Agreement - SportsLine USA Inc. and CBS Inc.
AGREEMENT
This Agreement (the "Agreement") is entered into as of the 5th day of
March, 1997 (the "Effective Date") between SPORTSLINE USA, INC., a Delaware
corporation with principal offices at 6340 NW 5th Way, Ft. Lauderdale, FL 33309
("SportsLine USA Inc.") and CBS INC., a New York corporation, with principal
offices at 51 West 52nd Street, New York, New York 10019 ("CBS").
RECITALS
A. SportsLine USA Inc. owns and operates the SportsLine USA Inc. Site
(as hereinafter defined).
B. SportsLine USA Inc. desires that CBS grant it the right to change
the name of the SportsLine USA Inc. Site to "CBS SportsLine" and to display
certain CBS sports-related content on such site.
C. SportsLine USA Inc. further desires that CBS promote the site to be
known as "CBS SportsLine" during certain CBS Television Network broadcasts as
specified herein.
D. In consideration of the performance by CBS of its obligations
hereunder, SportsLine USA Inc. desires to sell to CBS and CBS desires to
purchase from SportsLine USA Inc. a specified number of shares of SportsLine USA
Inc.'s common stock, in accordance with the terms and conditions set forth in
this Agreement.
NOW, THEREFORE, SportsLine USA Inc. and CBS agree as follows:
1. DEFINITIONS
1.1 "AD GUARANTEE" shall have the meaning ascribed to it in
subparagraph 8.1 hereof;
1.2 "AD SHARES" shall have the meaning ascribed to it in subparagraph
10.2 hereof;
1.3 "CBS COMPETITOR" means any person, firm or corporation, other than
CBS, who is engaged either directly, or indirectly through an Affiliate, in
radio or television programming or program distribution (whether free
over-the-air, cable, telephone, local, microwave, or direct broadcast satellite
or otherwise) in North America. For purposes of this paragraph an "Affiliate" of
a person, firm or corporation shall mean another person, firm or corporation
that directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such person, firm or
corporation;
1.4 "CBS CONTENT PAGES" shall have the meaning ascribed to it in
subparagraph 8.4 hereof;
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1.5 "CBS INTERNET SITE " shall have the meaning ascribed to it in
subparagraph 7.4 hereof;
1.6 "CBS LICENSE GUIDELINES AND RESTRICTIONS" means the clearance,
form, format and use restrictions and procedures set forth in Exhibit C attached
hereto and hereby made a part hereof which SportsLine USA, Inc. shall adhere to
in its use of CBS Sports Content, CBS Logos, CBS Merchandise and SportsLine USA
Inc. Content on the CBS SportsLine Site and on any Other SportsLine Site linked
from the CBS SportsLine Site (as such capitalized terms are hereinafter
defined);
1.7 "CBS LOGOS" means the logos specified in Exhibit B attached hereto
and hereby made a part hereof; the term "CBS Logos" shall not include the "CBS
SportsLine" logo.
1.8 "CBS MERCHANDISE" shall have the meaning ascribed to it in
subparagraph 8.7 hereof;
1.9 "CBS SPORTS CONTENT" means that certain Television Related Sports
Content and any additional sports-related Content which CBS has the right to
license to use on the Internet and which CBS and SportsLine USA Inc. mutually
agree pursuant to subparagraph 5.1 hereof should be placed on the CBS SportsLine
Site (as hereinafter defined), including, but not limited to the Content set
forth in Exhibit A attached hereto and hereby made a part hereof, to the extent
CBS already holds Internet rights to such Content. Nothing herein shall be
construed to grant SportsLine USA, Inc. any rights to CBS Radio Content or any
Content of CBS Cable;
1.10 "CBS SPORTS EVENT BROADCAST" shall have the meaning ascribed to it
in subparagraph 8.2 hereof;
1.11 "CBS SPORTSLINE SITE" means the SportsLine USA Inc. Site to be
renamed "CBS SportsLine" as provided herein, which shall be operated by
SportsLine USA Inc. and accessible through the URL http://cbs.sportsline.com and
/or such other URL as may be agreed between the parties;
1.12 "COMMON STOCK" shall have the meaning ascribed to it in
subparagraph 10.1 hereof;
1.13 "CONTENT" means text, graphics, photographs, video, audio and/or
other data or information relating to any subject;
1.14 "CONTENT SHARES" shall have the meaning ascribed to it in
subparagraph 10.1 hereof;
1.15 "CONTRACT YEAR" shall have the meaning ascribed to it in
subparagraph 3.1 hereof;
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1.16 "DEFICIT AD AMOUNT" shall have the meaning ascribed to it in
subparagraph 10.3 hereof;
1.17 "EFFECTIVE DATE" shall have the meaning ascribed to it in the
opening paragraph hereof;
1.18 "INTELLECTUAL PROPERTY RIGHTS" means all inventions, discoveries,
trademarks, patents, trade names, copyrights, jingles, know-how, intellectual
property, software, shop rights, licenses, developments, research data, designs,
technology, trade secrets, test procedures, processes, route lists, computer
programs, computer discs, computer tapes, literature, reports and other
confidential information, intellectual and similar intangible property rights,
whether or not patentable or copyrightable (or otherwise subject to legally
enforceable restrictions or protections against unauthorized third party usage),
and any and all applications for, registrations of and extensions, divisions,
renewals and reissuance of, any of the foregoing, and rights therein, including
without limitation (i) rights under any royalty or licensing agreements, and
(ii) programming and programming rights (including, but not limited to sports
material and outtakes), whether on film, tape or any other medium, whether
completed, in production or otherwise, and whether arising by contract, statute,
common law or otherwise;
1.19 "INTERNET" means a global network of interconnected computer
networks, each using the Transmission Control Protocol/Internet Protocol and/or
such other standard network interconnection protocols as may be adopted from
time to time, which is used to transmit Content that is directly or indirectly
delivered to a computer or other digital electronic device for display to an
end-user, whether such Content is delivered through on-line browsers, off-line
browsers, or through "push" technology, electronic mail, broadband distribution,
satellite, wireless or otherwise;
1.20 "INTERNET SITE" means any site or service delivering Content on or
through the Internet, including, without limitation, any on-line service such as
America Online, Compuserve, Prodigy and the Microsoft Network;
1.21 "INTERNET ADVERTISING DEFICIT" shall have the meaning ascribed to
it in subparagraph 8.8 hereof;
1.22 "NET ADVERTISING REVENUES" shall have the meaning ascribed to it
in subparagraph 8.5 hereof;
1.23 "NET MERCHANDISING REVENUES" shall have the meaning ascribed to it
in subparagraph 8.7 hereof;
1.24 "NEWS REPORTING" means the use of Television Related Sports
Content to report current news events, the use of which is licensed or which
does not require any third party license;
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1.25 "OTHER SECURITIES" shall have the meaning ascribed to it in
subparagraph 11.1 hereof;
1.26 "OTHER SPORTSLINE SITE" means any Internet Site owned in whole or
in part and/or operated by SportsLine USA Inc. other than the CBS SportsLine
Site or any Third Party Site;
1.27 "SIGNATURE EVENT" shall have the meaning ascribed to it in
subparagraph 8.5 hereof;
1.28 "SPORTSLINE USA, INC. CONTENT" shall have the meaning ascribed to
it in subparagraph 7.2 hereof;
1.29 "SPORTSLINE USA, INC. SITE" means that certain Internet Site
currently known as "SportsLine" and accessible through the URL
"http://www.sportsline.com"; it being understood that the term "SportsLine USA
Inc. Site" shall not include any Third Party Site or Other SportsLine Site;
1.30 "STOCKHOLDER AGREEMENT" shall have the meaning ascribed to it in
paragraph 13 hereof;
1.31 "TELEVISION RELATED SPORTS CONTENT" consists of video broadcast on
television and other Content which was used in the production and/or broadcast
of video on television;
1.32 "THIRD PARTY SITE" shall mean any Internet Site developed,
operated or maintained for a third party by SportsLine USA Inc.;
1.33 "UNITED STATES" means the United States of America, its
territories and possessions, including Puerto Rico;
1.34 "WARRANT" shall have the meaning ascribed to it in subparagraph
10.4 hereof.
2. LICENSES
2.1 CBS SPORTS CONTENT LICENSE. CBS hereby grants to SportsLine USA
Inc. during the term of this Agreement the exclusive right and license (to the
extent CBS owns or controls exclusive right or license) to use, copy, publicly
display, publicly perform, distribute or otherwise make available through the
CBS SportsLine Site and otherwise through the Internet, the CBS Sports Content,
subject to the terms and conditions contained herein. CBS agrees that users of
the CBS SportsLine Site may view, access, retrieve, copy and print only for
noncommercial private home use any CBS Sports Content distributed hereunder on
the CBS SportsLine Site. SportsLine USA, Inc. will present all video CBS Sports
Content in a streaming format or in another format designed to prevent
redistribution.
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2.2 CBS LOGO LICENSE. CBS hereby grants to SportsLine USA Inc. a
non-exclusive license to use the CBS Logos during the term of this Agreement in
connection with SportsLine USA Inc.'s operation of the CBS SportsLine Site,
subject to the terms and conditions contained herein. Nothing in this Agreement
grants SportsLine USA Inc. ownership or other rights in or to the CBS Logos,
except in accordance with this license.
2.3 CBS LICENSE GUIDELINES AND RESTRICTIONS. SportsLine USA Inc. shall
use the licenses granted by CBS hereunder subject to the terms and conditions of
this Agreement including, without limitation, and any restrictions or
requirements set forth in the CBS License Guidelines and Restrictions. It is
understood that the CBS License Guidelines and Restrictions may be revised,
frequently during the first three (3) months of the term of this Agreement and
from time to time thereafter, as mutually agreed upon by the parties to reflect
any changes in the business, practice, procedures or policies of CBS or
SportsLine USA Inc.
2.4 LICENSE EXEMPTIONS. SportsLine USA Inc. acknowledges that:
(i) CBS, in CBS's ordinary and regular course of
business, has the right to authorize or license the following
CBS or CBS related entities (herein individually referred to
as a "CBS Related Entity"and collectively referred to as the
"CBS Related Entities") the use of CBS Sports Content on said
CBS Related Entity's Internet Sites solely for the purpose of
(i) the advertising, marketing and promoting CBS Sports Event
Broadcasts to be exhibited on the CBS Related Entity's
facilities and to advertise, market and promote the CBS
Related Entity ("Promotion") and (ii) News Reporting:
(A) the CBS Television Network (e.g. CBS
Entertainment, CBS News and CBS Sports) and any CBS owned and
operated or affiliated standard television station;
(B) CBS Cable (e.g. CBS EYE ON PEOPLE, THE NASHVILLE
NETWORK (TNN), COUNTRY MUSIC TELEVISION (CMT) and CBS
TELENOTICIAS) and any CBS non-standard television network or
any CBS owned or affiliated non-standard television
facilities.
(C) the CBS Radio Network and any CBS owned and
operated or affiliated radio station.
CBS will advise all of said CBS Related Entities that they do not have
the right to use CBS Sports Content for any purpose other than News
Reporting and Promotion and that if they want to make a use of the CBS
Sports Content other than for a News Reporting or Promotion purpose,
CBS and SportsLine USA, Inc. have agreed, in their agreement
establishing the CBS SportsLine Site, that the CBS Related Entities
must negotiate in
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good faith with CBS SportsLine the terms and conditions for such use
and that a fee or other form of compensation will be due and owing for
such use. The CBS Related Entities will also be advised that (i) absent
reaching an agreement with CBS SportsLine, it was agreed that the CBS
Related Entities will pay to CBS SportsLine fifty percent (50%) of the
Net Advertising Revenues generated from the CBS Related Entity's web
site page containing the CBS Sports Content and (ii) that the CBS
Related Entity's Internet Site should have a link to the CBS SportsLine
Site on its home or sports page.
(ii) CBS may license CBS Sports Content to any entity, which
is not a CBS Related Entity, throughout the world in perpetuity in any
media now known or hereafter developed, other than the Internet,
including, without limitation, all forms of standard and non-standard
television, in connection with home video, CD-ROM and other interactive
multi-media distribution;
(iii) CBS may use, and authorize others to use CBS Sports
Content to advertise, market and/or promote in any media now known or
hereafter developed, including the Internet, CBS, any CBS Related
Entities, any programming of CBS and such CBS Related Entities, or any
distributor of such programming. CBS will use reasonable efforts to
establish a promotional link from any Internet Site page containing the
CBS Sports Content to the CBS SportsLine Site.
As used herein "standard television" shall mean terrestrial
over-the-air free television and "non-standard television" shall mean
all forms of television now existing or in the future developed, other
than standard television, including but not limited to cable
television, pay-cable television, master antenna television,
closed-circuit television, in-flight, hotel, motel or hospital room
service, and multi-point distribution videograms (such as videodiscs
and videocassettes and other copies of audiovisual works in all forms,
whether now or hereafter known or developed).
2.5 USE BY CBS SPORTSLINE OF CBS TELEVISION STATION SPORTS CONTENT. If
any CBS owned and operated television station creates any Television Related
Sports Content ("Television Station Sports Content") that is contained on the
television station's Internet Site and CBS SportsLine wishes to use the
Television Station Sports Content on the CBS SportsLine Site, CBS SportsLine and
the CBS Television Station shall negotiate in good faith the terms and
conditions for the inclusion of the Television Station Sports Content on the CBS
SportsLine Site. Absent an agreement, and provided there are no third party
restrictions with respect to such rights to the contrary, CBS SportsLine will
(A) pay to the CBS Television Station fifty percent (50%) of the Net Advertising
Revenues generated from the CBS SportsLine Site page containing the Television
Station's Sports Content and (B) link to the CBS Television Station's Internet
Site. With respect to CBS Television Network affiliates, SportsLine USA Inc.
will need to negotiate separate agreements.
2.6 USE BY CBS RELATED ENTITIES OF NON-CBS CONTENT FROM THE CBS
SPORTSLINE
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SITE. CBS Related Entities shall have the right to use non-CBS Content from the
CBS SportsLine Site on their Internet Site; provided that such use does not
exceed (i) a headline page, (ii) a sports score page and (iii) three (3) stories
or similar items, provided that such Content (A) links to the CBS SportsLine
Site and (B) the use of such Content does not violate any agreements which CBS
and/or SportsLine USA, Inc. have with a third party. CBS will advise all CBS
Related Entities that they do not have the right to use any non-CBS Content from
the CBS SportsLine Site for any purpose other than to publish such Content on
their Internet Site. The CBS Related Entities will also be advised that absent
reaching an agreement with CBS SportsLine, it was agreed that the CBS Related
Entities will pay to SportsLine USA, Inc. fifty percent (50%) of the Net
Advertising Reserves generated from the CBS Related Entity's Internet Site page
containing such non-CBS CBS SportsLine Content and that the CBS Related Entity's
Internet Site shall have a link to the CBS SportsLine Site on its sports page
and any page containing such non-CBS Content.
3. TERM
3.1 INITIAL TERM. This Agreement shall begin on the Effective Date and
shall continue in full force and effect through and including December 31, 2001,
unless it is terminated earlier in accordance with the terms and conditions
contained herein. Each successive one (1) year period during the term hereof
commencing January 1 and ending December 31 shall sometimes be referred to
herein as a "Contract Year," except that the first Contract Year shall commence
on the Effective Date and end on December 31, 1997.
3.2 EXTENSION OF TERM. The parties shall negotiate exclusively with
each other in good faith for a period of six (6) consecutive months (the
"Negotiation Period") with respect to any extension(s) of the term of this
Agreement at any time after July 1, 2000. The Negotiation Period shall be deemed
to commence either (i) upon the date of written notice from one party to the
other to initiate such Negotiation Period or (ii) on January 1, 2001, whichever
occurs first. At no time prior to or during the Negotiating Period shall
SportsLine USA, Inc. or CBS discuss, negotiate or enter into any agreement with
any third party for the comprehensive rights set forth in this Agreement. If at
the end of the Negotiating Period, CBS and SportsLine USA Inc. have not reached
agreement, CBS shall notify SportsLine USA Inc. in writing of the terms on which
it is then willing to extend the term of this Agreement (the "CBS Offer") and
SportsLine USA Inc. shall have a period of thirty (30) days in which to accept
the CBS Offer. If SportsLine USA Inc. does not accept the CBS Offer, SportsLine
USA Inc. shall have the right until September 30, 2001 (the "Offer Deadline") to
enter into any agreement with any third party with respect to the right to use
Television Related Sports Content on any Internet Site after the expiration of
this Agreement (a "Third Party Offer"), provided, however, that SportsLine USA
Inc. first in each instance furnish CBS a copy of all of the terms and
conditions of such Third Party Offer, signed by SportsLine USA Inc. and by the
third party making such offer. CBS shall only consider the terms and conditions
of any Third Party Offer which are readily reducible to a determinable sum of
money. If prior to the Offer Deadline, SportsLine USA, Inc. receives any Third
Party Offer which contains terms and conditions which do not exceed the CBS
Offer by more than ten percent
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(10%), CBS shall have the option, exercisable no later than twenty (20) business
days after its receipt of notice of such Third Party Offer, to offer SportsLine
USA, Inc. the same terms and conditions contained in such Third Party Offer.
Except as otherwise expressly provided in this Agreement, during the term of
this Agreement and for a period of six (6) months thereafter, SportsLine USA
Inc. shall not use Television Related Sports Content provided by any CBS
Competitor on any Internet Site or use the logos or tradenames of any CBS
Competitor to brand any Internet Site, unless SportsLine USA Inc.'s right to use
such Television Related Sports Content or such logos or tradenames is derived
from (i) the acceptance by SportsLine USA Inc. of a Third Party Offer which
exceeds the CBS Offer by more than ten percent (10%), or (ii) the acceptance by
SportsLine USA Inc. of a Third Party Offer which does not exceed the CBS Offer
by more than ten percent (10%), which Third Party Offer CBS declined to match
within twenty (20) business days after receiving written notice thereof from
SportsLine USA Inc.
4. EXCLUSIVE RELATIONSHIP
4.1 EXCLUSIVITY OBLIGATIONS - SPORTSLINE USA INC. Except as otherwise
specified in this Agreement, during the term of this Agreement, without CBS's
prior written approval:
(i) SportsLine USA Inc. shall not display, perform,
distribute, transmit or otherwise make available in any media now known
or hereafter developed, other than through the CBS SportsLine Site, any
CBS Sports Content, CBS Logos, CBS Merchandise (as defined in
subparagraph 8.7 hereof) or any portion thereof;
(ii) SportsLine USA Inc. shall not display, perform,
distribute, transmit or otherwise make available in any media now known
or hereafter developed, including, without limitation, on the CBS
SportsLine Site or on any Other SportsLine Site, any non-CBS or
non-SportsLine USA Inc. Television Related Sports Content; provided,
however, SportsLine USA Inc. may use such Television Related Sports
Content (i) in connection with its operation of a Third Party Site,
(ii) in connection with News Reporting by SportsLine USA Inc. or (iii)
if furnished to SportsLine USA Inc. under its Golf Channel Agreement as
currently in effect excluding any renewals unless such renewals are
mutually agreed to by CBS and SportsLine USA, Inc.; or
(iii) SportsLine USA Inc. shall not advertise, promote or
market in any media now known or hereafter developed, including the
Internet, any non-CBS or non-SportsLine USA Inc. Television Related
Sports Content, except to the extent that CBS would permit such
advertising, promotion or marketing on the CBS Television Network
pursuant to its Date & Time Network Guidelines (by way of example, the
CBS Date & Time Network Guidelines currently permit the advertising of
pay-per-view events on the CBS Television Network); it is understood
that the foregoing restrictions and allowances may be revised by CBS to
promote maximizing advertising revenues for the CBS SportsLine Site in
keeping with CBS advertising policy; provided, however, SportsLine USA
Inc. may advertise, promote or market such Television Related Sports
Content (i) in
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connection with its operation of a Third Party Site, (ii) in connection
with News Reporting by SportsLine USA Inc. or (iii) if furnished to
SportsLine USA Inc. under its Golf Channel Agreement as currently in
effect excluding any renewals unless such renewals are mutually agreed
to by CBS and SportsLine USA Inc.
4.2 EXCLUSIVITY OBLIGATIONS - CBS. Except as otherwise specified in
this Agreement, during the term of this Agreement, without SportsLine USA Inc.'s
prior written approval (i) CBS shall not display, perform, distribute, transmit
or otherwise make any Television Related Sports Content available on any
Internet Site, other than on the CBS SportsLine Site, and (ii) CBS shall not
own, in whole or in part, and/or operate for or on behalf of CBS Sports an
Internet Site competitive to the CBS SportsLine Site.
5. CBS SPORTS CONTENT
5.1 CLEARANCE - GENERAL. Subject to the provisions of subparagraphs
5.2, 5.3 and 5.4 hereof, SportsLine USA Inc. shall have access to all CBS Sports
Content. CBS shall also attempt in accordance with standard CBS business
practices, including such editorial and financial considerations, as determined
by CBS, to obtain Internet rights (other than with respect to on-air sports
talent and music) for all other CBS sports-related Content not yet cleared for
Internet use which CBS and SportsLine USA Inc. mutually desire to place on the
CBS SportsLine Site. Any such Content once cleared for Internet use shall be
deemed CBS Sports Content. Except as provided by subparagraphs 5.2 and 5.3
hereof, in the event that there are costs associated with obtaining any
additional Internet rights (whether for already or subsequently cleared CBS
Sports Content), prior to paying or entering into any arrangements to pay such
costs, CBS and SportsLine USA Inc. shall in good faith mutually agree on how
such costs shall be allocated between them.
5.2 CLEARANCE - TALENT. It is understood that CBS shall have no
obligation to secure the right to perform original services on the Internet from
its on-air sports talent. Without limiting the foregoing, CBS shall permit
SportsLine USA Inc. to contact all CBS on-air sports talent whose services have
not been secured by CBS to perform original services on the Internet. SportsLine
USA will consult CBS prior to contacting any such talent. CBS shall have the
right to be present at all presentations, conferences, discussions, negotiations
or other meetings between SportsLine USA Inc. and such CBS talent. SportsLine
USA Inc. shall have the right to negotiate and enter into any agreement with
such CBS talent with respect to the use of their original services on the CBS
SportsLine Site, so long as such negotiation or agreement does not infringe upon
or conflict or interfere with the rights of CBS or any third party. SportsLine
USA Inc. agrees that CBS shall at all times have first priority over such
talent's services. SportsLine USA Inc. shall be solely responsible for any
payments to be made to such talent for the use of such talent's original
services on the CBS SportsLine Site.
5.3 CLEARANCE - MUSIC. In the event that SportsLine USA, Inc. desires
to use any music contained in any CBS Sports Content on the CBS SportsLine Site,
prior to such use,
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SportsLine USA Inc. shall (i) report to the applicable music rights society on
behalf of CBS, all titles and publishers of all such music and, (ii) secure, at
its sole cost and expense, and pay for all performing, duplication and/or
recording rights licenses, if any, necessary for the use of such music on the
Internet. CBS shall endeavor to deliver to SportsLine USA Inc. accurate music
cue sheets for all such music.
5.4 DELIVERY. CBS shall deliver, at times reasonably requested by
SportsLine USA Inc., all CBS Sports Content in a mutually agreed form and
format. SportsLine USA Inc. shall be responsible for and shall reimburse CBS for
all actual and reasonable costs and expenses, above and beyond those expenses
normally incurred by CBS in the ordinary course of business, which are incurred
by CBS in preparing and/or delivering the CBS Sports Content in such form and
format, so long as CBS has notified SportsLine USA Inc. in advance, and
SportsLine USA Inc. has authorized the expenditure, of such costs and expenses.
5.5 CONTROL AND USE. During the term of this Agreement, CBS shall have
full and complete editorial and creative control and approval over the
presentation, look and feel of the CBS Sports Content as it appears on the CBS
SportsLine Site, and SportsLine USA Inc. may use any CBS Sports Content on the
CBS SportsLine Site, subject to any restrictions or requirements set forth in
the CBS License Guidelines and Restrictions. SportsLine USA Inc. shall be solely
responsible for the engineering, production, maintenance and monitoring of all
CBS Sport Content which SportsLine USA Inc. makes available on the CBS
SportsLine Site and for any commercial services that SportsLine USA Inc. offers
or makes available on the CBS SportsLine Site on behalf of CBS, including
without limitation any such services that SportsLine USA Inc. offers or makes
available pursuant to subparagraph 8.7 hereof. SportsLine USA Inc. shall have
the right to edit and revise the CBS Sports Content subject to any restrictions
or requirements set forth in the CBS License Guidelines and Restrictions. In
addition, subject to any restrictions or requirements in the CBS License
Guidelines and Restrictions, SportsLine USA Inc. shall have the right, but not
the obligation, to correct any errors, omissions and/or inaccuracies in the CBS
Sports Content identified by SportsLine USA Inc. or reported to SportsLine USA
Inc. by CBS SportsLine Site users. Notwithstanding anything to the contrary
contained herein, upon written notice from CBS, SportsLine USA Inc. shall cease
using any CBS Sports Content (i) which, in CBS's sole opinion, conflicts,
interferes with or is detrimental to CBS's reputation or business or (ii) which
becomes subject to any third party restriction or claim which would prohibit,
limit or restrict the use thereof on the Internet.
6. LOGOS
6.1 CBS LOGOS AND "SPORTSLINE" LOGOS. CBS shall deliver to SportsLine
USA Inc. a copy of each of the CBS Logos in the form in which it may be used by
SportsLine USA Inc. on the CBS SportsLine Site. SportsLine USA Inc. acknowledges
that the CBS Logos, including, without limitation, the trademark "CBS," are
trademarks owned or controlled by CBS Inc. and that all use by SportsLine USA
Inc. of such CBS Logos shall inure to CBS's benefit. CBS acknowledges that the
logo "SportsLine" is owned or controlled by SportsLine USA Inc. and that
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all use thereof by CBS shall inure to the benefit of SportsLine USA Inc. Each
party shall maintain such quality standards with respect to the use of the
other's logos, and otherwise use the other's logos subject to any restrictions
or requirements in the CBS License Guidelines and Restrictions.
6.2 CBS SPORTSLINE LOGO. CBS and SportsLine USA Inc. shall jointly
develop the "CBS SportsLine" logo. It is understood that CBS shall have the
right to use the "CBS SportsLine" logo in the exercise of its advertising,
promotional and marketing rights hereunder and SportsLine USA Inc. shall have
the right to use the "CBS SportsLine" logo in connection with its operation of
the CBS SportsLine Site and its advertising, promotion and marketing of the CBS
SportsLine Site in any media now known or hereafter developed. Each party shall
maintain such quality standards with respect to the use of the "CBS SportsLine"
logo, and otherwise use the "CBS SportsLine" logo subject to any restrictions or
requirements in the CBS License Guidelines and Restrictions. Except as otherwise
provided by subparagraph 6.1 above, the use by SportsLine USA Inc. and CBS of
the "CBS SportsLine" logo shall inure to the benefit of each of them equally.
6.3 USE OF SPORTSLINE LOGO ON OTHER INTERNET SITES. Subject to the
provisions of subparagraph 7.5 hereof, CBS acknowledges that SportsLine USA Inc.
may operate any Other SportsLine Site under the SportsLine name or logo which
(i) contains Content that either relates primarily to events occurring outside
of the United States or is intended to be delivered primarily to residents
outside of the United States (a "Foreign SportsLine Site") or (ii) is mutually
agreed to. SportsLine USA Inc. may also use the name "SportsLine" in connection
with its operation of any Third Party Site but only as a credit to identify
SportsLine USA Inc. as the operator of such site; it being understood that no
Third Party Site shall use the word "SportsLine" as the name or logo of such
site. Notwithstanding anything to the contrary contained herein, unless
otherwise mutually agreed, (i) no Third Party Site shall have the look and feel
of the CBS SportsLine Site and (ii) no Foreign SportsLine Site will use a
graphic look similar to the CBS SportsLine Site.
6.4 SIMILAR TRADEMARKS. CBS shall not file any application in any
country to register a trademark which contains the word "SportsLine," or is the
same as, similar to, or deceptive or misleading with respect to the "SportsLine"
logo, the "CBS SportsLine" logo or any other SportsLine USA Inc. trademark and
SportsLine USA Inc. shall not file any application in any country to register a
trademark which contains "CBS," or is the same as, similar to, or deceptive or
misleading with respect to the CBS Logos, the "CBS SportsLine" logo, or any
other CBS trademark, except as provided under subparagraph 6.3 above. If any
application for registration is filed in any country by CBS or SportsLine USA
Inc. in contravention of this subparagraph 6.4, the other party shall have the
right to take appropriate action against the infringing party, including seeking
injunctive relief, to prohibit or otherwise restrain the infringing party's use
of the infringing mark.
6.5 NOTICE OF THIRD PARTY INFRINGEMENT OF TRADEMARKS. In the event that
either party learns of any infringement, threatened infringement, or passing off
of the other's trademarks or
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logos licensed for used in connection with this Agreement, or that any third
party claims or alleges that the such trademarks or logos are liable to cause
deception or confusion to the public, then such party shall notify the other
party of the particulars thereof. It is understood that each party shall defend
and bear the cost of defending its own trademarks and logos, except that the
parties shall jointly defend and share equally in the cost of defending the "CBS
SportsLine" logo.
6.6 TERMINATION OF USE. Upon the expiration or earlier termination of
this Agreement, SportsLine USA Inc. and CBS shall each cease all use of the "CBS
SportsLine" logo and all use of the logos of the other, as well as, discontinue
the use of the CBS SportsLine URL, as soon as commercially and technically
practicable, but in no event shall any such use continue for more than fifteen
(15) days after the expiration, or for more than thirty (30) days after the
earlier termination, of this Agreement.
7. OPERATION OF CBS SPORTSLINE SITE
7.1 RENAMING OF THE SPORTSLINE URL. SportsLine USA Inc. shall take all
steps necessary (including filing any required domain name registration or
amendment) to adopt a new URL "http://cbs.sportsline.com" for the CBS SportsLine
Site. The new URL shall access the CBS SportsLine Site during the term of this
Agreement.
7.2 APPROVAL OF SPORTSLINE USA INC. CONTENT. SportsLine USA Inc. agrees
that all Content not furnished by CBS which SportsLine USA Inc. intends to use
on the CBS SportsLine Site ("SportsLine USA Inc. Content") shall include only
sports-related Content. During the term of this Agreement, any use of the
SportsLine USA Inc. Content on the CBS SportsLine Site shall be subject to any
restrictions or requirements set forth in the CBS License Guidelines and
Restrictions. Notwithstanding anything to the contrary contained herein, CBS
shall have the right to demand the withdrawal from the CBS SportsLine Site of
any SportsLine USA Inc. Content which in CBS's sole opinion conflicts,
interferes with or is detrimental to CBS's reputation or business. Upon written
notice from CBS setting forth the reason for such withdrawal, SportsLine USA
Inc. shall cease using any such Content on the CBS SportsLine Site as soon as
commercially and technically feasible, but in any event within fifteen (15) days
after the date of the receipt of CBS's notice. If SportsLine USA Inc. cannot
cease using such Content within seventy-two (72) hours, SportsLine USA Inc. will
provide CBS with the details of why the cessation cannot be accomplished within
seventy-two (72) hours. Subject to the provisions of subparagraph 7.5 hereof,
SportsLine USA Inc. shall have the right to place any such Content on any other
Internet Sites provided that such Internet Site shall not have the look and feel
of the CBS SportsLine Site, shall not contain the word "SportsLine" or "CBS" in
its name or logo nor have any other name or logo similar to, or deceptive or
misleading with respect thereto ("private labeled Content"). Notwithstanding the
foregoing, and subject to the provisions of subparagraph 7.5 hereof, SportsLine
USA Inc. may establish, subject to any restrictions or requirements in the CBS
License Guidelines and Restrictions, a cross-link between any private labeled
Content and any page within the CBS SportsLine Site which does not contain any
CBS Sports Content, CBS Logos or CBS Merchandise (as defined in subparagraph 8.7
hereof). If the removal of any
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Content (other than Content related to gambling, alcohol or tobacco) as a result
of a request by CBS can reasonably be expected to result in a material adverse
effect to the CBS SportsLine Site, which, for purposes of this Paragraph 7.2
shall mean any effect, such as a loss of existing or potential revenues, of more
than (i) during the first ten (10) months of this Agreement One Million Dollars
($1,000,000) and (ii) thereafter, ten percent (10%) of the revenues of
SportsLine USA, Inc. during the preceding fiscal year, then SportsLine USA, Inc.
shall have the right to terminate this Agreement unless CBS agrees to compensate
SportsLine USA Inc. for the effect of such removal in a mutually agreed amount.
7.3 CROSS LINKS BETWEEN THE CBS SPORTSLINE SITE AND SPORTSLINE USA INC.
OWNED OR OPERATED SITES. If SportsLine USA Inc. desires to establish a
cross-link between the CBS SportsLine Site and any Foreign SportsLine Site or
Third Party Site, SportsLine USA Inc. shall notify CBS in advance in writing.
Subject to the provisions of subparagraph 7.5 hereof, CBS shall permit
SportsLine USA Inc. to establish, subject to any restrictions or requirements in
the CBS License Guidelines and Restrictions, such cross-linkage if CBS has
determined that the cross-link will not in CBS's sole opinion, conflict with,
interfere with or be detrimental to CBS's reputation or business or violate any
agreement to which CBS is a party. Notwithstanding anything to the contrary
contained herein, SportsLine USA Inc. shall not operate any Other SportsLine
Site or Third Party Site relating to the 1998 Winter Olympics without CBS's
prior approval which will not be unreasonably withheld. SportsLine USA Inc.
acknowledges that no CBS Sports Content may be used on any Foreign SportsLine
Site or any Third Party Site without CBS's prior written approval.
7.4 CROSS LINKS BETWEEN THE CBS SPORTSLINE SITE AND CBS INTERNET SITES.
CBS and SportsLine USA Inc. agree that, subject to any restrictions or
requirements in the CBS License Guidelines and Restrictions a link shall be
established to the CBS SportsLine Site and all Internet Sites operated by or on
behalf of CBS (a "CBS Internet Site") which include any sports Content. This
provision excludes CBS Radio Network, CBS Radio Stations and CBS Cable entities.
7.5 PROHIBITION OF GAMBLING ACTIVITIES. SportsLine USA Inc. at no time
shall publicize, advertise, distribute, transmit, promote or otherwise make
available information about gambling or lotteries in violation of any federal,
state, local or foreign law, regulation, order or act of government or
governmental instrumentality to which either CBS or SportsLine USA Inc. is
subject, nor shall SportsLine USA Inc. engage in, aid or abet, any such gambling
or lottery activity in violation of any federal, state, local or foreign law,
regulation, order or act of government or governmental instrumentality to which
either CBS or SportsLine USA Inc. is subject. Furthermore, SportsLine USA Inc.
shall not at any time permit or authorize any cross-links between the CBS
SportsLine Site and any Other SportsLine Site or any Third Party Site that
publicizes, advertises, distributes, transmits, promotes or otherwise makes
available information about gambling or lotteries in violation of any federal,
state, local or foreign law, regulation, order or act of government or
governmental instrumentality to which either CBS or SportsLine USA Inc. is
subject.
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7.6 PROMOTION OF CBS SPORTSLINE SITE ON THE INTERNET. SportsLine USA,
Inc. shall have the right to use the Content from the CBS SportsLine Site to
advertise, market or promote the CBS SportsLine Site on other Internet Sites,
subject to CBS's approval, which will not be unreasonably withheld.
8. ADVERTISING, PROMOTIONAL AND MERCHANDISING OBLIGATIONS
8.1 GENERAL. During each Contract year during the term hereof, CBS
shall (i) arrange for the placement of broadcast advertising and promotion of
the CBS SportsLine Site in the type of media set forth in the Advertising and
Promotion placement schedule set forth in Exhibit D attached hereto and hereby
made a part hereof and (ii) provide such advertising and promotion in the
minimum amounts specified in Exhibit E attached hereto and hereby made a part
hereof (the "Ad Guarantee"). SportsLine USA Inc. shall pay for such advertising
and promotion provided by CBS in accordance with paragraph 10 hereof. The value
of all broadcast advertising and promotion provided to SportsLine USA, Inc.
shall be based upon the average paid unit price, excluding barter, for spots
purchased during the specific CBS Television Network broadcast in which the
advertising or promotion occurs, except as otherwise specified in Exhibit E. The
value of all advertising and promotion shall be subject to audit by SportsLine
USA Inc. pursuant to paragraph 12 hereof.
8.2 PLACEMENTS DURING CBS TELEVISION NETWORK BROADCASTS. Without
limiting the generality of subparagraph 8.1 above, at least semi-annually, CBS
shall, in consultation with SportsLine USA Inc., develop a schedule for the
placement of advertising and promotion of the CBS SportsLine Site and/or the URL
for the CBS SportsLine Site (an "ad placement") occurring in connection with a
CBS Sports broadcast of a sports events over the CBS Television Network during
the term of this Agreement (a "CBS Sports Event Broadcast") or any other ad
placement. Notwithstanding the foregoing, CBS shall not have to make any ad
placements if the exigencies of time or, despite CBS's reasonable efforts,
current or future contractual obligations, prevent or restrict CBS from doing
so. SportsLine USA Inc. acknowledges that CBS is contractually prohibited from
making any ad placements within the CBS Sports Event Broadcast of the Masters
Golf Tournament. CBS agrees that a minimum of seventy percent (70%) of the value
of all advertisement and promotion to be paid for by SportsLine USA Inc. during
each Contract Year shall be placed during, within and/or adjacent to CBS Sports
Event Broadcasts. CBS will deliver to SportsLine USA, Inc., within thirty (30)
days after the end of each Contract Year a statement, certified by an officer of
CBS, summarizing the value of the ad placements that CBS made for the CBS
SportsLine Site during such Contract Year (herein called a "Report"). Each
Report will include for each ad placement the time delivered, the average paid
unit price received by CBS and the total value of the ad placements received by
CBS SportsLine Site for the Contract Year.
8.3 OTHER PLACEMENTS. CBS agrees that, during the term of this
Agreement, it shall consult with SportsLine USA Inc. and discuss in good faith
additional promotional opportunities for the CBS SportsLine Site, including
without limitation the promotion of the CBS SportsLine Site on CBS's owned and
operated television stations and on the CBS Radio Network as
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described in Exhibit D.
8.4 INTERNET ADVERTISING - SALES STRATEGY. CBS and SportsLine USA Inc.
shall each have the right to sell advertising space on any pages of the CBS
SportsLine Site. CBS and SportsLine USA Inc. agree that the most critical
element necessary to ensure that advertising sales revenues are maximized will
be to avoid confusion in the marketplace of corporate and product identity. For
"CBS Content Pages" and Signature Events (as defined herein) CBS shall determine
ad sales strategy, sales call lists and pricing in consultation with a joint
staff designated by CBS and SportsLine USA Inc. to coordinate CBS SportsLine
Site advertising sales; provided that, unless otherwise agreed by SportsLine
USA, Inc., CBS shall not set the pricing of such advertising at a rate of more
than fifteen percent (15%) less than the average rate received from advertisers
on the CBS SportsLine Site during the preceding three (3) months. CBS represents
that all prior Internet advertising obligations it has for sports-related
programming are set forth in Exhibit K, and shall be honored within the CBS
SportsLine Site in a manner agreed to by CBS and SportsLine USA Inc. For all
other pages of the CBS SportsLine Site, SportsLine USA Inc. shall determine ad
sales strategy, call lists and pricing in consultation with CBS. For purposes of
this Agreement "CBS Content Pages" are pages of the CBS SportsLine Site that
include any CBS Sports Content and any CBS Merchandise. During the term of this
Agreement, SportsLine USA Inc. will give CBS access to all advertising and
customer usage research generated by SportsLine USA Inc.
8.5 INTERNET ADVERTISING -SALES SPLIT FOR CBS CONTENT PAGES. CBS shall
receive sixty percent (60%) and SportsLine USA Inc. shall receive forty percent
(40%) of the "Net Advertising Revenues" (as defined herein) from advertising
sold by either party relating to a Signature Event (as defined herein). In
addition, the parties shall share equally in Net Advertising Revenues from
advertising sold by either party on CBS Content Pages not relating to a
Signature Event. For purposes of this Agreement "Net Advertising Revenues" means
the gross U.S. dollar sums actually received from the sale of advertising on the
CBS SportsLine Site by SportsLine USA Inc. or CBS, as the case may be, less all
third-party payments actually made, including, without limitation, sales
representative commissions provided such sales representative commissions do not
exceed twenty percent (20%) in each instance. For purposes of this Agreement a
"Signature Event" means each of the sports events set forth in Exhibit F
attached hereto and hereby made a part hereof so long as CBS continues to hold
the free over-the-air television broadcast rights in the United States for the
CBS Television Network. CBS and SportsLine USA Inc. agree that all advertising
sales made under this Agreement shall be made in cash in U.S. dollars, unless
the parties mutually agree in advance to another method of payment.
8.6 INTERNET ADVERTISING -NEW EVENTS. If CBS acquires the free over the
air television broadcast rights in the United States for the CBS Television
Network for any of the events listed in Exhibit L, those events shall be
Signature Event for so long as CBS continues to hold such rights. If CBS
acquires the free over the air television broadcast rights in the United States
for the CBS Television Network to any regular season NFL or NBA games, CBS and
SportsLine USA, Inc. shall negotiate in good faith a revenue sharing arrangement
based on the following
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considerations:
(i) the quality of the package that CBS has acquired;
(ii) the history of traffic on the NFL or NBA sections of the
CBS SportsLine Site prior to the commencement of the broadcast of such
package;
(iii) the projected traffic of those sections absent such
broadcast package based on CBS SportsLine's historical performance and
projected industry trends; and
(iv) CBS's ability to promote the CBS SportsLine Site during
such broadcast packages.
8.7 INTERNET MERCHANDISING. For purposes of this Agreement "CBS
Merchandise" shall mean any CBS merchandise, whether or not related to CBS
sports programming. CBS and SportsLine USA Inc. agree that any and all CBS
Merchandise may be offered for sale on CBS Content Pages or on any other
merchandising page of the CBS SportsLine Site so long as such Merchandise has
been approved in advance by CBS. CBS and SportsLine USA Inc. shall share equally
in "Net Merchandising Revenues" (as defined herein) derived from the sales of
CBS Merchandise sold by SportsLine USA, Inc. For purposes of this Agreement "Net
Merchandising Revenues" means the gross U.S. dollar sums actually received from
the sale of CBS Merchandise (exclusive of VAT, sales and similar taxes) less all
taxes other than VAT, sales and similar taxes initially excluded, the costs of
goods sold, packaging costs, credits, rebates, credit card processing fees,
reserves against returns not exceeding twenty percent (20%) of gross sales,
insurance and shipping charges. CBS and SportsLine USA Inc. agree that all CBS
Merchandise sales made under this Agreement shall be made in U.S. dollars.
8.8 INTERNET ADVERTISING DEFICITS . In the event that either CBS or
SportsLine USA Inc. is unable to deliver the number of impressions guaranteed to
any advertiser buying inventory on any CBS Content Page, then the parties shall
mutually agree to: (i) provide such advertiser with substitute inventory on
another CBS Content Page in the value amount due and owing such advertiser (the
"Internet Advertising Deficit"), in which event the parties shall share in Net
Advertising Revenues as they would pursuant to subparagraph 8.5 or 8.6 above, or
(ii) in the event that there is no available inventory on a CBS Content Page,
SportsLine shall deliver the Internet Advertising Deficit on any other page of
the CBS SportsLine Site and may keep all of Net Advertising Revenues derived
therefrom.
8.9 CBS SPORTSLINE MERCHANDISING. For purposes of this Agreement "CBS
SportsLine Merchandise" shall mean any merchandise, whether or not related to
CBS Sports Content which contains the CBS SportsLine logo. CBS and SportsLine
USA Inc. agree that any and all CBS SportsLine Merchandise may be offered for
sale, so long as such CBS SportsLine Merchandise has been approved in advance by
CBS, on CBS Content Pages or on any other merchandising page of the CBS
SportsLine Site, on any CBS Internet Site, in the CBS Store, catalogues, or any
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other manner or means which CBS uses to merchandise it own CBS Merchandise . CBS
and SportsLine USA Inc. shall share equally in "Net Merchandising Revenues" (as
defined herein) derived from the sales of CBS SportsLine Merchandise. For
purposes of this Agreement "Net Merchandising Revenues" means the gross U.S.
dollar sums actually received from the sale of CBS SportsLine Merchandise
(exclusive of VAT, sales and similar taxes), less all taxes other than VAT,
sales and similar taxes initially excluded, the costs of goods sold, packaging
costs, credits, rebates, credit card processing fees, reserves against returns
not exceeding twenty percent (20%) of gross sales, insurance and shipping
charges. CBS and SportsLine USA Inc. agree that all CBS SportsLine Merchandise
sales made under this Agreement shall be made in U.S. dollars.
9. OTHER OBLIGATIONS
CBS shall use reasonable efforts to secure media credentials for a
reasonable number of SportsLine USA Inc.'s editorial staff to cover Signature
Events. CBS shall also use reasonable efforts to provide SportsLine USA Inc.
with a reasonable number of tickets to Signature Events and access to
hospitality suites therefor. SportsLine USA Inc. acknowledges that for certain
Signature Events such as the Masters, the 1998 Winter Olympics and the NCAA
Final Four, tickets and access may be difficult for CBS to provide. If
appropriate office space is available, CBS will sub-lease to SportsLine USA Inc.
such office space within its New York, Chicago, San Francisco, Los Angeles, and
Detroit offices, on terms to be mutually agreed upon the parties in good faith.
SportsLine USA Inc. shall reimburse CBS for all actual direct costs which CBS
incurs in fulfilling its obligations under this paragraph 9, provided that CBS
has notified SportsLine USA Inc. in advance of such costs, and SportsLine USA
Inc. has authorized the expenditure thereof.
10. COMPENSATION
10.1 SHARES FOR CBS SPORTS CONTENT AND CBS LOGOS. In consideration of
the grant by CBS of the licenses set forth in subparagraphs 2.1 and 2.2 hereof ,
on the first business day of each Contract Year during the term hereof,
SportsLine USA Inc. shall issue to CBS a stock certificate for the number of
shares of SportsLine USA Inc. common stock, par value $.01 per share ("Common
Stock") specified in the Content Contribution schedule set forth in Exhibit G
attached hereto and hereby made a part hereof ("Content Shares"). The Content
Shares shall not be subject to forfeiture except as provided in subparagraph
19.2 hereof.
10.2 SHARES FOR CBS'S ADVERTISING AND PROMOTION. In consideration of
CBS providing advertising and promotion during each Contract Year in the minimum
amount of the Ad Guarantee, on the first business day of each Contract Year
during the term hereof, SportsLine USA Inc. shall issue to CBS a stock
certificate for the number of shares of Common Stock specified in Exhibit E ("Ad
Shares").
10.3 ADVERTISING AND PROMOTION DEFICITS. If at the end of any Contract
Year during the term hereof, CBS has failed to meet its Ad Guarantee for such
Contract Year, CBS shall deliver advertisement and promotion valued at the
balance due and owing of such Ad Guarantee (the
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"Deficit Ad Amount") by the end of the third month of the subsequent Contract
Year (which shall be in addition to the Ad Guarantee allocated for such
subsequent Contract Year). If the value of the advertising and promotion
provided by CBS during any Contract Year (other than any advertising and
promotion provided by CBS pursuant to the preceding sentence) is in excess of
the Ad Guarantee, SportsLine USA, Inc. shall have no obligation to compensate
CBS for such excess (whether by issuance of additional shares of Common Stock or
otherwise).
10.4 WARRANTS. On the first business day of each Contract Year during
the term hereof, SportsLine USA Inc. shall grant CBS a warrant, in the form set
forth in Exhibit H attached hereto and hereby made a part hereof (the
"Warrant"), to purchase all or any part of the number of shares of Common Stock
set forth in Exhibit I attached hereto and hereby made a part hereof at the
price specified in Exhibit I. CBS may exercise each such Warrant at such time or
number of times as CBS shall elect; provided, that each such Warrant must be
exercised by written notice to SportsLine USA Inc. on or prior to the last
business day of the Contract Year in which it is granted.
11. EQUITY ADJUSTMENTS
11.1 SECURITIES ISSUABLE TO CBS. All amounts payable by SportsLine USA
Inc. to CBS pursuant to Paragraphs 10.1 and 10.2 hereof shall be payable solely
by the issuance by SportsLine USA Inc. of shares of Common Stock in the amounts
specified in such paragraphs. Notwithstanding the foregoing, the number and type
of securities issuable by SportsLine USA Inc. to CBS pursuant to Paragraphs 10.1
and 10.2, and the number and type of securities subject to Warrants to be
granted by SportsLine USA Inc. to CBS pursuant to Paragraph 10.4, shall be
subject to adjustment as set forth in Paragraphs 11.2 and 11.3. The term "Other
Securities" shall mean any securities of SportsLine USA Inc., other than Common
Stock, that, as a result of any adjustment made pursuant to Paragraphs 11.2 or
11.3, may hereafter be issuable as Content Shares or Ad Shares or subject to
Warrants granted hereunder. All shares of Common Stock or Other Securities
issuable by SportsLine USA Inc. hereunder shall, upon such issuance, be fully
paid and nonassessable.
11.2 ADJUSTMENT FOR RECAPITALIZATION, ETC. If SportsLine USA Inc. shall
at any time subdivide its outstanding shares of Common Stock (or Other
Securities at the time receivable by CBS hereunder as Content Shares or Ad
Shares) by recapitalization, reclassification or split-up thereof, or if
SportsLine USA Inc. shall declare a stock dividend or distribute shares of
Common Stock to its shareholders, the number of shares of Common Stock (or Other
Securities) issuable after the date of such subdivision to CBS as Content Shares
or Ad Shares pursuant to Paragraphs 10.1 and 10.2, respectively, and the number
of shares of Common Stock (or Other Securities) subject to any Warrants granted
after the date of such subdivision to CBS pursuant to Paragraph 10.4, shall be
proportionately increased and the price per Content Share or Ad Share or the
exercise price of any such Warrants, as the case may be, shall be
proportionately decreased; and if SportsLine USA Inc. shall at any time combine
the outstanding shares of Common Stock (or Other Securities) by
recapitalization, reclassification or combination thereof, the number of shares
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of Common Stock (or Other Securities) issuable after the date of such
combination to CBS as Content Shares or Ad Shares pursuant to Paragraphs 10.1
and 10.2, respectively, and the number of shares of Common Stock (or Other
Securities) subject to any Warrant granted after the date of such combination to
CBS pursuant to Paragraph 10.4, shall be proportionately decreased and the price
per Content Share or Ad Share and the exercise price of any such Warrants shall
be proportionately increased. Any such adjustments pursuant to this Paragraph
11.2 shall be effective at the close of business on the effective date of such
subdivision or combination or, if any adjustment is the result of a stock
dividend or distribution, then the effective date for such adjustment shall be
the record date therefor.
11.3. ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER, ETC. In
case of any reorganization of SportsLine USA Inc. (or any other corporation, the
securities of which are at the time receivable hereunder as Content Shares or Ad
Shares or subject to any Warrants granted hereunder) after the date hereof or in
case after the date hereof SportsLine USA Inc. (or any such other corporation)
shall consolidate with or merge into another corporation or convey all or
substantially all of its assets to another corporation, then, and in each such
case, CBS, at any time after the consummation of such reorganization,
consolidation, merger or conveyance, shall be entitled to receive, in lieu of
the number of shares of Common Stock (or Other Securities) issuable to CBS as
Content Shares or Ad Shares prior to such consummation, or subject to Warrants
thereafter granted, the securities or property to which CBS would have been
entitled (or which would have been issuable upon exercise of such Warrants)
after such consummation if such Content Shares, Ad Shares or Warrants had been
issued immediately prior thereto).
11.4 RESTRICTED SECURITIES. CBS understands that the Content
Securities, the Ad Securities, the Warrants and the shares of Common Stock
issuable upon exercise of the Warrants (collectively, the "Securities") will be
"restricted securities" under the federal securities laws inasmuch as they are
being acquired from SportsLine USA, Inc. in a transaction not involving a public
offering; and that under such laws and applicable regulations, such Securities
may be resold without registration under the Securities Act only in certain
limited circumstances. CBS agrees that the Securities are being and will be
acquired for investment for CBS's own account, and not with a view to the resale
or distribution thereof, and that CBS has no present intention of selling,
granting any participation in, or otherwise distributing the Securities. CBS
further agrees not to make any disposition of all or any portion of the
Securities unless (i) there is then in effect a registration statement under the
Securities Act of 1933 covering such proposed disposition and such disposition
is made in accordance with such registration statement, or (ii) CBS shall have
furnished SportsLine USA, Inc. with an opinion of counsel, reasonably
satisfactory to SportsLine USA, Inc., that such disposition will not require
registration under the Securities Act. Each certificate representing the
Securities shall be stamped or otherwise imprinted with a legend substantially
in the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 (THE "SECURITIES ACT") OR UNDER APPLICABLE STATE SECURITIES LAWS
AND MAY NOT BE SOLD,
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TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE
SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO
AVAILABLE EXEMPTIONS FROM SUCH REGISTRATION, PROVIDED THAT THE SELLER
DELIVERS TO THE COMPANY AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO THE COMPANY CONFIRMING THE AVAILABILITY OF SUCH EXEMPTION.
In addition to the foregoing, during each Contract Year, the Content Shares and
Ad Shares issued to CBS on the first day of such Contract Year shall not, until
the first business day of the subsequent Contract Year, be transferred, sold or
otherwise disposed of by CBS, except as may be permitted by Paragraph 20.1
hereof. To enforce the foregoing covenant, SportsLine USA, Inc. shall have right
to place the following restrictive legend on the certificates representing the
Securities and to refuse to transfer and/or impose stop transfer instructions
with respect to the Securities during any period that the foregoing restrictions
remain in effect:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE CANNOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF FOR A PERIOD OF ONE YEAR
AFTER THE DATE OF ISSUANCE.
12. AUDITS
During the term of this Agreement and for a period of two (2) years
thereafter, each party shall keep and maintain accurate books and records
relating to this Agreement. CBS will furnish to SportsLine USA, Inc. a certified
statement of an officer of CBS stating that the Reports furnished to SportsLine
USA Inc are complete and are based upon and accurately reflect all relevant
facts, figures, records and information. Upon request, SportsLine USA Inc. or
its agent(s) may inspect, audit and analyze copies of those records of CBS
relating to this Agreement certified by an officer of CBS as being the only
records relevant to the purpose of SportsLine USA Inc.'s audit. Upon request,
CBS or its agent(s) may inspect, audit and analyze copies of those records of
SportsLine USA Inc. relating to this Agreement certified by an officer of
SportsLine USA Inc. as being the only records relevant to the purpose of CBS's
audit. Any such audit by a party (the "auditing party") shall be conducted at
the auditing party's own cost and expense, during normal business hours at the
regular place of business of the other party (the "audited party") upon at least
ten (10) days prior written notice. Each party may exercise its right to audit
hereunder no more than once per year, unless a material discrepancy (i.e a
discrepancy in excess of Ten Thousand Dollars ($10,000) or ten percent (10%))
was discovered in an audit. In such cases, the auditing party may audit every
six (6) months until the results of the audit show that a material discrepancy
no longer exists. All underpayments shall be promptly remitted to the auditing
party. No payments rendered under this Agreement shall be subject to audit more
than two (2) years from the date of its presentation. Neither party shall
exercise its audit rights unless it has a reasonable basis to believe the
information provided by the other party is inaccurate.
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13. STOCKHOLDER AGREEMENT
SportsLine USA Inc. and CBS hereby agree that simultaneously with the
execution of this Agreement, the parties shall execute the " CBS/SportsLine
Stockholder Agreement" attached hereto as Exhibit J and hereby made a part
hereof (the "Stockholder Agreement"). It is understood that the stock provisions
of this Agreement shall be subject to the CBS Stockholder Agreement.
14. PUBLICITY
Upon execution of this Agreement, the parties will cooperate in
preparing a press release announcing the relationship between them. Each party
consents to the other party's use of its name in describing their relationship
in such press release. It is understood that no press release shall be released
without the consent of both parties, which shall not be unreasonably withheld.
The selection of a public relations agency for CBS SportsLine Site will be made
jointly by the parties with neither party unreasonably withholding its approval.
CBS shall approve the overall public relations strategy of the CBS SportsLine
Site.
15. CONFIDENTIALITY
15.1 CONFIDENTIAL INFORMATION. For purposes of this Agreement,
Confidential Information means: (i) business or technical information of either
party, including but not limited to any information relating to either party's
product plans, designs, costs, product prices and names, finances, marketing
plans, business opportunities, personnel, research, development or know-how;
(ii) any written information designated by either party as confidential or
proprietary or, if orally disclosed, reduced to writing by the disclosing party
within thirty (30) days of such disclosure; (iii) all materials furnished by one
party in connection with any audit conducted hereunder; and (iv) the terms and
conditions of this Agreement.
15.2 EXCLUSIONS. Confidential Information will not include: (i)
information that is or becomes generally known or available by publication,
commercial use or otherwise through no fault or breach of this Agreement by the
receiving party; (ii) information that is rightfully in the receiving party's
possession prior to first receiving it from the disclosing party; (iii)
information that is lawfully received by the receiving party from a third party,
without restriction on disclosure and without breach of a nondisclosure
obligation; or (iv) information that the receiving party can prove with written
evidence is independently developed by the receiving party, without use of or
access to Confidential Information of the disclosing party.
15.3 OBLIGATIONS. Each party shall not use the other party's
Confidential Information, except as expressly permitted under this Agreement and
will not disclose such Confidential Information to any third party, except to
its employees and consultants with a need to know for such party's performance
of this Agreement (and only subject to binding use and disclosure restrictions
at least as protective as those set forth herein executed in writing by such
employees
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or consultants). However, each party may disclose Confidential Information of
the other party: (i) pursuant to an order or requirement, to which it is
subject, of a court, administrative agency or other governmental body, provided
that such party gives reasonable notice to the other party to contest such order
or requirement; (ii) on a confidential basis to legal and financial advisors;
provided, however, that prior to such disclosure, the party disclosing the
Confidential Information shall use its best efforts to secure an agreement from
the third party receiving the Confidential Information to keep such information
confidential; and (iii) as required by any law, rule, or regulation, to which it
is subject.
16. OWNERSHIP
16.1 CBS OWNERSHIP. Subject to the terms and conditions of this
Agreement, as between CBS and SportsLine USA Inc., CBS presently owns and shall
continue to own all right, title, and interest throughout the world in any and
all media now known and hereafter developed, to the CBS Sports Content, the CBS
Logos, the CBS Merchandise and all Intellectual Property Rights therein
(excluding the joint CBS SportsLine logo).
16.2 SPORTSLINE USA INC. OWNERSHIP. Subject to the terms and conditions
of this Agreement, as between SportsLine USA Inc. and CBS, SportsLine USA Inc.
presently owns the SportsLine Site and, upon such site becoming the CBS
SportsLine Site, shall continue to own, all right, title, and interest
throughout the world in any and all media now known and hereafter developed, to
such site (including, without limitation, the "SportsLine" logo and the
SportsLine USA Inc. Content) and all Intellectual Property Rights therein
(excluding the CBS Sports Content, the CBS Logos, the joint CBS SportsLine logo,
the CBS Merchandise and all Intellectual Property Rights therein).
16.3 COPYRIGHT NOTICES. SportsLine USA Inc. shall place a notice of
copyright on each CBS Content Page in accordance with the CBS Licence Guidelines
and Restrictions. No CBS Content Page, upon which a notice of copyright is
placed pursuant to the preceding sentence, shall contain any other copyright
notice whatsoever except as provided in the CBS License Guidelines and
Restrictions. SportsLine USA Inc. shall cooperate fully with CBS in connection
with CBS's obtaining appropriate copyright protection in the name of CBS for any
CBS Content Page. SportsLine USA Inc. acknowledges and agrees that all
copyrights and rights of copyright referred to in subparagraph 16.3 in the name
of and/or owned by CBS shall be and remain the sole and complete property of
CBS; that all such copyrights and rights of copyright in the name of and/or
owned by any copyright proprietor other than CBS or SportsLine USA Inc. shall be
and remain the sole and complete property of such copyright proprietor; that
SportsLine USA Inc. shall not at any time acquire or claim any right, title or
interest of any nature whatsoever in any such copyright by virtue of this
Agreement or of SportsLine USA Inc.'s uses thereof in connection with CBS Sports
Content, CBS Logos, CBS Merchandise or any Intellectual Property Rights therein;
and that any right, title or interest in or relating to any such copyright which
comes into existence as a result of, or during the term of, the exercise by
SportsLine USA Inc. of any right granted to it hereunder shall immediately vest
in CBS.
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16.4 FURTHER ACTION. Each party agrees to take all action and cooperate
as is necessary, at the other party's request and expense, to protect the
other's respective rights, titles, and interests specified in this paragraph 16,
and further agrees to execute any documents that might be necessary to perfect
each party's ownership of such rights, titles and interests.
17. REPRESENTATIONS AND WARRANTIES
17.1 CBS GENERAL REPRESENTATIONS AND WARRANTIES. CBS represents and
warrants to SportsLine USA Inc. that:
(i) it has full corporate power and authority to enter
into this Agreement;
(ii) the execution, delivery and performance of this
Agreement have been duly authorized by CBS, and this Agreement
constitutes the valid and binding obligation of CBS enforceable against
CBS in accordance with its terms, except as limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other similar
laws of general application affecting enforcement of creditors' rights
generally, and as limited by laws relating to the availability of
specific performance, injunctive relief and other equitable remedies.;
(iii) it has sufficient right and authority to grant to
SportsLine USA Inc. all licenses and rights granted by CBS hereunder;
(iv) it owns or controls all right, title, and interest in
the CBS Sports Content, the CBS Logos, the CBS Merchandise and all
Intellectual Property Rights therein, (subject to the qualifications
set forth in this Agreement) necessary to carry out its obligation
hereunder and to grant and assign the rights and license granted to
SportsLine USA Inc. herein;
(v) the use as specified in this Agreement of the CBS
Sports Content, the CBS Logos and the CBS Merchandise, shall not
infringe or otherwise violate any rights of any third party; and
(vi) CBS is and shall be at the time of each issuance of
Content Shares, Ad Shares or Warranties hereunder an accredited
investor as defined in Regulation D under the Securities Act of 1933,
as amended.
17.2 SPORTSLINE USA INC. GENERAL REPRESENTATIONS AND WARRANTIES.
SportsLine USA Inc. represents and warrants to CBS that, as of the Effective
Date (and as to Subclause (v), at the time of each issuance of Content Share, Ad
Shares and Warrants):
(i) SportsLine USA Inc. is a corporation duly
incorporated, validly existing
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and in good standing under the laws of the State of Delaware.
SportsLine USA Inc. (A) has full corporate power and authority to own,
lease and operate its properties and assets and to conduct and carry on
its business as it is now being conducted and operated and as proposed
to be conducted and operated; (B) is duly qualified to do business and
is in good standing, and is duly licensed, authorized or qualified to
transact or conduct business, in each jurisdiction in which it is
required to be so licensed, authorized or qualified; and (C) has all
governmental licenses, certifications, permits, approvals and other
authorizations necessary to own its properties and assets and carry on
its business as it is presently being conducted and proposed to be
conducted.
(ii) SportsLine USA Inc. has full power and authority to
execute and deliver this Agreement and to execute and deliver the
Stockholder Agreement, and consummate the transactions contemplated by
this Agreement and the Stockholder Agreement, and to issue (or reserve
for issuance), sell and deliver the Common Stock being delivered
hereunder and the Common Stock issuable upon exercise of the CBS
Warrants (the "Warrant Shares"). Upon execution of this Agreement and
the Stockholder Agreement by SportsLine USA Inc., each of this
Agreement and the Stockholder Agreement shall have been duly and
validly executed and delivered by SportsLine USA Inc., and constitute
the legal, valid and binding obligation of SportsLine USA Inc.,
enforceable in accordance with its terms, except as limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other
similar laws of general application affecting enforcement of creditors'
rights generally, and as limited by laws relating to the availability
of specific performance, injunctive relief and other equitable
remedies.
(iii) As of the Effective Date and prior to the issuance of
the Content Shares, Ad Shares and Warrants issuable hereunder on such
date, (A) the authorized and issued and outstanding capital stock of
SportsLine USA Inc. is as follows: fifty million (50,000,000) shares of
Common Stock, of which six million five hundred thousand (6,500,000)
shares are outstanding; three million (3,000,000) shares of Series A
Preferred Stock, all of which are outstanding, six million one hundred
sixty-two thousand seven hundred seventy-six (6,162,776) shares of
Series B Preferred Stock, all of which are outstanding; and five
million three hundred thirty-three thousand three hundred thirty-three
(5,333,333) shares of Series C Preferred Stock, all of which are
outstanding and (B) all of the issued and outstanding capital stock of
SportsLine USA Inc. has been duly authorized, validly issued, fully
paid, nonassessable and issued in compliance with applicable state and
federal securities laws. Other than that certain Amended and Restated
Voting Agreement dated as of September 25, 1996 and that certain
Amended and Restated Investors' Rights Agreement dated as of September
25, 1996, there are no outstanding or existing (A) proxies, voting
trusts, shareholder agreements or other rights, understanding or
arrangements regarding the voting or disposition of the capital stock
of SportsLine USA Inc.; (B) securities convertible into or exchangeable
for capital stock of SportsLine USA Inc.; (C) obligations, options,
warrants or other rights of any kind or character to acquire, purchase
or subscribe for capital stock of SportsLine USA Inc. or
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securities convertible into or exchangeable for capital stock of
SportsLine USA Inc., except for outstanding options and warrants to
purchase an aggregate of six million eight hundred sixty-one thousand
nine hundred sixty-five (6,861,965) shares of Common Stock; or (D)
agreements, arrangements or understandings of any kind relating to the
authorization, issuance or sale of capital stock of SportsLine USA Inc.
or securities convertible into or exchangeable for capital stock of
SportsLine USA Inc., except for SportsLine USA, Inc.'s agreements with
International Merchandising Corporation and Sports Placement Services,
each of which provides for the issuance of warrants under certain
circumstances.
(iv) The execution, delivery and performance of this
Agreement and the Stockholder Agreement by SportsLine USA Inc. does not
and will not (A) conflict with or violate any provision of SportsLine
USA Inc.'s Certificate of Incorporation or Bylaws, each as amended to
date; (B) violate or breach any provision of, or result, through the
mere passage of time, in a violation of, or result in the termination
or acceleration of, or entitle any party to terminate or accelerate
(whether after the giving of notice or lapse of time or both), any
obligation under, be in conflict with or constitute or result in a
default (or an event which, with notice or lapse of time or both, would
constitute such a default) under, or result in the imposition of any
lien upon or the creation of a security interest in, the stock or any
assets, business or properties of SportsLine USA Inc. pursuant to, any
note, bond, mortgage, indenture, deed, license, franchise, permit,
lease, contract, agreement or other instrument, commitment or
obligation to which SportsLine USA Inc. is a party or by which
SportsLine USA Inc. or any of its assets is bound or subject, or
violate or conflict with any other material restriction of any kind or
character to which SportsLine USA Inc., or any of its properties or
assets, is subject; (C) violate any order, writ, injunction, decree,
judgment or ruling of any court or governmental authority to which
SportsLine USA Inc. is a party or it or its property is bound; or (D)
violate any statute, law, rule or regulation applicable to SportsLine
USA Inc.
(v) CBS shall acquire from SportsLine USA Inc. good title
to the Common Stock purchased under this Agreement, free and clear of
any and all liens, claims, charges, encumbrances or other security
interests (collectively, "Security Interests"), other than such
Security Interests as may arise out of acts or claims against CBS. The
Common Stock, when issued, sold and delivered in accordance with the
terms of this Agreement for the consideration provided for herein, will
be duly and validly issued, fully paid and nonassessable and will be
free of restrictions on transfer other than restrictions on transfer
under this Agreement, the Stockholder Agreement and applicable
securities laws. The Warrant Shares have been duly and validly reserved
for issuance and, upon issuance in accordance with the terms of the
Warrants, as the case may be, will be duly and validly issued, fully
paid and nonassessable and will be free of restrictions on transfer
other than restrictions on transfer under this Agreement, the
Stockholder Agreement and applicable securities laws, free and clear of
any and all Security Interests, other than such Security Interests as
may arise out of acts or claims against CBS. The offer, sale and
issuance of
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the Common Stock and (assuming no change in applicable law and no
unlawful distribution of the Common Stock by CBS or other parties), the
Warrant Shares will be exempt from the registration and prospectus
delivery requirements of the Securities Act of 1933, as amended (the
"Securities Act") by virtue of the exemption afforded by Section 4(2)
of the Securities Act (provided that with respect to the Warrant
Shares, no commission or other remuneration is paid or given, directly
or indirectly, for soliciting the exercise of the Warrants, as
applicable).
(vi) No consent, approval, order or authorization of, or
registration, qualification, designation, declaration or filing with,
any federal, state or local governmental authority on the part of
SportsLine USA Inc. is required in connection with the execution and
delivery by SportsLine USA Inc. of this Agreement or the Stockholder
Agreement (including the issuance of the Common Stock), except for such
filings under the Securities Act and the regulations thereunder and all
other applicable securities laws as may be required in connection with
the transactions contemplated by this Agreement and the Stockholder
Agreement and such consents or filings which the failure to obtain or
file would not, individually or in the aggregate, have a Material
Adverse Effect (as defined in subclause (xxvii)(A) hereof). All such
filings will be made within the time prescribed by law.
(vii) There is no action, suit, proceeding, claim,
arbitration or investigation ("Action") pending (or, to the best of
SportsLine USA Inc.'s knowledge, currently threatened) against
SportsLine USA Inc., its activities, properties or assets or, to the
best of SportsLine USA Inc.'s knowledge, against any officer, director
or employee of SportsLine USA Inc. in connection with such officer's,
director's or employee's relationship with, or actions taken on behalf
of, SportsLine USA Inc. SportsLine USA Inc. is not a party to or
subject to the provisions of any order, writ, injunction, judgment or
decree of any court or government agency or instrumentality, and there
is no Action by SportsLine USA Inc. currently pending or which
SportsLine USA Inc. intends to initiate.
(viii) SportsLine USA Inc. has full title to and ownership
of, or is duly licensed under or otherwise authorized to use, all
Intellectual Property Rights necessary to enable it to carry on its
business as now conducted and as proposed to be conducted without, to
SportsLine USA Inc.'s knowledge, any conflict with or infringement of
any rights of others.
(ix) SportsLine USA Inc. has not received any
communications alleging that SportsLine USA Inc. has infringed or, by
conducting its business as proposed, would infringe any of the
Intellectual Property Rights of any other person or entity. To
SportsLine USA Inc.'s best knowledge, none of SportsLine USA Inc.'s
employees is obligated under any contract (including licenses,
covenants or commitments of any nature) or other agreement, or subject
to any judgment, decree or order of any court or administrative agency,
that would interfere with the use of his or her best efforts to
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promote the interests of SportsLine USA Inc. or that would conflict
with SportsLine USA Inc.'s business as proposed to be conducted.
Neither the execution nor delivery of this Agreement or the Stockholder
Agreement, nor the carrying on of SportsLine USA Inc.'s business by the
employees of SportsLine USA Inc., nor the conduct of SportsLine USA
Inc.'s business by the employees of SportsLine USA Inc., nor the
conduct of SportsLine USA Inc.'s business as proposed, will, to
SportsLine USA Inc.'s knowledge, conflict with or result in a breach of
the terms, conditions or provisions of, or constitute a default under,
any contract, covenant or instrument under which any of such employees
is now obligated. SportsLine USA Inc. does not believe it is or will be
necessary to utilize any inventions, trade secrets or proprietary
information of any of its employees (or people it currently intends to
hire) made or developed prior to their employment by SportsLine USA
Inc., other than inventions, trade secrets or proprietary information
which have been assigned to SportsLine USA Inc.
(x) SportsLine USA Inc. is not in violation or default of
any provisions of its Certificate of Incorporation or Bylaws, and to
SportsLine USA Inc.'s best knowledge, except for any violations that
individually or in the aggregate would not have a Material Adverse
Effect (as defined in subclause (xxvii)(A) hereof, SportsLine USA Inc.
is in compliance with all applicable statutes, laws, regulations and
executive orders of the United States of America and all states,
foreign countries or other governmental bodies and agencies having
jurisdiction over SportsLine USA Inc.'s business or properties, and (B)
is in compliance with all contracts and agreements to which it is a
party.
(xi) SportsLine USA Inc. has not granted or agreed to
grant to any person or entity any rights (including piggyback
registration rights) to have any securities of SportsLine USA Inc.
registered with the United States Securities and Exchange Commission
("SEC") or any other governmental authority, except as set forth in (i)
that certain Amended and Restated Investors' Rights Agreement dated as
of September 25, 1996, (ii) the CBS/SportsLine Stockholder Agreement
and (iii) in SportsLine USA, Inc.'s agreements with International
Merchandising Corporation and certain athletes.
(xii) The audited Balance Sheet of SportsLine USA Inc. as
of December 31, 1996 reflects all of the personal property used by
SportsLine USA Inc. in its business or otherwise held by SportsLine USA
Inc., except for (A) property acquired or disposed of in the ordinary
course of business since the date of such audited Balance Sheet, and
(B) property not required under generally accepted accounting
principles to be reflected thereon. Except as reflected in the audited
Balance Sheet as of December 31, 1996 or the notes thereto, the
properties and assets SportsLine USA Inc. owns are owned by SportsLine
USA Inc. free and clear of all mortgages, deeds of trust, liens,
encumbrances and security interests except for statutory liens for the
payment of current taxes that are not yet delinquent and liens,
encumbrances and security interests which arise in the ordinary course
of business and which do not affect material properties and assets of
SportsLine USA Inc.. With respect to the property and assets it leases,
SportsLine USA
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Inc. is in material compliance with such leases and holds valid
leasehold interests free of any liens, claims or encumbrances.
(xiii) SportsLine USA Inc. does not have any Employee
Pension Benefit Plan as defined in Section 3 of the Employee Retirement
Income Security Act of 1974, as amended.
(xiv) SportsLine USA Inc. has delivered to CBS its audited
financial statements (balance sheet and profit and loss statement,
statement of stockholders' equity and statement of cash flows,
including notes thereto) at December 31, 1996 for the year then ended
(the "Financial Statements"). The Financial Statements have been
prepared in accordance with generally accepted accounting principals
applied on a consistent basis throughout the periods indicated and with
each other, except that unaudited Financial Statements may not contain
all footnotes or year-end audit adjustments required by generally
accepted accounting principles (which year-end audit adjustments are
not expected to have a material effect on the unaudited Financial
Statements). The Financial Statements fairly present the financial
condition and operating results of SportsLine USA Inc. as of the dates,
and for the periods, indicated therein. Except as set forth in the
December 31, 1996 audited Balance Sheet, SportsLine USA Inc. has no
material liabilities, contingent or otherwise, other than (A)
liabilities incurred in the ordinary course of business subsequent to
December 31, 1996 and (B) obligations under contracts and commitments
incurred in the ordinary course of business and not required under
generally accepted accounting principles to be reflected in the
Financial Statements. Except as disclosed in the Financial Statements,
SportsLine USA Inc. is not a guarantor or guarantor or indemnitor of
any other person, firm or corporation. SportsLine USA Inc. maintains
and will continue to maintain a standard system of accounting
established and administered in accordance with generally accepted
accounting principles.
(xv) SportsLine USA Inc. is not bound by or subject to any
written or oral, express or implied, contract, commitment or
arrangement with any labor union, and to SportsLine USA Inc.'s
knowledge, no labor union has requested, sought or attempted to
represent any employees, representatives or agents of SportsLine USA
Inc. There is no strike or other labor dispute involving SportsLine USA
Inc. pending nor, to SportsLine USA Inc.'s best knowledge, threatened,
nor is SportsLine USA Inc. aware of any labor organization activity
involving its employees. SportsLine USA Inc. is not aware that any
officer or key employee, or that any group of key employees, intends to
terminate their employment with SportsLine USA Inc., and SportsLine USA
Inc. does not have a present intention to terminate the employment of
any of the foregoing. The employment of each officer and employee of
SportsLine USA Inc. is terminable at the will of SportsLine USA Inc. To
SportsLine USA Inc.'s best knowledge, SportsLine USA Inc. has complied
in all material respects with all applicable state and federal equal
employment opportunity and other laws related to employment.
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(xvi) Since its inception SportsLine USA Inc. has not been
a "United States real property holding corporation", as defined in
Section 897(c)(2) of the U.S. Internal Revenue Code of 1986, as
amended, and in Section 1.897-2(b) of the Treasury Regulations issued
thereunder.
(xvii) SportsLine USA Inc. does not presently own or
control, directly or indirectly, any interest in any other corporation,
association, or other business entity, other than an interest in
Web-on-Site and in entities for Foreign SportsLine Sites. SportsLine
USA Inc. is not a participant in any joint venture, partnership, or
similar arrangement.
(xviii) SportsLine USA Inc. has not (A) declared or paid any
dividends or authorized or made any distribution upon or with respect
to any class or series of its capital stock, (B) incurred any
indebtedness for money borrowed or, except as contemplated by this
Agreement, any other liabilities individually in excess of $500,000 or,
in the case of indebtedness and/or liabilities individually less than
$500,000, in excess of $5,000,000 in the aggregate, (C) made any loans
or advances to any person, other than ordinary advances for travel
expenses, or (D) sold, exchanged or otherwise disposed of any of its
assets or rights, other than the sale of its inventory in the ordinary
course of business.
(xix) For the purposes of subsections (xx) above, all
indebtedness, liabilities, agreements, understandings, instruments,
contracts and proposed transactions involving the same person or entity
(including persons or entities SportsLine USA Inc. has reason to
believe are affiliated therewith) shall be aggregated for the purpose
of meeting the individual minimum dollar amounts of such subsections.
(xx) SportsLine USA Inc. is not a party to and is not
bound by any contract, agreement or instrument, or subject to any
restriction under its Certificate of Incorporation or Bylaws, that
adversely affects its business as now conducted or as proposed to be
conducted, its properties or its financial condition.
(xxi) Except as disclosed to the Board of Directors of
SportsLine USA Inc., SportsLine USA Inc. has not engaged in the last
three (3) months in any discussion (A) with any representative of any
corporation or corporations regarding the consolidation or merger of
SportsLine USA Inc. with or into any such corporations or corporations,
with any corporation, partnership, association or other business entity
or any individual regarding the sale, conveyance or disposition of all
or substantially all of the assets of SportsLine USA Inc. or a
transaction or series of related transactions in which more than fifty
percent (50%) of the voting power of SportsLine USA Inc. is disposed
of, or (B) regarding any other form of acquisition, liquidation,
dissolution or winding up of SportsLine USA Inc.
(xxii) No officer, or director of SportsLine USA Inc. or
member of his or her
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immediate family is indebted to SportsLine USA Inc., nor is SportsLine
USA Inc. indebted (or committed to make loans or extend or guarantee
credit) to any of them, other than for travel advances in the ordinary
course of business. To the best of SportsLine USA Inc.'s knowledge,
none of such persons has any direct or indirect ownership interest in
any firm or corporation with which SportsLine USA Inc. is affiliated or
with which SportsLine USA Inc. has a business relationship, or any firm
or corporation that competes with SportsLine USA Inc., except that
employees, officers, or directors of SportsLine USA Inc. and members of
their immediate family may own stock in publicly traded companies that
may compete with SportsLine USA Inc. No member of the immediate family
of any officer or director of SportsLine USA Inc. is directly or
indirectly interested in any material contract with SportsLine USA Inc.
(xxiii) SportsLine USA Inc. has all franchises, permits,
licenses, and any similar authority necessary for the conduct of its
business as now being conducted by it, the lack of which could have a
Material Adverse Effect (as defined in subclause (xxvii)(A) hereof),
and SportsLine USA Inc. believes it can obtain, without undue burden or
expense, any similar authorization to conduct its business as proposed
to be conducted. SportsLine USA Inc. is not in default in any material
respect under any of such franchises, permits, licenses, or other
similar authority.
(xxiv) To SportsLine USA Inc.'s best knowledge, SportsLine
USA Inc. is not in violation of any applicable statute, law or
regulation relating to the environment or occupational health and
safety, and to SportsLine USA Inc.'s best knowledge, no material
expenditures are or will be required in order to comply with any such
existing statute, law or regulation.
(xxv) SportsLine USA Inc. has fully provided CBS with all
the information that CBS has requested for deciding whether to enter
into this Agreement and the Stockholder Agreement. Neither this
Agreement, the Stockholder Agreement, nor any other statements or
certificates made or delivered in connection herewith or therewith,
when read in their entirety and in light of the circumstances in which
such statements were made, contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements
herein or therein not misleading.
(xxvi) SportsLine USA Inc. has timely filed all Tax Returns
required by applicable law to be filed. All Tax Returns of SportsLine
USA Inc. are true, complete and correct in all material respects.
SportsLine USA Inc. has paid all Taxes, except those, which are
currently being contested by it in good faith in the Financial
Statements in accordance with generally accepted accounting procedure
and for which adequate reserves have been made. The provision for taxes
of SportsLine USA Inc. as shown in the Financial Statements is adequate
for taxes due or accrued as of the date thereof. SportsLine USA Inc.
has not elected pursuant to the Internal Revenue Code of 1986, as
amended (the "Code"), to be treated as a Subchapter S corporation or a
collapsible corporation pursuant
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to Section 1362(a) or Section 341(f) of the Code respectively , nor has
it made any other elections pursuant to the Code (other than elections
that relate solely to methods of accounting, depreciation or
amortization) that would have a Material Adverse Effect (as defined in
subclause (xxvii)(A) hereof). No deficiency or adjustment for any Taxes
has been threatened, proposed, asserted or assessed against the
SportsLine USA Inc. There are no liens for Taxes upon the assets of
SportsLine USA Inc., except liens for current Taxes not yet due. No Tax
Returns of SportsLine USA Inc. have been examined by any Taxing
Authority and it has not been notified by any such Tax Authority that
such Tax Authority intends to audit such Returns. SportsLine USA Inc.
has not given or been requested to give any waiver of statutes of
limitations relating to the payment of Taxes. SportsLine USA Inc. is
not a party to, bound by, or has any obligation with respect to Taxes
under any tax sharing, cost sharing or similar agreement or policy.
SportsLine USA Inc. has not entered into agreements that would result
in the disallowance of any Tax deductions pursuant to Section 280G of
the Code. Since the date of the Financial Statements, SportsLine USA
Inc. has made adequate provisions on its books of account in accordance
with generally accepted accounting procedures for all Taxes with
respect to its business, properties and operations for such period.
SportsLine USA Inc. has withheld or collected from each payment made to
each of its employees, the amount of all Taxes (including, but not
limited to, federal income tax, Federal Insurance Contribution Act
taxes and Federal Unemployment Tax Act taxes) required to be withheld
or collected therefrom, and has paid the same to the proper tax
receiving officers or authorized depositories. "Tax or Taxes" shall
mean all federal, state, local and foreign taxes and other assessments
of a similar nature (whether imposed directly or through withholding),
including any interest, additions to tax, or penalties applicable
thereto. "Tax Returns" shall mean all federal, state, local and foreign
tax returns, declarations, statements, reports, schedules, forms and
information returns, and any amended Tax Return relating to Taxes.
"Taxing Authority" shall mean the Internal Revenue Service and any
other domestic or foreign governmental authority responsible for the
administration of any Taxes.
(xxvii) Since January 31, 1997 there has not been:
(A) any change in the business, operations, assets,
liabilities, financial condition or operating results of
SportsLine USA Inc. from that reflected in the audited
Financial Statements, which had a material adverse effect on
the business (as such business is presently conducted and as
it is proposed to be conducted), finances, properties or
prospects of SportsLine USA Inc. (a "Material Adverse
Effect");
(B) any damage, destruction or loss, whether or not
covered by insurance to or of the assets of SportsLine USA
Inc. which would have a Material Adverse Effect;
(C) any waiver by SportsLine USA Inc. of a valuable
right or of a
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material debt owed to it;
(D) any satisfaction or discharge of any lien, claim
or encumbrance or payment of any obligation by SportsLine USA
Inc., except in the ordinary course of business and which
would not have a Material Adverse Effect;
(E) any material change or amendment to a material
contract or arrangement by which SportsLine USA Inc. or any of
its assets or properties is bound or subject;
(F) any material change in any compensation
arrangement or agreement with any employee of or consultant to
SportsLine USA Inc.;
(G) any sale, assignment or transfer of any patent,
trademarks, copyrights, trade secrets, proprietary software or
other intangible assets, other than licenses thereof in the
ordinary course of business;
(H) any resignation or termination of employment of
any key officer of SportsLine USA Inc.;
(I) any mortgage, pledge, transfer of a security
interest in or other encumbrance of SportsLine USA Inc.'s
material properties or assets, except liens for current taxes
not yet due or payable;
(J) any direct or indirect loans or guarantees made
by SportsLine USA Inc. to or for the benefit of its
shareholders, employees, officers, directors or consultants,
or any members of their immediate families, other than travel
advances and other advances made in the ordinary course of its
business;
(K) any declaration, setting aside or payment of any
dividend or other distribution in respect of any of SportsLine
USA Inc.'s capital stock, or any direct or indirect
redemption, purchase or other acquisition of any of such stock
by SportsLine USA Inc.;
(L) to the best of SportsLine USA Inc.'s knowledge,
any other event or condition of any character that,
individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect;
(M) any disposal of, or agreement to dispose of, any
asset or property, tangible or intangible, except in the
ordinary course of business and which has not had a Material
Adverse Effect, and in each case for a consideration at least
equal to the fair market value of such asset or property, nor
any lease or license to others, or agreement to lease or
license, any property or asset, except in the
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ordinary course of business and which has not had a Material
Adverse Effect;
(N) any purchase or agreement to purchase or
otherwise acquire any debt or equity securities of any
corporation, partnership, joint venture, firm or other entity;
(O) any material expenditure or commitment for the
purchase, acquisition, construction or improvement of a
capital asset;
(P) any material change in, or agreement to change
materially, any employee profit sharing, stock option, stock
purchase, pension, bonus, incentive, retirement, medical
reimbursement, life insurance, deferred compensation or any
other employee benefit plan or arrangement;
(Q) any material change in the contingent obligations
of SportsLine USA Inc. by way of guaranty, endorsement,
indemnity, warranty or otherwise; or
(R) any agreement or commitment by SportsLine USA
Inc. to do any of the things described in this Subsection
(xxvii) hereof.
(xxviii) SportsLine USA Inc. has in full force and effect fire
and casualty insurance policies, with extended coverage, sufficient in
amount (subject to reasonable deductibles) to allow it to replace any
of its tangible properties that might be damaged or destroyed.
17.2A SportsLine USA, Inc. further warrants and represents that at all
times during the term of this Agreement:
(i) it shall, maintain insurance on its business operations
and property in such amounts as are necessary to insure against risks
usually insured against by persons operating similar businesses or
properties by insurers of recognized responsibility;
(ii) it has sufficient right and authority to grant to CBS
all licenses and rights granted by SportsLine USA Inc. hereunder;
(iii) it owns or controls all right, title, and interest in
and to the SportsLine USA Inc. Site, and all Intellectual Property
Rights therein, including, without limitation, the logo "SportsLine"
necessary to carry out its obligation hereunder and to grant and assign
the rights and licenses granted to CBS herein;
(iv) the CBS SportsLine Site, including the logo "SportsLine"
shall not, infringe or otherwise violate any rights of any third party;
(v) it shall obtain all necessary authorization, releases,
consents, clearances and
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licenses to use any SportsLine USA Inc. Content and all Intellectual
Property Rights therein, on the CBS SportsLine Site, and to otherwise
operate the CBS SportsLine Site as provided in this Agreement; and
(vi) it shall indemnify its directors, including any CBS
designees, and its officers to the fullest extent permitted under
Section 145 of the General Corporation law of the State of Delaware.
17.3 NO OTHER WARRANTIES. THE WARRANTIES SET FORTH IN THIS SECTION 17
ARE THE SOLE AND EXCLUSIVE WARRANTIES MADE BY EACH PARTY HEREUNDER AND ARE IN
LIEU OF ALL OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT
LIMITED) TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, ALL OF WHICH ARE HEREBY EXPRESSLY DISCLAIMED.
17.4 The warranties and representations of the parties made pursuant to
paragraph 17 of this Agreement shall survive any investigation made by either
party and shall survive the execution and delivery of this Agreement.
18. INDEMNIFICATION
Each party (the "INDEMNIFYING PARTY") shall indemnify, hold harmless
and defend the other party (collectively, the "INDEMNIFIED PARTY") from and
against any loss, cost, liability or expense (including court costs and
reasonable attorneys' fees) arising out of or resulting from any breach by the
Indemnifying Party of any representation, warranty, covenant or agreement
contained herein, including, without limitation, any breach of any warranty
concerning the "SportsLine" logo or the CBS Logos set forth in paragraph 17
hereof. In the event of any such claim, the Indemnified Party shall: (i)
promptly, but in any no later than twenty (20) days after receiving such claim,
notify the Indemnifying Party of the claim; (ii) allow the Indemnifying Party to
direct the defense and settlement of such claim with counsel of the Indemnifying
Party's choosing; and (iii) provide the Indemnifying Party, at the Indemnifying
Party's expense, with information and assistance that is reasonably necessary
for the defense and settlement of the claim. The Indemnified Party reserves the
right to retain counsel, at the Indemnified Party's sole expense, to participate
in the defense of any such claim. The Indemnifying Party shall not settle any
such claim or alleged claim without first obtaining the Indemnified Party's
prior written consent, which consent shall not be unreasonably withheld, if the
terms of such settlement would adversely affect the lndemnified Party's rights
under this Agreement or otherwise. If the Indemnifying Party assumes the defense
and settlement of the claim as set forth above, then the Indemnifying Party's
only obligation is to satisfy the claim, judgment or approved settlement.
19. TERMINATION
19.1 TERMINATION. CBS shall have the right to terminate this Agreement
upon the
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acquisition of forty (40) percent or more of the voting power of the outstanding
equity securities of SportsLine USA Inc. by a CBS Competitor. SportsLine USA,
Inc. shall have the right to terminate this Agreement as set forth in paragraph
7.2. In addition, either party shall have the right to terminate this Agreement
if:
(i) the other party breaches any material term or condition
of this Agreement that is capable of being cured and fails to cure such
breach within thirty (30) days after written notice from the
non-breaching party; provided, however, that the non-breaching party
shall extend the deadline for curing any breach appropriately if it is
capable of being cured but not reasonably within thirty (30) days;
(ii) the other party becomes insolvent or unable to pay its
debts as they mature or makes an assignment for the benefit of its
creditors;
(iii) the other party is the subject of a voluntary petition
in bankruptcy or any voluntary proceeding relating to insolvency,
receivership, liquidation, or composition for the benefit of creditors,
if such petition or proceeding is not dismissed within sixty (60) days
of filing;
(iv) the other party becomes the subject of any involuntary
petition in bankruptcy or any involuntary proceeding relating to
insolvency, receivership, liquidation, or composition for the benefit
of creditors, if such petition or proceeding is not dismissed within
sixty (60) days of filing; or
(v) the other party is liquidated or dissolved.
19.2 EFFECT OF TERMINATION.
Upon any termination of this Agreement:
(i) SportsLine USA Inc. shall remove the CBS Sports Content,
CBS Logos and CBS Merchandise from the CBS SportsLine Site as soon as
commercially and technically practicable, given customary Internet
business practices, but in no event shall any such material remain on
the CBS SportsLine Site more than thirty (30) days after CBS's notice
of termination;
(ii) each party shall immediately return to the other party
all Confidential Information of the other party in its possession or
control, and shall provide the other party with an officer's written
certification as to the return of such Confidential Information;
(iii) CBS shall return to SportsLine USA Inc. for cancellation
the stock certificate(s) representing all Content Shares issued to CBS
during the Contract Year in
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which the Agreement is terminated. Upon such cancellation, SportsLine
USA Inc. shall reissue to CBS a new stock certificate for that number
of Content Shares equal to the product of (i) the original number of
Content Shares issued in such Contract Year times (ii) a fraction, the
numerator of which is the number of whole months elapsed during such
Contract Year and the denominator which is twelve (12) (ten (10) in the
case of the first Contract Year).
(iv) if any Deficit Ad Amount for a Contract Year exists at
the time of the Agreement's termination, CBS shall return to SportsLine
USA Inc. for cancellation the stock certificate(s) representing all Ad
Shares issued to CBS during the Contract Year in which the Agreement is
terminated. Upon such cancellation, SportsLine USA Inc. shall reissue
to CBS a new stock certificate representing the original number of Ad
Shares issued in such Contract Year less the number of Ad Shares
represented by the Deficit Ad Amount for such Contract Year.
19.3 NON-EXCLUSIVE REMEDY. Except as expressly set forth in this
Agreement, the exercise by either party of any remedy under this Agreement shall
be without prejudice to its other remedies under this Agreement or otherwise.
19.4 SURVIVAL. The rights and obligations of the parties under
paragraphs 12, 15, 16, 17, 18, 19.2, 19.3 and 20 shall survive any termination
of this Agreement.
20. GENERAL
20.1 ASSIGNMENT. Neither party may assign this Agreement in whole or in
part without the other party's prior written consent. Any attempt to assign this
Agreement without such consent shall be void and of no effect ab initio.
Notwithstanding the foregoing, CBS may have the right to assign this Agreement
to any entity controlling, controlled by or under common control with, CBS, or
to any entity that acquires CBS by purchase of stock or by merger or otherwise,
or by obtaining substantially all of CBS's assets (a "CBS Assignee"), provided
that any such CBS Assignee, or any division thereof, thereafter performs the
same functions as CBS Sports performed prior to the date of such assignment and
succeeds to all of the rights and is subject to all of the obligations of CBS
under this Agreement.
20.2 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without regard to or
application of conflicts of-law rules or principles.
20.3 JURISDICTION; VENUE; BENCH TRIAL. Each party irrevocably submits
to the non-exclusive jurisdiction of the United States District Court for the
Southern District of New York for the purposes of any suit, action or other
proceeding arising out of this Agreement or any transaction contemplated hereby.
Each party further agrees that service of any process, summons, notice or
document by U.S. registered mail to such party's respective address set forth
above will
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be effective service of process for any action, suit or proceeding in New York
with respect to any matters to which it has submitted to jurisdiction as set
forth above in the immediately preceding sentence. Each party irrevocable and
unconditionally waives any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement or the transaction contemplated
hereby in the United States District Court for the Southern District of New
York, and hereby further irrevocably and unconditionally waives and agrees not
to plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum. TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY
WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT
OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE,
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS
AGREEMENT, ANY RELATED AGREEMENT OR THE SUBJECT MATTER HEREOF IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING OR WHETHER IN CONTRACT, IN TORT OR
OTHERWISE.
20.4 COMPLIANCE WITH LAWS. Each party shall comply in all material
respects with all laws and regulations applicable to its activities under this
Agreement.
20.5 SEVERABILITY. If any provision of this Agreement is found invalid
or unenforceable, that provision shall be enforced to the maximum extent
permissible, and the other provisions of this Agreement shall remain in force.
20.6 NOTICES. All notices under this Agreement shall be deemed given
when delivered personally, sent by confirmed facsimile transmission, or sent by
certified or registered U.S. mail or nationally-recognized express courier,
return receipt requested, to the address shown above or as may otherwise be
specified by either party to the other in accordance with this subparagraph.
Either party may change its address for notices under this Agreement by giving
written notice to the other party by the means specified in this subparagraph:
To SportsLine USA Inc.: To CBS:
SportsLine USA Inc. CBS Sports
6340 NW 5th Way 51 West 52nd Street
Ft. Lauderdale, FL 33309 New York, NY 10019
Attention: President Attention: President
Phone: 954-351-2120 Phone: 212-975-4321
Fax: 954-351-9175 Fax: 212-975-7292
Copy to: General Counsel
CBS Inc.
51 West 52nd Street
New York, NY 10019
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20.7 INDEPENDENT CONTRACTORS. The parties to this Agreement are
independent contractors. There is no relationship of partnership, joint venture,
employment, franchise, or agency between the parties. Neither party shall have
the power to bind the other or incur obligations on the other's behalf without
the other's prior written consent.
20.8 WAIVER. No failure of either party to exercise or enforce any of
its rights under this Agreement shall act as a waiver of such right.
20.9 ENTIRE AGREEMENT. This Agreement and its Exhibits (all of which
are incorporated herein by reference) are the complete and exclusive agreement
between the parties with respect to the subject matter hereof, superseding and
replacing any and all prior or contemporaneous agreements, communications, and
understandings (both written and oral) regarding such subject matter. This
Agreement may only be modified, or rights under it waived, by a written document
executed by both parties.
20.10 ATTORNEYS FEES. The prevailing party in any action to enforce
this Agreement (including the Stockholder Agreement) shall be entitled to
recover reasonable costs and expenses including, without limitation, reasonable
attorneys' fees.
20.11 COUNTERPARTS. This Agreement may be executed in counterpart, each
of which shall be deemed an original, but both of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives as of the Effective Date.
SPORTSLINE USA, INC. CBS INC.
By: /s/ MICHAEL LEVY By: /s/ FREDERIC G. REYNOLDS
-------------------------- -------------------------
Name: Michael Levy Name: Frederic G. Reynolds
------------------------ -----------------------
Title: President Title: Executive Vice President, CFO
----------------------- ------------------------------
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TABLE OF EXHIBITS
Exhibit A -- CBS Sports Content
Exhibit B -- CBS Logos
Exhibit C -- CBS License Guidelines and Restrictions
Exhibit D -- Advertising and Promotion-Placements
Exhibit E -- Ad Guarantees and Shares
Exhibit F -- Signature Events
Exhibit G -- Content Shares
Exhibit H -- Form of Warrant
Exhibit I -- Warrant Shares
Exhibit J -- Stockholder Agreement
Exhibit K -- CBS Sports Internet Commitments
Exhibit L -- New Signature Events
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EXHIBIT A
CBS SPORTS CONTENT
CBS SPORTS PROGRAM SCHEDULES
CBS SPORTS PRESS RELEASES
CBS SPORTS ON-AIR PROMOTION (VIDEO :10; :20; :30)
CBS SPORTS PRODUCTION RESEARCH MATERIALS DOCUMENTS SUPPLIED ON-
AIR TALENT AND PRODUCERS, DIRECTORS
CBS SPORTS PROGRAM MATERIALS (VIDEO)
A. FEATURE PROGRAMMING PRODUCED FOR HALF TIME AND
PREGAME SHOWS.
B. VIGNETTES (E.G., GOLF TIPS, GOLF RULES).
C. ORIGINAL MATERIAL PRODUCED AT SIGNATURE EVENTS DAYS PRIOR TO
AIR (SUBJECT TO THE PRESSURES OF EVENT PRODUCTION AND
DISTRIBUTION).
D. REPLAYS FROM EVENTS THAT CBS SPORTS CONTROLS "INTERNET"
RIGHTS TO
E. CBS SPORTS IDEAS FOR ORIGINAL "INTERNET" ACTIVITIES THAT
DEVELOP FROM TIME TO TIME.
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EXHIBIT B
CBS LOGOS
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<PAGE>
EXHIBIT C
CBS LICENSE GUIDELINES AND RESTRICTIONS
1. GENERAL
1. Subject to the terms of the Transition Period (as hereinafter
defined), all information currently included within the "Odds
and Analysis" section of the SportsLine USA, Inc. Site shall
not be included within the CBS SportsLine Site and may be
private labeled; provided, that the CBS SportsLine Site may
include information commonly published in daily newspapers in
the United States, subject to paragraph 7.5 of the Agreement.
a) The home page of the CBS SportsLine Site shall not
have an "Odds and Analysis" button or other
references to gambling.
b) The odds section of the CBS SportsLine Site shall not
display the word "odds" in its main headings or
otherwise in a prominent manner and shall be referred
to as "The Daily Line" or such other title as may be
mutually agreed.
c) Leading up to and during the NCAA basketball
tournaments and the Masters Golf Tournament, the CBS
SportsLine Site home page will prominently feature a
graphic link to the CBS SportsLine Site coverage of
that event. The section(s) of the CBS SportsLine Site
containing such coverage will be devoid of references
to odds or gambling.
d) There shall be no direct cross-links between the
"Daily Line" section and coverage on the CBS
SportsLine Site of amateur or collegiate events. Any
other cross-links with the "Daily Line" section shall
be subject to restrictions imposed by right holders.
e) The CBS SportsLine Site shall not include advertising
from casinos, sports books or other gambling
enterprises, nor shall it "courtesy" any enterprise
or individual for having supplied information to the
CBS SportsLine Site.
f) Analysis of sports events shall not be presented
within the "Daily Line" section.
g) Odds information shall not be presented in the
scoreboard section of the CBS SportsLine Site.
h) During the one-month period following the Effective
Date, or such longer period as may be mutually
agreed, (the "Transition Period"), the CBS SportsLine
Site may include links to the Content private labeled
pursuant to paragraph 1, above; provided, however,
prior to the conclusion of the NCAA Mens Basketball
Tournament, SportsLine USA, Inc. shall not display
any advertisements from any casinos, sportsbooks, or
other
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gambling related enterprises.
2. The CBS SportsLine Site shall not include Content that: (i) is
sexually explicit, (ii) contains profanity, (iii) is
slanderous or libelous or (iv) that denigrates a particular
group based on gender, race, creed, religion, sexual
preference or handicap. The parties acknowledge that
SportsLine USA Inc. may not be able to prevent such content
from appearing on the CBS SportsLine Site due to the actions
of non-employees, although SportsLine USA, Inc. shall take
such reasonable steps to prevent such action by non-employees
as may be prudent under the circumstances.
3. Each page of the CBS SportsLine Site containing any CBS Sports
Content, CBS Logos or CBS Merchandise shall have the same look
and feel of CBS Sports as CBS Sports shall from time to time
adopt.
II. CBS SPORTS CONTENT
1. Each party shall notify the other of all errors, omissions,
and/or inaccuracies in the CBS Sports Content within
forty-eight (48) hours after it becomes aware thereof.
2. If SportsLine USA, Inc. provides such notice, it shall specify
to CBS what action, if any, it has taken to correct the error,
omission and/or inaccuracy.
3. If CBS provides such a notice, or receives such notice, it may
specify the action to be taken by SportsLine USA Inc. to
correct the error, omission and/or inaccuracy or resubmit such
content.
4. All CBS Sports Content shall be subject to restrictions and
instructions disclosed by CBS at any time.
III. LOGOS
1. SportsLine USA Inc. shall place a trademark notice to be
furnished by CBS on all items or materials utilizing CBS
Logos. CBS shall provide SportsLine USA, Inc. with the manner,
style and placement of such notice, which shall be
incorporated into this Section.
IV. PRIVATE LABELING AND CROSS-LINKS
1. Subsequent to the Transition Period, SportsLine USA, Inc.
shall not establish any links from the CBS SportsLine Site to
any private labeled gambling content.
2. Subsequent to the Transition Period, SportsLine USA Inc. shall
not conduct any cross promotions between the CBS SportsLine
Site and any Internet Site to which any gambling content has
been private labeled.
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<PAGE>
V. OWNERSHIP
1. SportsLine USA Inc. shall place an appropriate copyright
notice to be furnished by CBS on all pages of the CBS
SportsLine Site.
2. SportsLine USA Inc. and CBS shall mutually develop the
procedures for placing any third party copyright notice on any
CBS Content Page.
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EXHIBIT D
ADVERTISING AND PROMOTION - PLACEMENTS
PLACEMENT OBLIGATIONS
- CBS will be responsible for the placement of all advertising and promotion of
the CBS SportsLine Site
PLACEMENT POSSIBILITIES
- CBS Television Network Sports programming
- Other CBS Television Network programming, e.g. Evening News, Primetime,
Daytime, Late Night
- Other CBS television programming. e.g. Syndication, CBS EYE ON PEOPLE
- CBS Owned and Operated Television Stations programming, e.g. sport segments of
local news, local avails
- CBS Owned and Operated Radio Stations programming, e.g. local news, music,
sports
- Banner Advertising on CBS Internet Sites
PLACEMENT TYPES
- 30 second units where available
- 15 second units where available
- 10 second units where available
- URL Scrolls
- On-air mention
- Banner ads
- Credit rolls/sign-offs
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EXHIBIT E
AD GUARANTEES AND SHARES
SportsLine USA Inc. will pay CBS for the use of CBS advertising and promotion
time pursuant to the following schedule:
TOTAL SHARES OF
YEAR(1) AMOUNT(2) CONVERSION PRICE COMMON STOCK
--------------------------------------------------------------------------------
First Contract Year $7 million $4.12 1,699,860
Second Contract Year $11 million(3) $6.39 1,722,293
Third Contract Year $11 million $8.52 1,291,720
Fourth Contract Year $14 million $10.65 1,315,194
FIFTH CONTRACT YEAR $14 MILLION $12.77 1,095,933
-------------------------------------------------------------------------------
TOTAL $57 MILLION $8/SHARE 7,125,000
--------
(1) Each payment shall be made on the first business day of each
Contract Year commencing in 1997.
(2) Placement costs:
- Regular time units priced at average unit cost for time
period
- URL Scroll, banner ads, priced at 10 second unit
- Credit rolls and signoffs priced at five (5) second unit
- On-air mention at 15 second unit
(3) Includes Winter Olympics in l998
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EXHIBIT F
SIGNATURE EVENTS
/bullet/ The 1998 Winter Olympics
/bullet/ 1997 - 2000 NCAA Basketball
Final Four Tournament
/bullet/ 1997 - 1998 PGA Golf Championship
and all PGA Tour events
/bullet/ 1997 - 1998 The Masters Golf Tournament
/bullet/ 1997 - 2001 Daytona 500
/bullet/ 1997 - 2000 U.S. Open Tennis
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EXHIBIT G
CONTENT SHARES
CONTENT CONVERSION SHARES OF
DATE* PAYMENT PRICE COMMON STOCK
-----------------------------------------------------------------------------
First Contract Year $1 million $4.12 180,823
Second Contract Year $1 million $6.39 117,213
Third Contract Year $1 million $8.52 105,750
Fourth Contract Year $1 million $10.65 103,754
Fifth Contract Year $1 million $12.77 117,460
-----------------------------------------------------------------------------
TOTAL $5 MILLION $8/SHARE 625,000
* Each payment shall be made on the first business day of each Contract
Year commencing in 1997.
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EXHIBIT H
FORM OF WARRANT
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<PAGE>
000,000 WARRANTS
THESE WARRANTS AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THESE
WARRANTS (THE "WARRANT SHARES") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 (THE "SECURITIES ACT") OR UNDER APPLICABLE STATE SECURITIES LAWS.
THE WARRANT SHARES MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS
REGISTERED UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR
PURSUANT TO AVAILABLE EXEMPTIONS FROM SUCH REGISTRATION, PROVIDED THAT THE
SELLER DELIVERS TO THE COMPANY AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
CONFIRMING THE AVAILABILITY OF SUCH EXEMPTION. INVESTORS SHOULD BE AWARE THAT
THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME.
[INSERT DATE- BEGINNING OF CONTRACT YEAR]
SPORTSLINE USA, INC.
WARRANTS FOR THE PURCHASE OF SHARES OF COMMON STOCK
FOR VALUE RECEIVED, SPORTSLINE USA, INC., a Delaware corporation
("SportsLine" or the "Company"), hereby certifies that CBS INC (the "Holder") is
entitled, subject to the provisions contained herein, to purchase from the
Company 000,000 fully paid and non-assessable shares of Common Stock (as defined
below), subject to adjustment as provided herein, at an exercise price per share
of Common Stock (the "Exercise Price") of $[INSERT EXERCISE PRICE].
The term "Common Stock" means the Common Stock, par value $.01 per
share, of the Company as constituted on the date hereof. The number of shares of
Common Stock to be received upon the exercise of these Warrants may be adjusted
from time to time as hereinafter set forth. The shares of Common Stock
deliverable upon such exercise, and as adjusted from time to time, are
hereinafter referred to as "Warrant Stock." The term "Other Securities" means
any other securities that may be issued by the Company in addition to, or in
substitution for, the Warrant Stock.
References herein to the "Company" are to (i) SportsLine and any
successor thereto, (ii) any successor corporation resulting from the merger or
consolidation of SportsLine, or any successor thereto, with another corporation
or (ii) any corporation to which SportsLine, or any successor thereto, has
transferred its property or assets as an entirety or substantially as an
entirety.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of these Warrants, and (in the
case of loss, theft or destruction) of reasonably satisfactory indemnification,
and upon surrender and cancellation of these Warrants, if mutilated, the Company
shall execute and deliver new Warrants of like tenor and date. Any such new
Warrants, upon execution and delivery, shall constitute an additional
contractual obligation on the part of the Company, whether or not these Warrants
so lost, stolen, destroyed or mutilated shall be at any time enforceable by
anyone.
The Holder agrees with the Company that these Warrants are issued, and
all the rights hereunder shall be held subject to, all of the conditions,
limitations and provisions set forth herein, including the following:
1. EXERCISE OF WARRANTS. The Warrants may be exercised, in whole or in
part, at any time prior to December 31, ____ [END OF CONTRACT YEAR]; provided,
however, that the
<PAGE>
exercisability of the Warrants shall be subject to the condition that the
Agreement dated as of March 5, 1997 between SportsLine and the Holder (the
"Principal Agreement"), as amended or modified, shall be in effect, and no
further Warrants shall be exercisable on or after the expiration, nonrenewal or
termination of said agreement. Subject to the foregoing, the Warrants shall be
exercisable by presentation and surrender of these Warrants to the Company at
its principal office (which on the date hereof is 6340 N.W. 5th Way, Fort
Lauderdale, Florida 33309), or at the office of its stock transfer agent (which
on the date hereof is the Company), if any, with the Warrant Exercise Form
attached hereto duly executed and accompanied by payment (either in cash or by
certified or official bank check or checks, payable to the order of the Company)
of the Exercise Price for the number of shares specified in such form. Upon
receipt by the Company of the Warrants, together with the Exercise Price, at its
office, or by the Company's stock transfer agent at its office, in proper form
for exercise, the Holder shall be deemed to be the holder of record of the
Warrant Stock (and Other Securities) issuable upon such exercise,
notwithstanding that the transfer books of the Company shall then be closed or
that certificates representing such Warrant Stock (or Other Securities) shall
not then be actually delivered to the Holder. The Company shall pay any and all
documentary stamp or similar issue or transfer taxes payable in respect of the
issue or delivery of Warrant Stock (and Other Securities) upon exercise of these
Warrants.
2. RESERVATION OF SHARES AND OTHER SECURITIES. The Company will at all
times reserve for issuance and delivery upon exercise of these Warrants all
shares of Warrant Stock and other shares of capital stock of the Company (and
Other Securities) from time to time receivable upon exercise of these Warrants.
All such shares (and Other Securities) shall be duly authorized and, when issued
upon such exercise, shall be validly issued, fully paid and non-assessable and
free and clear of all preemptive rights.
3. FRACTIONAL SHARES. No fractional shares or scrip representing
fractional shares shall be issuable upon the exercise of these Warrants, but the
Company shall pay the Holder an amount equal to the fair market value of such
fractional share in lieu of each fraction of a share otherwise issuable upon any
exercise of these Warrants, as determined by the Board of Directors in its
reasonable discretion.
4. EXCHANGE OF WARRANTS. These Warrants are exchangeable, without
expense, at the option of the Holder, upon presentation and surrender hereof to
the Company or at the office of its stock transfer agent, if any, for other
Warrants of different denominations, entitling the Holder to purchase in the
aggregate the same number of shares of Warrant Stock (and Other Securities)
purchasable hereunder.
5. RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be
entitled to any rights as a shareholder of the Company, either at law or in
equity, and the rights of the Holder are limited to those expressed herein.
6. ANTI-DILUTION PROVISIONS.
6.1 ADJUSTMENT FOR RECAPITALIZATION. If the Company shall at any time
subdivide its outstanding shares of Common Stock (or Other Securities at the
time receivable upon the exercise of these Warrants) by recapitalization,
reclassification or split-up thereof, or if the Company shall declare a stock
dividend or distribute shares of Common Stock to its shareholders, the number of
shares of Common Stock (or Other Securities) subject to these Warrants
immediately prior to such subdivision shall be proportionately increased and the
Exercise Price per share shall be proportionately decreased, and if the Company
shall at any time combine the outstanding shares of Common Stock (or Other
Securities) by recapitalization, reclassification or combination thereof, the
number of shares of Common Stock (or Other Securities) subject to these Warrants
immediately prior to such combination shall be proportionately decreased and the
Exercise Price per share shall be proportionately increased.
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Any such adjustments pursuant to this Section 6.1 shall be effective at the
close of business on the effective date of such subdivision or combination or,
if any adjustment is the result of a stock dividend or distribution, then the
effective date for such adjustment shall be the record date therefor.
6.2 ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER, ETC. (a) In
case of any reorganization of the Company (or any other corporation, the
securities of which are at the time receivable upon the exercise of these
Warrants) after the date hereof or in case after such date the Company (or any
such other corporation) shall consolidate with or merge into another corporation
or convey all or substantially all of its assets to another corporation, then,
and in each such case, the Holder, upon the exercise hereof, at any time after
the consummation of such reorganization, consolidation, merger or conveyance,
shall be entitled to receive, in lieu of the securities and property receivable
upon the exercise of these Warrants prior to such consummation, the securities
or property to which the Holder would have been entitled upon such consummation
if the Holder had exercised these Warrants immediately prior thereto (but had
not exercised any rights with respect to such securities or property in
connection with the reorganization, consolidation, merger or conveyance); in
each such case, the terms of these Warrants shall be applicable to the
securities or property receivable upon the exercise of these Warrants after such
consummation.
(b) In any case where the Company shall consolidate with or merge into
another corporation, and shall not be the surviving corporation, or shall convey
all or substantially all of its assets to another corporation, then, and in each
such case, the Company shall, as a condition of the closing of such transaction,
require that the surviving corporation or the corporation that shall have
received substantially all of the Company's assets expressly assume the
obligations of the Company under these Warrants in a form reasonably
satisfactory to the Holder.
6.3 NO IMPAIRMENT. The Company will not, by amendment of its charter or
through reorganization, consolidation, merger, dissolution, issue or sale of
securities, sale of assets or any other voluntary action, willfully avoid or
seek to avoid the observance or performance of any of the terms of these
Warrants, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder against impairment.
Without limiting the generality of the foregoing, while these Warrants are
outstanding, the Company (a) will not permit the par value, if any, of the
shares of Warrant Stock to be above the amount payable therefor upon such
exercise and (b) will take all such action as may be necessary or appropriate in
order that the Company may validly and legally issue or sell fully paid and
non-assessable shares of Warrant Stock and Other Securities upon the exercise of
these Warrants.
6.4 CERTIFICATE AS TO ADJUSTMENTS. In each case of an adjustment in the
number of shares of Warrant Stock or Other Securities receivable upon the
exercise of these Warrants, the Company at its expense will promptly compute
such adjustment in accordance with the terms of these Warrants and prepare a
certificate executed by an executive officer of the Company setting forth such
adjustment and showing in detail the facts upon which such adjustment is based.
The Company will forthwith mail a copy of each such certificate to the Holder.
6.5 NOTICES OF RECORD DATE, ETC. In case:
(a) the Company shall take a record of the holders of its Common Stock
(or Other Securities at the time receivable upon the exercise of these Warrants)
for the purpose of entitling them to receive any dividend (other than a cash
dividend at the same rate as the rate of the last cash dividend theretofore
paid) or other distribution, or any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any other securities, or
to receive any other right; or
(b) of any capital reorganization of the Company, any reclassification
of the capital stock
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<PAGE>
of the Company, any consolidation or merger of the Company with or into another
corporation, or any conveyance of all or substantially all of the assets of the
Company to another corporation; or
(c) of any voluntary or involuntary dissolution, liquidation or winding
up of the Company;
then, and in each such case, the Company shall mail or cause to be mailed to the
Holder a notice specifying, as the case may be, (i) the date on which a record
is to be taken for the purpose of such dividend, distribution or right, and
stating the amount and character of such dividend, distribution or right, or
(ii) the date on which such reorganization, reclassification, consolidation,
merger, conveyance, dissolution, liquidation or winding up is to take place, and
the time, if any, to be fixed, as to which the holders of record of Warrant
Stock (or such other securities at the time receivable upon the exercise of
these Warrants) shall be entitled to exchange their shares of Warrant Stock (or
such other securities) for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding up. Such notice shall be mailed at least 20
days prior to the date therein specified and these Warrants may be exercised
prior to said date during the term of these Warrants.
8. RESTRICTIONS ON TRANSFER OF WARRANTS, WARRANT STOCK AND OTHER
SECURITIES. The Warrant Stock and Other Securities may not be sold, transferred
or otherwise disposed of unless registered under the Securities Act of 1933 (the
"Securities Act") and any applicable state securities laws or pursuant to
available exemptions from such registration, provided that the seller delivers
to the Company an opinion of counsel satisfactory to the Company confirming the
availability of such exemption.
9. LEGEND. Unless the shares of Warrant Stock or Other Securities have
been registered under the Securities Act, upon exercise of any of these Warrants
and the issuance of any of the shares of Warrant Stock or Other Securities, all
certificates representing such securities shall bear on the face thereof
substantially the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 (THE "SECURITIES ACT") OR UNDER APPLICABLE STATE SECURITIES LAWS
AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS
REGISTERED UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES
LAWS OR PURSUANT TO AVAILABLE EXEMPTIONS FROM SUCH REGISTRATION,
PROVIDED THAT THE SELLER DELIVERS TO THE COMPANY AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY CONFIRMING THE AVAILABILITY OF SUCH
EXEMPTION.
10. NO RIGHTS OR LIABILITIES AS SHAREHOLDER. This Warrant does not by
itself entitle the Holder to any voting rights or other rights as a shareholder
of the Company. In the absence of affirmative action by the Holder to purchase
Warrant Stock by exercise of this Warrant, no provisions of this Warrant, and no
enumeration herein of the rights or privileges of the Holder shall cause the
Holder to be a stockholder of the Company for any purpose.
11. AMENDMENT; WAIVER. Any term of the Warrants may be amended and the
observance of any term of the Warrants may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Holder. Any amendment or waiver effected
in accordance with this Section shall be binding upon the Holder and the
Company.
12. NOTICES. All notices required hereunder shall be in writing and
shall be deemed given when telegraphed, delivered personally or within two days
after mailing when mailed by certified or
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<PAGE>
registered mail, return receipt requested, to the Company at its principal
office, or to the Holder at the address set forth on the record books of the
Company, or at such other address of which the Company or the Holder has been
advised by notice in writing hereunder.
13. ASSIGNMENT. These Warrants, and the rights of the Holder hereunder,
are not assignable by the Holder, except to a CBS Assignee (as defined in the
Principal Agreement). Any attempted assignment in violation of this Section 13
shall be null and void.
14. APPLICABLE LAW. These Warrants shall be governed by, and construed
in accordance with, the laws of the State of Delaware, without giving effect to
conflicts of law principles.
IN WITNESS WHEREOF, the Company has caused these Warrants to be signed
on its behalf, in its corporate name, by its duly authorized officer, all as of
the day and year first above written.
SPORTSLINE USA, INC.
By:
--------------------------------
Title: President
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<PAGE>
WARRANT EXERCISE FORM
The undersigned hereby irrevocably elects to exercise Warrants to purchase
_______________ shares of Common Stock of SportsLine USA, Inc., a Delaware
corporation, and hereby makes payment of $_________ in full satisfaction
therefor.
____________________________________________
Signature
____________________________________________
Signature, if jointly held
____________________________________________
Date
INSTRUCTIONS FOR ISSUANCE OF STOCK
(if other than to the Holder of the within Warrants)
Name ___________________________________________________________________________
(Please typewrite or print in block letters)
Address ________________________________________________________________________
________________________________________________________________________________
Social Security or Taxpayer Identification Number ______________________________
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<PAGE>
EXHIBIT I
WARRANT SHARES
WARRANT SHARES OF
GRANT* TOTAL COST PRICE COMMON STOCK
--------------------------------------------------------------------------------
First Contract Year $ 3,800,000 $4 950,000
Second Contract Year $ 5,700,000 $6 950,000
Third Contract Year $ 7,600,000 $8 950,000
Fourth Contract Year $ 9,500,000 $10 950,000
Fifth Contract Year $11,400,000 $12 950,000
--------------------------------------------------------------------------------
TOTAL $38,000,000 $8/SHARE 4.75 MILLION
* Each warrant will be granted on the first business day of each Contract
Year commencing in 1997 and is exercisable during the Contract Year in
which it is granted.
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<PAGE>
EXHIBIT J
STOCKHOLDER AGREEMENT
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<PAGE>
CBS/SPORTSLINE STOCKHOLDER AGREEMENT
This CBS/SPORTSLINE STOCKHOLDER AGREEMENT (this "AGREEMENT") is made
and entered into as of March 5, 1997, between SportsLine USA, Inc., a Delaware
corporation (the "COMPANY"), and CBS INC., a New York corporation ("CBS").
R E C I T A L S
A. CBS and the Company have entered into that certain Agreement, dated
as of the date hereof (the "PRINCIPAL AGREEMENT;" capitalized terms used herein
and not otherwise defined shall have the meanings defined in the Principal
Agreement), pursuant to which, among other things, CBS will acquire shares of
Common Stock and Warrants in consideration of the license by CBS of the CBS
Logos and the CBS Content and provision by CBS of certain broadcast advertising
and promotion.
B. CBS and the Company have agreed that the terms and conditions of
this Agreement shall govern CBS's rights with respect to the shares of Common
Stock it acquires pursuant to the Principal Agreement or upon the exercise of
the Warrants.
NOW THEREFORE, in consideration of the above recitals and the mutual
covenants made herein, the parties hereby agree as follows:
1. INFORMATION AND DIRECTOR RIGHTS.
1.1 FINANCIAL AND OTHER INFORMATION. The Company covenants and agrees
that, so long as the CBS Percentage (as defined in Section 1.3 hereof) is at
least ten percent (10%), the Company will furnish to CBS such financial and
other information (including annual, quarterly and monthly reports and an annual
budget) as the Company may from time to time be required to furnish to the
holders of the Company's outstanding Series A, Series B or Series C preferred
stock (the "PREFERRED STOCK HOLDERS") pursuant to the Amended and Restated
Investors' Rights Agreement dated as of September 25, 1996, among the Company,
the holders of the Preferred Stock, The Estate of Burk Zanft and Michael Levy,
as now in effect and as hereinafter amended from time to time in accordance with
the terms thereof (the "INVESTORS' RIGHTS AGREEMENT"). Such financial and other
information shall be provided to CBS by the Company at such time or times and in
the same manner as it is provided to the Preferred Stock Holders in accordance
with the Investors' Rights Agreement. CBS agrees to hold all such financial and
other information received pursuant to this Section 1.1 in confidence, and not
to use or disclose any of such information to any third party (other than to any
regulatory authority to which CBS is subject requesting the same), except to the
extent such information may be made publicly available by the Company.
1.2 CBS DESIGNEES. So long as the CBS Percentage is at least ten
percent (10%), CBS shall have the right to elect (and maintain in office) as
members of the Company's Board of Directors (the "BOARD") a number of
individuals equal to the product of (i) total number of members of the Board,
times (ii) the CBS Percentage (the "CBS DESIGNEES"). The CBS Designees shall be
designated from time to time in writing by CBS. Upon execution of this
Agreement, the Company shall cause two (2) CBS Designees to be appointed to the
Board. The Company further agrees to use its best efforts to cause the
nomination and election from time to time of the CBS Designees, including
obtaining the agreement of the holders of a majority of its outstanding Common
Stock and preferred stock to vote their shares of the Company's capital stock to
cause the election to the Board of any CBS Designees designated for election to
the Board by CBS.
1.3 OBSERVER RIGHTS. If CBS is no longer entitled to appoint CBS
Designees in accordance with Section 1.2, then so long as CBS owns not less than
250,000 shares of Common Stock, CBS, at its own expense, shall be entitled to
have a representative attend all meetings of the Company's Board of Directors in
a nonvoting observer capacity (each, a "CBS REPRESENTATIVE"). If CBS designates
a CBS Representative to the Company, the Company shall concurrently provide the
CBS Representative with copies of all notices, minutes, consents and other
materials it provides to members of the Board of Directors; provided, that the
<PAGE>
CBS Representative shall agree to hold in confidence and trust and to act in a
fiduciary manner with respect to all information so provided; and provided
further, that the Company reserves the right to withhold any information and to
exclude any CBS Representative from any meeting or portion thereof if access to
such information or meeting or attendance at such meeting could adversely affect
the attorney-client privilege between the Company and its counsel or would
result in disclosure of trade secrets to any CBS Representative.
1.4 CBS PERCENTAGE. For purposes of this Agreement, the term "CBS
PERCENTAGE" shall mean, at any particular time, that percentage determined by
dividing (a) the sum of (i) the number of shares of Common Stock CBS then holds,
plus (ii) the number of shares of Common Stock which CBS thereafter has the
right to acquire under the Principal Agreement or upon exercise of any Warrants
outstanding or to be granted thereunder, by (b) the sum of (i) the total number
of shares of Common Stock of the Company then outstanding plus (ii) the total
number of shares of Common Stock of the Company into which all then outstanding
shares of preferred stock of the Company are then convertible plus (iii) the
number of shares of Common Stock of the Company reserved for issuance under
stock purchase and stock option plans of the Company and outstanding options and
warrants.
2. RIGHT OF FIRST REFUSAL.
2.1 GENERAL. CBS shall have the right of first refusal to purchase the
CBS Percentage of all (or any part) of any New Securities that the Company may
from time to time issue after the date of this Agreement.
2.2 NEW SECURITIES. "NEW SECURITIES" shall mean any Common Stock or
preferred stock of the Company, whether now authorized or not, and rights,
options or warrants to purchase such Common Stock or preferred stock, and
securities of any type whatsoever that are, or may become, convertible or
exchangeable into such Common Stock or preferred stock; PROVIDED, HOWEVER, that
the term "New Securities" does not include: (i) shares of the Company's Common
Stock (and/or options or warrants therefor) issued to employees, officers,
directors, contractors, advisors or consultants of the Company pursuant to
incentive agreements or plans unanimously approved by the Board of Directors of
the Company ("EMPLOYEE OPTIONS"); (ii) any securities issuable upon conversion
of or with respect to any then outstanding shares of the Company's Series A,
Series B or Series C preferred stock or Common Stock or other securities
issuable upon conversion thereof; (iii) any securities issuable upon exercise of
any of the options, warrants or rights (other than Employee Options)("WARRANT
SECURITIES") outstanding as of the date hereof, any Warrant Securities hereafter
approved by the Board of Directors of the Company, and any Common Stock or other
securities issuable upon the conversion of any Warrant Securities; (iv) shares
of the Company's Common Stock or preferred stock issued in connection with any
stock split or stock dividend; (v) securities offered by the Company to the
public pursuant to a registration statement filed under the Securities Act; (vi)
up to 50,000 shares of the Company's Common Stock (and/or options or warrants
therefor) issued or issuable to nonaffiliate third parties providing the Company
with equipment leases, real property leases, loans, credit lines, guaranties of
indebtedness, cash price reductions or similar financing, provided that this
exception (vi) shall not apply unless the arrangement is unanimously approved by
the Company's Board of Directors; or (vii) securities issued pursuant to the
acquisition of another corporation or entity by the Company by consolidation,
merger, purchase of all or substantially all of the assets, or other
reorganization in which the Company acquires, in a single transaction or series
of related transactions, all or substantially all of the assets of such other
corporation or entity or fifty percent (50%) or more of the voting power of such
other corporation or entity or fifty percent (50%) or more of the equity
ownership of such other entity.
2.3 PROCEDURES. In the event that the Company proposes to undertake an
issuance of New Securities, it shall give CBS written notice of its intention to
issue New Securities (the "NOTICE"), describing the type of New Securities and
the price and the general terms upon which the Company proposes to issue such
New Securities. CBS shall have fifteen (15) days from the date of mailing of any
such Notice to agree in
2
<PAGE>
writing to purchase the CBS Percentage of such New Securities for the price and
upon the general terms specified in the Notice by giving written notice to the
Company and stating therein the quantity of New Securities to be purchased (not
to exceed the CBS Percentage).
2.4 FAILURE TO EXERCISE. In the event that CBS fails to exercise the
right of first refusal within such fifteen (15) day period, then the Company
shall have 120 days thereafter to sell the New Securities with respect to which
CBS's rights of first refusal hereunder were not exercised, at a price and upon
general terms not materially more favorable to the purchasers thereof than
specified in the Notice. In the event that the Company has not issued and sold
the New Securities within such 120 day period, then the Company shall not
thereafter issue or sell any New Securities without again first offering such
New Securities to CBS pursuant to this Section 2.
3. REGISTRATION RIGHTS.
3.1 DEFINITIONS. For purposes of this Section 3:
(a) REGISTRATION. The terms "REGISTER," "REGISTERED," and
"REGISTRATION" refer to a registration effected by preparing and filing a
registration statement in compliance with the Securities Act of 1933, as amended
(the "SECURITIES ACT"), and the declaration or ordering of effectiveness of such
registration statement.
(b) REGISTRABLE SECURITIES. The term "REGISTRABLE SECURITIES"
means: all shares of Common Stock (i) issued by the Company to CBS as Content
Shares or Ad Shares pursuant to the Principal Agreement, (ii) issuable upon the
exercise of outstanding and exercisable Warrants granted pursuant to the
Principal Agreement, and (iii) any shares of Common Stock of the Company issued
as (or issuable upon the conversion or exercise of any warrant, right or other
security which is issued as) a dividend or other distribution with respect to,
or in exchange for or in replacement of, all such shares of Common Stock
described in clause (i) or (ii) of this Section 3.1(b); EXCLUDING in all cases,
however, any Registrable Securities sold by CBS in a transaction in which rights
under this Section 3 are not assigned in accordance with this Agreement or any
Registrable Securities sold to the public or sold pursuant to Rule 144
promulgated under the Securities Act.
(c) REGISTRABLE SECURITIES THEN OUTSTANDING. The number of
shares of "REGISTRABLE SECURITIES THEN OUTSTANDING" shall mean the number of
shares of Common Stock which are Registrable Securities and (1) are then issued
and outstanding or (2) are then issuable pursuant to the exercise or conversion
of then outstanding and then exercisable options, warrants or convertible
securities.
(d) FORM S-3. The term "FORM S-3" means such form under the
Securities Act as is in effect on the date hereof or any successor registration
form under the Securities Act subsequently adopted by the SEC which permits
inclusion or incorporation of substantial information by reference to other
documents filed by the Company with the SEC.
(e) SEC. The term "SEC" or "COMMISSION" means the
United States. Securities and Exchange Commission.
3.2 DEMAND REGISTRATION. If the Company shall receive at any time six
months or more after the the effective date of the Company's initial public
offering of its securities pursuant to a registration filed under the Securities
Act a written request from CBS that the Company file a registration statement
under the Securities Act covering the registration of Registrable Securities
pursuant to this Section 3.2, then the Company shall effect, as soon as
practicable and in any event within sixty (60) days of the receipt of such
request, the registration under the Securities Act of all Registrable Securities
which CBS requests to be registered and included in such registration by such
written notice, subject only to the limitations of this
3
<PAGE>
Section 3.2; PROVIDED that the Registrable Securities requested by CBS to be
registered pursuant to such request must have an anticipated aggregate public
offering price (before any underwriting discounts and commissions) of not less
than $5,000,000.
If CBS intends to distribute the Registrable Securities covered by its
request by means of an underwriting, then CBS shall so advise the Company as a
part of its request made pursuant to this Section 3.2. The underwriter shall be
selected by the Company with the consent of CBS, which consent will not
unreasonably be withheld, and CBS shall enter into an underwriting agreement in
customary form with the managing underwriter or underwriters selected for such
underwriting by the Company. Notwithstanding any other provision of this Section
3.2, if the underwriter(s) advise(s) the Company in writing that marketing
factors require a limitation of the number of securities to be underwritten then
the Company shall so advise CBS, and the number of Registrable Securities that
may be included in the underwriting shall be reduced as required by the
underwriter(s) and allocated FIRST, to the Company, SECOND, to the Preferred
Stock Holders, if and to the extent such Preferred Stock Holders have exercised
their registration rights granted under the Investors' Rights Agreement, and
THIRD, if and only to the extent that the inclusion of such Registrable
Securities will not reduce the amount of the shares that the Preferred Stock
Holders may include in such registration and underwriting, to CBS; PROVIDED,
HOWEVER, that the managing underwriter(s) shall have the absolute right and
discretion to exclude from a registration and underwriting relating to the
Company's initial public offering any and all of the Registrable Securities. Any
Registrable Securities excluded and withdrawn from such underwriting shall be
withdrawn from the registration.
The Company is obligated to effect only one (1) registration pursuant
to this Section 3.2. The Company shall not be deemed to have effected a
registration pursuant to this Section 3.2 unless a registration statement in
respect thereof shall have been declared effective by the Commission.
Notwithstanding the foregoing, if the Company shall furnish to CBS a
certificate signed by the President or Chief Executive Officer of the Company
stating that in the good faith judgment of the Board of Directors of the
Company, it would be seriously detrimental to the Company and its stockholders
for such registration statement to be filed and it is therefore essential to
defer the filing of such registration statement, then the Company shall have the
right to defer such filing for a period of not more than 120 days after receipt
of the request of CBS; PROVIDED, HOWEVER, that the Company may not utilize this
right more than once in any twelve (12) month period.
3.3 PIGGYBACK REGISTRATIONS. The Company shall notify CBS in writing at
least thirty (30) days prior to filing any registration statement under the
Securities Act for purposes of effecting a public offering of securities of the
Company (including registration statements relating to secondary offerings of
securities of the Company but excluding registration statements relating to
offerings of securities pursuant to any employee benefit plan or a corporate
reorganization) and will afford CBS an opportunity to include in such
registration statement all or any part of the Registrable Securities then held
by CBS. If CBS desires to include in any such registration statement all or any
part of the Registrable Securities then held by it, CBS shall, within twenty
(20) days after receipt of the above-described notice from the Company, so
notify the Company in writing, and in such notice shall inform the Company of
the number of Registrable Securities CBS wishes to include in such registration
statement. If CBS decides not to include all of its Registrable Securities in
any registration statement thereafter filed by the Company, CBS shall
nevertheless continue to have the right to include any Registrable Securities in
any subsequent registration statement or registration statements as may be filed
by the Company with respect to offerings of its securities, all upon the terms
and conditions set forth herein.
If a registration statement under which the Company gives notice under
this Section 3.3 is for an underwritten offering, then the Company shall so
advise CBS. In such event, the right of CBS to have any of its Registrable
Securities included in a registration pursuant to this Section 3.3 shall be
conditioned upon CBS's participation in such underwriting and the inclusion of
CBS's Registrable Securities in the
4
<PAGE>
underwriting to the extent provided herein. CBS and any other stockholders
proposing to distribute their Company securities through such underwriting shall
enter into an underwriting agreement in customary form with the managing
underwriter or underwriter(s) selected for such underwriting. Notwithstanding
any other provision of this Agreement, if the managing underwriter determine(s)
in good faith that marketing factors require a limitation of the number of
shares to be underwritten, then the managing underwriter(s) may exclude shares
(including Registrable Securities) from the registration and the underwriting,
and the number of shares that may be included in the registration and the
underwriting shall be allocated, FIRST, to the Company, SECOND, to the Preferred
Stock Holders, if and to the extent such Preferred Stock Holders have exercised
their registration rights granted under the Investors' Rights Agreement, and
THIRD, if and only to the extent that the inclusion of such Registrable
Securities will not reduce the amount of the shares that the Preferred Stock
Holders may include in such registration and underwriting, to CBS; PROVIDED,
HOWEVER, that the managing underwriter(s) shall have the absolute right and
discretion to exclude from a registration and underwriting relating to the
Company's initial public offering any and all of the Registrable Securities. If
CBS disapproves of the terms of any such underwriting, CBS may elect to withdraw
therefrom by written notice to the Company and the underwriter(s), delivered at
least ten (10) business days prior to the effective date of the registration
statement. Any Registrable Securities excluded or withdrawn from such
underwriting shall be excluded and withdrawn from the registration.
3.4 FORM S-3 REGISTRATION. In case the Company shall receive from CBS a
written request or requests that the Company effect a registration on Form S-3
and any related qualification or compliance with respect to all or a part of the
Registrable Securities then owned by CBS, then the Company will, as soon as
practicable after receipt of the request, file a Form S-3 registration statement
covering such Registrable Securities and effect such registration and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of such Registrable Securities, together
with the securities of any holders of securities of the Company (other than CBS)
entitled to inclusion in such registration; PROVIDED, HOWEVER, that the Company
shall not be obligated to effect any such registration, qualification or
compliance pursuant to this Section 3.4:
(i) if the Company is not then eligible for the
use of Form S-3, or if Form S-3 is not available for such offering by CBS;
(ii) if CBS, together with the holders of any
other securities of the Company entitled to inclusion in such registration,
propose to sell Registrable Securities and such other securities (if any) at an
aggregate price to the public of less than $1,000,000;
(iii) if the Company shall furnish to CBS a
certificate signed by the President or Chief Executive Officer of the Company
stating that in the good faith judgment of the Board of Directors of the
Company, it would be seriously detrimental to the Company and its stockholders
for such Form S-3 Registration to be effected at such time, in which event the
Company shall have the right to defer the filing of the Form S-3 registration
statement no more than once during any twelve month period for a period of not
more than 120 days after receipt of the request of CBS under this Section 3.4;
(iv) if the Company has, within the twelve (12)
month period preceding the date of such request, already effected two (2)
registrations on Form S-3 for CBS or other holders of its securities; or
(v) in any particular jurisdiction in which the
Company would be required to qualify to do business or to execute a general
consent to service of process in effecting such registration, qualification or
compliance.
A Form S-3 registration effected pursuant to this Section 3.4 shall not
be deemed to be demand registration as described in Section 3.3 above.
5
<PAGE>
3.5 OBLIGATIONS OF THE COMPANY. Whenever required to effect the
registration of any Registrable Securities under this Agreement, the Company
shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use its best efforts to cause
such registration statement to become effective, and, upon the request of CBS,
keep such registration statement effective for up to one hundred twenty (120)
days or until the distribution contemplated in the Registration Statement has
been completed, whichever is earlier; provided, however, that such one hundred
twenty day (120) shall be extended for a period of time equal to the period CBS
refrains from selling any securities included in such registration at the
request of an underwriter of Common Stock (or other securities) of the Company.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.
(c) Furnish to CBS such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request in order
to facilitate the disposition of the Registrable Securities owned by CBS that
are included in such registration.
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by CBS,
provided that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions, unless the Company is
already subject to service in such jurisdictions.
(e) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter(s) of such offering. CBS and any
other holders of securities of the Company included in such registration and
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(f) Notify CBS at any time when a prospectus relating thereto
is required to be delivered under the Securities Act of the happening of any
event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
then existing.
(g) Furnish, at the request of CBS, on the date that such
Registrable Securities are delivered to the underwriters for sale, if such
securities are being sold through underwriters, or, if such securities are not
being sold through underwriters, on the date that the registration statement
with respect to such securities becomes effective, (i) an opinion, dated as of
such date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters in
an underwritten public offering and reasonably satisfactory to CBS, addressed to
the underwriters, if any, and CBS and any other stockholders requesting
registration of securities in such registration, and (ii) a "comfort" letter
dated as of such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public offering and
reasonably satisfactory to CBS and any other stockholders requesting
registration of securities in such registration, addressed to the underwriters,
if any, and to CBS and such other stockholders.
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(h) Cause the Registrable Securities registered pursuant
hereto to be listed on each securities exchange or market on which similar
securities issued by the Company are then listed.
(i) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration.
3.6 EXPENSES. All expenses incurred by the Company in connection with a
registration pursuant to Section 3.2, 3.3 or 3.4 (excluding underwriters' and
brokers' discounts and commissions), including, without limitation all federal
and "blue sky" registration and qualification fees, printing expenses, fees and
disbursements of the Company's accountants and counsel, and reasonable fees and
disbursements of one counsel for CBS and all other selling stockholders, shall
be borne by the Company. CBS and each other stockholder participating in a
registration pursuant to Section 3.2, 3.3 or 3.4 shall bear their proportionate
share (based on the total number of shares sold in such registration other than
for the account of the Company) of all discounts and commissions payable to
underwriters or brokers in connection with such offering.
3.7 FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to Sections 3.2, 3.3 or
3.4 that CBS shall furnish to the Company such information regarding itself, the
Registrable Securities held by it, and the intended method of disposition of
such securities as shall be required to timely effect the registration of its
Registrable Securities.
3.8 DELAY OF REGISTRATION. CBS shall not have any right to obtain or
seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 3.
3.9 INDEMNIFICATION. In the event any Registrable Securities are
included in a registration statement under Sections 3.2, 3.3 or 3.4:
(a) BY THE COMPANY. To the extent permitted by law, the
Company will indemnify and hold harmless CBS, its officers and directors, any
underwriter (as deemed in the Securities Act) for CBS and each person, if any,
who controls CBS or any such underwriter within the meaning of the Securities
Act or the Securities Exchange Act of 1934, as amended (the "1934 ACT"), against
any losses, claims, damages, or liabilities (joint or several) to which they may
become subject under the Securities Act, the 1934 Act or other federal or state
law, insofar as such losses, claims, damages, or liabilities (or actions in
respect thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively a "VIOLATION"): (i) any untrue statement
or alleged untrue statement of a material fact contained in such registration
statement, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto; (ii) the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading, or (iii) any violation
or alleged violation by the Company of the Securities Act, the 1934 Act, any
federal or state securities law or any rule or regulation promulgated under the
Securities Act, the 1934 Act or any federal or state securities law in
connection with the offering covered by such registration statement; and the
Company will reimburse CBS and each such officer or director, underwriter or
controlling person for any legal or other expenses reasonably incurred by them,
as incurred, in connection with investigating or defending any such loss, claim,
damage, liability or action; PROVIDED, HOWEVER, that the indemnity agreement
contained in this subsection 3.9(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld), nor shall the Company be liable in any such case
to CBS or any such officer or director, underwriter or controlling person for
any such loss, claim, damage, liability or action to the extent that it arises
out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by CBS or such officer, director or controlling person.
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(b) BY CBS. To the extent permitted by law, CBS will indemnify
and hold harmless the Company, each of its directors, each of its officers who
have signed the registration statement, each person, if any, who controls the
Company within the meaning of the Securities Act, any underwriter and any other
holder selling securities under such registration statement or any of such other
holder's partners, directors or officers or any person who controls such holder
within the meaning of the Securities Act or the 1934 Act, against any losses,
claims, damages or liabilities to which the Company or any such director,
officer, controlling person, underwriter or such holder, partner or director,
officer or controlling person of such other holder may become subject under the
Securities Act, the 1934 Act or other federal or state law, insofar as such
losses, claims, damages or liabilities (or actions in respect thereto) arise out
of or are based upon any Violation, in each case to the extent (and only to the
extent) that such Violation occurs in reliance upon and in conformity with
written information furnished by CBS expressly for use in connection with such
registration; and CBS will reimburse any legal or other expenses reasonably
incurred by the Company or any such director, officer, controlling person,
underwriter or other holder, partner, officer, director or controlling person of
such other holder in connection with investigating or defending any such loss,
claim, damage, liability or action, as incurred; PROVIDED, HOWEVER, that the
indemnity agreement contained in this subsection 3.9(b) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of CBS (which consent shall
not be unreasonably withheld); and PROVIDED FURTHER, that the total amounts
payable in indemnity by CBS under this Section 3.9(b) in respect of any
Violation shall not exceed the net proceeds received by CBS in the registered
offering out of which such Violation arises.
(c) NOTICE. Promptly after receipt by an indemnified party
under this Section 3.9 of notice of the commencement of any action (including
any governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section 3.9,
deliver to the indemnifying party a written notice of the commencement thereof
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; PROVIDED, HOWEVER, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential conflict of interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 3.9, but the omission so to deliver written
notice to the indemnifying party will not relieve it of any liability that it
may have to any indemnified party otherwise than under this Section 3.9.
(d) DEFECT ELIMINATED IN FINAL PROSPECTUS. The foregoing
indemnity agreements of the Company and CBS are subject to the condition that,
insofar as they relate to any Violation made in a preliminary prospectus but
eliminated or remedied in the amended prospectus on file with the SEC at the
time the registration statement in question becomes effective or the amended
prospectus filed with the SEC pursuant to SEC Rule 424(b) (the "FINAL
PROSPECTUS), such indemnity agreement shall not inure to the benefit of CBS if a
copy of the Final Prospectus was furnished to CBS and was not furnished by CBS
to the person asserting the loss, liability, claim or damage at or prior to the
time such action is required by the Securities Act.
(e) CONTRIBUTION. In order to provide for just and equitable
contribution to joint liability under the Securities Act in any case in which
either (i) CBS, or any controlling person of CBS, makes a claim for
indemnification pursuant to this Section 3.9 but it is judicially determined (by
the entry of a final judgment or decree by a court of competent jurisdiction and
the expiration of time to appeal or the denial of the last right of appeal) that
such indemnification may not be enforced in such case notwithstanding the fact
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<PAGE>
that this Section 3.9 provides for indemnification in such case, or (ii)
contribution under the Securities Act may be required on the part of CBS or any
such controlling person in circumstances for which indemnification is provided
under this Section 3.9; then, and in each such case, the Company and CBS will
contribute to the aggregate losses, claims, damages or liabilities to which they
may be subject (after contribution from others and based on equitable
considerations) in such proportion so that CBS is responsible for the portion
represented by the percentage that the public offering price of its Registrable
Securities offered by and sold under the registration statement bears to the
public offering price of all securities offered by and sold under such
registration statement, and the Company and other selling holders are
responsible for the remaining portion; PROVIDED, HOWEVER, that, in any such
case, (A) CBS will not be required to contribute any amount in excess of the net
proceeds received by CBS from the offering pursuant to such registration
statement; and (B) no person or entity guilty of fraudulent misrepresentation
(within the meaning of Section 11 (f) of the Securities Act) will be entitled to
contribution from any person or entity who was not guilty of such fraudulent
misrepresentation.
(f) SURVIVAL. The obligations of the Company and CBS under
this Section 3.9 shall survive the completion of any offering of Registrable
Securities in a registration statement, and otherwise.
(g) CONFLICT WITH UNDERWRITING AGREEMENT. In the event of any
conflict between the indemnity provisions of this Agreement and those of any
underwriting agreement entered into by the Company, CBS and any other holders
with respect to a registration of Registrable Securities, the provisions of the
underwriting agreement shall supersede and control.
3.10 "MARKET STAND-OFF" AGREEMENT. CBS hereby agrees that it shall not,
to the extent requested by the Company or an underwriter of securities of the
Company, sell or otherwise transfer or dispose of any Registrable Securities or
other shares of stock of the Company owned by CBS for up to one hundred eighty
(180) days following the effective date of a registration statement of the
Company filed under the Securities Act; PROVIDED, HOWEVER, that (a) such
agreement shall be applicable only to the first two such registration statements
of the Company which cover securities to be sold on its behalf to the public in
an underwritten offering but not to Registrable Securities sold pursuant to such
registration statement, and (b) all executive officers and directors and, to the
extent finally required by the Company's underwriters, employees of the Company
then holding Common Stock of the Company enter into or become bound by similar
agreements. In order to enforce the foregoing covenant, the Company shall have
the right to place restrictive legends on the certificates representing the
shares subject to this Section and to impose stop transfer instructions with
respect to the Registrable Securities and such other shares of stock of CBS
until the end of such period.
3.11 RULE 144 REPORTING. With a view to making available the benefits
of certain rules and regulations of the Commission which may at any time permit
the sale of the Registrable Securities to the public without registration, after
such time as a public market exists for the Common Stock of the Company, the
Company agrees to:
(a) Make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act, after the
effective date of the first registration under the Securities Act filed by the
Company for an offering of its securities to the general public;
(b) Use its best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under the
Securities Act and the 1934 Act (at any time after it has become subject to such
reporting requirements); and
(c) So long as CBS owns any Registrable Securities, to furnish
to CBS upon request a written statement by the Company as to its compliance with
the reporting requirements of said Rule 144 (at any time after 90 days after the
effective date of the first registration statement filed by the Company for an
offering of its securities to the general public), and of the Securities Act and
the 1934 Act (at any time after it
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<PAGE>
has become subject to the reporting requirements of the 1934 Act), a copy of the
most recent annual or quarterly report of the Company, and such other reports
and documents of the Company as CBS may reasonably request in availing itself of
any rule or regulation of the Commission allowing CBS to sell any such
securities without registration (at any time after the Company has become
subject to the reporting requirements of the 1934 Act).
3.12 TERMINATION OF THE COMPANY'S OBLIGATIONS. The Company shall have
no obligations pursuant to Sections 3.2 through 3.5 with respect to: (i) any
request or requests for registration made by CBS on a date more than five (5)
years after the closing date of the Company's initial public offering; or (ii)
any Registrable Securities proposed to be sold by CBS in a registration pursuant
to Section 3.2, 3.3 or 3.4 if, in the opinion of counsel to the Company, all
such Registrable Securities proposed to be sold by CBS may be sold in a
three-month period without registration under the Securities Act pursuant to
Rule 144 under the Securities Act.
3.13 LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS. From and after the
date of this Agreement, the Company shall not, without the prior written consent
of CBS, enter into any agreement with any holder or prospective holder of any
securities of the Company which would allow such holder or prospective holder to
include such securities in any registration filed under Section 3.2 hereof,
unless under the terms of such agreement, such holder or prospective holder may
include such securities in any such registration only to the extent that the
inclusion of his securities will not reduce the amount of the Registrable
Securities of CBS which are included.
4. ASSIGNMENT; AMENDMENT; TERMINATION OF CERTAIN RIGHTS.
4.1 ASSIGNMENT. Neither party shall assign this Agreement or any of its
rights or obligations hereunder, in whole or in part, without the other party's
prior written consent; provided, that in the event CBS assigns its rights under
the Principal Agreement to a CBS Assignee, such CBS Assignee shall succeed to
all of CBS's rights under this Agreement, subject to CBS's obligations
hereunder.
4.2 AMENDMENT OF RIGHTS. Any provision of this Agreement may be amended
and the observance thereof may be waived (either generally or in a particular
instance and either retroactively or prospectively), only by a written
instrument executed by the Company and CBS. Any amendment or waiver effected in
accordance with this Section 4.2 shall be binding upon the Company, CBS and each
permitted successor or assignee of each of the foregoing.
4.3 TERMINATION OF CERTAIN RIGHTS. The rights of CBS under Sections
1.1, 1.2, 1.3, 2.1, 2.3 and 2.4 hereof, and the Company's obligations under such
sections, shall terminate (i) immediately upon the closing of the first
underwritten sale of Common Stock of the Company to the public pursuant to a
registration statement filed with, and declared effective by, the SEC under the
Securities Act, covering the offer and sale of Common Stock to the public, or
(ii) upon (a) the acquisition of all or substantially all the assets of the
Company or (b) an acquisition of the Company by another corporation or entity by
consolidation, merger or other reorganization in which the holders of the
Company's outstanding voting stock immediately prior to such transaction own,
immediately after such transaction, securities representing less than fifty
percent (50%) or more of the voting power of the corporation or other entity
surviving such transaction. Notwithstanding clause (i) above, if the Preferred
Stock Holders retain their rights of first refusal to purchase New Securities
after the Company's initial public offering pursuant to the terms of the
Investors' Rights Agreement, then the rights of CBS under Section 2 of this
Agreement shall continue in effect until such time as the rights of first
refusal of the Preferred Stock Holders are terminated.
5. GENERAL PROVISIONS.
5.1 NOTICES. All notices hereunder shall be in writing and shall be
given by (i) certified
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or registered mail, return receipt requested, (ii) hand delivery, or (iii)
nationally recognized overnight courier service; a notice shall be deemed to
have been given (a) when delivered by hand, (b) three days after mailing, in the
case of certified or registered mail, and (c) one business day after being
forwarded to a nationally recognized overnight courier service for overnight
delivery; in each case correctly addressed to such party at its address set
forth below or such other address as such party may specify by notice to the
other parties hereto:
(a) if to the Company, at 6340 N.W. 5th Way, Fort Lauderdale,
Florida 33309, Attention: President; and
(b) if to CBS Sports, at 51 West 52nd Street, New York, New
York 10019, Attention: President.
5.2 ENTIRE AGREEMENT. This Agreement, together with all the Exhibits
hereto, constitutes and contains the entire agreement and understanding of the
parties with respect to the subject matter hereof and supersedes any and all
prior negotiations, correspondence, agreements, understandings, duties or
obligations between the parties respecting the subject matter hereof.
5.3 GOVERNING LAW. This Agreement shall be governed by and construed
exclusively in accordance with the internal laws of the State of Delaware as
applied to agreements among Delaware residents entered into and to be performed
entirely within Delaware, excluding that body of law relating to conflict of
laws and choice of law.
5.4 SEVERABILITY. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, then such provision(s) shall be
excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provision(s) were so excluded and shall be enforceable in
accordance with its terms.
5.5 THIRD PARTIES. Nothing in this Agreement, express or implied, is
intended to confer upon any person, other than the parties hereto and their
successors and assigns, any rights or remedies under or by reason of this
Agreement.
5.6 SUCCESSORS AND ASSIGNS. Subject to the provisions of Section 4.1,
the provisions of this Agreement shall inure to the benefit of, and shall be
binding upon, the successors and permitted assigns of the parties hereto.
5.7 CAPTIONS. The captions to sections of this Agreement have been
inserted for identification and reference purposes only and shall not be used to
construe or interpret this Agreement.
5.8 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
5.9 COSTS AND ATTORNEYS' FEES. In the event that any action, suit or
other proceeding is instituted concerning or arising out of this Agreement or
any transaction contemplated hereunder, the prevailing party shall recover all
of such party's costs and attorneys' fees incurred in each such action, suit or
other proceeding, including any and all appeals or petitions therefrom.
5.10 ADJUSTMENTS FOR STOCK SPLITS, ETC. Wherever in this Agreement
there is a reference to a specific number of shares of Common Stock of any class
or series, then, upon the occurrence of any subdivision, combination or stock
dividend of such class or series of stock, the specific number of shares so
referenced in this Agreement shall automatically be proportionally adjusted to
reflect the affect on the outstanding shares of such class or series of stock by
such subdivision, combination or stock dividend.
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IN WITNESS WHEREOF, the parties hereto have executed this
CBS/SportsLine Stockholder Agreement as of the date and year first above
written.
SPORTSLINE USA, INC.
By: ______________________________________
Title: President
CBS INC.
By: ______________________________________
Title:
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EXHIBIT K
CBS SPORTS INTERNET COMMITMENTS
College Basketball
Intel: College BB Trivia Quiz (1997)
Pepsi: Virtual Press Room (1997)
Enterprise
Rent-A-Car Pick Sixteen (1997)
Philips: Tournament Challenge (1997)
Golf
Taylor Made: CBS Golf Page Sponsorship
April lst - May 15th, 1997
Cobra: Golf Page Sponsorship
May 19th - June 29th, 1997
Auto Racing
Anheuser-Busch: The exclusive alcoholic beverage and
non-alcoholic malt beverage sponsor of the
CBS NASCAR Page on the CBS Web site for all
current NASCAR races promoted on the World
Wide Web for 1997 & 1998, with the right of
first refusal in 1999. Additionally, CBS has
done a promotion with AB around the Miami
300 each year which has an Internet
component.
EconoLodge: NASCAR participation through 1997 on CBS Web
Page.
Tennis
American Express A presence on the CBS US Open Tennis
Internet Site with credit card exclusivity.
Commitment; four years firm.
-52-
<PAGE>
EXHIBIT L
NEW SIGNATURE EVENTS
1. Indy 500
2. Kentucky Derby
3. Belmont Stakes
4. Preakness Stakes
5. Triple Crown or any
6. World Cup
7. NCAA Football Playoffs or Championship
8. Wimbledon
9. US Open Golf Tournament
10. British Open Golf Tournament
11. Any Professional Sports post-season event
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<PAGE>
EXHIBIT G
CONTENT SHARES
SportsLine USA Inc. will pay CBS for the use of CBS Sports Content pursuant to
the following schedule:
SHARES OF
CONTENT CONVERSION COMMON
DATE* PAYMENT PRICE STOCK
------------------------------------------------------------------------------
First Contract Year $744,991 $4.12 180,823
Second Contract Year $748,991 $6.39 117,213
Third Contract Year $900,990 $8.52 105,750
Fourth Contract Year $1,104,980 $10.65 103,754
Fifth Contract Year $1,500,048 $12.77 117,460
------------------------------------------------------------------------------
TOTAL $5 MILLION $8/SHARE 625,000
*Each payment shall be made on the first business day of each Contract Year
commencing in 1997.
<PAGE>
AMENDMENT NO 1. TO AGREEMENT
THIS AMENDMENT NO. 1 TO AGREEMENT is entered into as of the ___ day of April,
1997, between SPORTSLINE USA, INC., a Delaware corporation with principal
offices at 6340 N.W. 5th Way, Ft. Lauderdale, FL 33309 and CBS INC., a New York
corporation, with principal offices at 51 West 52nd Street, new York, NY 10019.
RECITALS
A. The parties entered into an Agreement dated Marcy 5, 1997 (the
"Agreement").
B. The parties have deemed it advisable and desire to amend
Exhibit G to the Agreement as contained in this Amendment.
NOW, THEREFORE, the parties hereto, in consideration of the terms and
conditions hereof and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
do hereby agree as follows:
1. Exhibit G to the Agreement is hereby amended by replacing it
with the revised Exhibit G attached hereto.
2. Except as specifically amended hereby, the Agreement is
ratified and confirmed and shall remain in full force and
effect in accordance with its terms.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.
SPORTSLINE USA, INC. CBS INC.
By: /s/ MICHAEL LEVY By: /s/ FREDERIC G. REYNOLDS
-------------------------- -------------------------
Name: Michael Levy Name: Frederic G. Reynolds
------------------------ -----------------------
Title: President Title: Executive Vice President, CFO
----------------------- ------------------------------