EXHIBIT D
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REGISTRATION RIGHTS AGREEMENT
Dated as of June 10, 1999
By and Among
GLOBAL SPORTS, INC.
and
SOFTBANK AMERICA INC.
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REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of June 10, 1999, by and among
Global Sports, Inc., a Delaware corporation (the "Company"), and SOFTBANK
America Inc., a Delaware corporation ("SOFTBANK America").
RECITALS
WHEREAS, the Company and SOFTBANK America have entered into the Stock
Purchase Agreement, dated as of June 10, 1999 (the "Purchase Agreement"),
providing for, among other things, the sale by the Company and the purchase by
SOFTBANK America or its designees of an aggregate of 6,153,850 shares of Common
Stock; and
WHEREAS, this Agreement is being entered into in order to induce
SOFTBANK America to purchase the Common Stock pursuant to the Purchase
Agreement;
NOW, THEREFORE, in consideration of the premises, and of the
mutual covenants, representations, warranties and agreements herein contained,
the parties hereto agree as follows:
1. Certain Definitions.
As used in this Agreement, the following terms shall have the
following respective meanings:
(a) "Closing Date" shall mean the First Closing Date specified
in the Purchase Agreement.
(b) "Commission" shall mean the Securities and Exchange Commission,
or any other federal agency at the time administering the Exchange Act or the
Securities Act, whichever is the relevant statute for the particular purpose.
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(c) "Common Stock" shall mean the Common Stock, par value $0.01 per
share, of the Company purchased by SOFTBANK America pursuant to the Purchase
Agreement.
(d) "Exchange Act" shall mean the Securities Exchange Act of 1934, or
any successor thereto, as the same shall be amended from time to time.
(e)"Existing Registration Agreements" shall mean the agreements set
forth on Schedule 1(e) hereto.
(f) "Holder" shall mean any party hereto (other than the Company) and
each of its respective successive successors and assigns who acquire Registrable
Securities, directly or indirectly, from any such party or from any successive
successor or assign of any such party.
(g) The term "person" shall mean a corporation, association,
partnership, limited liability company, organization, business, individual,
government or political subdivision thereof or governmental agency.
(h) "Registrable Securities" shall mean the Common Stock; and
any securities issued successively in exchange for or in respect of any of the
foregoing, whether pursuant to a merger or consolidation, as a result of any
successive stock split or reclassification of, or stock dividend on, any of the
foregoing or otherwise; provided, however, that such shares of Common Stock or
securities shall cease to be Registrable Securities when (i) a registration
statement registering such shares of Common Stock or securities, as the case may
be, under the Securities Act has been declared effective and such shares of
Common Stock or securities, as the case may be, have been sold or otherwise
transferred by the Holder thereof pursuant to such effective registration
statement or (ii) such shares of Common Stock or securities, as the case may be,
are sold pursuant to Rule 144 (or any successor provision) promulgated under the
Securities Act under circumstances in which any legend borne by such shares of
Common Stock or securities relating to restrictions on transferability
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thereof, under the Securities Act or otherwise, is removed by the Company.
(i) "Registration Expenses" shall have the meaning assigned
thereto in Section 4 of this Agreement.
(j) "Rights" shall mean any option, warrant, security, right or
other instrument convertible into or exchangeable or exercisable for, or
otherwise giving the holder thereof the right to acquire, directly or
indirectly, any Common Stock or any other such option, warrant, security, right
or instrument, including any instrument the value of which is measured by
reference to the value of the Common Stock.
(k) "Securities Act" shall mean the Securities Act of 1933,
or any successor thereto, as the same shall be amended from time to time.
(l) "Senior Registration Rights Agreement" shall mean (i) the
Registration Rights Agreement, dated May 12, 1998, among the Company, DMJ
Financial, Inc., ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ and certain individuals
and entities specified therein, and (ii) the Registration Rights Agreement,
dated July 27, 1998, between the Company and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
2. Registration Under the Securities Act.
(a) Demand Registrations.
(i) At any time from and after the date 12 months after the Closing
Date, any Holder or Holders may elect, by giving written notice thereof to the
Company, to require the Company to use its reasonable best efforts to register
all or a portion of its Registrable Securities under the Securities Act;
provided, however, that the Company shall be obligated to register the
Registrable Securities upon such election only if the Registrable Securities to
be registered, in the aggregate, constitute 5% or more of the then-outstanding
securities of the class or series to which such Registrable Securities belong;
provided, further, that
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in any event the Company shall be obligated to register such Registrable
Securities upon such election only if the Registrable Securities to be
registered have a total market value (or, if there is no existing public market,
a proposed maximum aggregate offering price to be set forth on the facing page
of the applicable registration statement) of at least $5 million. Promptly
following such election, the Company shall (1) give notice to each other Holder
of Registrable Securities of such election, which notice shall set forth the
identity of the electing Holders, and (2) use its reasonable best efforts to
cause to be declared or become effective under the Securities Act a registration
statement providing for the registration of, and the sale in accordance with the
intended method or methods of distribution thereof by the electing Holders of,
the Registrable Securities. The Company shall be required to cause to become
effective pursuant to this Section 2(a) no more than three registration
statements in the aggregate and no more than one registration statement in any
six month period. Notwithstanding the foregoing, the Company shall not be
obligated to register Registrable Securities upon any election pursuant to this
Section 2(a)(i) if (1) fewer than 180 days have elapsed after the effective date
of a registration statement registering newly issued or treasury shares of the
Company's common stock for purposes of a primary offering (as defined in Section
2(b)(i) hereof) on a firm commitment underwritten basis, but only if and to the
extent that (x) the underwriting agreement entered into in connection with any
such offering expressly prohibited registration of Registrable Securities upon
such election and (y) no period referred to in this sentence, and no
postponement referred to in Section 2(a)(iii) hereof, was in effect during the
12 months immediately preceding the commencement of such 180 day period, unless
any Holders having made elections during the previous period or postponement, as
the case may be, shall have had the opportunity to register their Registrable
Securities pursuant to an effective registration statement prior to the current
such period.
(ii) In the event of any registration of Registrable Securities
pursuant to Section 2(a)(i) hereof,
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the Company shall not, without the express written consent of the Holders of a
majority of such Registrable Securities, cause or permit any other securities of
the Company or of any other Person (whether such securities are to be issued by
the Company, are held in the Company's treasury or are then outstanding and held
by other persons) to be covered by such registration statement or otherwise to
be included in such registration; provided, however, that any other Holder of
Registrable Securities may elect, by giving written notice to such effect to the
Company no later than 15 business days after the Company shall have given the
notice referred to in clause (1) of Section 2(a)(i), to have such Holder's
Registrable Securities included in such registration, in which case such Holder
shall be treated for all purposes hereunder as having made a demand for
registration pursuant to this Section 2(a).
(iii) In the event that, following any election pursuant to Section
2(a)(i) hereof but prior to the filing of a registration statement in respect of
such election, (A) the Board of Directors of the Company, in its reasonable
judgment and in good faith, resolves that the filing of such registration
statement and the offering of Registrable Securities pursuant thereto would
materially interfere with any significant acquisition, corporate reorganization
or other similar transaction involving the Company, and (B) the Company gives
the Holders having made such election written notice of such determination
(which notice shall include a copy of such resolution), the Company shall,
notwithstanding the provisions of Section 2(a)(i) hereof, be entitled to
postpone for up to 90 days the filing of any registration statement otherwise
required to be prepared and filed by it pursuant to Section 2(a)(i) hereof;
provided, however, that no such postponement may be effected if any other
postponement of a registration pursuant to this Section 2 was in effect during
the 12 months immediately preceding the commencement of such postponement,
unless any Holders having made elections during the previous postponement shall
have had the opportunity to register their Registrable Securities pursuant to an
effective registration statement prior to the current postponement.
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(b) "Piggy-Back" Registrations.
(i) If, at any time, the Company proposes to register any of
its Common Stock or Rights or any other equity securities under the Securities
Act on a registration statement on Form S-1, Form S-2 or Form S-3 (or an
equivalent general registration form then in effect) for purposes of an offering
or sale by or on behalf of the Company of its Common Stock or Rights or such
equity securities for its own account (a "primary offering"), or upon the
request or for the account of any holder of its Common Stock or Rights or any
such equity securities (a "secondary offering"), or for purposes of a combined
primary and secondary offering (a "combined offering"), then each such time the
Company shall, at least 10 business days prior to the time when any such
registration statement is filed with the Commission, give prompt written notice
to the Holders of its intention to do so. Such notice shall specify, at a
minimum, the number and class of shares, Rights or equity securities so proposed
to be registered, the proposed date of filing of such registration statement,
any proposed means of distribution of such shares, Rights or securities, any
proposed managing underwriter or underwriters of such shares, Rights or
securities and a good faith estimate by the Company of the proposed maximum
offering price thereof, as such price is proposed to appear on the facing page
of such registration statement. Upon the written direction of any Holder or
Holders, given within five business days following the receipt by such Holder of
any such written notice (which direction shall specify the number of Registrable
Securities intended to be disposed of by such Holder and the intended method of
distribution thereof), the Company shall include in such registration statement
any or all of the Registrable Securities then held by such Holder requesting
such registration (a "Selling Shareholder") to the extent necessary to permit
the sale or other disposition of such Registrable Securities as such Holder has
so directed the Company to be so registered. Notwithstanding the foregoing, the
Holders shall not have any right under this Section 2(b) if the registration
proposed to be effected by the Company relates solely to shares of Common Stock,
Rights or other equity securities
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which are issuable solely to officers or employees of the Company or any
subsidiary thereof pursuant to a bona fide employee stock option, bonus or other
employee benefit plan or as direct consideration in connection with a merger,
exchange offer or acquisition of a business.
(ii) In the event that the Company proposes to register shares of
Common Stock, Rights or other equity securities for purposes of a primary
offering, and any managing underwriter shall advise the Company and the Selling
Shareholders in writing that, in its opinion, the inclusion in the registration
statement of some or all of the Registrable Securities sought to be registered
by such Selling Shareholders creates a substantial risk that the price per unit
the Company will derive from such registration will be materially and adversely
affected or that the number of shares, Rights or securities sought to be
registered (including, in addition to the securities sought to be registered by
the Company, any securities sought to be included in such registration statement
by any other shareholder pursuant to "piggyback" registration rights (a
"Piggyback Shareholder") and those sought to be registered by the Selling
Shareholders) is too large a number to be reasonably sold, then the Company will
include in such registration statement such number of shares, Rights or
securities as the Company, the Piggyback Shareholders and such Selling
Shareholders are so advised can be sold in such offering without such an effect
(the "Primary Maximum Number"), as follows and in the following order of
priority: (A) first, such number of shares, Rights or securities as the Company,
in its reasonable judgment and acting in good faith and in accordance with sound
financial practice, shall have determined, (B) second, if and to the extent that
the number of shares, Rights or securities to be registered under clause (A) is
less than the Primary Maximum Number, shares, Rights or securities of each
Piggyback Shareholder that is exercising "piggyback" registration rights under a
Senior Registration Rights Agreement, and (C) third, if and to the extent that
the number of shares, Rights or securities to be registered under clauses (A)
and (B) is less than the Primary Maximum Number, Registrable Securities of each
Selling Shareholder and shares, Rights or securities
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of each other Piggyback Shareholder, pro rata, and without any priority as
between the Selling Shareholders and such Piggyback Shareholders, in proportion
to the number sought to be registered by each Selling Shareholder and each such
Piggyback Shareholder relative to the number sought to be registered by all the
Selling Shareholders and all such Piggyback Shareholders, which in the
aggregate, when added to the number of shares, Rights or securities to be
registered under clauses (A) and (B), equals the Primary Maximum Number.
(iii) In the event that the Company proposes to register shares of
Common Stock or other equity securities for purposes of a secondary offering,
upon the request or for the account of any holder thereof pursuant to "demand"
registration rights of such holder (each a "Requesting Shareholder"), and any
managing underwriter shall advise the Requesting Shareholder or Shareholders and
the Selling Shareholders in writing that, in its opinion, the inclusion in the
registration statement of some or all of the shares, Rights or securities sought
to be registered by the Requesting Shareholders and of the Registrable
Securities sought to be registered by the Selling Shareholders creates a
substantial risk that the price per unit that such Requesting Shareholder or
Shareholders and such Selling Shareholders will derive from such registration
will be materially and adversely affected or that the number of shares, Rights
or securities sought to be registered (including any securities sought to be
registered at the instance of the Requesting Shareholder or Shareholders, any
securities sought to be included in such Registration Statement by any Piggyback
Shareholder and those sought to be registered by the Selling Shareholders) is
too large a number to be reasonably sold, the Company will include in such
registration statement such number of shares, Rights or securities as the
Requesting Shareholders and the Selling Shareholders are so advised can
reasonably be sold in such offering, or can be sold without such an effect (the
"Secondary Maximum Number"), as follows and in the following order of priority:
(A) first, such number of shares, Rights or securities as the Requesting
Shareholder shall have requested, (B) second, if and to the extent that the
number
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of shares, Rights or securities to be registered under clause (A) is less than
the Secondary Maximum Number, shares, Rights or securities of each Piggyback
Shareholder that is exercising "piggyback" registration rights under a Senior
Registration Rights Agreement, and (C) third, if and to the extent that the
number of shares, Rights or securities to be registered under clauses (A) and
(B) is less than the Secondary Maximum Number, Registrable Securities of each
Selling Shareholder and shares, Rights or securities of each other Piggyback
Shareholder, pro rata, and without any priority as between the Selling
Shareholders and each such Piggyback Shareholders, in proportion to the number
sought to be registered by each Selling Shareholder and such Piggyback
Shareholder relative to the number sought to be registered by all the Selling
Shareholders and all such Piggyback Shareholders, which, in the aggregate, when
added to the number of shares, Rights or securities to be registered under
clauses (A) and (B), equals the Secondary Maximum Number.
(iv) In the event that the Company proposes to register shares of
Common Stock, Rights or other equity securities for purposes of a combined
offering, and any managing underwriter shall advise the Company, the Requesting
Shareholder or Shareholders and the Selling Shareholders in writing that, in its
opinion, the inclusion in the registration statement of some or all of the
Registrable Securities sought to be registered by the Selling Shareholders and
any shares, Rights or securities sought to be registered by Piggyback
Shareholders creates a substantial risk that the price per unit the Company
and/or the Requesting Shareholders will derive from such registration will be
materially and adversely affected, then the Company will include in such
registration statement such number of shares, Rights or securities as the
Company, the Requesting Shareholders, the Piggyback Shareholders and the Selling
Shareholders are so advised can be sold in such offering without such an effect
(the "Combined Maximum Number"), as follows and in the following order of
priority: (A) first, such number of shares, Rights or securities as the Company,
in its reasonable judgment and acting in good faith and in accordance with sound
financial practice, shall
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have determined, and any shares, Rights or securities sought to be registered by
any Requesting Shareholders, (B) second, if and to the extent that the number of
shares, Rights or securities to be registered under clause (A) is less than the
Combined Maximum Number, shares, Rights or securities of each Piggyback
Shareholder that is exercising "piggyback" registration rights under a Senior
Registration Rights Agreement, and (C) third, if and to the extent that the
number of shares, Rights or securities to be registered under clauses (A) and
(B) is less than the Combined Maximum Number, such number of Registrable
Securities of each Selling Shareholder and such number of shares, Rights or
securities of each other Piggyback Shareholder, pro rata, and without any
priority as between the Selling Shareholders and each such Piggyback
Shareholders, in proportion to the number sought to be registered by each
Selling Shareholder and each such Piggyback Shareholder relative to the number
sought to be registered by all the Requesting Shareholders and Selling
Shareholders, which, in the aggregate, when added to the number of shares,
Rights or securities to be registered under clauses (A) and (B), equals the
Combined Maximum Number.
(c) Withdrawals. Any Holder having notified or directed the
Company to include any or all of his or its Registrable Securities in a
registration statement pursuant to Section 2(a) or 2(b) hereof shall have the
right to withdraw such notice or direction with respect to any or all of the
Registrable Securities designated for registration thereby by giving written
notice to such effect to the Company at least five business days prior to the
anticipated effective date of such registration statement. In the event of any
such withdrawal, the Company shall amend such registration statement and take
such other actions as may be necessary so that such Registrable Securities are
not included in the applicable registration and not sold pursuant thereto, and
such Registrable Securities shall continue to be Registrable Securities in
accordance herewith. In the event of any such withdrawal with respect to a
direction pursuant to Section 2(a), the Holders, at their option, may elect (i)
to pay the Registration Expenses (as defined in Section 4 hereof), incurred in
connection
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with the registration statement so withdrawn prior to the date such written
notice of withdrawal is given, in which event such direction shall not be deemed
to have utilized one of the three occasions on which Holders may demand
registration pursuant to Section 2(a) or (ii) not to pay such Registration
Expenses, in which event such direction shall be deemed, notwithstanding such
withdrawal, to have utilized one of such occasions. No such withdrawal shall
affect the obligations of the Company with respect to Registrable Securities not
so withdrawn, provided, however, that in the case of a registration pursuant to
Section 2(a) hereof, if such withdrawal shall reduce the total market value of
the Registrable Securities to be registered (or, if applicable, the proposed
maximum aggregate offering price thereof) below $5 million, then the Company
shall, prior to the filing or effectiveness, as appropriate, of such
registration statement, give each Holder of Registrable Securities so to be
registered notice, referring to this Agreement, of such fact and, within ten
business days following the giving of such notice, either the Company or the
Holders of a majority of such Registrable Securities may, by written notice to
each Holder of such Registrable Securities or the Company, as the case may be,
elect that such registration statement not be filed or, if it has theretofore
been filed, that it be withdrawn. During such ten business day period, the
Company shall not file such registration statement or, if it has theretofore
been filed, shall use its reasonable best efforts not to permit it to become
effective. In the event of any election contemplated by the proviso to the next
preceding sentence, no registration statement with respect to Registrable
Securities shall thereafter be filed with the Commission without compliance with
all of the procedures set forth in Section 2(a) hereof.
3. Registration Procedures.
(a) In connection with the Company's obligations with respect
to any registration of Registrable Securities pursuant to Section 2 hereof, the
Company shall use its reasonable best efforts to effect or cause such
registration to permit the sale of the Registrable Securities by the
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Holders thereof in accordance with the intended method or methods of
distribution thereof described in the registration statement relating thereto
and to maintain the effectiveness of such registration statement for a period of
six calendar months after the date of effectiveness of such registration
statement or, if shorter, until the disposition of all of the Registrable
Securities covered by such registration statement is completed. In connection
therewith, the Company shall, as soon as reasonably possible:
(i) prepare and file with the Commission a registration statement with
respect to such registration on any form which may be utilized by the
Company and which shall permit the disposition of the Registrable
Securities in accordance with the intended method or methods thereof, as
specified in writing by the Holders thereof, and use its reasonable best
efforts to cause such registration statement to become effective as soon as
reasonably possible thereafter;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus included
therein as may be necessary to effect and maintain the effectiveness of
such registration statement and as may be required by the applicable rules
and regulations of the Commission and the instructions applicable to the
form of such registration statement, and furnish to the underwriters, if
any, of the Registrable Securities to be registered, the sales or placement
agent, if any, therefor, and a representative of the Holders of Registrable
Securities registered thereby copies of any such supplement or amendment
prior to its being used and/or filed with the Commission;
(iii) comply with the provisions of the Securities Act applicable to
issuers with respect to the disposition of all of the Registrable
Securities covered by such registration statement in accordance with the
intended methods of disposition by the Holders thereof set forth in such
registration statement, in
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any such case for a period of six calendar months after the date of
effectiveness of such registration statement or, if shorter, until such
disposition is completed;
(iv) provide (A) any Holder registering more than 10% of the
Registrable Securities to be registered, (B) the underwriters (which term,
for purposes of this Agreement, shall include a person deemed to be an
underwriter within the meaning of Section 2(11) of the Securities Act), if
any, of the Registrable Securities to be registered, (C) the sales or
placement agent, if any, therefor, (D) counsel for such underwriters or
agent, and (E) counsel for the Holders thereof the opportunity to
participate in the preparation of such registration statement, each
prospectus included therein or filed with the Commission, and each
amendment or supplement thereto;
(v) for a reasonable period prior to the filing of such registration
statement, and throughout the period specified in Section 3(a)(iii) hereof,
make available for inspection by the parties referred to in Section
3(a)(iv), subject to execution and delivery of a confidentiality agreement
in customary form in favor of the Company by the Holders seeking to
exercise such inspection rights, above such financial and other information
and books and records of the Company, and cause the officers, directors,
employees, counsel and independent certified public accountants of the
Company to respond to such inquiries, as shall be reasonably necessary, in
the judgment of the respective counsel referred to in such Section, to
conduct a reasonable investigation within the meaning of Section 11 of the
Securities Act;
(vi) promptly notify the selling Holders of Registrable Securities,
the sales or placement agent, if any, therefor and the managing underwriter
or underwriters, if any, thereof and confirm such advice in writing, (A)
when such registration statement or the prospectus included therein or any
prospectus amendment
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or supplement or post-effective amendment has been filed, and, with respect
to such registration statement or any post-effective amendment, when the
same has become effective, (B) of any comments by the Commission and by the
Blue Sky or securities commissioner or regulator of any state with respect
thereto or any request by the Commission for amendments or supplements to
such registration statement or prospectus or for additional information,
(C) of the issuance by the Commission of any stop order suspending the
effectiveness of such registration statement or the initiation or
threatening of any proceedings for that purpose, (D) if at any time the
representations and warranties of the Company contemplated by Section
3(a)(xv) or Section 5 hereof cease to be true and correct in all material
respects, (E) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose, or (F) at any time when a prospectus is
required to be delivered under the Securities Act, that such registration
statement, prospectus, prospectus supplement or post-effective amendment,
or any document incorporated by reference in any of the foregoing, contains
an untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing;
(vii) use its reasonable best efforts to obtain the withdrawal of any
order suspending the effectiveness of such registration statement or any
post-effective amendment thereto at the earliest practicable date;
(viii) if requested by any managing underwriter or underwriters, any
placement or sales agent or any Holder, promptly incorporate in a
prospectus supplement or post-effective amendment such information as is
required by the applicable rules and regulations of the Commission and as
such managing underwriter or underwriters, such agent or such Holder
specifies
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should be included therein relating to the terms of the sale of such
Registrable Securities, including, without limitation, information with
respect to the number of Registrable Securities being sold by the Holders
or agent or to any underwriters, the name and description of the Holders,
agent or underwriter, the offering price of such Registrable Securities and
any discount, commission or other compensation payable in respect thereof,
the purchase price being paid therefor by such underwriters and with
respect to any other terms of the offering of the Registrable Securities to
be sold by the Holders or agent or to such underwriters; and make all
required filings of such prospectus supplement or post-effective amendment
promptly after notification of the matters to be incorporated in such
prospectus supplement or post effective amendment;
(ix) furnish (A) to any Holder registering more than ten percent of
the Registrable Securities to be registered in such registration, each
placement or sales agent, if any, therefor, each underwriter, if any,
thereof and the respective counsel referred to in Section 3(a)(iv) an
executed copy of such registration statement, each such amendment and
supplement thereto (in each case including all exhibits thereto and
documents incorporated by reference therein), and (B) to any Holder of
Registrable Securities to be registered in such registration such number of
copies of such registration statement (excluding exhibits thereto and
documents incorporated by reference therein unless specifically so
requested by any Holder, agent or underwriter, as the case may be) and of
the prospectus included in such registration statement (including each
preliminary prospectus), in conformity with the requirements of the
Securities Act, and such other documents, as any such Holder, agent, if
any, and underwriter, if any, may reasonably request in order to facilitate
the offering and disposition of the Registrable Securities owned by any
such Holder, offered or sold by such agent or underwritten by such
underwriter and to permit each Holder, agent and underwriter to satisfy the
prospectus delivery
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requirements of the Securities Act; and the Company hereby consents to the
use of such prospectus (including such preliminary prospectus) and any
amendment or supplement thereto by each Holder and by any such agent and
underwriter, in each case in the form most recently provided to such party
by the Company, in connection with the offering and sale of the Registrable
Securities covered by the prospectus (including such preliminary
prospectus) or any supplement or amendment thereto;
(x) use its reasonable best efforts to (A) register or qualify the
Registrable Securities to be included in such registration statement under
such securities laws or blue sky laws of such jurisdictions as any Holder
and any placement or sales agent, if any, therefor and underwriter, if any,
thereof shall reasonably request, (B) keep such registrations or
qualifications in effect and comply with such laws so as to permit the
continuance of offers, sales and dealings therein in such jurisdictions for
so long as may be necessary to enable the Holders, agents or underwriters
to complete its distribution of Securities pursuant to such registration
statement and (C) take any and all other actions as may be reasonably
necessary or advisable to enable the Holders, agents, if any, and
underwriters, if any, to consummate the disposition in such jurisdictions
of such Registrable Securities; provided, however, that the Company shall
not be required for any such purpose to (I) qualify as a foreign
corporation in any jurisdiction wherein it would not otherwise be required
to qualify but for the requirements of this Section 3(a)(x) or (II) consent
to general service of process in any such jurisdiction;
(xi) use its reasonable best efforts to obtain the consent or approval
of each governmental agency or authority, whether federal, state or local,
which may be required to effect such registration or the offering or sale
in connection therewith or to enable the Holders to offer, or to consummate
the disposition of, the Registrable Securities;
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(xii) cooperate with the Holders and the managing underwriters, if
any, to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold, which certificates shall be
printed, lithographed or engraved, or produced by any combination of such
methods, on steel engraved borders if required or appropriate and which
shall not bear any restrictive legends; and, in the case of an underwritten
offering, enable such Registrable Securities to be in such denominations
and registered in such names as the managing underwriters may request at
least two business days prior to any sale of the Registrable Securities;
(xiii) provide a CUSIP number for all Registrable Securities, not
later than the effective date of such registration statement;
(xiv) enter into one or more underwriting agreements, engagement
letters, agency agreements, "best efforts" underwriting agreements or
similar agreements, as appropriate, and take such other actions in
connection therewith as the Holders shall reasonably request in order to
expedite or facilitate the disposition of the Registrable Securities
registered;
(xv) whether or not an agreement of the type referred to in Section
(3)(a)(xiv) hereof is entered into and whether or not any portion of the
offering contemplated by such registration statement is an underwritten
offering or is made through a placement or sales agent or any other entity,
(A) make such representations and warranties to the Holders and the
placement or sales agent, if any, therefor and the underwriters, if any,
thereof in form, substance and scope as are customarily made in connection
with an offering of common stock or other equity securities pursuant to any
appropriate agreement and/or to a registration statement filed on the form
applicable to such registration; (B) use its reasonable best efforts to
obtain an opinion of counsel to the Company in customary form and covering
such matters, of the type
-17-
customarily covered by such an opinion, as the managing underwriters, if
any, and as the Holders may reasonably request, addressed to the Holders
and the placement or sales agent, if any, therefor and the underwriters, if
any, thereof, and dated the effective date of such registration statement
(and if such registration statement contemplates an underwritten offering
of a part or all of the Registrable Securities, dated the date of the
closing under the underwriting agreement relating thereto); (C) use its
reasonable best efforts obtain a "comfort" letter or letters from the
independent certified public accountants of the Company addressed to the
Holders and the placement or sales agent, if any, therefor and the
underwriters, if any, thereof, dated (I) the effective date of such
registration statement, (II) the effective date of any prospectus
supplement, if any, to the prospectus included in such registration
statement or post-effective amendment to such registration statement which
includes unaudited or audited financial statements as of a date or for a
period subsequent to that of the latest such statements included in such
prospectus and (III) (if such registration statement contemplates an
underwritten offering pursuant to any prospectus supplement to the
prospectus included in such registration statement or post-effective
amendment to such registration statement which includes unaudited or
audited financial statements as of a date or for a period subsequent to
that of the latest such statements included in such prospectus) dated the
date of the closing under the underwriting agreement relating thereto, such
letter or letters to be in customary form and covering such matters of the
type customarily covered by letters of such type; (D) deliver such
documents and certificates, including officers' certificates, as may be
reasonably requested by the Holders and the placement or sales agent, if
any, therefor and the managing underwriters, if any, thereof to evidence
the accuracy of the representations and warranties made pursuant to clause
(A) above or those contained in Section 5(a) hereof and the compliance with
or satisfaction of any agreements or conditions
-18-
contained in the underwriting agreement or other agreement entered into by
the Company; and (E) undertake such obligations relating to expense
reimbursement, indemnification and contribution as are provided in Section
6 hereof;
(xvi) in the event that (i) any broker-dealer registered under the
Exchange Act shall underwrite any Registrable Securities or participate as
a member of an underwriting syndicate or selling group or "assist in the
distribution" (within the meaning of the Rules of Fair Practice and the
By-Laws of the National Association of Securities Dealers, Inc. ("NASD"))
thereof, whether as a Holder of Registrable Securities or as an
underwriter, a placement or sales agent or a broker or dealer in respect
thereof, or otherwise, or (ii) more than 10% of the net offering proceeds,
not including underwriting compensation, of such distribution is intended
to be paid to any such broker-dealer or "associated or affiliated persons"
of such broker-dealer or "members of the immediate family of such persons"
(each within the meaning of such Rules), the Company shall take reasonable
steps to assist such broker-dealer in complying with the requirements of
such Rules and By-Laws, including, without limitation, by (A) if such Rules
or By-Laws shall so require, engaging a "qualified independent underwriter"
(as defined in such Schedule) to participate in the preparation of the
registration statement relating to such Registrable Securities, to exercise
usual standards of due diligence in respect thereto and, if any portion of
the offering contemplated by such registration statement is an underwritten
offering or is made through a placement or sales agent, to recommend the
price of such Registrable Securities, (B) indemnifying any such qualified
independent underwriter to the extent of the indemnification of
underwriters provided in Section 6 hereof, and (C) providing such
information to such broker-dealer as may be required in order for such
broker-dealer to comply with the requirements of the Rules of Fair Practice
of the NASD;
-19-
(xvii) comply with all applicable rules and regulations of the
Commission, and make generally available to its securityholders, as soon as
practicable but in any event not later than eighteen months after the
effective date of such registration statement, an earning statement of the
Company and its subsidiaries complying with Section 11(a) of the Securities
Act (including, at the option of the Company, Rule 158 thereunder); and
(xviii) use its reasonable best efforts to list prior to the effective
date of such registration statement, subject to notice of issuance, the
Registrable Securities covered by such registration statement on any
securities exchange on which the Common Stock is then listed or, if the
Common Stock is not then so listed, to have the Registrable Securities
accepted for quotation of trading on the Nasdaq National Market (or a
comparable interdealer quotation system then in effect).
(b) In the event that the Company would be required, pursuant to
Section 3(a)(vi)(F) above, to notify the Holders, the placement or sales agent,
if any, therefor and the managing underwriters, if any, thereof, the Company
shall without delay prepare and furnish to the Holders, to each placement or
sales agent, if any, and to each underwriter, if any, a reasonable number of
copies of a prospectus supplemented or amended so that, as thereafter delivered
to purchasers of Registrable Securities, such prospectus shall not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing. The Holders agree that upon receipt of
any notice from the Company pursuant to Section 3(a)(vi)(F) hereof, they shall
forthwith discontinue the disposition of Registrable Securities pursuant to the
registration statement applicable to such Registrable Securities until they
shall have received copies of such amended or supplemented prospectus, and if so
directed by the Company, the Holders shall deliver to the Company (at the
Company's
-20-
expense) all copies, other than permanent file copies, then in their possession
of the prospectus covering such Registrable Securities at the time of receipt of
such notice.
(c) The Company may require the Holders to furnish to the Company such
information regarding the Holders and their intended method of distribution of
such Registrable Securities as the Company may from time to time reasonably
request in writing, but only to the extent that such information is required in
order to comply with the Securities Act. Each Holder agrees to notify the
Company as promptly as practicable of any inaccuracy or change in information
previously furnished by such Holder to the Company or of the occurrence of any
event in either case as a result of which any prospectus relating to such
registration contains or would contain an untrue statement of a material fact
regarding such Holder or such Holder's intended method of distribution of such
Registrable Securities or omits or would omit to state any material fact
regarding such Holder or its intended method of distribution of such Registrable
Securities required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing, and promptly
to furnish to the Company any additional information required to correct and
update any previously furnished information or required so that such prospectus
shall not contain, with respect to such Holder or the distribution of such
Registrable Securities, an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing.
(d) From the time that the Company receives any notice pursuant to
Section 2(a)(i) hereof or, as the case may be, any direction from a Holder in
connection with a secondary offering or a combined offering pursuant to Section
2(b)(i) hereof until the earlier of (i) the date 90 days after the effectiveness
of the registration statement relating thereto or such shorter period of time as
may be recommended by the managing underwriters involved in such offering and
(ii) the date an election is made not to
-21-
file a registration statement with the Commission pursuant to Section 2(c)
hereof, the Company will not offer, issue, sell, agree or commit to issue or
sell, grant any option for the purchase of, file with the Commission a
registration statement relating to any primary, secondary or combined offering
of or solicit any offer to buy any Common Stock or any Rights, other than (A) in
connection with the Registrable Securities to be registered pursuant to such
notice or direction, (B) such Common Stock or other equity securities as were,
at the time of such direction, to be included in such secondary offering or
combined offering, (C) pursuant to an approved employee stock option, stock
purchase plan, or similar benefit program or agreement for the benefit of
employees of, or consultants to, the Company, where the primary purpose is not
to raise additional equity capital for the Company or (D) as direct
consideration for the acquisition of a business in a merger, consolidation or
similar transaction.
4. Registration Expenses.
The Company agrees to bear and to pay or cause to be paid promptly
upon request being made therefor all expenses incident to the Company's
performance of or compliance with this Agreement, including, without limitation,
(a) all Commission and any NASD registration and filing fees and expenses, (b)
all fees and expenses in connection with the qualification of the Securities for
offering and sale under the State securities and blue sky laws, including
reasonable fees and disbursements of counsel for the placement or sales agent or
underwriters in connection with such qualifications, (c) all expenses relating
to the preparation, printing, distribution and reproduction of each registration
statement required to be filed hereunder, each prospectus included therein or
prepared for distribution pursuant hereto, each amendment or supplement to the
foregoing, the certificates representing the Common Stock or other equity
securities to be sold and all other documents relating hereto, (d) messenger and
delivery expenses, (e) fees and expenses of any escrow agent or custodian, (f)
internal expenses of the Company (including, without limitation, all salaries
and expenses of
-22-
the Company's officers and employees performing legal or accounting duties), (g)
fees, disbursements and expenses of counsel and independent certified public
accountants of the Company (including the expenses of any opinions or "comfort"
letters required by or incident to such performance and compliance), (h) fees,
disbursements and expenses (including fees and expenses of counsel) of any
"qualified independent underwriter" engaged pursuant to Section 3(a)(xvi)
hereof, (i) reasonable fees, disbursements and expenses of one counsel for all
of the Holders retained in connection with any particular registration, and
fees, expenses and disbursements of any other persons retained by the Company in
connection with such registration, and (j) all fees and expenses (including,
without limitation, listing and qualification fees) in connection with the
listing or admission to quotation of the Registrable Securities as required by
Section 3(a)(xviii) hereof (collectively, the "Registration Expenses"). To the
extent that any Registration Expenses are incurred, assumed or paid by the
Holder or any placement or sales agent therefor or underwriter thereof, the
Company shall reimburse such person for the full amount of the Registration
Expenses so incurred, assumed or paid promptly after receipt of a request
therefor. Notwithstanding the foregoing, the Holders of Registrable Securities
being registered each shall pay their pro rata share (based on their proportion
of the Registrable Securities being sold by them) of all agency fees and
commissions and all underwriting discounts and commissions attributable to the
sale of the Registrable Securities and the fees and disbursements of any counsel
or other advisors or experts retained by the Holder, other than the counsel and
experts specifically referred to above.
5. Representations and Warranties.
The Company represents and warrants to, and agrees with, each Holder
from time to time of Registrable Securities that:
(a) Each registration statement covering Registrable Securities and
each prospectus (including any preliminary prospectus) contained therein or
furnished
-23-
pursuant to Section 3(a)(ix) hereof and any further amendments or supplements to
any such registration statement or prospectus, when it becomes effective or is
filed with the Commission, as the case may be, and, in the case of an
underwritten offering of Registrable Securities, at the time of the closing
under the underwriting agreement relating thereto will conform in all material
respects to the requirements of the Securities Act and will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading;
and at all times subsequent to the effective date of such registration statement
when a prospectus would be required to be delivered under the Securities Act,
other than from (i) such time as a notice has been given to Holders of
Registrable Securities pursuant to Section 3(a)(vi)(F) hereof until (ii) such
time as the Company furnishes an amended or supplemented prospectus pursuant to
Section 3(b) hereof, each such registration statement, and each prospectus
contained therein or furnished pursuant to Section 3(a)(ix) hereof, as then
amended or supplemented, will conform in all material respects to the
requirements of the Securities Act and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances then existing; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company by a
Holder of Registrable Securities expressly for use therein.
(b) Any documents incorporated by reference in any prospectus referred
to in Section 5(a) hereof, when they become or became effective or are or were
filed with the Commission, as the case may be, as then amended or supplemented,
will conform or conformed in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable, and none of such documents
will contain an untrue statement of a material fact or will omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading;
-24-
provided, however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Company by a Holder of Registrable Securities
expressly for use therein.
(c) The compliance by the Company with all of the provisions of this
Agreement and the consummation of the transactions herein contemplated will not
(i) conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any
subsidiary is a party or by which the Company or any subsidiary is bound or to
which any of the property or assets of the Company or any subsidiary is subject,
or (ii) result in any violation of the provisions of the Certificate of
Incorporation or By-Laws of the Company or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company or any subsidiary or any of their properties except, with respect to
clause (i) or (ii), for such conflicts, breaches, defaults and violations as,
individually and in the aggregate, do not have a material adverse effect on the
financial condition, results of operations, business or prospects of the Company
and its subsidiaries and do not materially hinder or delay the exercise by the
Holders of their rights hereunder; and no consent, approval, authorization,
order, registration or qualification of or with any such court or governmental
agency or body is required for the consummation by the Company of the
transactions contemplated by this Agreement, except the registration under the
Securities Act of the Registrable Securities and such consents, approvals,
authorizations, registrations or qualifications as may be required under State
securities or blue sky laws in connection with the offering and distribution of
the Registrable Securities.
6. Indemnification.
(a) Indemnification by the Company. Upon the registration of any
Registrable Securities pursuant to
-25-
Section 2 hereof, and in consideration of the agreements of the Holders
contained herein, and as an inducement to SOFTBANK America to enter into the
Purchase Agreement, the Company shall, and it hereby agrees to, indemnify and
hold harmless each Holder, and each person who participates as a placement or
sales agent or as an underwriter in any offering or sale of such Registrable
Securities, against any losses, claims, damages or liabilities, joint or
several, to which any such Holder, agent or underwriter may become subject,
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
registration statement under which such Registrable Securities were registered
under the Securities Act, or any preliminary or final prospectus contained
therein or furnished by the Company to any such Holder, agent or underwriter, or
any amendment or supplement thereto, or any document incorporated by reference
therein, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading (in the case of the Registration Statement
or any amendment thereto) or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading (in the
case of any preliminary or final prospectus or supplement thereto), and the
Company shall, and it hereby agrees to, reimburse any such Holder, agent and
underwriter for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such action or claim; provided,
however, that the Company shall not be liable to any such person in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement, preliminary or final
prospectus, amendment or supplement or incorporated document in reliance upon
and in conformity with written information furnished to the Company by such
person expressly for use therein; provided, further, that the Company shall not
be liable to (i) any Holder, underwriter or placement or sales agent under the
indemnity agreement in
-26-
this subsection (a) with respect to any preliminary prospectus to the extent
that any such loss, claim, damage or liability of such Holder, underwriter or
agent, respectively, results from the fact that such Holder, underwriter or
agent sold Registrable Securities to a person to whom there was not sent or
given, at or prior to the written confirmation of such sale, a copy of the
related final prospectus if the Company has previously furnished on a timely
basis to such Holder, underwriter or agent, respectively, sufficient copies
thereof and such prospectus corrects the statement or omission, or alleged
statement or omission, out of which such loss, claim, damage or liability arises
or (ii) any Holder distributing securities otherwise than in an underwritten
offering or through a broker-dealer acting as placement agent for such Holder,
with respect to any preliminary or final prospectus to the extent that any such
loss, claim, damage or liability of such Holder arises from the fact that such
Holder delivered such preliminary or final prospectus after receipt of any
notice from the Company pursuant to Section 3(a)(vi)(F) hereof and the amended
or supplemented prospectus furnished pursuant to Section 3(b) hereof corrects
the statement or omission, or alleged statement or omission, out of which such
loss, claim, damage or liability arises.
(b) Indemnification by the Holder and any Agents and Underwriters. The
Company may require, as a condition to including any Registrable Securities in
any registration statement filed pursuant to Section 2 hereof and to entering
into any underwriting agreement with respect thereto, that the Company shall
have received an undertaking from the Holder thereof and from each underwriter
named in any such underwriting agreement, severally and not jointly, to (i)
indemnify and hold harmless the Company, and all other Holders, if any, of
Registrable Securities selling under the same registration statement, against
any losses, claims, damages or liabilities to which the Company or such other
Holders of Registrable Securities may become subject, under the Securities Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in
-27-
such registration statement, or any preliminary or final prospectus contained
therein or furnished by the Company to the Holders, agent or underwriter, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading (in the case
of the Registration Statement or any amendment thereto) or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (in the case of any preliminary or final prospectus or
supplement thereto), in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by the Holder or underwriter expressly for use therein,
and (ii) reimburse the Company for any legal or other expenses reasonably
incurred by the Company in connection with investigating or defending any such
action or claim; provided, however, that no Holder shall be required to
undertake liability under this Section 6(b) for any amounts in excess of the
dollar amount of the proceeds to be received by such Holder from the sale of its
Registrable Securities pursuant to such registration, as reduced by any damages
or other amounts that such Holder was otherwise required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission.
(c) Notices of Claims, Etc. Promptly after receipt by an indemnified
party under subsection (a) or (b) above of written notice of the commencement of
any action, such indemnified party shall, if a claim in respect thereof is to be
made against an indemnifying party pursuant to the indemnification provisions of
or contemplated by this Section 6, notify such indemnifying party in writing of
the commencement of such action; but the omission so to notify the indemnifying
party shall not relieve it from any liability which it may have to any
indemnified party except to the extent the indemnifying party is materially
prejudiced thereby. In case any such action shall be brought against any
indemnified party and it shall notify an indemnifying party of the commencement
thereof, such
-28-
indemnifying party shall be entitled to participate therein and, to the extent
that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who may be counsel to the indemnifying party unless
representation of both parties by the same counsel would be inappropriate due to
actual or potential conflicts of interest between them), and, after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, such indemnifying party shall not be liable to such
indemnified party for any legal expenses of other counsel or any other expenses,
in each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation.
(d) Contribution. Each party hereto agrees that, if for any reason the
indemnification provisions contemplated by Section 6(a) or Section 6(b) hereof
are unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, claims, damages or liabilities (or actions in respect
thereof) referred to therein, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and the indemnified party in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative fault of such indemnifying party and indemnified party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by such indemnifying party or by
such indemnified party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 6(d) were determined by pro rata allocation
-29-
(even if the Holders or any agents or underwriters or all of them were treated
as one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to in this Section
6(d). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, or liabilities (or actions in respect thereof) referred
to above shall be deemed to include any legal or other fees or expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 6(d), no Holder shall be required to contribute any amount in excess of
the amount by which the dollar amount of the proceeds received by such Holder
from the sale of any Registrable Securities (after deducting any fees, discounts
and commissions applicable thereto) exceeds the amount of any damages which such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission, and no underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
such underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Holders' and any underwriter's
obligations in this Section 6(d) to contribute shall be several in proportion to
the number or amount of Registrable Securities sold or underwritten, as the case
may be, by them and not joint.
(e) The obligations of the Company under this Section 6 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each officer, director and partner of any
Holder, agent or underwriter and each person, if any, who controls any Holder,
agent or underwriter within the meaning of the Securities Act; and the
obligations of the
-30-
Holders and any underwriters contemplated by this Section 6 shall be in addition
to any liability which the Holders or any underwriter may otherwise have and
shall extend, upon the same terms and conditions, to each officer and director
of the Company (including any person who, with his consent, is named in any
registration statement as about to become a director of the Company) and to each
person, if any, who controls the Company within the meaning of the Securities
Act.
7. Underwritten Offerings.
(a) Selection of Underwriters. If any of the Registrable Securities
covered by any registration statement filed pursuant to Section 2(a) hereof are
to be sold pursuant to an underwritten offering, the managing underwriter or
underwriters thereof shall be designated by the Company, provided that such
designated managing underwriter or underwriters is or are reasonably acceptable
to the Holders of a majority of the Registrable Securities so to be offered.
(b) Participation by Holders. Each Holder hereby agrees that it may
not participate in any underwritten offering hereunder unless it (i) agrees to
sell its Registrable Securities on the basis provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
8. Rule 144.
The Company covenants to and with each Holder of Registrable
Securities that to the extent it shall be required to do so under the Exchange
Act, the Company shall timely file the reports required to be filed by it under
the Exchange Act or the Securities Act (including, but not limited to, the
reports under Section 13 and 15(d) of the Exchange Act referred to in
subparagraph (c)(1) of Rule 144
-31-
adopted by the Commission under the Securities Act) and the rules and
regulations adopted by the Commission thereunder, and shall take such further
action as any Holder may reasonably request, all to the extent required from
time to time to enable the Holders to sell Registrable Securities without
registration under the Securities Act within the limitations of the exemption
provided by Rule 144 under the Securities Act, as such Rule may be amended from
time to time, or any similar rule or regulation hereafter adopted by the
Commission. Upon the request of any Holder of Registrable Securities, the
Company shall deliver to such Holder a written statement as to whether it has
complied with such requirements.
9. Miscellaneous.
(a) No Inconsistent Agreements. The Company covenants and agrees that
it shall not (i) grant registration rights with respect to any class of Common
Stock or any other securities which would be inconsistent with the terms
contained in this Agreement or (ii) enter into or become bound by, or permit any
subsidiary of the Company to enter into or become bound by, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument which
would prohibit, be violated by, conflict with or provide that a default would
arise from, the compliance by the Company with any of the provisions of this
Agreement or the consummation of the transactions herein contemplated, except
for any such prohibitions, violations, conflicts or defaults as, individually
and in the aggregate, would not have a material adverse effect on the financial
condition, results of operations, business or prospects of the Company and its
subsidiaries and would not materially hinder or delay the exercise by the
Holders of their rights hereunder. The Company represents and warrants that it
is not currently a party to any agreement with respect to any of its equity or
debt securities granting any registration rights to any person, other than the
Existing Registration Agreements.
(b) Specific Performance. The Company acknowledges that it would be
impossible to determine the
-32-
amount of damages that would result from any breach by it of any of the
provisions of this Agreement and that the remedy at law for any breach, or
threatened breach, of any of such provisions would likely be inadequate and,
accordingly, agrees that each Holder shall, in addition to any other rights or
remedies which it may have, be entitled to seek such equitable and injunctive
relief as may be available from any court of competent jurisdiction to compel
specific performance of, or restrain the Company from violating any of, such
provisions. In connection with any action or proceeding for injunctive relief,
the Company hereby waives the claim or defense that a remedy at law alone is
adequate and agrees, to the maximum extent permitted by law, to have each
provision of this Agreement specifically enforced against it, without the
necessity of posting bond or other security against it.
(c) Illegality. If any term or provision of this Agreement or any
application thereof shall be declared or held invalid, illegal or unenforceable,
in whole or in part, whether generally or in any particular jurisdiction, such
provision shall be deemed amended to the extent, but only to the extent,
necessary to cure such invalidity, illegality or unenforceability, and the
validity, legality and enforceability of the remaining provisions, both
generally and in every other jurisdiction, shall not in any way be affected or
impaired thereby.
(d) Recovery of Litigation Costs. Except as otherwise expressly
provided herein to the contrary, in the event any dispute between the parties to
this Agreement shall result in litigation, arbitration or other proceeding, the
prevailing party shall be entitled to recover from the losing party all
reasonable costs and expenses, including without limitation reasonable
attorneys' fees and disbursements, incurred by the prevailing party in
connection with such litigation or other proceeding and any appeal thereof. Such
costs, expenses, fees and disbursements shall be included in and made a part of
the judgment recovered by the prevailing party, if any.
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(e) Notices. All notices, requests, claims, demands, waivers and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered by hand, when delivered personally or by courier,
three days after being deposited in the mail (registered or certified mail,
postage prepaid, return receipt requested), or when received by facsimile
transmission if promptly confirmed by one of the foregoing means, as follows: If
to the Company, to it at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: President, facsimile no. (▇▇▇)▇▇▇-▇▇▇▇, and if to a Holder, to
the address or facsimile transmission number of such Holder set forth in the
security register or other records of the Company, or to such other address or
facsimile transmission number as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
(f) Parties in Interest. All the terms and provisions of this
Agreement shall be binding upon, shall inure to the benefit of and shall be
enforceable by the parties hereto and their respective successors and assigns,
but, except as set forth in this Section 9(f), no such term or provision is for
the benefit of, or intended to create any obligations to, any other persons. In
the event that any transferee of SOFTBANK America or any other Holder shall
acquire Registrable Securities, in any manner, whether by gift, bequest,
purchase, operation of law or otherwise, such transferee shall, without any
further writing or action of any kind, be deemed a party hereto for all purposes
and such Registrable Securities shall be held subject to all of the terms of
this Agreement, and by taking and holding such Registrable Securities, such
transferee shall be entitled to receive the benefits of and be conclusively
deemed to have agreed to be bound by and to perform all of the terms and
provisions of this Agreement; provided, however, that no such transferee shall
receive such benefits (or be deemed to have agreed to be bound by and to perform
such terms and provisions) unless, immediately after giving effect to such
transfer, and taking into account any Registrable Securities held by such
transferee prior to such transfer as well as the Registrable Securities acquired
by such transferee in
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such transfer, such transferee owns at least 500,000 shares of Common Stock
(appropriately adjusted for any stock split, reverse stock split or stock
dividend) or an equivalent number of Registrable Securities other than Common
Stock. If the Company shall so request, any such successor, assign or transferee
shall agree in writing to acquire and hold the Registrable Securities subject to
all of the terms hereof. Any Holder effecting a transfer to a transferee that
acquires any rights or benefits under this Agreement as a result of such
transfer shall, prior to or promptly after such transfer is made, give written
notice to the Company of such transfer, specifying the number of Registrable
Securities transferred and identifying the transferee.
(g) Survival. The respective indemnities, agreements, representations,
warranties and each other provision set forth in this Agreement or made pursuant
hereto shall remain in full force and effect regardless of any investigation (or
statement as to the results thereof) made by or on behalf of any Holder, any
director, officer, partner or employee of any Holder, any agent or underwriter
or any director, officer, partner or employee thereof, or any controlling person
of any of the foregoing, and shall survive delivery of and payment for the
Common Stock purchased pursuant to the Purchase Agreement and the transfer and
registration of Registrable Securities by any Holder.
(h) LAW GOVERNING. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN WITH THE LAWS OF THE STATE OF DELAWARE
(i) Headings. The descriptive headings of the several Sections and
paragraphs of this Agreement are inserted for convenience only, do not
constitute a part of this Agreement and shall not affect in any way the meaning
or interpretation of this Agreement.
(j) Entire Agreement; Amendments. This Agreement and the other
writings referred to herein or delivered pursuant hereto which form a part
hereof contain the entire understanding of the parties with respect to its
subject
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matter. This Agreement supersedes all prior agreements and understandings
between the parties with respect to its subject matter. This Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or prospectively)
only by a written instrument duly executed by the Company and the Holders of
more than 50 percent of the Registrable Securities at the time outstanding. Each
Holder of any Registrable Securities at the time or thereafter outstanding shall
be bound by any amendment or waiver effected pursuant to this Section 9(h),
whether or not any notice, writing or marking indicating such amendment or
waiver appears on such Registrable Securities or is delivered to such Holder.
The entry by the Company into any contract, agreement or understanding that
directly or indirectly gives to any person the right to register, or cause the
Company to register, any securities of the Company under the Securities Act on
terms more favorable to such person than those set forth herein shall require
written approval by the Holders of more than 50 percent of the Registrable
Securities at the time outstanding.
(k) Inspection. For so long as this Agreement shall be in effect, this
Agreement and a complete list of the names and addresses of all the Holders of
Registrable Securities shall be made available for inspection and copying on any
business day by any Holder of Registrable Securities at the offices of the
Company at the address thereof set forth in Section 9(e) above.
(l) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed as of the date first written above.
GLOBAL SPORTS, INC.
By:________________________________
Name:
Title:
SOFTBANK AMERICA INC.
By:________________________________
Address: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
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