a result of the transactions contemplated hereby.
ARTICLE VI
COVENANTS
Section 6.1 HSR ACT FILINGS.
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(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, but in no event more than 15 days, 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, but in no event more than 15 days, 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
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the FTC or the DOJ
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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 the Company, Rubin and
the Purchaser.
Section 6.2 CLARIFICATION OF COVENANTS IN 2000 STOCK PURCHASE AGREEMENT.
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(a) The Company and the Purchaser entered into that certain Stock
and Warrant Purchase Agreement dated as of September 13, 2000 (the "2000 Stock
Purchase Agreement"), pursuant to which the Purchaser acquired 5,000,000 shares
of Common Stock and warrants to purchase an additional 4,500,000 shares of
Common Stock. The 2000 Stock Purchase Agreement contains various covenants that
require the Purchaser Group to maintain certain ownership percentages of Common
Stock, based on the number of shares of Common Stock that the Purchaser Group
held immediately after the closings of the transactions contemplated in the 2000
Stock Purchase Agreement, in order to retain certain rights granted by the
Company therein (specifically, Section 5.2 regarding the right to designate
members of the Company's Board of Directors, Section 5.8 regarding the right to
prohibit the Company from entering into transactions with certain excluded
transferees, and Section 5.9 regarding the right to designate a non-voting
observer to attend meetings of the Company's Board of Directors and its
committees). The parties hereby clarify that it was their intention at the time
they entered into the 2000 Stock Purchase Agreement that, if the Purchaser ever
acquired additional shares of Common Stock, it would be permitted to include
such additional shares for the purpose of determining whether such ownership
thresholds were met (while still basing such ownership threshold tests on the
number of shares of Common Stock that the Purchaser Group held immediately after
the closings of the transactions contemplated in the 2000 Stock Purchase
Agreement). Accordingly, the Purchaser shall be entitled to include the Shares
purchased hereunder, and any other shares of Common Stock hereafter acquired,
for the purpose of determining whether such ownership thresholds are met.
(b) The 2000 Stock Purchase Agreement also contains a covenant in
Section 5.3 thereof regarding the preemptive right of the Purchaser (including
qualifying transferees thereof) to purchase its Proportionate Share (as such
term is defined in the 2000 Stock Purchase Agreement) of any shares of Common
Stock or Rights (as such term is defined in the 2000 Stock Purchase Agreement)
proposed to be issued, granted or sold by the Company from time to time. The
parties hereby clarify that it was there intention at the time they entered into
the 2000 Stock Purchase Agreement that, if the Purchaser (or any such qualifying
transferee) ever acquired additional shares of Common Stock, the Purchaser (or
such qualifying transferee) would be permitted to include such additional shares
for the purpose of calculating the Purchaser's (or any qualifying transferee's)
Proportionate Share thereunder. Accordingly, the Purchaser (and any qualifying
transferee of the Shares) shall be entitled to include the Shares purchased
hereunder, and any other shares of Common Stock or Rights hereafter acquired,
for the purpose of calculating the Purchaser's (or such qualifying transferee's)
Proportionate Share thereunder.
-11-
(c) The 2000 Stock Purchase Agreement (including, without
limitation, those covenants mentioned above and all other covenants contained
therein), as clarified hereby, shall be and remain in full force and effect in
accordance with its terms.
Section 6.3 PUBLICITY. The Company, Rubin 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 6.4 LISTING OF THE SHARES. The Company shall file on a timely
---------------------
basis such notification with the NASD as shall be required in connection with
the issuance of the Company Shares, and shall take all such other action as
shall be appropriate, with respect to the listing of the Company Shares on
Nasdaq or such other national securities exchange or trading market on which
other shares of Common Stock are listed.
Section 6.5 REMOVAL OF LEGEND. The Company shall promptly remove, upon
-----------------
the request of the Purchaser or any transferee of Shares, the legend set forth
in Section 5.6 hereof from the share certificates representing such Shares upon
such time as the Shares (a) 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 (b) may be resold pursuant to Rule 144(k)
under the Securities Act (or a comparable successor provision); provided that
--------
the Purchaser shall be required to provide to the Company appropriate
certification as may be reasonably necessary to demonstrate that clause (a) or
(b), as the case may be, is applicable.
Section 6.6 FUTURE AND CURRENT INVESTMENTS AND ACTIVITIES; INFORMATION.
----------------------------------------------------------
(a) The Company acknowledges that (i) the Purchaser and its
Affiliates engage in a wide variety of activities and have investments in many
other companies, (ii) it is critical to the Purchaser that the Purchaser and its
Affiliates be permitted to continue to develop their current and future business
and investment activities without any restriction arising from an investment by
the Purchaser or any Affiliate in the Company, the right of Purchaser or any
Affiliate to designate a member of the board of directors of the Company or any
committee thereof or any relationship, contractual or otherwise, between the
Purchaser and any Affiliate and the Company or any affiliate of the Company, and
(iii) from time to time, in connection with the foregoing activities of the
Purchaser and its current and future Affiliates (the "Activities"), the
Purchaser and Affiliates of the Purchaser may have information that may be
useful to the Company (which information may or may not be known by a Designated
Director (as defined below) or Observer (as defined in the 2000 Stock Purchase
Agreement)). The Company further acknowledges that, subject to the provisions of
applicable law, (A) the Company does not intend or desire that the relationship
between the Purchaser and any of its Affiliates with the Company and any of its
affiliates (x) interfere with or impose conditions or restrictions on any of the
Activities of the Purchaser or any of its current or future Affiliates, or (y)
confer upon the Company any right to participate in any of the Activities of the
Purchaser or any of its Affiliates, and (B) the Company intends and desires that
(I) the Purchaser and its Affiliates shall be free to
-12-
engage in the Activities in any capacity, whether active or passive, without any
obligation or liability to the Company or to its shareholders, including,
without any limitation, any obligation to offer the Company a right to acquire,
participate or have any interest of any nature whatsoever in any of such
Activities; (II) no director designated by the Purchaser or any Affiliate (a
"Designated Director") shall have any liability solely by reason of any such
Activities (it being understood that no action by a Designated Director in
connection with any such Activities shall be deemed to constitute as such a
breach by such Designated Director of any duty owed to the Company); and (III)
the Purchaser, its Affiliates, and its Designated Directors and Observer, shall
have no duty to disclose any information known to such person to the Company;
provided, however, that this Section 6.6 shall not relieve the Purchaser, its
- -------- -------
Affiliates or a Designated Director or Observer of its or his duty of
confidentiality with respect to information pertaining to the Company; and
provided, further, that, in the event it has been finally adjudicated by a court
- -------- -------
of competent jurisdiction that, notwithstanding the provisions of this Section
6.6, any of the foregoing actions on the part of the Purchaser, its Affiliates,
or a Designated Director or Observer has resulted in any liability of, or the
imposition of any equitable remedy against, the Purchaser or such Affiliate,
Designated Director or Observer to the Company by reason of a breach of the
fiduciary duty of such person to the Company, there shall not be deemed to have
been a violation or breach of this Section 6.6 by the Company.
(b) The Company hereby waives, to the full extent that it may do
so under applicable law, any claim arising under the corporate opportunity
doctrine. In this connection, the Company represents that the board of directors
has, in conformance with Section 122(17) of the Delaware General Corporation
Law, adopted a resolution to renounce any interest or expectancy of the Company
in, or being offered an opportunity to participate in, any business
opportunities presented to the Purchaser or any of its Affiliates from whatever
source other than the Company.
Section 6.7 AGREEMENTS WITH RESPECT TO VOTING AGREEMENTS.
--------------------------------------------
(a) The Purchaser agrees that the sale of the Rubin Shares by
Rubin to the Purchaser hereunder shall not constitute a disposition of such
shares for purposes of Section 7 of that certain Voting Agreement dated as of
September 13, 2000 by and between ITH and Rubin (the "Rubin-ITH Voting
Agreement").
(b) To the extent that Section 5.2 of the 2000 Stock Purchase
Agreement is incorporated by reference into the Rubin-ITH Voting Agreement,
Rubin hereby acknowledges his consent to the clarification of such section as
set forth in Section 6.2(a) hereof.
(c) Upon the execution of the Softbank Letter Agreement (as
defined in Section 7.1(i) hereof), the Purchaser acknowledges that, to the
extent that Section 5.2 of that certain Stock Purchase Agreement dated April 28,
2000 between the Company and the Softbank Entities is incorporated by reference
into that certain Voting Agreement dated as of September 13, 2000 by and among
ITH and the Softbank Entities, the Purchaser consents to the amendment of such
section as set forth in the Softbank Letter Agreement.
-13-
Section 6.8 FULFILLMENT OF CONDITIONS. Each of the Company, Rubin 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, complied with or fulfilled on its part prior to or on the Closing
Date.
Section 6.9 FURTHER ASSURANCES. The Company and Rubin shall use their
------------------
respective reasonable efforts at any time and from time to time prior to, at and
after the Closing 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 Company Shares and the Rubin
Shares, respectively, to the Purchaser and to consummate the transactions
contemplated by this Agreement.
ARTICLE VII
CONDITIONS TO CLOSING
Section 7.1 CONDITIONS TO THE PURCHASER'S OBLIGATIONS AT THE CLOSING. The
--------------------------------------------------------
obligation of the Purchaser to consummate the transactions contemplated herein
at the Closing is subject to the fulfillment on or prior to the Closing Date of
the following conditions:
(a) REPRESENTATIONS AND WARRANTIES CORRECT; PERFORMANCE OF
------------------------------------------------------
OBLIGATIONS. The representations and warranties made by Rubin in Article III
- -----------
hereof and by the Company in Article IV hereof shall be true and correct in all
material respects as of the date of this Agreement and as of the 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 the Closing Date; and
the Company and Rubin shall have performed all obligations herein required to be
performed by each of them on or prior to the Closing Date in all material
respects (except with respect to obligations containing a materiality
qualification, which must be performed in all respects).
(b) REGISTRATION RIGHTS AGREEMENT AMENDMENT. The Company, SOFTBANK
---------------------------------------
Capital Partners LP and SOFTBANK Capital Advisors Fund LP (collectively, the
"Softbank Entities") and Rustic Canyon Ventures, L.P. (f/k/a/ TMCT Ventures,
L.P.) ("RCV") shall have each duly executed and delivered the Registration
Rights Agreement Amendment.
(c) CLOSING DELIVERIES. The Company and Rubin shall each have
------------------
delivered to the Purchaser all items required to be delivered by each of them at
the Closing by Section 2.2 hereof.
(d) COMPLIANCE CERTIFICATE. The President of the Company shall
----------------------
deliver to the Purchaser a certificate certifying that the conditions specified
in Section 7.1(a) have
-14-
been fulfilled with respect to the Company, and Rubin shall deliver to the
Purchaser a certificate certifying that the conditions specified in Section
7.1(a) have been fulfilled with respect to Rubin.
(e) 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 the Closing Date, in the form attached
hereto as Exhibit B.
---------
(f) 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.
(g) BOARD APPROVAL. The Company's Board of Directors shall have
--------------
approved the transactions contemplated by this Agreement.
(h) WAIVER OF PREEMPTIVE RIGHTS. The Softbank Entities and RCV
---------------------------
shall have all waived their respective preemptive rights with respect to the
issuance of the Company Shares.
(i) SOFTBANK LETTER AGREEMENT. The Company and the Softbank
-------------------------
Entities shall have entered into a letter agreement substantially in the form
attached hereto as Exhibit C (the "Softbank Letter Agreement").
---------
(j) WAITING PERIOD. Any waiting period applicable to the sale of
--------------
the Shares under the HSR Act shall have expired or been terminated.
(k) SATISFACTION OF CONDITIONS. All of the foregoing conditions
--------------------------
shall have been satisfied or waived by the Purchaser on or prior to the close of
business on the date which is 180 days following the date hereof.
Section 7.2 CONDITIONS TO THE COMPANY'S AND RUBIN'S OBLIGATIONS AT THE
----------------------------------------------------------
CLOSING. The obligation of the Company and Rubin to consummate the transactions
- -------
contemplated herein at the Closing is subject to the fulfillment on or prior to
the Closing Date of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES CORRECT; PERFORMANCE OF
--------------------------------------- --------------
OBLIGATIONS. The representations and warranties made by the Purchaser in
- -----------
Article V hereof shall be true and correct in all material respects as of the
date of this Agreement and as of the 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 the Closing Date; and the Purchaser shall have performed
all obligations herein required to be performed by them on or prior to the
Closing Date in all material respects (except
-15-
with respect to obligations containing a materiality qualification, which must
be performed in all respects).
(b) REGISTRATION RIGHTS AGREEMENT AMENDMENT. The Purchaser shall
---------------------------------------
have duly executed and delivered the Registration Rights Agreement Amendment.
(c) CLOSING DELIVERIES. The Purchaser shall have delivered to the
------------------
Company all items required to be delivered by the Purchaser at the Closing by
Section 2.2 hereof.
(d) 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.
(e) WAITING PERIOD. Any waiting period applicable to the sale of
--------------
the Shares under the HSR Act shall have expired or been terminated.
(f) SATISFACTION OF CONDITIONS. All of the foregoing conditions
--------------------------
shall have been satisfied or waived by the Company and Rubin on or prior to the
close of business on the date which is 180 days following the date hereof.
ARTICLE VIII
INDEMNIFICATION
Section 8.1 INDEMNIFICATION BY THE COMPANY. The Company covenants and
------------------------------
agrees to indemnify and hold the Purchaser harmless from and against, and to
reimburse the Purchaser for, any claim for any losses, damages, liabilities or
expenses, including reasonable counsel fees (collectively "Damages") incurred by
the Purchaser by reason of or arising from (i) any misrepresentation or breach
of any representation or warranty of the Company contained in this Agreement or
in any instrument delivered hereunder or (ii) any failure by the Company to
perform any obligation or covenant required to be performed by it under any
provision of this Agreement.
Section 8.2 INDEMNIFICATION BY RUBIN. Rubin covenants and agrees to
------------------------
indemnify and hold the Purchaser harmless from and against, and to reimburse the
Purchaser for, any claim for any Damages incurred by the Purchaser by reason of
or arising from (i) any misrepresentation or breach of any representation or
warranty of Rubin contained in this Agreement or in any instrument delivered
hereunder or (ii) any failure by Rubin to perform any obligation or covenant
required to be performed by him under any provision of this Agreement.
Section 8.3 INDEMNIFICATION BY THE PURCHASER. The Purchaser covenants and
--------------------------------
agrees to indemnify and hold the Company and Rubin harmless from and against,
and to reimburse the Company and Rubin for, any claim for any Damages incurred
by the Company or Rubin by reason of or arising from (i) any misrepresentation
or breach of any representation or
-16-
warranty of the Purchaser contained in this Agreement or in any instrument
delivered hereunder or (ii) any failure by the Purchaser to perform any
obligation or covenant required to be performed by it under any provision of
this Agreement.
ARTICLE IX
MISCELLANEOUS
Section 9.1 GOVERNING LAW. This Agreement shall be governed by, and
-------------
construed in accordance with, the laws of the State of Delaware without regard
to the conflict of laws provisions thereof.
Section 9.2 SURVIVAL. The representations, warranties, covenants and
--------
agreements made herein shall survive the closing of the transactions
contemplated hereby.
Section 9.3 SUCCESSORS AND ASSIGNS. Except as expressly provided herein,
----------------------
the rights and obligations hereunder may not be assigned or delegated by the
Purchaser without the prior written consent of the Company and Rubin and may not
be assigned or delegated by Rubin or the Company without the prior written
consent of the Purchaser; provided, however, that the 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 all or any portion of the Company Purchase Price or the Rubin
Purchase Price) to any entity that directly or indirectly controls, is
controlled by, or is under common control with the Purchaser, including, without
limitation, Comcast Corporation and QVC, Inc. (each, an "Affiliate" and, all
Affiliates together with the Purchaser, the "Purchaser Group"); and provided,
--------
further, that any such delegation by the Purchaser of its obligations shall not
- -------
relieve the Purchaser of liability to the Company and Rubin 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 9.4 ENTIRE AGREEMENT; AMENDMENT. Except as expressly provided to
---------------------------
the contrary in any separate agreement, 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, Rubin and the Purchaser.
Section 9.5 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, Rubin or the Purchaser as
the case may be at the following address:
-17-
To the Company: Global Sports, Inc.
1075 First Avenue
King of Prussia, Pennsylvania 19406
Telephone: (610) 265-3229
Facsimile: (610) 265-1730
Attn: General Counsel
With a copy to: Blank Rome Comisky & McCauley LLP
One Logan Square
Philadelphia, Pennsylvania 19103
Attn: Francis E. Dehel, Esq.
Telephone: (215) 569-5532
Facsimile: (215) 569-5628
To Rubin: Michael G. Rubin
Global Sports, Inc.
1075 First Avenue
King of Prussia, Pennsylvania 19406
Telephone: (610) 265-3229
Facsimile: (610) 265-1730
With copies to: Global Sports, Inc.
1075 First Avenue
King of Prussia, Pennsylvania 19406
Telephone: (610) 265-3229
Facsimile: (610) 265-1730
Attn: General Counsel
and
Blank Rome Comisky & McCauley LLP
One Logan Square
Philadelphia, Pennsylvania 19103
Attn: Francis E. Dehel, Esq.
Telephone: (215) 569-5532
Facsimile: (215) 569-5628
-18-
To the Purchaser: c/o QVC, Inc.
Studio Park
Mail Code 223
West Chester, Pennsylvania
19380
Attn: Neal Grabell, Esq.
Telephone: (610) 701-8974
Facsimile: (610) 701-1380
With a copy to: Drinker Biddle & Reath LLP
One Logan Square
Philadelphia, Pennsylvania 19103
Attn: Howard A. Blum, Esq.
Telephone: (215) 988-2794
Facsimile: (215) 988-2757
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 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 9.6 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 9.7 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 9.8 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
-19-
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 9.9 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 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.
-20-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
and year first above written.
GLOBAL SPORTS, INC.
By: /s/ Michael G. Rubin
----------------------------------
Name: Michael G. Rubin
Title: President and
Chief Executive Officer
/s/ Michael G. Rubin
------------------------------------
MICHAEL G. RUBIN
INTERACTIVE TECHNOLOGY HOLDINGS, LLC
By: QK Holdings, Inc., its Managing Member
By: /s/ David Apostolico
------------------------------------
Name: David Apostolico
Title: President