10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 2, 2011

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     .

Commission file number 0-16611

GSI COMMERCE, INC.

(Exact name of registrant as specified in its charter)

DELAWARE	04-2958132
(State or other jurisdiction of	(I.R.S. employer identification no.)
incorporation or organization)

935 FIRST AVENUE, KING OF PRUSSIA, PA	19406
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (610) 491-7000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer þ	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

There were 72,711,252 shares of the registrant’s common stock outstanding as of the close of business on April 27, 2011.

GSI COMMERCE, INC.
FORM 10-Q
FOR THE QUARTER ENDED APRIL 2, 2011

INDEX

	Page
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited):
Condensed Consolidated Balance Sheets as of January 1, 2011 and April 2, 2011		4
Condensed Consolidated Statements of Operations for the three-month periods ended April 3, 2010 and April 2, 2011		5
Condensed Consolidated Statements of Cash Flows for the three-month periods ended April 3, 2010 and April 2, 2011		6
Notes to Condensed Consolidated Financial Statements		7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		20
Item 3. Quantitative and Qualitative Disclosures About Market Risk		25
Item 4. Controls and Procedures		25
PART II — OTHER INFORMATION
Item 1. Legal Proceedings		26
Item 1A. Risk Factors		26
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		27
Item 3. Defaults Upon Senior Securities		27
Item 4. (Reserved)		27
Item 5. Other Information		27
Item 6. Exhibits		27
SIGNATURES		29
Exhibit 10.7
Exhibit 10.8
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

The Company’s fiscal year ends on the Saturday nearest the last day of December. The Company’s fiscal year ends are as follows:

References To	Refer to the Years Ended/Ending
Fiscal 2010	January 1, 2011
Fiscal 2011	December 31, 2011
Fiscal 2012	December 29, 2012
Fiscal 2013	December 28, 2013
Fiscal 2014	January 3, 2015
Fiscal 2015	January 2, 2016

2

INTRODUCTORY NOTE

On March 27, 2011, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with eBay Inc. (“eBay”) and Gibraltar Acquisition Corp., a wholly owned subsidiary of eBay (“Merger Sub”). Unless stated otherwise, all forward-looking information contained in this Quarterly Report on Form 10-Q does not take into account or give effect to the impact of the proposed merger. For additional details regarding the proposed merger, see:

• Note 12, Merger Agreement with eBay, to our condensed consolidated financial statements, contained in Part I, Item I of this Quarterly Report on Form 10-Q;

• Management’s Discussion and Analysis of Financial Condition and Results of Operations, contained in Part I, Item 2 of this Quarterly Report on Form 10-Q; and

• Risk Factors, contained in Part II, Item 1A of this Quarterly Report on Form 10-Q.

3

PART I

ITEM 1: FINANCIAL STATEMENTS

GSI COMMERCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)

	January 1,			April 2,
	2011			2011
ASSETS
Current assets:
Cash and cash equivalents	$	242,146		$	109,624
Accounts receivable, net		96,382			72,151
Inventory, net		62,412			92,099
Deferred tax assets		16,439			19,235
Prepaid expenses and other current assets		16,984			21,497
Total current assets		434,363			314,606
Property and equipment, net		188,829			212,282
Goodwill		318,179			494,822
Intangible assets, net		132,972			204,953
Long-term deferred tax assets		2,279			—
Other assets, net		30,540			39,283
Total assets	$	1,107,162		$	1,265,946
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	144,323		$	84,387
Accrued expenses and other		197,417			154,277
Deferred revenue		23,808			28,088
Current portion — long-term debt		11,136			17,985
Total current liabilities		376,684			284,737
Convertible notes		123,391			125,107
Long-term debt		32,287			183,793
Deferred acquisition payments		1,750			4,673
Deferred tax liabilities		—			6,450
Deferred revenue and other long-term liabilities		10,017			9,300
Total liabilities		544,129			614,060
Commitments and contingencies (Note 6)
Stockholders’ equity:
Preferred stock, $0.01 par value:
Authorized shares — 5,000
Issued and outstanding shares — none		—			—
Common stock, $0.01 par value:
Authorized shares — 180,000 and 180,000
Issued and outstanding shares — 66,984 and 72,246		670			722
Additional paid in capital		765,857			867,195
Accumulated other comprehensive loss		(1,378	)		(306	)
Accumulated deficit		(202,116	)		(215,725	)
Total stockholders’ equity		563,033			651,886
Total liabilities and stockholders’ equity	$	1,107,162		$	1,265,946

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

GSI COMMERCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)

	Three Months Ended
	April 3,			April 2,
	2010			2011
Revenues:
Net revenues from product sales	$	159,275		$	178,940
Service fee revenues		113,317			144,554
Net revenues		272,592			323,494
Costs and expenses:
Cost of revenues from product sales		117,474			129,100
Marketing		10,807			14,691
Account management and operations		77,694			91,284
Product development		34,317			46,587
General and administrative		24,397			46,519
Depreciation and amortization		18,761			23,165
Changes in fair value of deferred acquisition payments		2,074			—
Total costs and expenses		285,524			351,346
Loss from operations		(12,932	)		(27,852	)
Other (income) expense:
Interest expense		5,208			5,248
Interest income		(234	)		(65	)
Other (income) expense		474			(1,098	)
Total other expense		5,448			4,085
Loss before income taxes and equity-method investment earnings		(18,380	)		(31,937	)
Benefit for income taxes		(10,255	)		(17,874	)
Equity-method investment earnings		—			(454	)
Net loss	$	(8,125	)	$	(13,609	)
Loss per share- basic and diluted	$	(0.13	)	$	(0.20	)
Weighted average shares outstanding — basic and diluted		60,446			68,156

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

GSI COMMERCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)

	Three Months Ended
	April 3,			April 2,
	2010			2011
Cash Flows from Operating Activities:
Net loss	$	(8,125	)	$	(13,609	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		14,646			18,024
Amortization		4,115			5,141
Amortization of discount on convertible notes		2,809			1,716
Changes in fair value of deferred acquisition payments		2,074			—
Stock-based compensation		6,931			5,012
Foreign currency transaction losses (gains)		475			(1,006	)
Equity-method investment earnings		—			(454	)
Deferred income taxes		(11,191	)		(18,598	)
Changes in operating assets and liabilities:
Accounts receivable, net		16,420			27,221
Inventory, net		(2,621	)		4,739
Prepaid expenses and other current assets		(561	)		(1,114	)
Other assets, net		149			(1,706	)
Accounts payable and accrued expenses		(110,530	)		(117,402	)
Deferred revenue		238			(465	)
Net cash used in operating activities		(85,171	)		(92,501	)
Cash Flows from Investing Activities:
Payments for acquisitions of businesses, net of cash acquired		—			(169,875	)
Cash paid for property and equipment, including internal use software		(15,868	)		(18,485	)
Net cash used in investing activities		(15,868	)		(188,360	)
Cash Flows from Financing Activities:
Proceeds from long term borrowings		—			115,000
Borrowings on revolving credit loan		—			40,000
Debt issuance costs paid		(856	)		(5,674	)
Repayments of capital lease obligations		(1,473	)		(2,832	)
Repayments of mortgage note		(50	)		(53	)
Excess tax benefit in connection with exercise of stock options and awards		978			856
Proceeds from exercise of common stock options		6,933			448
Net cash provided by financing activities		5,532			147,745
Effect of exchange rate changes on cash and cash equivalents		(520	)		594
Net decrease in cash and cash equivalents		(96,027	)		(132,522	)
Cash and cash equivalents, beginning of period		228,430			242,146
Cash and cash equivalents, end of period	$	132,403		$	109,624
Supplemental Cash Flow Information
Cash paid during the period for interest	$	866		$	2,483
Cash paid during the period for income taxes		602			1,555
Noncash Investing and Financing Activities:
Accrual for purchases of property and equipment		3,633			2,406
Property and equipment acquired under capital leases and financings		—			6,241

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

GSI COMMERCE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
(unaudited)

NOTE 1—BASIS OF PRESENTATION

The accompanying condensed consolidated financial statements of GSI Commerce, Inc. and Subsidiaries (“the Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and in accordance with the instructions for Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all information and note disclosures required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements.

The accompanying financial information is unaudited; however, in the opinion of the Company’s management, all adjustments (consisting of normal recurring adjustments and accruals) necessary to present fairly the financial position, results of operations and cash flows for the periods reported have been included. The results of operations for the periods reported are not necessarily indicative of those that may be expected for a full year.

The financial statements presented include the accounts of the Company and all wholly-owned subsidiaries. All inter-company balances and transactions among consolidated entities have been eliminated.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and assumptions.

This quarterly report should be read in conjunction with the financial statements and notes thereto included in the Company’s audited financial statements presented in the Company’s Annual Report on Form 10-K for the fiscal year ended January 1, 2011, filed with the Securities and Exchange Commission (“SEC”) on March 1, 2011.

NOTE 2— FAIR VALUE OF FINANCIAL AND NONFINANCIAL INSTRUMENTS

The Company’s financial assets and liabilities subject to fair value measurements on a recurring basis are as follows (in thousands):

	Fair Value Measurements on January 1, 2011
	Quoted Prices in				Significant
	Active Markets for		Significant Other		Unobservable
	Identical Assets		Observable Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)
Assets
Cash and cash equivalents(1)	$	242,146	$	—	$	—
Liabilities
Deferred acquisition payments(2)	$	—	$	—	$	—

	Fair Value Measurements on April 2, 2011
	Quoted Prices in				Significant
	Active Markets for		Significant Other		Unobservable
	Identical Assets		Observable Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)
Assets
Cash and cash equivalents(1)	$	109,624	$	—	$	—
Liabilities
Deferred acquisition payments(2)	$	—	$	—	$	—

(1)

Cash and cash equivalents consist entirely of bank deposits.

(2)

Deferred acquisition payments, a Level 3 category liability, represent the fair value of estimated acquisition payments that are contingent upon Rue La La achieving specified minimum earnings thresholds. The Company does not expect Rue La La to achieve the minimum earnings thresholds needed to trigger any of the deferred acquisition payments and has determined that the fair value of the deferred acquisition payment liability is $0.

7

GSI COMMERCE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
(unaudited)

NOTE 3—GOODWILL AND OTHER INTANGIBLE ASSETS

The following table summarizes the changes in the carrying amount of goodwill for each of the Company’s reportable segments:

	Global e-		Global
	Commerce		Marketing
	Services		Services		Consumer
	(“GeC”)		(“GMS”)		Engagement		Consolidated
January 1, 2011	$	78,865	$	137,733	$	101,581	$	318,179
Acquisitions		164,553		12,090		—		176,643
April 2, 2011	$	243,418	$	149,823	$	101,581	$	494,822

The Company’s intangible assets are as follows:

							Weighted-
	January 1,			April 2,			Average
	2011			2011			Life
Gross carrying value of intangible assets subject to amortization:
Contract based	$	60,636		$	72,106			2.6
Customer related		22,200			22,200			2.6
Technology		13,723			16,207			3.6
Trade name		840			1,574			1.5
		97,399			112,087			2.8
Accumulated amortization:
Contract based		(36,904	)		(39,509	)
Customer related		(6,649	)		(8,023	)
Technology		(4,962	)		(5,891	)
Trade name		(716	)		(931	)
		(49,231	)		(54,354	)
Net carrying value:
Contract based		23,732			32,597
Customer related		15,551			14,177
Technology		8,761			10,316
Trade name		124			643
Total intangible assets subject to amortization, net		48,168			57,733
Indefinite life intangible assets:
Trade names		84,804			147,220
Total intangible assets	$	132,972		$	204,953

8

GSI COMMERCE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
(unaudited)

Amortization expense of intangible assets was $5,123 for the three-month period ended April 2, 2011 and $4,105 for the three-month period ended April 3, 2010. Estimated future amortization expense related to intangible assets as of April 2, 2011, is as follows:

Fiscal 2011	$	15,967
Fiscal 2012		16,021
Fiscal 2013		12,806
Fiscal 2014		8,599
Fiscal 2015		2,887
Thereafter		1,453
	$	57,733

NOTE 4—ACQUISITIONS

Fanatics

On March 15, 2011, the Company acquired 100% of the issued and outstanding capital stock of Fanatics, Inc. (“Fanatics”), in exchange for cash and shares of the Company’s common stock, including the assumption of Fanatics unvested stock options, pursuant to the terms of an Agreement and Plan of Merger dated February 9, 2011. Fanatics operates over 250 e-commerce websites and over 60 e-commerce stores for collegiate and professional sports partners and media organizations. The Company believes the combination of Fanatics and the Company will create a leader in the online licensed sports merchandise industry.

The fair value of Fanatics’ stock options assumed was determined using the Black-Scholes model. The following table summarizes the consideration paid for Fanatics:

Cash consideration	$	167,974
4,768 shares of stock consideration		89,018
257 assumed stock options		1,219
Total consideration	$	258,211

9

GSI COMMERCE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
(unaudited)

The Company’s estimates and assumptions used for the allocation of the purchase price are preliminary as the process to assign fair value to the various tangible and intangible assets acquired, including goodwill, is not final and are subject to change. The excess purchase price over the book value of the net assets acquired has been recorded to goodwill. Final adjustments could result in a materially different allocation of the purchase price, which could affect the value assigned to the tangible and/or intangible assets and amount of depreciation and amortization expense recorded in the Company’s Condensed Consolidated Statements of Operations. The following table summarizes the preliminary allocation of the purchase price to the fair values of the Fanatics assets acquired and liabilities assumed, including cash acquired, as of the acquisition date:

Total current assets	$	55,512
Property, plant, and equipment		18,510
Goodwill		164,553
Identifiable intangible assets:
Contract based		4,066
Trade name		60,341
Other long-term assets		1,381
Total assets acquired		304,363
Total current liabilities		(19,288	)
Long-term deferred tax liabilities		(26,864	)
Total liabilities assumed		(46,152	)
Net assets acquired	$	258,211

Fanatics’ results of operations are included on the Company’s Consolidated Statements of Operations beginning on March 16, 2011. Fanatics’ revenue and net loss for the period from March 16, 2011 to April 2, 2011 included in the Company’s Consolidated Statements of Operations is $5,358 and $438, respectively. Fanatics’ results are included in the Company’s GeC segment.

MBS

In April 2010, the Company completed the acquisition of all of the capital stock of MBS Insight, Inc. (“MBS”).

Other Acquisitions

During the first quarter of fiscal 2011, the Company made one acquisition within its GMS segment.

Unaudited Pro Forma Financial Information

The financial information in the table below summarizes the combined results of operations of the Company, MBS and Fanatics on a pro forma basis, as though the companies had been combined as of the beginning of the periods presented. The pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had actually taken place at the beginning of the periods presented and is not intended to be a projection of future results or trends.

	Three Months Ended
	April 3,			April 2,
	2010			2011
Net revenues	$	302,364		$	349,747
Net loss	$	(11,666	)	$	(15,056	)

10

GSI COMMERCE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
(unaudited)

NOTE 5—LONG-TERM DEBT AND CREDIT FACILITY

The following table summarizes the Company’s long-term debt as of:

	January 1,			April 2,
	2011			2011
Convertible notes	$	123,391		$	125,107
Credit facility		—			155,000
Notes payable (1)		15,989			18,773
Capital lease obligations		27,434			28,005
Total debt		166,814			326,885
Less: Current portion		(11,136	)		(17,985	)
Total long-term debt	$	155,678		$	308,900

(1) The estimated fair market value of the notes payable approximated their carrying value as of April 2, 2011 and January 1, 2011.

The estimated fair market value of the convertible notes was $168,330 as of April 2, 2011 and $162,570 as of January 1, 2011 based on quoted market prices.

Credit Facility

On February 9, 2011, the Company entered into a new $400,000 secured credit facility (the “New Credit Facility”) with a consortium of banks that became effective on March 15, 2011, simultaneous with the completion of acquisition of Fanatics, and expires on February 9, 2016. The New Credit Facility replaced the Company’s previous $150,000 secured revolving credit facility. The New Credit Facility is comprised of a 5-year $285,000 revolving credit facility (the “Revolving Credit Facility”) and a 5-year $115,000 term loan (the “Term Loan”) with the option to increase the commitments under these facilities by up to an additional $50,000 to a total of $450,000. The New Credit Facility is secured by substantially all of the Company’s personal property and assets and contains certain affirmative and negative covenants. The terms of the New Credit Facility limit the Company’s ability to declare or pay dividends on its common stock subject to certain exceptions.

The Revolving Credit Facility provides for the issuance of up to $30,000 of letters of credit and a $25,000 sublimit for swing loan borrowings, both of which are included in the $285,000 available for borrowing under the Revolving Credit Facility. Borrowings under the New Credit Facility bear interest at the Company’s option, at either (i) a “base rate” (“Base Rate”) equal to, for any day, a fluctuating rate per annum equal to the highest of (a) the federal funds rate plus 0.5%, (b) the “prime rate” of Bank of America, N.A., as administrative agent, and (c) the London Interbank Offered Rate (“LIBOR”) for a three-month Interest Period plus 1.00%, in each case plus an applicable margin, or (ii) a rate derived from LIBOR as adjusted for statutory reserve requirements for Eurocurrency liabilities, plus an applicable margin. In either case, the applicable margin is determined by the Company’s “Leverage Ratio” (as defined in the Credit Agreement), which is the ratio of consolidated “Indebtedness” of the Company and its subsidiaries to “Consolidated Adjusted EBITDA” (as such terms are defined in the Credit Agreement). The applicable margin in the case of Base Rate term loans ranges from 1.25% to 2.50%, in the case of LIBOR term loans ranges from 2.25% to 3.50%, in the case of Base Rate revolving loans ranges from 0.90% to 2.00% and in the case of LIBOR revolving loans ranges from 1.90% to 3.00%. The revolving credit commitment (whether used or unused) under the New Credit Facility at any time is subject to a facility fee ranging from 0.35% to 0.50% based on the Company’s Leverage Ratio. The initial commitment fee is 0.375%. The Company had $40,000 of outstanding borrowings and $1,823 of outstanding letters of credit under the Revolving Credit Facility as of April 2, 2011.

11

GSI COMMERCE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
(unaudited)

The principal amount of the Term Loan is payable in aggregate quarterly installments of (i) 1.25% of $115,000, the aggregate principal amount of the Term Loan outstanding as of March 15, 2011, commencing on July 5, 2011 and ending on April 5, 2013, (ii) 2.50% of $115,000 commencing on July 5, 2013 and ending on January 5, 2016 and (iii) a final payment due on February 9, 2016, the expiration date of the New Credit Facility, equal to the total outstanding principal amount of the Term Loan, all accrued, but unpaid, interest thereon and all fees and other amounts owing under the New Credit Facility with respect thereto.

NOTE 6—COMMITMENTS AND CONTINGENCIES

Legal Proceedings

The Company is involved in various litigation incidental to its business, including alleged contractual claims, claims relating to infringement of intellectual property rights of third parties, claims relating to the manner in which goods are sold through its integrated platform and claims relating to the Company’s collection of sales taxes in certain states. The Company collects sales taxes for goods owned and sold by it and shipped into certain states. As a result, the Company is subject from time to time to claims from other states alleging that the Company failed to collect and remit sales taxes for sales and shipments of products to customers in states.

Based on the merits of the cases and/or the amounts claimed, the Company does not believe that any claims are likely to have a material adverse effect on its business, financial position or results of operations. The Company may, however incur substantial expenses and devote substantial time to defend these claims whether or not such claims are meritorious. In addition, litigation is inherently unpredictable. In the event of a determination adverse to the Company, the Company may incur substantial monetary liability and may be required to implement expensive changes in its business practices, enter into costly royalty or licensing agreements, or begin to collect sales taxes in states in which it previously did not. An adverse determination could have a material adverse effect on the Company’s business, financial position or results of operations. Expenditures for legal costs are expensed as incurred.

See Note 12, Merger Agreement with eBay, for information on litigation related to the Company’s pending merger with eBay.

Operating and Capital Commitments

The following summarizes the Company’s principal operating and capital commitments, excluding open orders for inventory purchases that support normal operations, as of April 2, 2011:

	2011		2012		2013		2014		2015		Thereafter		Total
Operating lease obligations(1)	$	20,442	$	27,664	$	23,032	$	17,211	$	12,797	$	17,977	$	119,123
Purchase obligations and marketing commitments(1)		6,900		24,883		18,332		16,895		16,000		32,000		115,010
Client revenue share payments(1)		16,302		26,916		28,076		27,785		28,729		58,163		185,971
Debt interest(1)		8,815		8,848		8,572		6,055		3,729		308		36,327
Debt obligations		4,895		8,128		11,025		173,121		11,853		114,750		323,772
Capital lease obligations, including interest(2)		9,844		10,787		7,463		1,948		127		11		30,180
Deferred acquisition payments(3)		1,500		3,695		1,000		—		—		—		6,195
Total (4)	$	68,698	$	110,921	$	97,500	$	243,015	$	73,235	$	223,209	$	816,578

(1)	Not required to be recorded in the Condensed Consolidated Balance Sheet as of April 2, 2011 in accordance with accounting principles generally accepted in the United States of America.
(2)	Capital lease obligations, excluding interest, are recorded in the Condensed Consolidated Balance Sheets.
(3)	The $6,195 of deferred acquisition payments in the table above represent fixed contractual future payments. The Company is also obligated to pay up to an additional $227,400 from fiscal 2011 through fiscal 2016 based on the achievement of certain financial targets by certain of its acquired companies, of which the Company has the ability to pay up to $55,800 with shares of the Company’s common stock. The Company is uncertain as to if or when such amounts may be settled; as a result, these obligations are not included in the table above.
(4)	The Company has long-term incentive plan arrangements with certain of its employees, and consultants which may obligate the Company to pay up to $60,000 based on the performance of the business for which the employee is responsible. Amounts due under these incentive plans are payable in cash and/or stock from fiscal 2012 through fiscal 2015. As payment is not probable for any of these plans and the Company is uncertain as to if or when such amounts may be settled, these obligations are not reflected in the Consolidated Balance Sheet as of January 1, 2011 and not included in the table above.

12

GSI COMMERCE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
(unaudited)

Approximately $4,174 of unrecognized tax benefits have been recorded as liabilities as of April 2, 2011, and the Company is uncertain as to if or when such amounts may be settled; as a result, these obligations are not included in the table above. Changes to these tax contingencies that are reasonably possible in the next 12 months are not expected to be material.

NOTE 7—EQUITY AND STOCK AWARDS

The Company maintains the 2010 Equity Incentive Plan (“2010 Plan”) which provides for the grant of equity to certain employees, directors and other persons. As of April 2, 2011, 2,574 shares of common stock were available for future grants under the 2010 Plan. The equity awards granted under the 2010 Plan generally vest at various times over periods ranging up to five years and have terms of up to ten years after the date of grant, unless the optionee’s service to the Company is interrupted or terminated.

In March 2011, the Company assumed the Fanatics Equity Incentive Plan (“Fanatics Plan”) which provides for the grant of equity to certain employees of Fanatics. As of April 2, 2011, 384 shares of common stock were available for future grants under the Fanatics Plan. The equity awards granted under the Fanatics Plan generally vest at various times over periods ranging up to eight years and have terms of up to ten years after the date of grant, unless the optionee’s service to the Company is interrupted or terminated.

Stock Options and Warrants

The Company calculated the fair value of each option award on the date of grant using the Black-Scholes option pricing model. The following weighted-average assumptions were used to value the stock options assumed from the acquisition of Fanatics:

	Three Months Ended
	April 3, 2010		April 2, 2011
Risk-free interest rates		N/A		1.64	%
Expected lives (in years)		N/A		4.0
Dividend yield		N/A		0.00
Expected volatility		N/A		34	%

The Company’s computation of implied volatility was based on the market-based implied volatility from traded options on its stock. The Company’s computation of expected life was determined based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior. The interest rate for periods within the contractual life of the award was based on the U.S. Treasury yield curve in effect at the time of grant.

13

GSI COMMERCE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
(unaudited)

The following table summarizes the stock option and warrant activity for the three-month period ended April 2, 2011:

						Weighted
				Weighted		Average
	Number of			Average		Remaining		Aggregate
	Shares			Exercise		Contractual		Intrinsic
	(in thousands)			Price		Life (in years)		Value
Outstanding at January 1, 2011		1,222		$	12.50
Assumed from Acquisition		257		$	10.57
Exercised		(96	)	$	13.45
Forfeited/Cancelled		(6	)	$	6.70
Outstanding at April 2, 2011		1,377		$	12.09		4.07	$	23,746
Vested and expected to vest at April 2, 2011		1,377		$	12.09		4.07	$	23,746
Exercisable at April 2, 2011		1,120		$	12.44		3.22	$	18,920

Restricted Stock Units and Awards

The following table summarizes the restricted stock unit and restricted stock award activity for the three-month period ended April 2, 2011:

				Weighted
	Number of			Average
	Shares			Grant Date
	(in thousands)			Fair Value
Nonvested shares at January 1, 2011		3,505		$	22.22
Granted		1,265		$	19.50
Vested		(397	)	$	15.85
Forfeited/Cancelled		(134	)	$	18.94
Nonvested shares at April 2, 2011		4,239		$	22.11

Stock-based Compensation Expense

The following table summarizes stock-based compensation expense included in the Company’s Condensed Consolidated Statements of Operations:

	Three Months Ended
	April 3,		April 2,
	2010		2011
Includes stock-based compensation as follows:
Account management and operations	$	2,446	$	1,789
Product development	$	1,869	$	1,377
General and administrative	$	2,616	$	1,846

In the first quarter of fiscal 2011, the Company’s Board of Directors authorized a stock repurchase program contingent upon the closing of the Fanatics acquisition which closed on March 15, 2011. Under the program, the Company is authorized to repurchase up to $50,000 of its outstanding shares of common stock from time to time through March 14, 2013. The Company did not repurchase any of its common stock during the three months ended April 2, 2011.

14

GSI COMMERCE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
(unaudited)

NOTE 8—INCOME TAXES

The reported effective tax rate for the three months ended April 2, 2011 was 56.0%. The estimated annual effective tax rate of 60.0% was different from the actual tax rate of 56.0% primarily due to the losses in foreign operations that generate no tax benefit and therefore they are not included in the pre-tax book income calculation for the annual effective tax rate partially offset by the benefit from certain discrete items.

The reported effective tax rate for the three months ended April 3, 2010 was 55.8%. The annual effective tax rate of 65.3% was different from the actual tax rate of 55.8% primarily due to losses in certain foreign operations that generate no tax benefit and therefore are not included in the pre-tax book income calculation for the annual effective tax rate partially offset by the net benefit from certain discrete items.

NOTE 9—LOSS PER SHARE

Basic and diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the fiscal year.

The following is a summary of the securities that are issuable pursuant to equity awards or the conversion of notes that have been excluded from the calculations because the effect on net loss per share would have been anti-dilutive:

	As Of
	April 3,		April 2,
	2010		2011
Stock units and awards		4,265		4,239
Stock options and warrants		2,574		1,377
Convertible notes		8,229		5,000
		15,068		10,616

NOTE 10 — COMPREHENSIVE LOSS

Comprehensive loss is computed as net loss plus certain other items that are recorded directly to shareholders’ equity in accordance with standards of accounting for “Reporting Comprehensive Income.” Comprehensive loss is calculated as follows:

	Three Months Ended
	April 3,			April 2,
	2010			2011
Net loss	$	(8,125	)	$	(13,609	)
Other comprehensive loss:
Cumulative translation adjustment		(703	)		1,072
Comprehensive loss	$	(8,828	)	$	(12,537	)

15

GSI COMMERCE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
(unaudited)

NOTE 11—SEGMENT INFORMATION

The Company operates three reportable segments: Global e-Commerce Services (“GeC”), Global Marketing Services (“GMS”) and Consumer Engagement. For GeC, the Company offers a comprehensive suite of e-commerce services that enable companies to operate e-commerce businesses and to integrate their e-commerce businesses with their multi-channel retail offerings. For GMS, the Company offers a broad suite of services to help clients exploit digital marketing channels. For Consumer Engagement, the Company operates consumer facing e-commerce businesses that are complimentary to the clients of the GeC and GMS segments.

The Company manages its segments and makes financial decisions and allocates resources based on an internal management reporting process that provides segment revenue and segment profit/loss. The Company defines segment profit/loss as income/loss from operations excluding stock-based compensation, depreciation and amortization expenses, and the following expenses related to acquisitions: transaction expenses, due diligence expenses, integration expenses, non-cash inventory valuation adjustments, the cash portion of any deferred acquisition payments recorded as compensation expense, the changes in fair value of deferred acquisition payments and any impairment of goodwill and intangible assets. The Company believes this metric is an appropriate measure of evaluating the operational performance of the Company’s segments. The Company also uses this metric for planning, forecasting and analyzing future periods. However, this measure should be considered in addition to, not as a substitute for, or superior to, income from operations or other measures of financial performance prepared in accordance with GAAP.

The Company manages its working capital on a consolidated basis and does not allocate long-lived assets to segments. Pursuant to accounting standards for “Disclosures about Segments of an Enterprise and Related Information,” total segment assets have not been disclosed.

16

GSI COMMERCE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
(unaudited)

The following tables present summarized information by segment:

	Three Months Ended April 3, 2010
					Consumer			Intersegment
	GeC		GMS		Engagement			Eliminations			Consolidated
Net revenues	$	201,372	$	38,371	$	44,454		$	(11,605	)	$	272,592
Segment costs and expenses		192,164		29,040		45,612			(11,605	)	$	255,211
Segment profit (loss)		9,208		9,331		(1,158	)		—			17,381
Acquisition related integration, transaction, due diligence expenses, non-cash inventory valuation adjustments, and the cash portion of deferred acquisition payments recorded as compensation expense												2,547
Depreciation and amortization												18,761
Changes in fair value of deferred acquisition payments												2,074
Stock-based compensation expense												6,931
Loss from operations												(12,932	)
Interest expense												5,208
Interest income												(234	)
Other expense, net												474
Loss before income taxes and equity-method investment earnings											$	(18,380	)

	Three Months Ended April 2, 2011
					Consumer			Intersegment
	GeC		GMS		Engagement			Eliminations			Consolidated
Net revenues	$	231,768	$	50,322	$	57,587		$	(16,183	)	$	323,494
Segment costs and expenses		219,404		43,365		62,142			(16,183	)	$	308,728
Segment profit (loss)		12,364		6,957		(4,555	)		—			14,766
Acquisition related integration, transaction, due diligence expenses, non-cash inventory valuation adjustments, and the cash portion of deferred acquisition payments recorded as compensation expense												14,441
Depreciation and amortization												23,165
Changes in fair value of deferred acquisition payments												—
Stock-based compensation expense												5,012
Loss from operations												(27,852	)
Interest expense												5,248
Interest income												(65	)
Other income, net												(1,098	)
Loss before income taxes and equity-method investment earnings											$	(31,937	)

The Company’s operations are substantially within the United States.

17

NOTE 12—MERGER AGREEMENT WITH eBAY

On March 27, 2011, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with eBay Inc. (“eBay”) and Gibraltar Acquisition Corp., a wholly owned subsidiary of eBay (“Merger Sub”).

The Merger Agreement provides that, upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into the Company (the “Merger”), with the Company continuing as the surviving corporation and a wholly-owned subsidiary of eBay. As of the effective time of the Merger, the Merger Agreement provides that each issued and outstanding share of Company common stock (other than shares held by eBay, Merger Sub, the Company or any of their respective subsidiaries or shares held by stockholders who have properly exercised and perfected appraisal rights under Delaware law) will be canceled and converted into the right to receive $29.25 in cash, without interest (the “Merger Consideration”).

To the extent that any outstanding shares of Company common stock are unvested or subject to a repurchase option, risk of forfeiture or other contractual right as of the effective time of the Merger, such shares will be converted into Merger Consideration that will remain unvested and subject to such rights, as applicable, and need not be paid until such time as such repurchase option, risk of forfeiture or other contractual right lapses or otherwise terminates.

Each outstanding stock option of the Company, to the extent vested immediately prior to the effective time of the Merger will be converted into the right to receive cash based on the Merger Consideration and the formulas contained in the Merger Agreement. Each outstanding stock option of the Company, to the extent unvested immediately prior to the effective time of the Merger, will be converted into an option to purchase eBay common stock in an amount based on formulas contained in the Merger Agreement. Each Company restricted stock unit that is outstanding and unvested immediately prior to the effective time of the Merger will be converted into a restricted stock unit representing the right to receive the number of shares of eBay common stock based on formulas contained in the Merger Agreement.

NRG, a Delaware limited liability company wholly-owned by Michael Rubin, the Company’s Chairman, President and Chief Executive Officer, is a party to a stock purchase agreement, dated as of March 27, 2011, with eBay (the “Purchase Agreement”), pursuant to which eBay has agreed to sell all or a portion of the equity interests of certain subsidiaries of the Company to NRG immediately after the completion of the Merger on the terms and subject to the conditions set forth in the Purchase Agreement (including the condition that the Merger has been completed). In addition, NRG will enter into a secured loan agreement with the Company pursuant to which the Company, which will be an affiliate of eBay at the time the agreement is entered into, will lend NRG funds to finance a substantial portion of the purchase price for such divestiture transaction on the terms and subject to the conditions set forth in the loan agreement. The closing of the Merger is not subject to, or dependent upon, the closing of the divestiture transaction.

A preliminary proxy statement containing important information about the Company, eBay and the proposed Merger was filed with the SEC on April 18, 2011.

Litigation

Following the announcement of the Company’s proposed Merger with eBay, five putative stockholder class action complaints challenging the transaction were filed in the Delaware Court of Chancery (the “Delaware Court”) on each of March 29, 2011, April 1, 2011, April 4, 2011, April 5, 2011, and April 11, 2011, respectively, against various combinations of eBay, Merger Sub, NRG, the Company, the individual members of the Company’s board of directors, and certain of the Company’s non-director officers. Two of these complaints subsequently have been amended. The complaints generally allege, among other things, that the members of the Company’s board of directors breached their fiduciary duties owed to the Company’s public stockholders by entering into the Merger Agreement, approving the proposed Merger, failing to take steps to maximize the Company’s value to the Company’s public stockholders, and failing to make adequate disclosures; that Mr. Rubin breached his fiduciary duties owed to the Company’s public stockholders by engaging in a transaction pursuant to which eBay agreed to sell certain subsidiaries of the Company to NRG after the completion of the Merger; and that various combinations of eBay, Merger Sub, NRG, and the Company aided and abetted such breaches of fiduciary duties. In addition, the complaints allege that the transactions improperly favor eBay and Mr. Rubin and unjustly enrich certain of the defendants; and that certain provisions of the Merger Agreement unduly restrict the Company’s ability to negotiate with other potential bidders. In one of these actions, the plaintiff also purports to bring derivative claims on behalf of the Company, alleging that the individual members of the board of directors and certain non-director officers are wasting corporate assets, unjustly enriching themselves, and breaching their fiduciary duties, and that eBay and Merger Sub are aiding and abetting such breaches of fiduciary duties. The complaints generally seek, among other things, declaratory and injunctive relief concerning the alleged fiduciary breaches, injunctive relief prohibiting the defendants from consummating the proposed Merger, as well as damages and other forms of equitable relief.

18

Beginning on April 5, 2011, various plaintiffs in these lawsuits filed motions to consolidate the suits, to expedite the proceedings, to appoint lead plaintiff and lead counsel, and for preliminary injunction.

On April 27, 2011, the Delaware Court held a hearing on these motions. On April 29, 2011, the Delaware Court issued a letter opinion consolidating the Delaware cases, appointing lead plaintiff and lead counsel, and directing the parties to submit an order setting forth a schedule and effectuating the letter opinion. By order dated May 4, 2011, the Delaware court scheduled a hearing on the plaintiffs' motion to preliminarily enjoin the proposed merger for June 10, 2011.

On April 21, 2011, a putative stockholder class action complaint challenging the transaction was filed in the Court of Common Pleas for Montgomery County, Pennsylvania (the “Pennsylvania Court”) against eBay, Merger Sub, NRG, the Company, and the individual members of the Company’s board of directors. The complaint alleges, among other things, that the members of the Company’s board of directors breached their fiduciary duties owed to the Company’s public stockholders by entering into the Merger Agreement, approving the proposed Merger, failing to take steps to maximize the Company’s value to the Company’s public stockholders, and failing to make adequate disclosures; that Mr. Rubin breached his fiduciary duties owed to the Company’s public stockholders by engaging in a transaction pursuant to which eBay agreed to sell certain subsidiaries of the Company to NRG after the completion of the Merger; and that eBay, NRG, and the Company aided and abetted such breaches of fiduciary duties. In addition, the complaint alleges that the transactions improperly favor eBay and Mr. Rubin, and that certain provisions of the Merger Agreement unduly restrict the Company’s ability to negotiate with other potential bidders. The complaint seeks, among other things, injunctive relief prohibiting the defendants from consummating the proposed Merger, and other forms of equitable relief.

On April 21, 2011, the plaintiff also filed a motion for expedited proceedings and preliminary injunction. This motion is currently pending before the Pennsylvania Court. A hearing on the motion for expedited proceedings is scheduled for May 5, 2011.

One of the conditions to the closing of the Merger is that no restraining order, injunction, or ruling by a court or other governmental entity shall be in effect that prevents the consummation of the Merger or that makes the consummation of the Merger illegal. As such, while the defendants believe the actions described above are without merit and intend to defend against them vigorously, if the plaintiffs in any of the actions are successful in obtaining an injunction prohibiting the defendants from completing the Merger on the agreed-upon terms, then such injunction may prevent the Merger from becoming effective, or from becoming effective within the expected timeframe. While these cases are in their early stages, the Company believes that the claims asserted therein are without merit and intends to contest the lawsuits vigorously.

19

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.

All statements made in this Quarterly Report on Form 10-Q, other than statements of historical fact, are forward-looking statements, as defined under federal securities law. The words “look forward to,” “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “will,” “would,” “should,” “could,” “guidance,” “potential,” “opportunity,” “continue,” “project,” “forecast,” “confident,” “prospects,” “schedule,” “designed,” “future” “discussions,” “if” and similar expressions typically are used to identify forward-looking statements. Forward-looking statements are based on the then-current expectations, beliefs, assumptions, estimates and forecasts about our business. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or implied by these forward-looking statements. Factors which may affect our business, financial condition and operating results include the effects of changes in the economy, consumer spending, the financial markets and the industries in which we and our clients operate; changes affecting the Internet e-commerce and marketing service, our ability to develop and maintain relationships with clients and suppliers and the timing of our establishment, extension or termination of our relationships with clients; our ability to timely and successfully develop, maintain and protect our technology, confidential and proprietary information, and to timely and successfully enhance, develop and maintain our product and service offerings; our ability to execute operationally to attract and retain qualified personnel, to successfully integrate our recent acquisitions of other businesses, including Fanatics, Inc. (“Fanatics”); and the performance of acquired businesses, including Fanatics. More information about potential factors that could affect us is described in Part I, Item 1A in our Annual Report on Form 10-K for the fiscal year ended January 1, 2011, filed with the SEC on March 1, 2011(the “2010 Form 10-K”). We expressly disclaim any intent or obligation to update these forward-looking statements.

Executive Overview

First Quarter of Fiscal 2011 Financial Results Compared to the First Quarter of Fiscal 2010, and Significant Events:

• On March 27, 2011, we entered into an agreement to be acquired by eBay Inc. (“eBay”) for $29.25 per share. We expect the acquisition to close in the third quarter of fiscal 2011. Expenses of $7.3 million related to this transaction are included in our loss from operations for the first quarter of fiscal 2011. For more information regarding this acquisition, see Item 1 of Part I, Financial Statements, Note 12, Merger Agreement with eBay.

• On March 15, 2011 we acquired Fanatics, Inc. (“Fanatics”), an online retailer of licensed sports merchandise for approximately $258 million, including $168 million of cash and 5.0 million shares of our common stock, including assumed unvested options, valued at $90 million.

• We entered into a new $400 million credit agreement (“the New Credit Facility”) that closed simultaneously with the closing of the Fanatics acquisition. The New Credit Facility replaced our $150 million credit facility and includes a $285 million revolving line of credit and a $115 million term loan, with the option to increase the commitments under these facilities by up to an additional $50 million to a total of $450 million.

• On March 15, 2011, we commenced a share buy-back program, which was previously approved by our Board of Directors, of up to an aggregate of $50 million during the period from March 15, 2011 to March 15, 2013. Shares of our common stock may be repurchased from time to time at prevailing prices in the open market, including pursuant to Rule 10b5-1 trading plans. During the period beginning on March 15, 2011 and ending on April 2, 2011, no shares were repurchased by the Company.

• Net revenues increased by $50.9 million, or 19%, net revenues from product sales increased by $19.6 million, or 12%, and service fee revenues increased $31.3 million, or 28%.

• Loss from operations was $27.9 million compared to a loss of $12.9 million.

• Net loss was $13.6 million including a benefit for income taxes of $17.9 million, compared to a net loss of $8.1 million including a benefit for income taxes of $10.3 million.

20

Consolidated Results (amounts in tables in millions):

Total Net Revenues, Costs and Expenses and Loss from Operations

	First Quarter
	Fiscal			% of Net			Fiscal			% of Net			Increase/
	2010			Revenues			2011			Revenues			(Decrease)			% Change
Revenues:
Net revenues from product sales	$	159.3			58	%	$	178.9			55	%	$	19.6			12	%
Service fee revenues		113.3			42	%		144.6			45	%		31.3			28	%
Total net revenues		272.6			100	%		323.5			100	%		50.9			19	%
Costs and expenses:
Cost of revenues from product sales		117.5			43	%		129.1			40	%		11.6			10	%
Marketing		10.8			4	%		14.7			5	%		3.9			36	%
Account management and operations		77.7			29	%		91.3			28	%		13.6			18	%
Product development		34.3			13	%		46.6			14	%		12.3			36	%
General and administrative		24.4			9	%		46.5			14	%		22.1			91	%
Depreciation and amortization		18.7			7	%		23.2			7	%		4.5			24	%
Changes in fair value of deferred acquisition payments		2.1			1	%		—			0	%		(2.1	)
Total costs and expenses		285.5			105	%		351.4			109	%		65.9			23	%
Income loss from operations	$	(12.9	)		(5	%)	$	(27.9	)		(9	%)	$	(15.0	)		116	%

Net Revenues from Product Sales

The increase in net revenues from product sales in the first quarter of fiscal 2011 was primarily driven by the growth of RueLaLa, Inc. (“Rue La La”) in the Consumer Engagement segment, the acquisition of Fanatics in March 2011, and higher shipping revenue due to increased volume of unit shipments in the Global e-Commerce Services (“GeC”) segment.

Service Fee Revenues

The increase in service fee revenues in the first quarter of fiscal 2011 was primarily driven by growth in the GeC and Global Marketing Services (“GMS”) segments. The revenue growth in both segments was driven by increased revenue from existing clients, the addition of new clients as well as from the impact of companies acquired in the past twelve months.

Costs and Expenses

Cost of Revenues from Product Sales

	First Quarter
	Fiscal 2010			Fiscal 2011
Cost of revenues from product sales	$	117.5		$	129.1
As a percentage of net revenues from product sales		74	%		72	%

The increase in cost of revenues from product sales in the first quarter of fiscal 2011 was driven by increased net revenues from product sales in the Consumer Engagement and GeC segments including the acquisition of Fanatics in March 2011. Cost of revenue from product sales as a percentage of net revenues from product sales decreased as a result of a favorable mix of product sales from higher margin webstores.

Marketing

The absolute dollar increase in marketing expenses was driven by the increase in net revenues from product sales in the GeC segment, including the acquisition of Fanatics, an increase in the GMS segment due to companies acquired in the past twelve months, and the Consumer Engagement segment. As a percentage of net revenues from product sales, marketing expenses increased from 7% in the first quarter of fiscal 2010 to 8% in the first quarter of fiscal 2011 primarily due to the acquisition of Fanatics.

21

Account Management and Operations

The absolute dollar increase in account management and operations expenses was driven primarily by increased payroll, professional fees and related personnel expenses in each of our segments as well as increased fulfillment, customer care and credit card fees in the GeC and Consumer Engagement segments driven by increased order and shipment volume in the GeC segment and the growth in the Consumer Engagement segment.

Product Development

The absolute dollar increase in product development expenses was primarily driven by payroll and professional fees in each of our segments for enhancements to our technology platforms, the expansion and upgrading of our technology operations infrastructure and costs associated with launching new clients on our platforms as well as from companies acquired in the past twelve months.

General and Administrative

The absolute dollar increase in general and administrative expenses was primarily driven by $10.5 million of due diligence and transaction related expenses for the Fanatics acquisition and the pending eBay Merger and $3.2 million of earnout expenses related to the acquisition of Fetchback, Inc. The remaining increase was driven by increased payroll and related expenses and professional fees in each of our segments including expenses from the companies acquired in the past twelve months. Acquisition related due diligence, transaction and integration expenses were $2.5 million in the first quarter of fiscal 2010.

Depreciation and Amortization

Depreciation expense increased by $3.4 million for the first quarter of fiscal 2011 primarily due to an increase in capital expenditures in the GeC segment as well as depreciation on assets from companies acquired in the past twelve months. Amortization expense increased by $1.1 million for the first quarter of fiscal 2011 due to the intangible asset amortization related to the companies acquired in fiscal 2010 and fiscal 2011.

Changes in Fair Value of Deferred Acquisition Payments

The decrease in the fair value of deferred acquisition payments was due to a revision in the fourth quarter of fiscal 2010 of our estimate of the amount of deferred acquisition payments that will be paid to the former shareholders of Rue La La based on Rue La La’s financial performance in fiscal 2010 and revised financial projections for fiscal years 2011 and 2012. Based on these revised estimates, we do not expect Rue La La to achieve the minimum earnings thresholds needed to trigger any of the deferred acquisition payments and have determined that the fair value of the deferred acquisition payment liability is $0 as of the end of the first quarter of fiscal 2011.

Other (Income) Expense

	First Quarter
	Fiscal 2010			Fiscal 2011			Change
Interest expense	$	5.2		$	5.3		$	0.1
Interest income		(0.3	)		(0.1	)		0.2
Other (income) expense		0.5			(1.1	)		(1.6	)
Total other expense	$	5.4		$	4.1		$	(1.3	)

Other (income) expense is primarily comprised of foreign currency exchange gains and losses on transactions denominated in currencies other than the functional currency. The foreign currency exchange loss in fiscal 2010 was primarily due to the strengthening of the U.S. Dollar against the Euro and British Pound. The foreign currency exchange gain in fiscal 2011 was primarily due to the weakening of the U.S. Dollar against the Euro and British Pound.

Income Taxes

We recorded a benefit of $17.9 million in the first quarter of fiscal 2011. Our tax provision for the first quarter of fiscal 2011 was determined using an estimate of our annual effective tax rate of 60.0 % for fiscal 2011 plus any discrete items that effect taxes that occur during the quarter. The effective tax rate of 56.0% was higher than the 35% federal statutory tax rate primarily due to non-deductible permanent book to tax differences. Estimated annual losses from certain international operations yield no tax benefit and were removed from the calculation of the annual effective tax rate. We do not provide for U.S. taxes on our undistributed earnings of foreign subsidiaries since it intends to invest such undistributed earnings indefinitely outside of the U.S.

22

Segment Results

	First Quarter
	Fiscal 2010			Fiscal 2011			$ Change			% Change
GeC:
Net revenues	$	201.4		$	231.8		$	30.4			15	%
Segment profit(1)	$	9.2		$	12.4		$	3.2			35	%
GMS:
Net revenues	$	38.4		$	50.3		$	11.9			31	%
Segment profit(1)	$	9.3		$	7.0		$	(2.3	)		-25	%
Consumer engagement:
Net revenues	$	44.4		$	57.6		$	13.2			30	%
Segment profit (loss)(1)	$	(1.1	)	$	(4.6	)	$	(3.5	)		-318	%
Segment Margins:
GeC		4.6	%		5.3	%
GMS		24.2	%		13.9	%
Consumer engagement		(2.5	%)		(8.0	%)

(1) Segment profit (loss) equals net revenues less costs and expenses excluding stock-based compensation expense, depreciation and amortization expenses, and the following expenses related to acquisitions: transaction expenses, due diligence expenses, integration expenses, non-cash inventory valuation adjustments, the cash portion of any deferred acquisition payments recorded as compensation expense, changes in fair value of deferred acquisition payments, and impairment any of goodwill and intangible assets.

GeC Segment:

Net revenues increased 15% in the first quarter of fiscal 2011. The increase in net revenues was driven by an increase in revenue from clients that operated for the entirely of both periods, an increase in shipping revenue due to increased unit shipments, and the acquisition of Fanatics.

Segment profit increased $3.2 million or 35% in the first quarter of fiscal 2011 compared to the first quarter of fiscal 2010 and segment operating margins increased to 5.3% in the first quarter of fiscal 2011 versus 4.6% in the first quarter of fiscal 2010. The increase in segment operating margins was driven primarily by service fee revenues comprising a larger percentage of total net revenues as service fee revenue has no associated cost of revenue or marketing expenses. If the National Football League work stoppage is not settled prior to the scheduled start of the 2011 football season, revenues for the remainder of fiscal 2011 from the www.nflshop.com website that we manage could be adversely impacted compared to the same period in fiscal 2010.

GMS Segment:

Net revenues increased 31% in the first quarter of fiscal 2011. The increase is primarily driven by revenue from companies acquired in the fiscal 2010 and the first quarter of fiscal 2011.

Segment profit decreased $2.3 million or 25% in the first quarter of fiscal 2011 compared to the first quarter of fiscal 2010. Segment operating margins decreased from 24.2% to 13.9% in the first quarter of fiscal 2011 compared to the first quarter of fiscal 2010. The decrease in segment profit was primarily driven by an unfavorable mix of revenue from lower margin services, and expenses associated with hiring an executive management team for the segment.

23

Consumer Engagement Segment:

Net revenues increased $13.2 million in the first quarter of fiscal 2011. The increase is primarily driven by Rue La La which accounted for substantially all of the segment revenues. Segment profit decreased $3.5 million due to Rue La La and ShopRunner, Inc (“ShopRunner”). Although Rue La La’s revenue grew significantly in the first quarter of fiscal 2011, we continued to invest in the business to support expected continued growth throughout fiscal 2011. ShopRunner’s segment profit also decreased as we continue to invest in the business. Shoprunner began operations in late fiscal 2009 but did not begin to generate any revenue until the fourth quarter of fiscal 2010.

Seasonality

We have experienced and expect to continue to experience seasonal fluctuations in our revenues from GeC. These seasonal patterns will cause quarterly fluctuations in our operating results. We also expect to experience seasonal fluctuations from Consumer Engagement, but to a lesser degree than with GeC. We experience less seasonality in our revenues from GMS. The fourth fiscal quarter has accounted for and is expected to continue to account for a disproportionate percentage of our total annual revenues. We believe that results of operations for any quarterly period may not be indicative of the results for any other quarter or for the full year.

Liquidity and Capital Resources

	As of
	January 1,			April 2,
	2011			2011
	(in millions)
Cash and cash equivalents	$	242.1		$	109.6
Percentage of total assets		22	%		9	%

As of April 2, 2011 and January 1, 2011, our cash and cash equivalents was comprised entirely of bank deposits.

We have experienced and expect to continue to experience seasonal fluctuations in our cash flows. We generate the substantial majority of cash from our operating activities in our fourth fiscal quarter. In our first fiscal quarter, we typically use cash generated from operating activities in the fourth quarter of the prior fiscal year to satisfy accounts payable and accrued expenses incurred in the fourth fiscal quarter of our prior fiscal year. During our second and third fiscal quarters, we generally fund our operating expenses and capital expenditures either from cash generated from operating activities, cash and cash equivalents, or financing activities.

Sources of Cash

Our principal sources of liquidity in the first three months of fiscal 2011 were our cash and cash equivalents balances and $155 million of borrowings on our New Credit Facility.

As of April 2, 2011 we had $155 million of borrowings under our New Credit Facility. We did not have any borrowings under our former credit facility as of January 1, 2011. The New Credit Facility contains financial and restrictive covenants that limit our ability to engage in activities that may be in our long term best interests. We do not believe the financial covenants will limit our ability to utilize the entire borrowing availability in fiscal 2011, if necessary.

Uses of Cash

We used $92.5 million and $85.2 million of cash to fund operating activities in the first three months of fiscal 2011 and fiscal 2010, respectively. Our operating cash flows result primarily from cash received from our customers and clients offset by cash payments we make for products and services, employee compensation (less amounts capitalized related to internal use software that are reflected as cash used in investing activities), payment processing and related transaction costs, and operating leases. Changes to our operating cash flows have historically been driven primarily by changes in operating income (excluding changes in non-cash items such as depreciation, amortization and stock-based compensation) and changes to the components of working capital, including changes to accounts receivable, accounts payable, accrued expenses and deferred revenue.

24

We used $169.9 million in cash for acquisitions in the first three months of fiscal 2011, which included the acquisition of Fanatics. We are obligated to pay up to an additional $227.4 million in earnout payments through 2016 based on the achievement of certain performance targets by certain of our acquired companies, of which we have the ability to pay up to $55.8 million with shares of our common stock.

Our capital expenditures totaled $18.5 million and $15.9 million in the first three months of fiscal 2011 and fiscal 2010, respectively. Our capital expenditures have generally comprised purchases of computer hardware and software, internally developed software, and furniture and fixtures.

See Item 1 of Part I, Financial Statements, Note 6, Commitments and Contingencies, for additional discussion of our principal contractual commitments.

Outlook

We expect to generate positive cash flow from operations in fiscal 2011, all of which we expect to be generated in our fourth fiscal quarter. We believe that our cash flow from operating activities, cash and cash equivalents balances, and borrowing availability under our New Credit Facility will be sufficient to meet our anticipated operating cash needs, including any deferred acquisition payments, for at least the next 12 months. However, any projections of future cash needs and cash flows are subject to substantial uncertainty.

We continually evaluate opportunities to sell additional equity or debt securities, obtain credit facilities, or repurchase, refinance, or otherwise restructure our long-term debt for strategic reasons or to further strengthen our financial position. Our existing and new secured revolving bank credit facilities contain negative covenants including restrictions on our ability to incur additional indebtedness. The sale of additional equity or convertible debt securities would likely be dilutive to our stockholders. In addition, we will, from time to time, consider the acquisition of, or investment in, complementary businesses, products, services, and technologies, which might affect our liquidity requirements or cause us to issue additional equity or debt securities. There can be no assurance that additional lines-of-credit or financing instruments will be available in amounts or on terms acceptable to us, if at all.

Critical Accounting Policies

The preparation of our consolidated financial statements requires us to make estimates, assumptions and judgments that affect our assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities. We base these estimates and assumptions on historical data and trends, current fact patterns, expectations and other sources of information we believe are reasonable. Actual results may differ from these estimates under different conditions. For a full description of our critical accounting policies, see Item 7— Management’s Discussion and Analysis of Financial Condition and Results of Operations in the 2010 Form 10-K.

Recent Accounting Pronouncements

There were no new accounting pronouncements that could have an effect on us.

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

There have been no significant changes in market risks for the fiscal quarter ended April 2, 2011. See the information set forth in Part II, Item 7A of the Company’s 2010 Form 10-K.

ITEM 4: CONTROLS AND PROCEDURES.

Evaluation of disclosure controls and procedures. We maintain disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and accumulated and communicated to our management, including our chief executive officer and chief financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Our management, with the participation of our chief executive officer and our chief financial officer, conducted an evaluation, as of the end of the period covered by this report, of the effectiveness of our disclosure controls and procedures, as such term is defined in Exchange Act Rule 13a-15(e). Based on this evaluation, our chief executive officer and our chief financial officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures, as defined in Rule 13a-15(e), were effective at the reasonable assurance level.

25

Changes in internal control over financial reporting. We monitor and evaluate on an ongoing basis our internal control over financial reporting in order to improve its overall effectiveness. In the course of these evaluations, we modify and refine our internal processes and controls as conditions warrant. As required by Rule 13a-15(d), our management, including our chief executive officer and our chief financial officer, also conducted an evaluation of our internal control over financial reporting to determine whether any changes occurred during the fiscal quarter ended April 2, 2011 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Based on that evaluation, there has been no such change during the fiscal quarter ended April 2, 2011.

PART II — OTHER INFORMATION

ITEM 1: LEGAL PROCEEDINGS.

See Item 1 of Part I, “Financial Statements — Note 6, Commitments and Contingencies and Note 12, Merger Agreement with eBay.”

ITEM 1A: RISK FACTORS.

In addition to the other information contained in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in Part I, Item 1A “Risk Factors” in our 2010 Form 10-K in evaluating our business, financial position, future results, and prospects. The information presented below updates and supplements those risk factors for events, changes and developments since the filing of the 2010 Form 10-K and should be read in conjunction with the risks and other information contained in the 2010 Form 10-K. The risks described in our 2010 Form 10-K, as updated below, are not the only risks we face. Additional risks that we do not presently know or that we currently believe are not material could also materially adversely affect our business, financial position, future results and prospects.

Failure to complete the merger with eBay (“Merger”) could negatively impact the market price of GSI common stock.

If the Merger is not completed for any reason, GSI will be subject to a number of material risks, including the following:

• the market price of GSI’s common stock may decline;

• costs relating to the Merger, such as legal, accounting and financial advisory fees, and, in specified circumstances, termination fees, must be paid by GSI, even if the Merger is not completed; and

• the diversion of management’s attention from the day-to-day business of GSI, the potential disruption to its employees and its relationships with customers, suppliers and distributors and potential diversion from certain aspects of its previously announced capital expenditure program may make it difficult for GSI to regain its financial and market positions.

If the Merger is not adopted by our stockholders, GSI, eBay and Merger Sub will not be permitted under Delaware law to complete the Merger, and each of GSI, eBay and Merger Sub will have the right to terminate the Merger Agreement. Upon such termination, GSI may be required to pay eBay a termination fee.

Further, if the Merger is terminated and our Board of Directors seeks another merger or business combination, stockholders cannot be certain that we will be able to find a party willing to pay an equivalent or better price than the price to be paid in the proposed Merger.

Uncertainties associated with the Merger may cause GSI to lose key personnel.

Our current and prospective employees may be uncertain about their future roles and relationships with GSI following the completion of the Merger. This uncertainty may adversely affect our ability to attract and retain key management and personnel.

26

GSI’s executive officers and directors have certain interests in the Merger different from other stockholders that may have influenced them to approve the Merger Agreement and Merger and recommend the adoption of the Merger Agreement.

GSI’s directors and executive officers have interests in the transaction that are different from, and in addition to, the interests of GSI stockholders generally, including with respect to employment, indemnification, stock options, restricted stock units and other arrangements, which may present a potential conflict of interest. Our Board of Directors, and the executive officers in making recommendations to the our Board of Directors relating to the Merger, was aware of these interests and considered that these interests may be different from, and in addition to, the interests of our stockholders generally, among other matters, in approving the Merger Agreement and the Merger, and in determining to recommend that our stockholders vote for adoption of the Merger Agreement.

GSI will no longer exist as an independent public company following the Merger and GSI’s stockholders will forego any increase in our value.

If the Merger is completed, GSI will be a subsidiary of eBay and will no longer be a publicly held corporation, and our stockholders will forego any increase in our value that might have otherwise resulted from our possible growth

ITEM 2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Pursuant to the terms of a Consulting Agreement dated April 22, 2009 between Arimor, LLC (“Arimor”) and GSI Commerce Solutions, Inc., the Company agreed to issue to Arimor shares of the Company’s common stock as a fee for consulting services provided by Arimor. In the fiscal quarter ended April 2, 2011, the Company issued an aggregate of 8,660 shares of common stock to Arimor (“Arimor Shares”) pursuant to such agreement.

The issuance of the Arimor Shares was completed in accordance with Section 4(2) of the Securities Act of 1933, as amended, in offerings without any public offering or distribution. The Arimor Shares are restricted securities and include appropriate restrictive legends.

ITEM 3: DEFAULTS UPON SENIOR SECURITIES.

None

ITEM 4: [Reserved]

ITEM 5: OTHER INFORMATION.

None

ITEM 6: EXHIBITS.

Exhibit
Number		Description
	2.1	Agreement and Plan of Merger, dated as of February 9, 2011, by and among GSI Commerce, Inc., Gator Acquisition Corp., Gator Acquisition LLC, Fanatics, Inc., the stockholders of Fanatics, Inc. named therein, those persons listed on Annex II thereto and Insight Venture Partners, LLC (as Stockholders’ Representative). The schedules and exhibits to the merger agreement are omitted pursuant to Item 601(b)(2) of Regulation S-K. GSI agrees to furnish supplementally to the SEC, upon request, a copy of any omitted schedule or exhibit. (filed as Exhibit 2.1 to GSI Commerce, Inc.’s Current Report on Form 8-K/A filed on February 15, 2011 and incorporated herein by reference)†
	2.2	Agreement and Plan of Merger, dated as of March 27, 2011, by and among eBay Inc., Gibraltar Acquisition Corp. and GSI Commerce, Inc. The schedules and exhibits to the merger agreement are omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally to the SEC, upon request, a copy of any omitted schedule or exhibit. (filed as Exhibit 2.1 to GSI Commerce, Inc.’s Current Report on Form 8-K filed on March 28, 2011 and incorporated herein by reference)†
	4.1	Amendment to Rights Agreement, dated as of March 27, 2011, between GSI Commerce, Inc. and American Stock Transfer & Trust Company, LLC, as Rights Agent (filed as Exhibit 4.1 to GSI Commerce, Inc.’s Current Report on Form 8-K filed on March 28, 2011 and incorporated herein by reference)

27

Exhibit
Number			Description
	10.1		Credit Agreement, dated as of February 9, 2011, by and among GSI Commerce, Inc. and GSI Commerce Solutions, Inc., as borrowers, the guarantors party thereto, Bank of America, N.A., as administrative agent, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley Senior Funding, Inc., PNC Capital Markets LLC, Deutsche Bank Securities Inc. and J.P. Morgan Securities Inc., as joint lead arrangers and joint bookrunners, and the other financial institutions party thereto (filed as Exhibit 10.1 to GSI Commerce, Inc.’s Current Report on Form 8-K filed on February 9, 2011 and incorporated herein by reference)
	10.2		Stock Transfer Restriction and Registration Agreement, dated as of March 15, 2011, by and among GSI Commerce, Inc., Insight Venture Partners V, L.P., Insight Venture Partners (Cayman) V, L.P., Insight Venture Partners V (Employee Co-Investors), L.P., Insight Venture Partners VI, L.P., Insight Venture Partners (Cayman) VI, L.P., Insight Venture Partners VI (Co-Investors), L.P., Alan S. Trager, Trustee of Alan S. Trager Revocable Trust u/a/d 1/2/08, Mitchell Trager, Trustee of Mitchell Trager Revocable Trust u/a/d 1/7/08, Brent L. Trager, Trustee of Brent L. Trager Revocable Trust u/a/d 7/1/08, Jason Trager and David Trager, Co-Trustees of David Remainder Trust u/a/d 5/1/07, Jason Trager and David Trager, Co-Trustees of Jason Remainder Trust u/a/d 5/1/07, Jason Trager and David Trager, Co-Trustees of Brandon Remainder Trust u/a/d 5/1/07, Brent L. Trager and Sheri Weiss, Co-Trustees of Sheri Remainder Trust u/a/d 5/1/07, Brent L. Trager and Erica Leibo, Co-Trustees of Erica Remainder Trust u/a/d 5/1/07 and Mitchell Trager, Trustee of Brent L. Trager Remainder Trust u/a/d 5/1/07 (filed as Exhibit 10.1 to GSI Commerce, Inc.’s Current Report on Form 8-K filed on March 15, 2011 and incorporated herein by reference)
	10.3	+	Form of Restricted Stock Unit Award Grant for Michael R. Conn (filed as Exhibit 10.1 to GSI Commerce, Inc.’s Current Report on Form 8-K filed on March 28, 2011 and incorporated herein by reference)
	10.4	+	Form of Transaction Incentive Agreement for Christopher Saridakis, Damon Mintzer and J. Scott Hardy (filed as Exhibit 10.2 to GSI Commerce, Inc.’s Current Report on Form 8-K filed on March 28, 2011 and incorporated herein by reference)
	10.5	+	Form of Transaction Incentive Agreement for Michael R. Conn (filed as Exhibit 10.3 to GSI Commerce, Inc.’s Current Report on Form 8-K filed on March 28, 2011 and incorporated herein by reference)
	10.6	+	Form of Voting and Support Agreement entered into between eBay Inc. and Michael G. Rubin (filed as Exhibit 99.1 to GSI Commerce, Inc.’s Current Report on Form 8-K filed on March 28, 2011 and incorporated herein by reference)
	10.7	+	Football Fanatics, Inc. 2008 Equity Incentive Plan, as amended, including form of Stock Option Grant Agreement
	10.8		Amendment No 1 dated as of March 14, 2011, to the Credit Agreement dated as of February 9, 2011, among GSI Commerce, Inc., and GSI Commerce Solutions, Inc., as borrowers, each of the guarantors party thereto, the lenders from time to time party thereto and Bank Of America, N.A., as Administrative Agent, Swing Loan Lender and as Issuing Lender.
	31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934
	31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934
	32.1		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	99.1		Form of Voting and Support Agreement entered into between eBay Inc. and the following directors and officers of GSI Commerce, Inc.: M. Jeffrey Branman, Michael J. Donahue, Ronald D. Fisher, John A. Hunter, Josh Kopelman, Mark S. Menell, Jeffrey F. Rayport, David Rosenblatt, Lawrence S. Smith, Andrea M. Weiss, Michael R. Conn, James Flanagan, J. Scott Hardy, Damon Mintzer and Christopher Saridakis (filed as Exhibit 99.2 to GSI Commerce, Inc.’s Current Report on Form 8-K filed on March 28, 2011 and incorporated herein by reference)

+	Management contract or compensatory plan or arrangement
†	Confidential treatment has been requested for certain portions of this exhibit. Omitted portions have been filed separately with the Securities and Exchange Commission.

28

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: May 5, 2011

GSI COMMERCE, INC.
By:	/s/ MICHAEL G. RUBIN
	Michael G. Rubin
	Chairman, President and Chief Executive Officer
By:	/s/ MICHAEL R. CONN
	Michael R. Conn
	Executive Vice President, Finance and Chief Financial Officer (principal financial officer & principal accounting officer)

29

EX-10.7

Exhibit 10.7

FOOTBALL FANATICS, INC.
2008 EQUITY INCENTIVE PLAN

SECTION 1. Purpose; Definitions. The purposes of the Football Fanatics, Inc. 2008 Equity Incentive Plan (the “Plan”) are to: (a) enable Football Fanatics, Inc. (the “Company”) and its affiliated companies to recruit and retain highly qualified employees, directors and consultants; (b) provide those employees, directors and consultants with an incentive for productivity; and (c) provide those employees, directors and consultants with an opportunity to share in the growth and value of the Company.

For purposes of the Plan, unless otherwise provided by the Board with respect to a particular Award, the following initially capitalized words and phrases will be defined as set forth below, unless the context clearly requires a different meaning:

(a) “Affiliate” means, with respect to a Person, a Person that directly or indirectly Controls, or is Controlled by, or is under common Control with such Person.

(b) “Award” means a grant of Options, Restricted Stock or Restricted Stock Units pursuant to the provisions of the Plan.

(c) “Award Agreement” means, with respect to any particular Award, the written document that sets forth the terms of that particular Award.

(d) “Board” means the Board of Directors of the Company, as constituted from time to time; provided, however, that if the Board appoints a Committee to perform some or all of the Board’s administrative functions hereunder pursuant to Section 2, references in the Plan to the “Board” will be deemed to also refer to that Committee in connection with administrative matters to be performed by that Committee.

(e) “Cause” means (i) conviction of, or the entry of a plea of guilty or no contest to, a felony or any other crime that causes the Company or its Affiliates public disgrace or disrepute, or materially and adversely affects the Company’s or its Affiliates’ operations or financial performance or the relationship the Company has with its customers, (ii) gross negligence or willful misconduct with respect to the Company or any of its Affiliates, including, without limitation fraud, embezzlement, theft or proven dishonesty in the course of his or her employment; (iii) alcohol abuse or use of controlled drugs other than in accordance with a physician’s prescription; (iv) refusal to perform any lawful, material obligation or fulfill any duty (other than any duty or obligation of the type described in clause (vi) below) to the Company or its Affiliates (other than due to a Disability), which refusal, if curable, is not cured within 15 days after delivery of written notice thereof; (v) material breach of any agreement with or duty owed to the Company or any of its Affiliates, which breach, if curable, is not cured within 15 days after the delivery of written notice thereof; or (vi) any breach of any obligation or duty to the Company or any of its Affiliates (whether arising by statute, common law or agreement) relating to confidentiality, noncompetition, nonsolicitation or proprietary rights. Notwithstanding the foregoing, if a Participant and the Company (or any of its Affiliates) have entered into an employment agreement, consulting agreement or other similar agreement that specifically defines “cause,” then with respect to such Participant, “Cause” shall have the meaning defined in that employment agreement, consulting agreement or other agreement.

1

(f) “Change in Control” means, with respect to any entity: (i) the sale, transfer, assignment or other disposition (including by merger or consolidation, but excluding any sales by stockholders made as part of an underwritten public offering of the common stock of the entity) by stockholders of the entity, in one transaction or a series of related transactions, of more than 50% of the voting power represented by the then outstanding capital stock of the entity to one or more Persons, (ii) the sale of all or substantially all of the assets of the entity (other than a transfer of financial assets made in the ordinary course of business for the purpose of securitization), or (iii) the liquidation, dissolution or winding up of the entity.

(g) “Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time, and any successor thereto.

(h) “Committee” means a committee appointed by the Board in accordance with Section 2 of the Plan.

(i) “Control” means, as to any Person, the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise (the terms “Controlled by” and “under common Control with” shall have correlative meanings).

(j) “Director” means a member of the Board.

(k) “Disability” means a condition rendering a Participant Disabled.

(l) “Disabled” with respect to a particular Participant will have the same meaning as set forth in any long-term disability policy or program sponsored by the Company or any Affiliate covering such Participant, as in effect as of the date of such determination, or if no such policy or program shall be in effect, “Disabled” will have the meaning as set forth in Section 22(e)(3) of the Code.

(m) “Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.

(n) “Fair Market Value” of a Share, means, as of any date: (i) the closing price of the Share as reported on the principal nationally recognized stock exchange on which the type of Shares are traded on such date, or if no prices are reported with respect to such Shares on such date, the closing price of the Share on the last preceding date on which there were reported prices of such Shares; or (ii) if the type of Shares are not listed or admitted to unlisted trading privileges on a nationally recognized stock exchange, the closing price of the Share as reported by The Nasdaq Global Market on such date, or if no prices of such Shares are reported on such date, the closing price of the Shares on the last preceding date on which there were reported prices of such Shares; or (iii) if Shares of that type are not listed or admitted to unlisted trading privileges on a nationally recognized stock exchange or traded on The Nasdaq Stock Market, the Fair Market Value will be determined in good faith by the Board acting in its discretion using the reasonable application of a reasonable valuation method based on the facts and circumstances existing on the valuation date, which determination will be conclusive.

(o) “Incentive Stock Option” means any Option intended to be and designated as an “Incentive Stock Option” within the meaning of Section 422 of the Code.

2

(p) “Non-Employee Director” will have the meaning set forth in Rule 16b-3(b)(3)(i) promulgated by the U.S. Securities and Exchange Commission under the Exchange Act, or any successor definition adopted by the Securities and Exchange Commission.

(q) “Non-Qualified Stock Option” means any Option that is not an Incentive Stock Option.

(r) “Option” means any option to purchase Shares (including Restricted Stock, if the Board so determines) granted pursuant to Section 5 hereof.

(s) “Parent” means a “parent corporation” of the Company (or, in the context of Section 15(c) of the Plan, of a successor corporation), whether now or hereafter existing, as defined in Section 424(e) of the Code.

(t) “Participant” means an employee, leased employee, consultant, Director or other service provider of the Company or any of its Affiliates to whom an Award is granted.

(u) “Person” means an individual, partnership, corporation, limited liability company, trust, joint venture, unincorporated association, or other entity or association.

(v) “Repurchase Agreement” means an agreement between the Company and a Participant (or such Participant’s estate, heirs or beneficiaries), in such form determined from time to time by the Company in its sole discretion, that may require a Participant (or such Participant’s estate, heirs or beneficiaries) to sell Shares acquired or received pursuant to an Award under the Plan back to the Company at a per share price equal to Fair Market Value (or, with respect to a Participant whose employment with the Company is terminated by the Company for Cause, if lower, at a per share price equal to the exercise price or purchase price relating to such Shares), in the event that such Participant’s employment with the Company terminates for any reason.

(w) “Restricted Stock” means Shares that are subject to restrictions pursuant to Section 7 hereof.

(x) “Restricted Stock Unit” means a right granted under and subject to restrictions pursuant to Section 8 hereof.

(y) “Shares” means shares of the Company’s Common Stock, par value $0.001, subject to substitution or adjustment as provided in Section 3(c) hereof.

(z) “Service Provider” means an employee, officer, director or independent contractor of the Company, as the case may be.

(aa) “Subsidiary” means, in respect of the Company, a subsidiary company, whether now or hereafter existing, as defined in Sections 424(f) of the Code.

(bb) “Voting Agreement” means that certain Voting Agreement made by and among the Company and certain of its stockholders, dated as of August 2, 2007, as amended from time to time.

3

SECTION 2. Administration.

(a) The Plan will be administered by the Board; provided, however, that the Board may at any time appoint a Committee to perform some or all of the Board’s administrative functions hereunder; and provided further, that the authority of any Committee appointed pursuant to this Section 2 will be subject to such terms and conditions as the Board may prescribe.

(b) Subject to the requirements of the Company’s by-laws and certificate of incorporation, the Voting Agreement and any other agreement that governs the appointment of Board committees, any Committee established under this Section 2 will be composed of not fewer than two members, each of whom will serve for such period of time as the Board determines. From time to time the Board may increase the size of the Committee and appoint additional members thereto, remove members (with or without cause) and appoint new members in substitution therefor, fill vacancies however caused, or remove all members of the Committee and thereafter directly administer the Plan.

(c) Directors who are eligible for Awards or have received Awards may vote on any matters affecting the administration of the Plan or the grant of Awards, except that no such member will act upon the grant of an Award to himself or herself, but any such member may be counted in determining the existence of a quorum at any meeting of the Board during which action is taken with respect to the grant of Awards to himself or herself.

(d) The Board will have full authority to grant Awards under this Plan. In particular, subject to, the terms of the Plan, the Board will have the authority:

(i) to select the persons to whom Awards may from time to time be granted hereunder (consistent with the eligibility conditions set forth in Section 4);

(ii) to determine the type of Award to be granted to any person hereunder;

(iii) to determine the number and type of Shares, if any, to be covered by each Award;

(iv) to establish the terms and conditions of each Award Agreement;

(v) to determine whether and under what circumstances an Option may be exercised without a payment of cash under Section 5(b); and

(vi) to determine whether, to what extent and under what circumstances Shares and other amounts payable with respect to an Award may be deferred either automatically or at the election of the Participant.

(e) The Board will have_, the authority to adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan as it, from time to time, deems advisable; to establish the terms of each Award Agreement; to interpret the terms and provisions of the Plan and any Award issued under the Plan (and any Award Agreement); and to otherwise supervise the administration of the Plan. The Board may correct any defect, supply any omission or reconcile any inconsistency in the Plan or in any Award in the manner and to the extent it deems necessary to carry out the intent of the Plan.

4

(f) All decisions made by the Board pursuant to the provisions of the Plan will be final and binding on all persons, including the ‘Company, its Affiliates and Participants. No Director or member of the Committee, nor any delegate thereof, shall be liable for any act, omission, interpretation, construction or determination made in good faith in connection with the Plan, and each of the foregoing shall be entitled in all cases to indemnification and reimbursement by the Company in respect of any claim, loss, damage or expense (including without limitation reasonable attorneys’ fees) arising or resulting therefrom to the fullest extent permitted by law and/or under any directors’ and officers’ liability insurance coverage which may be in effect from time to time.

SECTION 3. Shares Subject to the Plan.

(a) Shares Subject to the Plan. The Shares to be subject to or related to Awards under the Plan will be authorized and unissued Shares of the Company, whether or not previously issued and subsequently acquired by the Company. The maximum number of Shares that may be subject to Awards under the Plan is one million, one hundred eighty-eight thousand seven hundred forty-eight (1,188,748), all of which may be issued in respect of Incentive Stock Options. The Company will reserve for the purposes of the Plan, out of its authorized and unissued Shares, such number of Shares.

(b) Effect of the Expiration or Termination of Awards. If and to the extent that an Option expires, terminates or is canceled or forfeited for any reason without having been exercised in full, the Shares associated with that Option will again become available for grant under the Plan. Similarly, if and to the extent any Restricted Stock or Restricted Stock Unit is canceled, forfeited or repurchased for any reason, or if any Share is withheld pursuant to Section 12(d) in settlement of a tax withholding obligation associated with an Award, that Share will again become available for grant under the Plan. Finally, if any Share is received in satisfaction of the exercise price payable upon exercise of an Option, that Share will become available for grant under the Plan.

(c) Other Adjustment. Subject to any required action by the shareholders of the Company, the number of Shares of Common Stock covered by each outstanding Option and/or Restricted Stock Unit, and the number of Shares of Restricted Stock outstanding, and the number of Shares which have been authorized for issuance under the Plan but as to which no Awards have yet been granted or which have been returned to the Plan upon cancellation or expiration of an Award, as well as the price per share of Common Stock covered by each such outstanding Option and/or Restricted Stock Unit, shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.” Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Shares of Common Stock subject to an Award hereunder.

(d) Change in Control. Notwithstanding anything to the contrary set forth in the Plan, upon or in anticipation of any Change in Control of the Company or any of its Affiliates, the Board may, in its sole and absolute discretion and without the need for the consent of any Participant, take one or more of the following actions contingent upon the occurrence of that Change in Control: (i) cause any or all outstanding Options held by

5

Participants affected by the Change in Control to become vested and immediately exercisable, in whole or in part; (ii) cause any or all outstanding Restricted Stock or Restricted Stock Units held by Participants affected by the Change in Control to become non-forfeitable, in whole or in part; (iii) cancel any Option in exchange for a substitute option in a manner consistent with the requirements of Treas. Reg. §1.424-1(a) (notwithstanding the fact that the original Option may never have been intended to satisfy the requirements for treatment as an Incentive Stock Option); (iv) cancel any Restricted Stock or Restricted Stock Units held by a Participant affected by the Change in Control in exchange for restricted stock of or restricted stock units in respect of the capital stock of any successor corporation; (v) redeem any Restricted Stock held by a Participant affected by the Change in Control for cash and/or other substitute consideration with a value equal to the Fair Market Value of an unrestricted Share on the date of the Change in Control; (vi) cancel any Option held by a Participant affected by the Change in Control in exchange for cash and/or other substitute consideration with a value equal to (A) the number of Shares subject to that Option, multiplied by (B) the difference, if any, between the Fair Market Value per Share on the date of the Change in Control and the exercise price of that Option; provided, that if the Fair Market Value per Share on the date of the Change in Control does not exceed the exercise price of any such Option, the Board may cancel that Option without any payment of consideration therefor; or (vii) cancel any Restricted Stock Unit held by a Participant affected by the Change in Control in exchange for cash and/or other substitute consideration with a value equal to the Fair Market Value per Share on the date of the Change in Control.

SECTION 4. Eligibility. Employees, Directors, consultants, and other individuals who provide services to the Company or its Affiliates are eligible to be granted Awards under the Plan; provided, however, that only employees of the Company or a Subsidiary are eligible to be granted Incentive Stock Options.

SECTION 5. Options.

(a) Options granted under the Plan may be of two types: (i) Incentive Stock Options or (ii) Non-Qualified Stock Options. Any Option granted under the Plan will be in such form as the Board may at the time of such grant approve.

(b) The Award Agreement evidencing any Option will incorporate the following terms and conditions and will contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Board deems appropriate in its sole and absolute discretion:

(i) Option Price. The exercise price per Share purchasable under an Option will be not less than 100% of the Fair Market Value of the Share on the date of the grant. However, any Incentive Stock Option granted to any Participant who, at the time the Option is granted, owns more than 10% of the voting power of all classes of shares of the Company or of a Subsidiary will have an exercise price per Share of not less than 110% of Fair Market Value per Share on the date of the grant.

(ii) Option Term. The term of each Option will be fixed by the Board, but no Option will be exercisable more than 10 years after the date the Option is granted. However, any Incentive Stock Option granted to any Participant who, at the time such Option is granted, owns more than 10% of the voting power of all classes of shares of the Company or of a Subsidiary may not have a term of more than five years. No Option may be exercised by any person after expiration of the term of the Option.

6

(iii) Exercisability. Options will vest and be exercisable at such time or times and subject to such terms and conditions as determined by the Board at the time of grant. If the Board provides, in its discretion, that any Option is exercisable only in installments, the Board may waive such installment exercise provisions at any time at or after grant, in whole or in part, based on such factors as the Board determines, in its sole and absolute discretion.

(iv) Method of Exercise. Subject to the terms of the Plan (including without limitation the termination provisions set forth in Section 6) and the applicable Award Agreement, Options may be exercised in whole or in part at any time and from time to time during the term of the Option, by the delivery of written notice of exercise by the Participant to the Company specifying the number of Shares to be purchased. Such notice will he accompanied by payment in full of the purchase price, either by certified or bank check, or such other means as the Board may accept. As determined by the Board, in its sole discretion, at or after grant, payment in full or in part of the exercise price of an Option may be made in the form of previously acquired Shares based on the Fair Market Value of the Shares on the date the Option is exercised. Subject to the approval of the Board, an Option may be exercised through a cashless exercise procedure, including by the Company withholding and cancelling an appropriate number of Shares otherwise issuable to the Participant upon such exercise. No Shares will be issued upon exercise of an Option until full payment therefor has been made. A Participant will not have the right to distributions or dividends or any other rights of a stockholder with respect to Shares subject to the Option until the Participant has given written notice of exercise, has paid in full for such Shares, and, if requested, has given the representation described in Section 12(a) hereof.

(v) Notwithstanding any other provision of the Plan to the contrary, the Board shall have the sole and absolute right to condition the exercise of any Option upon the Participant or other person holding such Option executing, or otherwise becoming a party to, the Voting Agreement and the Repurchase Agreement.

(vi) Incentive Stock Option Limitations. In the case of an Incentive Stock Option, the aggregate Fair Market Value (determined as of the time of grant) of the Shares with respect to which Incentive Stock Options are exercisable for the first time by the Participant during any calendar year under the Plan and/or any other plan of the Company or any Parent or Subsidiary will not exceed $100,000. For purposes of applying the foregoing limitation, Incentive Stock Options will be taken into account in the order granted. To the extent any Option does not meet such limitation, that Option will be treated for all purposes as a Non-Qualified Stock Option.

(vii) Termination of Service. Unless otherwise specified in the applicable Award Agreement, Options will be subject to the terms of Section 6 with respect to exercise upon or following termination of employment or other service.

(viii) Transferability of Options. Except as may otherwise be specifically determined by the Board with respect to a particular Option: (i) no Option will he transferable by the Participant other than by will or by the laws of descent and distribution; and (ii) all Options will be exercisable during the Participant’s lifetime only by the Participant or, in the event of his or her Disability, by his or her personal representative. Notwithstanding the foregoing, subject to the approval of the Board, a Non-Qualified Stock Option may be assigned in whole or in part during the Participant’s lifetime to one or more members of the Participant’s family or to a trust established exclusively for the Participant

7

and/or one or more such family members or to Participant’s former spouse, to the extent such assignment is in connection with the Participant’s estate plan or pursuant to a domestic relations order. The assigned portion may only be exercised by the person or persons who acquire a proprietary interest in the Non-Qualified Option pursuant to the assignment. The terms applicable to the assigned portion shall be the same as those in effect for the Option immediately prior to such assignment and shall be set forth in such documents issued to the assignee as the Board may deem appropriate.

SECTION 6. Termination of Service. Unless otherwise specified with respect to a particular Award, Options granted hereunder will remain exercisable after termination of employment or other service only to the extent specified in this Section 6.

(a) Termination by Reason of Death. If a Participant’s service with the Company or any of its Affiliates terminates by reason of death, any Option held by such Participant may thereafter be exercised, to the extent then vested and exercisable or on such accelerated basis as the Board may determine, at or after grant, by the legal representative of the estate or by the legatee of the Participant under the will of the Participant, for a period expiring (i) at such time as may be specified by the Board at or after the time of grant, or (ii) if not specified by the Board, then 12 months from the date of death, or (iii) if sooner than the applicable period specified under (i) or (ii) above, then upon the expiration of the stated term of such Option.

(b) Termination by Reason of Disability. If a Participant’s service with the Company or any of its Affiliates terminates by reason of Disability, any Option held by such Participant may thereafter be exercised by the Participant or his or her personal representative, to the extent it was vested and exercisable at the time of termination, or on such accelerated basis as the Board may determine at or after grant, for a period expiring (i) at such time as may be specified by the Board at or after the time of grant, or (ii) if not specified by the Board, then 12 months from the date of termination of service, or (iii) if sooner than the applicable period specified under (i) or (ii) above, then upon the expiration of the stated term of such Option.

(c) Cause. If a Participant’s service with the Company or any Affiliate is terminated for Cause: (i) any Option not already exercised, whether or not then vested, will be immediately and automatically forfeited as of the date of such termination, and (ii) any Shares for which the Company has not yet delivered share certificates will be immediately and automatically forfeited and the Company will refund to the Participant the Option exercise price paid for such Shares, if any.

(d) Other Termination. If a Participant’s service with the Company or any Affiliate terminates for any reason other than death, Disability or Cause, any Option held by such Participant may thereafter be exercised by the Participant, to the extent it was vested and exercisable at the time of such termination, or on such accelerated basis as the Board may determine at or after grant, for a period expiring (i) at such time as may be specified by the Board at or after the time of grant, or (ii) if not specified by the Board, then 180 days from the date of termination of service, or (iii) if sooner than the applicable period specified under (i) or (ii) above, then upon the expiration of the stated term of such Option.

8

SECTION 7. Restricted Stock.

(a) Issuance. Restricted Stock may be issued either alone or in conjunction with other Awards. The Board will determine the time or times within which Restricted Stock may be subject to forfeiture, and all other conditions of such Awards.

(b) Awards and Certificates. The Award Agreement evidencing the grant of any Restricted Stock will contain such terms and conditions, not inconsistent with the terms of the Plan, as the Board deems appropriate in its sole and absolute discretion. The prospective recipient of an Award of Restricted Stock will not have any rights with respect to such Award, unless and until such recipient has executed an Award Agreement and has delivered a fully executed copy thereof to the Company, and has otherwise complied with the applicable terms and conditions of such Award. The purchase price for Restricted Stock may, but need not, be zero. A share certificate will be issued in connection with each Award of Restricted Stock. Such certificate will be registered in the name of the Participant receiving the Award, and will bear the following legend and/or any other legend required by this Plan, the Award Agreement, the Voting Agreement, if any, or by applicable law:

THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS OF THE FOOTBALL FANATICS, INC. 2008 EQUITY INCENTIVE PLAN AND AN AGREEMENT ENTERED INTO BETWEEN [THE PARTICIPANT] AND FOOTBALL FANATICS, INC. (WHICH TERMS AND CONDITIONS MAY INCLUDE, WITHOUT LIMITATION, CERTAIN TRANSFER RESTRICTIONS, REPURCHASE RIGHTS AND FORFEITURE CONDITIONS). COPIES OF THAT PLAN AND AGREEMENT ARE ON FILE IN THE PRINCIPAL OFFICES OF FOOTBALL FANATICS, INC. AND WILL BE MADE AVAILABLE TO THE HOLDER OF THIS CERTIFICATE WITHOUT CHARGE UPON REQUEST TO THE SECRETARY OF THE COMPANY.

Share certificates evidencing Restricted Stock will be held in custody by the Company or in escrow by an escrow agent until the restrictions thereon have lapsed. As a condition to any Restricted Stock award, the Participant may be required to deliver to the Company a share power, endorsed in blank, relating to the Shares covered by such Award.

(c) Restrictions and Conditions. The Restricted Stock awarded pursuant to this Section 7 will be subject to the following restrictions and conditions:

(i) During a period commencing with the date of an Award of Restricted Stock and ending at such time or times as specified by the Board (the “Restriction Period”), the Participant will not be permitted to sell, transfer, pledge, assign or otherwise encumber Restricted Stock awarded under the Plan. The Board may condition the lapse of restrictions on Restricted Stock upon the continued employment or service of the recipient, the attainment of specified individual or corporate performance goals, or such other factors as the Board may determine, in its sole and absolute discretion.

9

(ii) Except as provided in this Paragraph (ii) or Section 7(c)(i), once the Participant has been issued a certificate or certificates for Restricted Stock, the Participant will have, with respect to the Restricted Stock, all of the rights of a stockholder of the Company, including the right to vote the Shares, and the right to receive any cash distributions or dividends. The Board, in its sole discretion, as determined at the time of award, may permit or require the payment of cash distributions or dividends to be deferred and, if the Board so determines, reinvested in additional Restricted Stock to the extent Shares are available under Section 3 of the Plan. Any distributions or dividends paid in the form of securities with respect to Restricted Stock will be subject to the same terms and conditions as the Restricted Stock with respect to which they were paid, including, without limitation, the same Restriction Period.

(iii) Subject to the applicable provisions of the Award Agreement, if a Participant’s service with the Company and its Affiliates terminates prior to the expiration of the Restriction Period, all of that Participant’s Restricted Stock which then remain subject to forfeiture will then be forfeited automatically.

(iv) If and when the Restriction Period expires without a prior forfeiture of the Restricted Stock subject to such Restriction Period (or if and when the restrictions applicable to Restricted Stock lapse pursuant to Sections 3(d)), the certificates for such Shares will be replaced with new certificates, without the restrictive legends described in Section 7(b) applicable to such lapsed restrictions, and such new certificates will be promptly delivered to the Participant, the Participant’s representative (if the Participant has suffered a Disability), or the Participant’s estate or heir (if the Participant has died).

SECTION 8. Restricted Stock Units. Subject to the other terms of the Plan, the Board may grant Restricted Stock Units to eligible individuals and may impose conditions on such units as it may deem appropriate. Each granted Restricted Stock Unit shall be evidenced by an Award Agreement in the form. that is approved by the Board and that is not inconsistent with the terms and conditions of the Plan. Each granted Restricted Stock Unit shall entitle the Participant to whom it is granted a distribution from the Company in an amount equal to the Fair Market Value (at the time of the distribution) of one Share. Distributions may be made in cash, Shares or a combination of cash and Shares. All other terms governing Restricted Stock Units, such as vesting, time and form of payment and termination of units shall be set forth in the Award Agreement.

SECTION 9. Amendments and Termination. The Board may amend, alter or discontinue the Plan at any time. However, except as otherwise provided in Section 3(d) of the Plan, no amendment, alteration or discontinuation will be made which would adversely affect the rights of a Participant with respect to an Award, without that Participant’s consent, or which, without the approval of such amendment within one year (365 days) of its adoption by the Board, by the Company’s stockholders in a manner consistent with Section 1.422-5 of the Treasury Regulations, would: (i) increase the total number of Shares reserved for the purposes of the Plan (except as otherwise provided in Section 3(c)), or (ii) change the persons or class of persons eligible to receive Awards.

SECTION 10. Unfunded Status of Plan. The Plan is intended to be “unfunded.” With respect to any payments not yet made to a Participant by the Company, nothing contained herein will give any such Participant any rights that are greater than those of a general creditor of the Company. In its sole discretion, the Board may authorize the creation of grantor trusts or other arrangements to meet the obligations created under the Plan to deliver Shares or payments in lieu of Shares or with respect to Awards.

10

SECTION 11. Substitute Options. In the event that the Company, directly or indirectly, acquires another entity, the Board may authorize the issuance of stock options (“Substitute Options”) to the individuals performing services for the acquired entity in substitution of stock options previously granted to those individuals in connection with their performance of services for such entity upon such terms and conditions as the Board shall determine, taking into account the conditions of Code Section 424(a), as from time to time amended or superseded, in the case of a Substitute Option that is intended to be an Incentive Stock Option. Shares of capital stock underlying Substitute Stock Options shall not constitute Shares issued pursuant to the Plan for any purpose.

SECTION 12. General Provisions.

(a) The Board shall condition any Award upon compliance with applicable securities laws. The Board may require each Participant to represent to and agree with the Company in writing that the Participant is acquiring securities of the Company for investment purposes and without a view to distribution thereof and as to such other matters as the Board believes are appropriate. The certificate evidencing any Award and any securities issued pursuant thereto may include any legend which the Board deems appropriate to reflect any restrictions on transfer and compliance with applicable securities laws. All certificates for Shares or other securities delivered under the Plan will be subject to such share-transfer orders and other restrictions as the Board may deem advisable under the rules, regulations, and other requirements of the Securities Act of 1933, as amended, the Exchange Act, any stock exchange upon which the Shares are then listed, and any other applicable federal or state securities laws, and the Board may cause a legend or legends to he put on any such certificates to make appropriate reference to such restrictions.

(b) Nothing contained in the Plan will prevent the Board from adopting other or additional compensation arrangements, subject to stockholder approval if such approval is required; and such arrangements may be either generally applicable or applicable only in specific cases.

(c) Neither the adoption of the Plan nor the execution of any document in connection with the Plan will (i) confer upon any person any right to continued employment or engagement with the Company or any of its Affiliates, or (ii) interfere in any way with the right of the Company or any Affiliate to terminate the employment of any of its employees at any time.

(d) No later than the date as of which an amount first becomes includible in the gross income of the Participant for federal income tax purposes with respect to any Award under the Plan, the Participant will pay to the Company, or make arrangements satisfactory to the Board regarding the payment of any federal, state or local taxes of any kind required by law to be withheld with respect to such amount. Unless otherwise determined by the Board, the minimum required withholding obligations may be settled with Shares, including Shares that would otherwise be issuable to a Participant upon the vesting, purchase or exercise of the Award that gives rise to the withholding requirement. The obligations of the Company under the Plan will be conditioned on such payment or arrangements and the Company will, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the Participant.

11

SECTION 13. Effective Date of Plan. Subject to the approval of the Plan by the Company’ stockholders within 12 months of the Plan’s adoption by the Board, the Plan will become effective on the date that it is adopted by the Board. In the absence of such stockholder approval, any Incentive Stock Option granted prior to the expiration of such 12-month period shall be treated for all purposes as a Non-Qualified Option.

SECTION 14. Term of Plan. The Plan will continue in effect until terminated in accordance with Section 9; provided, however, that no Incentive Stock Option will be granted hereunder on or after the 10th anniversary of the earlier of: (a) the date of the Plan’s adoption by the Board; or (b) the date of stockholder approval of the Plan (or, if the stockholders approve an amendment that increases the number of shares subject to the Plan, the 10^th anniversary of the date of such approval); but provided further, that Incentive Stock Options granted prior to such 10^th anniversary may extend beyond that date.

SECTION 15. Invalid Provisions. in the event that any provision of this Plan is found to be invalid or otherwise unenforceable under any applicable law, such invalidity or unenforceability will not be construed as rendering any other provisions contained herein as invalid or unenforceable, and all such other provisions will be given full force and effect to the same extent as though the invalid or unenforceable provision was not contained herein.

SECTION 16. Governing Law. The Plan and all Awards granted hereunder will be governed by and construed in accordance with the laws and judicial decisions of the State of Delaware, without regard to the application of the principles of conflicts of laws of Delaware or any other jurisdiction.

SECTION 17. Board Action. Notwithstanding anything to the contrary set forth in the Plan, any and all actions of the Board or Committee, as the case may be, taken

under or in connection with the Plan and any agreements, instruments, documents, certificates or other writings entered into, executed, granted, issued and/or delivered pursuant to the terms hereof, will be subject to and limited by any and all votes, consents, approvals, waivers or other actions of all or certain stockholders of the Company or other persons required by:

(a) the Certificate of Incorporation of the Company (as the same may be amended and/or restated from time to time);

(b) the Bylaws of the Company (as the same may be amended and/or restated from time to time); and

(c) any other agreement, instrument, document or writing now or hereafter existing, between or among the Company and its stockholders or other persons (as the same may be amended from time to time).

SECTION 18. Notices. Any notice to be given to the Company pursuant to the provisions of the Plan will be given by registered or certified mail, postage prepaid, and, addressed, if to the Company to its Secretary (or such other person as the Company may designate in writing from time to time) at its principal executive office, and, if to a Participant, to the address given beneath his or her or her signature on his or her or her Award Agreement, or at such other address as such Participant may hereafter designate in writing to the Company. Any such notice will be deemed duly given on the date and at the time delivered via personal, courier or recognized overnight delivery service or, if sent via telecopier, on the date and at the time telecopied with confirmation of delivery or, if mailed, on the date five (5) days after the date of the mailing (which will be by regular, registered or certified mail). Delivery of a notice by telecopy (with confirmation) will he permitted and will he considered delivery of a notice notwithstanding that it is not an original that is received.

12

FIRST AMENDMENT TO

FOOTBALL FANATICS, INC.

2008 EQUITY INCENTIVE PLAN

This Amendment (this “Amendment”) to the Football Fanatics, Inc. 2008 Equity Incentive Plan (the “Plan”) is effective as of May 17, 2010 and is entered into in accordance with Section 9 of the Plan. All terms used herein but not otherwise defined shall have the respective meanings used in the Plan.

WHEREAS, the Company has determined to increase the maximum number of Shares that may be subject to Awards under the Plan to two million (2,000,000) (the “Increase of Plan Shares”); and

WHEREAS, the Board and the stockholders of the Company have each approved the Increase of Plan Shares.

NOW THEREFORE, in consideration of the foregoing recitals, the Plan is hereby amended as follows:

1.	Amendment to Section 3(a). Section 3(a) of the Plan is hereby amended by deleting the number “one million, one hundred eighty-eight thousand seven hundred forty-eight (1,188,748)” from the second line thereof and replacing such number with “two million (2,000,000).”
2.	No Other Amendments to the Plan. Each of the other terms and provisions of the Plan shall remain unaffected by this Amendment and shall remain in full force and effect.
3.	Governing Law. The internal laws of the State of Delaware, irrespective of its choice of law principles, shall govern this Amendment.

IN WITNESS WHEREOF, the Company has caused an authorized officer to execute this Amendment as of the first date set forth above.

Football Fanatics, Inc.
 

/s/ Thomas W. Stoltz  

Thomas W. Stoltz 

Chief Financial Officer 

13

SECOND AMENDMENT TO

FOOTBALL FANATICS, INC.

2008 EQUITY INCENTIVE PLAN

This Second Amendment (this “Second Amendment”) to the Football Fanatics, Inc. 2008 Equity Incentive Plan, as amended (the “Plan”) is effective as of July 22, 2010 and is entered into in accordance with Section 9 of the Plan. All terms used herein but not otherwise defined shall have the respective meanings used in the Plan.

WHEREAS, the Board and the Company’s stockholders have each approved the Company’s Amended and Restated Certificate of Incorporation implementing a dual class voting structure.

NOW THEREFORE, in consideration of the foregoing recitals, the Plan is hereby amended as follows:

1.	Amendment to Section 1(y). The definition of “Shares” set forth in Section 1(y) of the Plan is hereby amended and restated in its entirety as follows:
	“Shares” means shares of the Company’s class A common stock, par value $0.001 per share (the “Class A Common Stock”), subject to substitution or adjustment as provided in Section 3(c) hereof.
2.	Amendment to Section 3(c). Section 3(c) of the plan is hereby amended and restated in its entirety as follows:
	Other Adjustment. Subject to any required action by the shareholders of the Company, the number of Shares of Class A Common Stock covered by each outstanding Option and/or Restricted Stock Unit, and the number of Shares of Restricted Stock outstanding, and the number of Shares which have been authorized for issuance under the Plan but as to which no Awards have yet been granted or which have been returned to the Plan upon cancellation or expiration of an Award, as well as the price per share of Class A Common Stock covered by each such outstanding Option and/or Restricted Stock Unit, shall be proportionately adjusted for any increase or decrease in the number of issued shares of Class A Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Class A Common Stock, or any other increase or decrease in the number of issued shares of Class A Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.” Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Shares of Class A Common Stock subject to an Award hereunder.

14

3.	No Other Amendments to the Plan. Each of the other terms and provisions of the Plan shall remain unaffected by this Second Amendment and shall remain in full force and effect.
4.	Governing Law. The internal laws of the State of Delaware, irrespective of its choice of law principles, shall govern this Second Amendment.

IN WITNESS WHEREOF, the Company has caused an authorized officer to execute this Second Amendment as of the first date set forth above.

Football Fanatics, Inc.
 

/s/ Thomas W. Stoltz  

Thomas W. Stoltz 

Chief Financial Officer 

15

FORM OF

STOCK OPTION GRANT AGREEMENT

pursuant to the

FOOTBALL FANATICS, INC. 2008 EQUITY INCENTIVE PLAN

THIS STOCK OPTION GRANT AGREEMENT (the “Grant Agreement”) is made and entered into by and between Football Fanatics, Inc., a Delaware corporation (the “Company”) and the following individual:

Name:	(the “Optionee”)
Address

Capitalized terms used but not otherwise defined herein shall have the meanings as set forth in the Football Fanatics, Inc. 2008 Equity Incentive Plan, as amended (the “Plan”). The Optionee agrees to be bound by the terms and conditions of the Plan, which are incorporated herein by reference and which control in case of any conflict with this Grant Agreement, except as otherwise specifically provided in the Plan.

The Optionee is granted an Option to purchase Class A Common Stock of the Company, subject in all events to the terms and conditions of the Plan and this Grant Agreement, as follows:

A. DATE OF GRANT:                                         

B. TYPE(S) OF OPTION: Non-Qualified Stock Option (“NSO”). This Option is NOT intended to qualify as an “incentive stock option.”

C. TOTAL SHARES OF CLASS A COMMON STOCK COVERED BY OPTION:

                                         Shares

D. EXERCISE PRICE OF OPTION: $                                         per Share (the “Exercise Price”)

E. EXPIRATION DATE: (subject to earlier termination as provided in the Plan and in Section G. below).

F. EXERCISE SCHEDULE: This Option will vest with respect to an incremental                                         % of the Shares covered hereby on each of the                                          anniversaries of the Date of Grant (indicated above).

16

Notwithstanding the foregoing, if 50% or fewer of the “Total Shares of Class A Common Stock Covered By Option” (as referenced in Section C of this Grant Agreement above and as adjusted pursuant to Section 3(c) of the Plan, if applicable (“Total Granted Adjusted Shares”)) are not yet vested, then, in the event of an Acceleration Transaction (as defined below), the following number of incremental Shares covered by this Option shall become, upon such Acceleration Event, fully vested and exercisable (if such number is greater than zero):

(i) Total Granted Adjusted Shares, multiplied by one-half;

minus

(ii) the total number of Shares subject to this Option that are vested immediately prior to such Acceleration Transaction (including any such Shares that have been previously exercised by the Optionee).

For purposes of the foregoing, an Acceleration Transaction shall mean a “Change in Control” of the Company that is described in Section 1(f)(i) or 1(f)(ii) (but not Section 1(f)(iii)) of the Plan.

G. EXERCISE OF OPTION FOLLOWING TERMINATION OF SERVICE: This Option shall terminate and be canceled to the extent not exercised within one hundred and eighty (180) days after the Optionee ceases to be a Service Provider, except that if such cessation is due to the death or Disability of the Optionee, this Option shall terminate and be canceled twelve months after the Optionee ceases to be a Service Provider. Notwithstanding the foregoing, in the event that the Service Provider’s service with the Company or any Affiliate is terminated for “Cause” (as defined in the Plan), then the Option shall immediately terminate on the date of such termination of service and shall not be exercisable for any period following such date. In no event, however, shall this Option be exercised later than the Expiration Date as provided above and in no event shall this Option be exercised for more Shares than the Shares which otherwise have become exercisable as of the date of cessation of status as a Service Provider.

H. COVENANTS AGREEMENT. As a condition of the granting of this Option, the Optionee shall execute and deliver a Non-Disclosure and Invention Assignment Agreement, in such form as determined by the Company in its sole discretion. This Option shall be forfeited in the event that the Optionee breaches any provision of the Invention Assignment Agreement or any other agreement between the Optionee and the Company with respect to noncompetition, nonsolicitation, assignment of inventions and contributions and/or nondisclosure obligations of the Optionee. In addition, the exercise of this Option shall be subject to the Optionee executing and becoming a party to the Voting Agreement and the Repurchase Agreement and such other agreements that the Company reasonably determines to be necessary and appropriate, and in such forms as determined by the Company in its sole discretion.

17

I. METHOD OF EXERCISE. This Option is exercisable by delivery of an exercise notice in the form attached as Exhibit A (the “Exercise Notice”) or such other form as the Board may require, which shall state the election to exercise the Option, the number of Shares with respect to which the Option is being exercised (the “Exercised Shares”), and such other representations and agreements as may be required by the Company pursuant to the provisions of the Plan. The Exercise Notice shall be completed by the Optionee and delivered to the Board. The Exercise Notice shall be accompanied by payment of the aggregate Exercise Price for the Exercised Shares. This Option shall be deemed to be exercised upon receipt by the Company of the fully executed Exercise Notice accompanied by the aggregate Exercise Price. Notwithstanding the foregoing, no Exercised Shares shall be issued unless such exercise and issuance complies with the requirements relating to the administration of stock option plans and other applicable equity plans under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Class A Common Stock is listed or quoted, and the applicable laws of any foreign country or jurisdiction where stock grants or other applicable equity grants are made under the Plan; assuming such compliance, for income tax purposes the Exercised Shares shall be considered transferred to the Optionee on the date the Option is exercised with respect to such Shares.

Exercise of the Option may be conditioned upon the Optionee’s execution of the Voting Agreement, the Repurchase Agreement, a stock restrictions agreement, as well as such other agreements as the Board or the Committee may require. Such agreements may include terms and conditions that provide the Company and/or other shareholders with (i) a right of first refusal with respect to Exercised Shares, (ii) a right of the Company to repurchase Exercised Shares at the Shares’ Fair Market Value (provided that if the Optionee’s service or employment terminates for Cause, then the Company may have the right to repurchase the Exercised Shares at a price that is equal to the lesser of the Fair Market Value of the Exercised Shares or the exercise price paid by the Optionee for such Exercised Shares), (iii) “drag-along” rights in favor of the shareholders owning a majority of Shares of the Company, (iv) “market standoff” or “lock-up” conditions, and (v) such other terms and conditions as the Board or the Committee may require.

J. METHOD OF PAYMENT. Payment of the aggregate Exercise Price shall be by any of the following, or a combination thereof:

1.	cash;
2.	check; or
3.	such other form of consideration as the Board shall determine in its discretion, provided that such form of consideration is permitted by the Plan and by applicable law, or pursuant to a cashless exercise procedure approved by the Board.

Upon exercise of the Option by the Optionee and prior to the delivery of such Exercised Shares, the Company shall have the right to require the Optionee to remit to the Company cash in an amount sufficient to satisfy applicable Federal and state tax withholding requirements.

18

K. TAX CONSEQUENCES OF OPTION. Some of the federal income tax consequences relating to the grant and exercise of this Option, as of the date of this Option, are set forth below. THE FOLLOWING DESCRIPTION OF FEDERAL INCOME TAX CONSEQUENCES IS NECESSARILY INCOMPLETE (AS THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE), AND ASSUMES THAT THE EXERCISE PRICE OF THIS OPTION IS NO LESS THAN THE FAIR MARKET VALUE OF THE CLASS A COMMON STOCK UNDERLYING THE OPTION AT THE DATE OF GRANT. MOREOVER, THIS SUMMARY ONLY ADDRESSES THE FEDERAL INCOME TAX CONSEQUENCES UNDER THE LAWS OF THE UNITED STATES, AND DOES NOT ADDRESS WHETHER AND HOW THE TAX LAWS OF ANY OTHER JURISDICTION MAY APPLY TO THIS OPTION OR TO THE OPTIONEE. ACCORDINGLY, THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF ANY EXERCISED SHARES.

Circular 230 Disclaimer: Nothing contained in this discussion of certain federal income tax considerations is intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transactions or tax-related matters addressed herein.

1.	Grant of the Option. The grant of an Option generally will not result in the imposition of a tax under the federal income tax laws.
2.	Exercising the Option.
	The Optionee may incur regular federal income tax liability upon exercise of a non-qualified stock option (“NSO”). The Optionee will be treated as having received compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value of the Exercised Shares on the date of exercise over their aggregate Exercise Price. If the Optionee is an Employee or a former Employee, the Company will be required to withhold from his or her compensation or collect from the Optionee and pay to the applicable taxing authorities an amount in cash equal to a specified percentage of this compensation income at the time of exercise, and may refuse to honor the exercise and refuse to deliver Shares if such withholding amounts are not delivered at the time of exercise.
3.	Disposition of Shares.
	Upon disposition of the NSO Shares, the Optionee will recognize a capital gain or loss equal to the difference between the selling price and the sum of the amount paid for the NSO Shares plus any amount recognized as ordinary income upon exercise of the NSO. If the Optionee holds NSO Shares for at least one year, any gain (or loss) realized on disposition of the NSO Shares will be treated as long-term capital gain (or loss) for federal income tax purposes.

19

L. NON-TRANSFERABILITY OF OPTION. Unless otherwise consented to in advance in writing by the Board, this Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of the Optionee only by the Optionee. The terms of the Plan and this Grant Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee.

M. SECURITIES MATTERS. All Shares and Exercised Shares shall be subject to the restrictions on sale, encumbrance and other disposition provided by Federal or state law. The Company shall not be obligated to sell or issue any Shares or Exercised Shares pursuant to this Grant Agreement unless, on the date of sale and issuance thereof, such Shares are either registered under the Securities Act of 1933, as amended, and all applicable state securities laws, or are exempt from registration thereunder.

N. OTHER PLANS. No amounts of income received by the Optionee pursuant to this Grant Agreement shall be considered compensation for purposes of any pension or retirement plan, insurance plan or any other employee benefit plan of the Company or its subsidiaries, unless otherwise provided in such plan.

O. NO GUARANTEE OF CONTINUED SERVICE. THE OPTIONEE ACKNOWLEDGES AND AGREES THAT THE RIGHT TO EXERCISE SHARES PURSUANT TO THE EXERCISE SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING EMPLOYMENT WITH THE COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES HEREUNDER). THE OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS GRANT AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE EXERCISE SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED EMPLOYMENT FOR THE EXERCISE PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH THE OPTIONEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE THE EMPLOYMENT RELATIONSHIP AT ANY TIME, WITH OR WITHOUT CAUSE.

P. ENTIRE AGREEMENT; GOVERNING LAW. The Plan is incorporated herein by reference. The Plan and this Grant Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Optionee with respect to the subject matter hereof, and may not be modified adversely to the Optionee’s interest except by means of a writing signed by the Company and Optionee. This Grant Agreement is governed by the internal substantive laws, but not the choice of law rules, of the State of Delaware.

20

By your signature and the signature of the Company’s representative below, you and the Company agree that this Option is granted under and governed by the terms and conditions of the Plan and this Grant Agreement. The Optionee has reviewed the Plan and this Grant Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Agreement and fully understands all provisions of the Plan and this Grant Agreement. The Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Board upon any questions relating to the Plan and this Grant Agreement. The Optionee further agrees to notify the Company upon any change in the residence address indicated herein.

OPTIONEE	FOOTBALL FANATICS, INC.
	By:
Date:	Date:

21

EXHIBIT A

FOOTBALL FANATICS, INC. 2008 EQUITY INCENTIVE PLAN

EXERCISE NOTICE

Football Fanatics, Inc.

Attention:                                         

1. Exercise of Option. Effective as of today,                                         , 20     , the undersigned (the “Purchaser”) hereby elects to purchase                                          shares (the “Shares”) of the class A common stock, par value $0.001 per share, of Football Fanatics, Inc. (the “Company”) under and pursuant to the Football Fanatics, Inc. 2008 Equity Incentive Plan, as amended (the “Plan”) and the Stock Option Agreement dated                      (the “Option Agreement”). The purchase price for the Shares shall be $                     per share, or $                     in total as required by the Option Agreement.

2. Delivery of Payment, Voting Agreement and Repurchase Agreement. Purchaser herewith delivers to the Company the full purchase price for the Shares. Purchaser has signed, executed and become a party to the Voting Agreement, the Repurchase Agreement and any other agreement as required by the Board, and herewith delivers to the Company such duly executed agreements.

3. Rights as Shareholder. Until the issuance (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company) of the Shares, no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the Shares covered by the Option, notwithstanding the exercise of the Option. The Shares so acquired shall be issued to the Optionee as soon as practicable after exercise of the Option. No adjustment will be made for a dividend or other right for which the record date is prior to the date of issuance.

4. Tax Consultation. Purchaser understands that Purchaser may suffer adverse tax consequences as a result of Purchaser’s purchase or disposition of the Shares. Purchaser represents that Purchaser has consulted with any tax consultants Purchaser deems advisable in connection with the purchase or disposition of the Shares and that Purchaser is not relying on the Company for any tax advice.

5. Entire Agreement; Governing Law. The Plan and Option Agreement are incorporated herein by reference. This Agreement, the Plan and the Option Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Purchaser with respect to the subject matter hereof, and may not be modified adversely to the Purchaser’s interest except by means of a writing signed by the Company and Purchaser. This agreement is governed by the internal substantive laws, but not the choice of law rules, of the State of Delaware.

22

Submitted by:	Accepted by:
PURCHASER	FOOTBALL FANATICS, INC.
	By:
Print Name	Print Name/Title
Date:	Date:

23

EX-10.8

Exhibit 10.8

EXECUTION COPY

AMENDMENT NO. 1 dated as of March 14, 2011 (this “Amendment”), to the Credit Agreement dated as of February 9, 2011 (the “Credit Agreement”), among GSI COMMERCE, INC., a Delaware corporation (“Parent”), GSI COMMERCE SOLUTIONS, INC., a Pennsylvania corporation (“GSICS”) (each, a “Borrower” and collectively, the “Borrowers”), each of the guarantors party thereto, the lenders from time to time party thereto (each a “Lender” and, collectively, the “Lenders”) and BANK OF AMERICA, N.A., as Administrative Agent, Swing Loan Lender and as Issuing Lender.

WHEREAS the Lenders have agreed to extend credit to the Borrowers under the Credit Agreement on the terms and subject to the conditions set forth therein; and

WHEREAS the Borrowers have requested that the Lenders amend certain provisions of the Credit Agreement and the Lenders whose signatures appear below, constituting at least the Required Lenders, are willing to amend the Credit Agreement on the terms and subject to the conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual agreements herein contained and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto agree as follows:

SECTION 1. Definitions. Capitalized terms used but not defined in this Amendment have the meanings assigned thereto in the Credit Agreement. The provisions of Section 1.2 of the Credit Agreement are hereby incorporated by reference herein, mutatis mutandis.

SECTION 2. Amendment of the Credit Agreement. Effective as of the Amendment Effective Date (as defined below):

(a) The definition of Consolidated EBITDA is hereby amended by replacing the phrase “non-cash credits to net income” in clause (b)(i) of such definition with “[Reserved]”.

(b) The second sentence of the first paragraph of Section 2.8(a) [Issuance of Letters of Credit] of the Credit Agreement is hereby amended by replacing such sentence in its entirety with “Each Letter of Credit may be issued as a standby Letter of Credit or a commercial Letter of Credit; provided, however, that any commercial Letter of Credit issued hereunder shall provide solely for cash payment upon presentation of a sight draft.”.

(c) The last sentence of the first paragraph of Section 2.8(a) [Issuance of Letters of Credit] of the Credit Agreement is hereby amended by replacing such sentence in its entirety with “Unless otherwise expressly agreed by the Issuing Lender and the Borrowers when a Letter of Credit is issued, (i) the rules of the ISP shall apply to each standby Letter of Credit and (ii) the rules of the Uniform Customs and Practice for Documentary Credits, as most recently published by the International Chamber of Commerce at the time of issuance, shall apply to each commercial Letter of Credit.”.

(d) Schedules 1.1(B), 1.1(C) and 11.5 to the Credit Agreement are hereby replaced with the corresponding schedules attached hereto as Exhibit A.

SECTION 3. Representations and Warranties. To induce the other parties hereto to enter into this Amendment, each Loan Party represents and warrants to each of the other parties hereto that, as of the Amendment Effective Date: the execution, delivery and performance by each Loan Party of this Amendment has been duly authorized by all requisite corporate actions required for the lawful execution, delivery and performance thereof; this Amendment has been duly executed and delivered by each Loan Party; and this Amendment and the Credit Agreement, as amended by this Amendment, constitute legal, valid and binding obligations of each Loan Party, enforceable against each such Loan Party in accordance with their terms, except to the extent that enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforceability of creditors’ rights generally or limiting the rights of specific performance.

SECTION 4. Effectiveness. This Amendment shall become effective as of the date (the “Amendment Effective Date”) on which the Administrative Agent shall have executed a counterpart of this Amendment and shall have received (a) duly executed counterparts of this Amendment from each Loan Party, (b) duly executed counterparts hereof that, when taken together, bear the authorized signatures of Lenders constituting at least the Required Lenders and (c) a duly executed counterpart of this Amendment from the Issuing Lender.

SECTION 5. Credit Agreement. Except as expressly set forth herein, this Amendment shall not by implication or otherwise limit, impair, constitute a waiver of, or otherwise affect the rights and remedies of the Lenders or the Administrative Agent under, the Credit Agreement, and shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement, all of which are ratified and affirmed in all respects and shall continue in full force and effect. On and after the Amendment Effective Date, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein”, or words of like import, shall be deemed to be a reference to the Credit Agreement as amended hereby.

SECTION 6. Counterparts. This Amendment may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Amendment by facsimile or electronic transmission shall be effective as delivery of a manually executed counterpart of this Amendment.

SECTION 7. Headings. Section headings used herein are for convenience of reference only, are not part of this Amendment and are not to affect the construction of, or to be taken into consideration in interpreting, this Amendment.

2

SECTION 8. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

3

IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly authorized, have executed this Amendment as of the day and year first above written.

BORROWERS:

GSI COMMERCE, INC.
GSI COMMERCE SOLUTIONS, INC.

BY:	/s/ Michael R. Conn
	NAME:	MICHAEL R. CONN
	TITLE:	EXECUTIVE VICE PRESIDENT FINANCE, CHIEF FINANCIAL OFFICER AND TREASURER

GUARANTORS:

ASFD, INC.
GSI COMMERCE CALL CENTER, INC.
GSI COMMERCE SOUTH, INC.
GSI EQUIPMENT, INC.
GSI LEGACY HOLDINGS, INC.
KOP PROMOTIONS, LLC
ONLINE DIRECT, INC.
PROMOTIONS DISTRIBUTOR SERVICE CORPORATION

BY:	/s/ Michael R. Conn
	NAME:	MICHAEL R. CONN
	TITLE:	PRESIDENT AND TREASURER

CLEAR SALEING, INC.
E-DIALOG, INC.
FETCHBACK, INC.
GSI INTERACTIVE, INC.
GSI MARKETING SERVICES, INC.
GSI MEDIA, INC.
M3 MOBILE, INCORPORATED
MBS INSIGHT, INC.
RUELALA, INC.
SB.COM, INC.
SILVERLIGN GROUP, INC.
SMARTBARGAINS, INC.
SMARTBARGAINS SECURITY CORPORATION
VENDORNET, INC.

BY:	/s/ Michael R. Conn
	NAME:	MICHAEL R. CONN
	TITLE:	TREASURER

RETAIL CONVERGENCE.COM, LP

	SB.COM, INC.,
BY:	ITS GENERAL PARTNER
	BY:	/s/ Michael R. Conn
		NAME:	MICHAEL R. CONN
		TITLE:	TREASURER

SHOPRUNNER, INC.

BY:	/s/ Michael R. Conn
	NAME:	MICHAEL R. CONN
	TITLE:	CHIEF FINANCIAL OFFICER AND TREASURER

935 KOP ASSOCIATES, LLC
1075 FIRST GLOBAL ASSOCIATES, LLC

	GSI COMMERCE, INC.,
BY:	ITS SOLE MEMBER AND MANAGER
	BY:	/s/ Michael R. Conn
		NAME:	MICHAEL R. CONN
		TITLE:	EXECUTIVE VICE PRESIDENT FINANCE, CHIEF FINANCIAL OFFICER AND TREASURER

7601 TRADE PORT DRIVE, LLC

	GSI COMMERCE SOLUTIONS, INC.,
BY:	ITS SOLE MEMBER AND MANAGER
	BY:	/s/ Michael R. Conn
		NAME:	MICHAEL R. CONN
		TITLE:	EXECUTIVE VICE PRESIDENT FINANCE, CHIEF FINANCIAL OFFICER AND TREASURER

GATOR ACQUISITION CORP.

BY:	/s/ Michael R. Conn
	NAME:	MICHAEL R. CONN
	TITLE:	PRESIDENT, TREASURER AND SECRETARY

GATOR ACQUISITION LLC

	GSI COMMERCE, INC.,
BY:	ITS SOLE MEMBER
	BY:	/s/ Michael R. Conn
		NAME:	MICHAEL R. CONN
		TITLE:	EXECUTIVE VICE PRESIDENT FINANCE, CHIEF FINANCIAL OFFICER AND TREASURER

BANK OF AMERICA, N.A.,

individually and as Administrative
Agent and Issuing Lender

By:	/s/ Andrew Richards
	Name:	Andrew Richards
	Title:	SVP

PNC BANK, National Association

By:	/s/ John M DiNapoli
	Name:	John M DiNapoli
	Title:	Senior Vice President

Deutsche Bank Trust Company Americas

By:	/s/ Paul O’Leary
	Name:	Paul O’Leary
	Title:	Director
By:	/s/ Evelyn Thierry
	Name:	Evelyn Thierry
	Title:	Director

JPMorgan Chase Bank, N.A.

By:	/s/ Eugene M. Kennedy
	Name:	Eugene M. Kennedy
	Title:	Vice President

TD Bank NA

By:	/s/ Thomas M. McGrory
	Name:	Thomas M. McGrory
	Title:	Vice President

RBS Citizens N.A.

By:	/s/ William M. Clossey
	Name:	William M. Clossey
	Title:	Vice President

UBS Loan Finance LLC

By:	/s/ Irja R. Otsa
	Name:	Irja R. Otsa
	Title:	Associate Director Banking Products Services, US
By:	/s/ Mary E. Evans
	Name:	Mary E. Evans
	Title:	Associate Director Banking Products Services, US

EXHIBIT A

SCHEDULE 1.1(B)

REVOLVING CREDIT COMMITMENTS OF
REVOLVING CREDIT LENDERS
AND ADDRESSES FOR NOTICES

Part 1—Revolving Credit Commitments of Revolving Credit Lenders

		Applicable
	Amount of Commitment for	Revolving Credit
Lender	Revolving Credit Loans	Percentage
Bank of America N.A. NC1-001-04-39 101 North Tryon Street Charlotte, NC 28255	$    29,212,500.00		10.250000000	%
Daily Operations Contact: Name: Nilesh Patel Telephone: (980) 386-5094 Telecopy: (704) 719-8870 npatel@baml.com
Loan Closer Contact: Name: Wayne A. Richard Telephone: (980) 388-6484 Telecopy: (704) 208-3075 wayne.a.richard@baml.com
Other Notices as Administrative Agent: Bank of America, N.A. Agency Management Address: 135 S. LaSalle Street, IL1-231-05-41 Chicago, IL 60603 Attention: Fani Davidson Telephone: (312) 923-0604 Telecopy: (312) 453-4217 fani.davidson@baml.com
Standby L/C Issuer: Bank of America, N.A. Trade Operations Address: 1 Fleet Way, PA6-580-02-30 Scranton, PA 18507 Attention: Alfonso Malave Telephone: (570) 330-4212 Telecopy: (570) 330-4186 alfonso.malave@baml.com
Commercial L/C Issuer: Bank of America, N.A. Trade Operations Address: 1 Fleet Way, PA6-580-02-30 Scranton, PA 18507 Attention: Anne Rodeghiero Telephone: (570) 330-4804 Telecopy: (212) 293-8117 anne.t.rodeghiero@baml.com

			Applicable
	Amount of Commitment for		Revolving Credit
Lender	Revolving Credit Loans		Percentage
USD PAYMENT INSTRUCTIONS: Bank of America New York NY ABA 026009593 Acct # 1366212250600 Acct Name: Corporate Credit Services Ref: GSI COMMERCE, INC.
Morgan Stanley Bank, N.A.	$	29,212,500.00		10.250000000	%
PNC Bank, N.A.	$	29,212,500.00		10.250000000	%
Deutsche Bank Trust Company Americas	$	29,212,500.00		10.250000000	%
JPMorgan Chase Bank, N.A.	$	29,212,500.00		10.250000000	%
TD Bank, N.A.	$	21,375,000.00		7.500000000	%
HSBC Bank USA, National Association	$	21,375,000.00		7.500000000	%
RBS Citizens N.A.	$	21,375,000.00		7.500000000	%
Sovereign Bank	$	21,375,000.00		7.500000000	%
UBS Loan Finance LLC	$	14,250,000.00		5.000000000	%
Raymond James Bank, FSB	$	14,250,000.00		5.000000000	%
Union Bank, N.A.	$	14,250,000.00		5.000000000	%
First Commonwealth Bank	$	7,125,000.00		2.500000000	%
Goldman Sachs Bank USA	$	3,562,500.00		1.250000000	%
Total	$	285,000,000.00		100.000000000	%

Part 2—Addresses for Notices to Borrowers and Guarantors

BORROWERS:

Name: GSI Commerce, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: GSI Commerce Solutions, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

GUARANTORS:

Name: 935 KOP Associations, LLC.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: 1075 First Global Associates, LLC
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: GSI Legacy Holdings, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: ASFD, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: GSI Commerce Call Center, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: GSI Commerce South, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: GSI Equipment, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: 7601 Trade Port Drive, LLC
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: Online Direct, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: Promotions Distributor Services Corporation
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: E-Dialog, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: GSI Interactive, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: KOP Promotions, LLC.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: Silverlign Group, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: GSI Media, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: Retail Convergence, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: SmartBargains, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: SmartBargains Security Corporation
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: SB.com, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: Retail Convergence.com, LP
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: ShopRunner, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: M3 Mobile, Incorporated
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: MBS Insight, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: VendorNet, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: GSI Marketing Services, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: Fetchback, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: RueLaLa, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: Gator Acquisition Corp.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: Gator Acquisition LLC
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

SCHEDULE 1.1(C)

TERM LOAN COMMITMENTS OF TERM LOAN LENDERS
AND ADDRESSES FOR NOTICES

Part 1—Term Loan Commitments of Term Loan Lenders

	Amount of Commitment for		Applicable Term
Lender	Term Loans		Loan Percentage
Bank of America N.A. NC1-001-04-39 101 North Tryon Street Charlotte, NC 28255	$	11,787,500.00		10.250000000	%
Daily Operations Contact: Name: Nilesh Patel Telephone: (980) 386-5094 Telecopy: (704) 719-8870 npatel@baml.com
Loan Closer Contact: Name: Wayne A. Richard Telephone: (980) 388-6484 Telecopy: (704) 208-3075 wayne.a.richard@baml.com
Other Notices as Administrative Agent: Bank of America, N.A. Agency Management Address: 135 S. LaSalle Street, IL1-231-05-41 Chicago, IL 60603 Attention: Fani Davidson Telephone: (312) 923-0604 Telecopy: (312) 453-4217 fani.davidson@baml.com
Standby L/C Issuer: Bank of America, N.A. Trade Operations Address: 1 Fleet Way, PA6-580-02-30 Scranton, PA 18507 Attention: Alfonso Malave Telephone: (570) 330-4212 Telecopy: (570) 330-4186 alfonso.malave@baml.com
Commercial L/C Issuer: Bank of America, N.A. Trade Operations Address: 1 Fleet Way, PA6-580-02-30 Scranton, PA 18507 Attention: Anne Rodeghiero Telephone: (570) 330-4804 Telecopy: (212) 293-8117 anne.t.rodeghiero@baml.com

	Amount of Commitment for		Applicable Term
Lender	Term Loans		Loan Percentage
USD PAYMENT INSTRUCTIONS: Bank of America New York NY ABA 026009593 Acct # 1366212250600 Acct Name: Corporate Credit Services Ref: GSI COMMERCE, INC.
Morgan Stanley Bank, N.A.	$	11,787,500.00		10.250000000	%
PNC Bank, N.A.	$	11,787,500.00		10.250000000	%
Deutsche Bank Trust Company Americas	$	11,787,500.00		10.250000000	%
JPMorgan Chase Bank, N.A.	$	11,787,500.00		10.250000000	%
TD Bank, N.A.	$	8,625,000.00		7.500000000	%
HSBC Bank USA, National Association	$	8,625,000.00		7.500000000	%
RBS Citizens N.A.	$	8,625,000.00		7.500000000	%
Sovereign Bank	$	8,625,000.00		7.500000000	%
UBS Loan Finance LLC	$	5,750,000.00		5.000000000	%
Raymond James Bank, FSB	$	5,750,000.00		5.000000000	%
Union Bank, N.A.	$	5,750,000.00		5.000000000	%
First Commonwealth Bank	$	2,875,000.00		2.500000000	%
Goldman Sachs Bank USA	$	1,437,500.00		1.250000000	%
Total	$	115,000,000.00		100.000000000	%

Part 2—Addresses for Notices to Borrowers and Guarantors

BORROWERS:

Name: GSI Commerce, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: GSI Commerce Solutions, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

GUARANTORS:

Name: 935 KOP Associations, LLC.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: 1075 First Global Associates, LLC
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: GSI Legacy Holdings, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: ASFD, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: GSI Commerce Call Center, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: GSI Commerce South, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: GSI Equipment, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: 7601 Trade Port Drive, LLC
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: Online Direct, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: Promotions Distributor Services Corporation
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: E-Dialog, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: GSI Interactive, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: KOP Promotions, LLC.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: Silverlign Group, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: GSI Media, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: Retail Convergence, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: SmartBargains, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: SmartBargains Security Corporation
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: SB.com, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: Retail Convergence.com, LP
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: ShopRunner, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: M3 Mobile, Incorporated
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: MBS Insight, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: VendorNet, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: GSI Marketing Services, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: Fetchback, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: RueLaLa, Inc.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: Gator Acquisition Corp.
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

Name: Gator Acquisition LLC
Address: 935 First Avenue
King of Prussia, PA 19406
Attention: Chief Financial Officer
Telephone: (610) 496-7000
Telecopy: (610) 265-1730

SCHEDULE 11.5

ADMINISTRATIVE AGENT INFORMATION

Bank of America, N.A.
NC1-001-04-39
101 North Tryon Street
Charlotte, NC 28255

Daily Operations Contact:
Name: Nilesh Patel
Telephone: (980) 386-5094
Telecopy: (704) 719-8870
npatel@baml.com

Loan Closer Contact:
Name: Wayne A. Richard
Telephone: (980) 388-6484
Telecopy: (704) 208-3075
wayne.a.richard@baml.com

Other Notices as Administrative Agent:
Bank of America, N.A.
Agency Management
Address: 135 S. LaSalle Street, IL1-231-05-41
Chicago, IL 60603
Attention: Fani Davidson
Telephone: (312) 923-0604
Telecopy: (312) 453-4217
fani.davidson@baml.com

Standby L/C Issuer:
Bank of America, N.A.
Trade Operations
Address: 1 Fleet Way, PA6-580-02-30
Scranton, PA 18507
Attention: Alfonso Malave
Telephone: (570) 330-4212
Telecopy: (570) 330-4186
alfonso.malave@baml.com

Commercial L/C Issuer:
Bank of America, N.A.
Trade Operations
Address: 1 Fleet Way, PA6-580-02-30
Scranton, PA 18507
Attention: Anne Rodeghiero
Telephone: (570) 330-4804
Telecopy: (212) 293-8117
anne.t.rodeghiero@baml.com

USD PAYMENT INSTRUCTIONS:
Bank of America
New York NY
ABA 026009593
Acct # 1366212250600
Acct Name: Corporate Credit Services
Ref: GSI COMMERCE, INC.

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Michael G. Rubin, certify that:

1. I have reviewed this report on Form 10-Q of GSI Commerce, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

May 5, 2011

By:	/s/ Michael G. Rubin
	Michael G. Rubin
	Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Michael R. Conn, certify that:

1. I have reviewed this report on Form 10-Q of GSI Commerce, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

May 5, 2011

By:	/s/ Michael R. Conn
	Michael R. Conn
	Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350 of Chapter 63 of Title 18 of the United States Code), each of the undersigned officers of GSI Commerce, Inc. (the “Company”), does hereby certify with respect to the Quarterly Report on Form 10-Q for the period ended April 2, 2011 (the “Report”) that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ Michael G. Rubin
	Michael G. Rubin
	Chief Executive Officer

May 5, 2011

By:	/s/ Michael R. Conn
	Michael R. Conn
	Chief Financial Officer

May 5, 2011

The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350 of Chapter 63 of Title 18 of the United States Code) and is not being filed as part of the Report or as a separate disclosure document.