EXHIBIT 2.2
SUBORDINATED LOAN AGREEMENT
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THIS LOAN AGREEMENT (this "Agreement") is made effective as of the 10/th/
day of June, 1999 (the "Effective Date"), by and between Global Sports, Inc., a
Delaware corporation (the "Company") , and SOFTBANK America Inc., a Delaware
corporation ("Lender").
RECITALS
WHEREAS, on the date hereof, the Company and Lender are entering into a
Stock Purchase Agreement (the "Purchase Agreement"), pursuant to which the
Company intends to sell and Lender intends to acquire 6,153,850 shares of the
Company's Common Stock, par value $.01 per share (the "Share Acquisition").
WHEREAS, the Company and Lender wish to enter into this Agreement to fund
the Company's operations until the closing of the Share Acquisition.
IN WITNESS WHEREOF, the parties agree as follows:
1. The Loan. Subject to the terms and conditions of this Agreement,
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Lender agrees to lend to the Company, and the Company agrees to borrow from
Lender, funds in an aggregate principal amount of Fifteen Million Dollars
($15,000,000) (the "Loan"), in one installment. The Loan shall be made on the
date hereof. Interest shall accrue on the Loan from the date hereof. Lender
will transmit the Loan via wire transfer of immediately available funds to the
following account: Account No.: 323-266193, Bank Name: The Chase Manhattan
Bank; ABA No.: 000000000; or pursuant to such other instructions as may have
been provided in writing by the Company, and the Company will accept the Loan
pursuant to the terms of this Agreement.
2. The Convertible Subordinated Note. The Loan will be evidenced by, and
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repaid with interest in accordance with, an interest-bearing promissory note in
the form of Exhibit A (the "Convertible Subordinated Note"), duly completed and
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dated as of the date of the Loan and delivered to Lender at or prior to the time
of the Loan.
3. Interest and Payments. Interest shall accrue and be paid to Lender on
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the outstanding and unpaid principal amount of the Loan at the rate of 4.98% per
annum, computed on the basis of the actual number of days elapsed and a year of
360 days consisting of twelve 30 day months. Payments of principal and interest
will be made to Lender in the manner specified in the Convertible Subordinated
Note.
4. Conditions to Funding of Loan. The obligation of the Lender to make
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the Loan is subject to the fulfillment on or prior to the time of funding of the
Loan of the following conditions:
(a) The representations and warranties made by the Company in Article
III of the Purchase Agreement shall be true and correct in all material respects
as of such time (except with respect to representations and warranties made as
of a specific time, which shall be true in all material respects as of such
time, and except for representations and warranties containing a materiality
qualification, which must be true in all respects) with the same effect as
though such representations and warranties had been made at and as of such time;
and the Company shall have performed all obligations herein required to be
performed by it on or prior to such time in all material respects (except with
respect to obligations containing a materiality qualification, which must be
performed in all respects).
(b) The Company shall have duly executed and delivered the Purchase
Agreement and the Convertible Subordinated Note.
(c) The Company shall have duly executed and delivered the
Registration Rights Agreement (as defined in the Purchase Agreement).
(d) Xxxxxxx X. Xxxxx shall have duly executed and delivered the
Voting Agreement in the form attached hereto as Exhibit C to the Purchase
Agreement.
(e) If the Purchase Agreement is executed and delivered on a date
prior to the date the Loan is funded, the President of the Company shall deliver
to the Lender on the date of funding a certificate certifying that the
conditions specified in Section 3(a) have been fulfilled.
(f) The Lender shall have received from Blank, Rome, Xxxxxxx &
XxXxxxxx LLP, counsel to the Company, an opinion addressed to the Lender, dated
the date of such funding, reasonably satisfactory in form and substance to
Xxxxxxxx & Xxxxxxxx, counsel to the Lender.
5. Events of Default. The occurrence of any of the following events will
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be an "Event of Default" hereunder:
(a) Voluntary Bankruptcy or Insolvency Proceedings. The Company shall
(i) apply for or consent to the appointment of a receiver, trustee, liquidator
or custodian of itself or of all or a substantial part of its property, (ii)
make a general assignment for the benefit of its or any of its creditors, (iii)
commence a voluntary case or other proceeding
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seeking liquidation, reorganization or other relief with respect to itself or
its debts under any bankruptcy, insolvency or other similar law now or hereafter
in effect or consent to any such relief or to the appointment of or taking
possession of its property by any official in an involuntary case or other
proceeding commenced against it, or (iv) take any action for the purpose of
effecting any of the foregoing; or
(b) Involuntary Bankruptcy or Insolvency Proceedings. Proceedings for
the appointment of a receiver, trustee, liquidator or custodian of the Company
or of all or a substantial part of the property thereof, or an involuntary case
or other proceedings seeking liquidation, reorganization or other relief with
respect to the Company or the debts thereof under any bankruptcy, insolvency or
other similar law now or hereafter in effect shall be commenced and an order for
relief entered or such proceeding shall not be dismissed or discharged within
sixty (60) days of commencement.
(c) Cross Default. The Company fails to pay or discharge any
obligation in excess of $1,000,000 when due, whether by scheduled maturity,
required prepayment, acceleration, or otherwise).
(d) Judgment. Rendering of a final judgment or judgments (not subject
to appeal) against the Company or any of its subsidiaries in an aggregate amount
in excess of $1,000,000 which remains unstayed, in effect and unpaid for a
period of 60 consecutive days thereafter.
(e) Conversion Default. With respect to outstanding obligations under
the Convertible Subordinated Note, any breach by the Company with respect to its
obligations to issue shares of Common Stock upon conversion of the Convertible
Subordinated Note pursuant to Section 3 thereof.
6. Rights of the Lender upon Default. Upon the occurrence or existence
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of an Event of Default specified in Section 5(a) or (b), immediately and
without notice, all outstanding obligations payable by the Company hereunder and
under the Convertible Subordinated Note shall automatically become immediately
due and payable, without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived. Upon the occurrence or
existence of an Event of Default as specified in Sections 5(c), (d) or (e), the
Lender may declare the outstanding obligations hereunder and under the
Convertible Subordinated Note immediately due and payable by written notice to
the Company and upon any such declaration such obligations shall become
immediately due and payable.
7. Successors and Assigns. This Agreement and the Convertible
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Subordinated Note shall be binding upon and benefit the successors, assigns,
heirs, administrators and transferees of the parties.
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8. Waiver and Amendment. Any provision of this Agreement may be amended,
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waived or modified upon the written consent of the Company and the Lender.
9. Assignment. Neither this Agreement nor any of the rights, interests
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or obligations hereunder may be assigned, by operation of law or otherwise, in
whole or in part, by the Company or the Holder without the prior written consent
of the other party except (i) in the case of the Company, in connection with an
assignment in whole to a successor corporation to the Company, provided that
such successor corporation acquires, by purchase of assets, merger or otherwise,
all or substantially all of the Company's property and assets, and (ii) in the
case of Lender to any affiliates of Lender or SOFTBANK Corp., a Japanese
corporation, including, without limitation, any partnership or other entity of
which any direct or indirect subsidiary of SOFTBANK Corp. is a general partner
or has investment discretion, or any employees of any of the foregoing.
10. Addresses for Notices, etc. Any notices and other communications
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required or permitted under this Agreement shall be effective if in writing and
delivered personally or sent by telecopier, Federal Express or registered or
certified mail, postage prepaid, addressed as follows:
If to Lender, to: SOFTBANK Holdings Inc.
00 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
SOFTBANK America Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx Xxxxxx
Facsimile: (000) 000-0000
with a copy to: Xxxxxxxx & Xxxxxxxx
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxx X. Xxxxx, Esq.
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If to the Company, to: Global Sports, Inc.
000 Xxxxx Xxxxxxxxx Xxxx
Xxxx xx Xxxxxxx, Xxxxxxxxxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx
with a copy to: Blank Rome Comisky & XxXxxxxx LLP
Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxxx Xxxxxx, Esq.
Unless otherwise specified herein, such notices or other communications
shall be deemed effective (a) on the date delivered, if delivered personally,
(b) two business days after being sent, if sent by Federal Express or other
commercial overnight delivery service, (c) one business day after being sent, if
sent by telecopier with confirmation of good transmission and receipt, and (d)
three business days after being sent, if sent by registered or certified mail.
Each of the parties hereto shall be entitled to specify another address by
giving notice as aforesaid to each of the other parties hereto.
11. Severability. The holding of any provision of this Agreement to be
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invalid or unenforceable by a court of competent jurisdiction shall not affect
any other provisions and the other provisions of this Convertible Subordinated
Note shall remain in full force and effect.
12. Governing Law. This Agreement shall be governed by and construed and
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enforced in accordance with the laws of the State of Delaware.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first above written.
Global Sports, Inc.,
a Delaware corporation
By:/s/ Xxxxxxx X. Xxxxx
______________________________
Xxxxxxx X. Xxxxx
Title: Chairman and Chief Executive Officer
____________________________________
SOFTBANK America Inc.,
a Delaware corporation
By:/s/ Xxxxxx X. Xxxxxx
______________________________
Xxxxxx X. Xxxxxx
Title: Vice-Chairman
___________________________
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