July 20, 2001
VIA TELECOPIER
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SOFTBANK Capital Partners LP and Interactive Technology Holdings, LLC
SOFTBANK Capital Advisors Fund LP c/o QVC, Inc.
1188 Centre Street Studio Park
Newton Center, MA 02459 Mail Code 223
Attention: Steve Murray West Chester, PA 19380
Attn: Neal Grabell, Esq
Global Sports, Inc Michael G. Rubin
1075 First Avenue c/o Global Sports, Inc
King of Prussia, PA 19406 1075 First Avenue
Attn: Michael G. Rubin King of Prussia, PA 19406
Re: Letter Agreement
Gentlemen:
As you are aware, (i) Global Sports, Inc. ("Global") plans to offer, sell
and issue, to Interactive Technology Holdings, LLC or certain of its affiliates
(collectively, the "Investor"), 3,000,000 shares of its Common Stock at a price
per share of $10.00, for an aggregate purchase price of $30,000,000 (the
"Company Sale") and (ii) Michael G. Rubin ("Rubin") plans to offer and sell to
the Investor, 1,000,000 shares of Global's Common Stock held by him (the "Rubin
Sale") pursuant to a Stock Purchase Agreement to be entered into among Global,
Rubin and the Investor (the "2001 Stock Purchase Agreement"). To induce the
parties to enter into the 2001 Stock Purchase Agreement, and in consideration of
the mutual promises set forth herein, and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledges, the parties agree
as follows.
1. Pursuant to (i) Section 5.4 of the Stock Purchase Agreement, dated as
of June 10, 1999, by and between SOFTBANK America Inc. and Global, (the "1999
Softbank Purchase Agreement") and (ii) Section 5.3 of the Stock Purchase
Agreement, dated as of April 28, 2000, by and among SOFTBANK Capital Partners
LP, SOFTBANK Capital Advisors Fund LP (collectively, with SOFTBANK Capital
Partners LP, "Softbank") and Global, as amended (as amended, the "2000 Softbank
Stock Purchase Agreement" and, collectively with the 1999 Softbank Purchase
Agreement, the "Softbank Purchase Agreements"), Softbank has been granted
certain preemptive rights (the "Preemptive Rights") in the event that Global
intends to sell, grant or issue any of its Common Stock or Rights (as such terms
are defined in the Purchase Agreements). Intending to be legally bound, Softbank
hereby waives its Preemptive Rights with respect to the Company Sale described
above, including but not limited to, any notice requirements with respect to
such Preemptive Rights. Nothing in this letter agreement shall be
July 20, 2001
Page 2
deemed a waiver of Softbank's Preemptive Rights other than with respect to the
Company Sale described above.
2. Pursuant to Section 5.2 of the 2000 Softbank Stock Purchase
Agreement, Softbank has the contractual right to designate three members of
Global's Board of Directors under certain circumstances. The parties desire to
eliminate Softbank's contractual right to designate three members of Global's
Board of Directors. Accordingly, clause (i) of Section 5.2 of the 2000 Softbank
Stock Purchase Agreement is amended and restated in its entirety to read as
follows: " (i) (A) so long as the Purchasers and the SOFTBANK Entities (as
defined herein) collectively own or have the right to acquire 25% or more of the
Common Stock (on an as if exercised basis) held immediately after consummation
of the Purchase, to designate two (2) members of the Company's Board of
Directors, and (B) so long as the Purchasers and the SOFTBANK Entities (as
defined herein) collectively own or have the right to acquire 5% or more of the
Common Stock (on an as if exercised basis) held immediately after consummation
of the Purchase, to designate one (1) member of the Company's Board of Directors
(collectively, the "Board Composition Requirement"); and". Except as provided in
this paragraph, the 2000 Softbank Stock Purchase Agreement shall remain in full
force and effect in accordance with its terms.
3. Pursuant to Section 3.1 of the Restated Voting Agreement, dated as of
May 1, 2000, by and among Softbank and Michael G. Rubin, as amended, (as
amended, the "Softbank-Rubin Voting Agreement"), Softbank has the contractual
right to designate three members of Global's Board of Directors under certain
circumstances. The parties desire to eliminate Softbank's contractual right to
designate three members of Global's Board of Directors. Accordingly, clause (i)
of Section 3.1 of the Voting Agreement is amended and restated in its entirety
to read as follows: "(i) (A) so long as SOFTBANK and the SOFTBANK Entities (as
defined in the Purchase Agreement) collectively own or have the right to acquire
25% or more of the Common Stock (on an as if exercised basis) held immediately
after consummation of the Purchase, to designate two (2) members of the
Company's Board of Directors, and (B) so long as SOFTBANK and the SOFTBANK
Entities collectively own or have the right to acquire 5% or more of the Common
Stock (on an as if exercised basis) held immediately after consummation of the
Purchase, to designate one (1) member of the Company's Board of Directors
(collectively, the "Board Composition Requirement"); and".
4. Softbank agrees that the sale of up to 1,000,000 shares of the
Company's Common Stock by Rubin to the Investor pursuant to the 2001 Stock
Purchase Agreement shall not be considered to have been "Disposed" of for the
purposes of the last sentence of Section 6 of the Softbank-Rubin Voting
Agreement. Except as provided in paragraph 3 above and this paragraph 4, the
Softbank-Rubin Voting Agreement shall remain in full force and effect in
accordance with its terms.
5. Softbank has reviewed Section 6.2(a) of the 2001 Stock Purchase
Agreement, a copy of which is attached hereto as Exhibit "A". Section 6.2(a) of
the 2001 Stock Purchase Agreement clarifies Section 5.2 of the Stock Purchase
Agreement, dated as of September 13, 2000 between the Company and Interactive
Technology Holdings, LLC ("ITH") (the "ITH Stock Purchase Agreement"). To the
extent that Section 5.2 of the ITH Stock Purchase Agreement is incorporated by
reference into that certain Voting Agreement dated as of
July 20, 2001
Page 3
September 13, 2000 by and between ITH and Softbank (the "ITH-Softbank Voting
Agreement"), Softbank hereby acknowledges its consent to the clarification of
such section as set forth in Section 6.2(a) of the 2001 Stock Purchase
Agreement. Softbank and ITH also agree that (i) to the extent that Section 5.2
of the 2000 Softbank Stock Purchase Agreement is amended without the written
consent of ITH, or (ii) Section 5.2 of the 2000 ITH Stock Purchase Agreement is
amended without the written consent of Softbank, the use of the terms "ITH
Purchase Agreement" and "Softbank Purchase Agreement" throughout the ITH-
Softbank Voting Agreement shall refer to such agreements prior to any such
amendments. Except as provided in this paragraph, the ITH-Softbank Voting
Agreement shall remain in full force and effect in accordance with its terms.
6. This letter agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original and all of which shall
constitute one agreement. This letter agreement shall be governed in all
respects by Delaware law without regard to principles of conflicts of laws.
This letter agreement may not be amended except with the written consent of all
of the parties affected by such amendment.
7. The parties to the respective agreements referred to above agree to
take such additional actions and execute such additional documents, including
amendments or restatements of the agreements referred to above, as may be
reasonably necessary or desirable in connection with the transactions
contemplated hereby.
Intending to be legally bound, the parties have executed this letter
agreement as of the date set forth above.
July 20, 2001
Page 4
[Softbank signature page]
SOFTBANK CAPITAL PARTNERS LP
By: Softbank Capital Partners LLC
Its General Partner
By: /s/ Steven J. Murray
-----------------------------
Name: Steven J. Murray
Title: Admin Member
SOFTBANK CAPITAL ADVISORS FUND LP
By: Softbank Capital Partners LLC
Its General Partner
By: /s/ Steven J. Murray
-----------------------------
Name: Steven J. Murray
Title: Admin Member
July 20, 2001
Page 5
[ITH signature page]
INTERACTIVE TECHNOLOGY HOLDINGS, LLC
(as to paragraphs 5, 6 and 7)
By: QK Holdings, Inc., its Managing Member
By /s/ Gerald Timlin
-----------------
Name: Gerald Timlin
Title: Vice President/Secretary
July 20, 2001
Page 6
[Global and Rubin signature page]
GLOBAL SPORTS, INC. (as to paragraphs 1, 2, 5,
6 and 7)
By: /s/ Michael G. Rubin
-------------------------------------
Name: Michael G. Rubin
Title: President and
Chief Executive Officer
MICHAEL G. RUBIN (as to paragraphs 3, 4, 5,
6 and 7)
/s/ Michael G. Rubin
-----------------------------------------
Michael G. Rubin
July 20, 2001
Page 7
Exhibit "A" - Section 6.2(a) of the 2001 Stock Purchase Agreement
Section 6.2 CLARIFICATION OF COVENANTS IN 2000 STOCK PURCHASE AGREEMENT.
(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.