<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
SportsLine USA, Inc.
----------------------------------------
(Name of Issuer)
Common Stock, par value $.01 per share
----------------------------------------------
(Title of Class of Securities)
848934105
---------
(CUSIP Number)
Angeline C. Straka, Esq.
Vice President, Secretary & Associate General Counsel
CBS Corporation
11 Stanwix Street
Pittsburgh, Pennsylvania 15222-1384
(412) 642-5631
------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
January 2, 1998
---------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-l(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with this statement [x]. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of less than five percent of such class.
See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-l(a) for other parties to whom copies are to
be sent.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
<PAGE> 2
CUSIP NO. 45662610
- -----------------------------------------------------------------------------
(1) Name of Reporting Persons. S.S. or I.R.S.
Identification No. of Above Person
CBS Corporation, I.R.S.
Identification No. 25-0877540
- -----------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group
(a) [x]
(b) [ ]
- -----------------------------------------------------------------------------
(3) SEC Use Only
- -----------------------------------------------------------------------------
(4) Source of Funds
00
- -----------------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e)
[ ]
- -----------------------------------------------------------------------------
(6) Citizenship or Place of Organization
Pennsylvania
- -----------------------------------------------------------------------------
Number of (7) Sole Voting Power None
Shares Bene- --------------------------------------------------------
ficially (8) Shared Voting Power 2,248,075
Owned by (See response to Item 5)
Each Report- --------------------------------------------------------
ing Person (9) Sole Dispositive Power None
With --------------------------------------------------------
(10) Shared Dispositive Power 2,248,075
(See response to Item 5)
- -----------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
2,248,075 (See response to Item 5)
- -----------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
[ ]
- -----------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
14.8% (See response to Item 5)
- -----------------------------------------------------------------------------
(14) Type of Reporting Person CO
<PAGE> 3
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
SportsLine USA, Inc.
----------------------------------------
(Name of Issuer)
Class A Common Stock, par value $.01 per share
----------------------------------------------
(Title of Class of Securities)
848934105
---------
(CUSIP Number)
Angeline C. Straka, Esq.
Vice President & Secretary
Westinghouse CBS Holding Company, Inc.
11 Stanwix Street
Pittsburgh, Pennsylvania 15222-1384
(412) 642-5631
------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
January 2, 1998
---------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with this statement [x]. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of less than five percent of such class.
See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
<PAGE> 4
CUSIP NO. 45662610
- -----------------------------------------------------------------------------
(1) Name of Reporting Person. S.S. or I.R.S.
Identification No. of Above Person
Westinghouse CBS Holding Company, Inc., I.R.S.
Identification No. 25-1776511
- -----------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group
(a) [x]
(b) [ ]
- -----------------------------------------------------------------------------
(3) SEC Use Only
- -----------------------------------------------------------------------------
(4) Source of Funds
00
- -----------------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e)
[ ]
- -----------------------------------------------------------------------------
(6) Citizenship or Place of Organization
Delaware
- -----------------------------------------------------------------------------
Number of (7) Sole Voting Power None
Shares Bene- --------------------------------------------------------
ficially (8) Shared Voting Power 2,248,075
Owned by (See response to Item 5)
Each Report- --------------------------------------------------------
ing Person (9) Sole Dispositive Power None
With --------------------------------------------------------
(10) Shared Dispositive Power 2,248,075
(See response to Item 5)
- -----------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
2,248,075 (See response to Item 5)
- -----------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
[ ]
- -----------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
14.8% (See response to Item 5)
- -----------------------------------------------------------------------------
(14) Type of Reporting Person CO
<PAGE> 5
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
SportsLine USA, Inc.
----------------------------------------
(Name of Issuer)
Class A Common Stock, par value $.01 per share
----------------------------------------------
(Title of Class of Securities)
848934105
---------
(CUSIP Number)
Angeline C. Straka, Esq.
Vice President & Secretary
CBS Broadcasting, Inc.
11 Stanwix Street
Pittsburgh, Pennsylvania 15222-1384
(412) 642-5631
------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
January 2, 1998
---------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with this statement [x]. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of less than five percent of such class.
See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
<PAGE> 6
CUSIP NO. 45662610
- -----------------------------------------------------------------------------
(1) Name of Reporting Person. S.S. or I.R.S.
Identification No. of Above Person
CBS Broadcasting Inc., I.R.S.
Identification No. 13-0590730
- -----------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group
(a) [x]
(b) [ ]
- -----------------------------------------------------------------------------
(3) SEC Use Only
- -----------------------------------------------------------------------------
(4) Source of Funds
00
- -----------------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e)
[ ]
- -----------------------------------------------------------------------------
(6) Citizenship or Place of Organization
New York
- -----------------------------------------------------------------------------
Number of (7) Sole Voting Power None
Shares Bene- --------------------------------------------------------
ficially (8) Shared Voting Power 2,248,075
Owned by (See response to Item 5)
Each Report- --------------------------------------------------------
ing Person (9) Sole Dispositive Power None
With --------------------------------------------------------
(10) Shared Dispositive Power 2,248,075
(See response to Item 5)
- -----------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
2,248,075 (See response to Item 5)
- -----------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
[ ]
- -----------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
14.8% (See response to Item 5)
- -----------------------------------------------------------------------------
(14) Type of Reporting Person CO
<PAGE> 7
Item 1. Security and Issuer
This statement relates to the Common Stock, par value $.01 per share (Common
Stock), of SportsLine USA, Inc. (Issuer), a Delaware corporation with its
principal executive offices at 6340 N.W. 5th Way, Fort Lauderdale, Florida
33309.
-1-
<PAGE> 8
Item 2. Identity and Background
The persons filing this statement are: (i) CBS Corporation (CBS), formerly
known as Westinghouse Electric Corporation, a Pennsylvania corporation. The
address of the principal office and principal business address of CBS is 51
West 52nd Street, New York, NY 10019. CBS conducts its business directly and
through various subsidiaries; (ii) Westinghouse CBS Holding Company, Inc., a
wholly owned subsidiary of CBS (Holding). The address of the principal office
and principal business address of Holding is 7800 Beverly Boulevard, Los
Angeles, CA 90036; and (iii) CBS Broadcasting, Inc. (Broadcasting), formerly
known as CBS, Inc., a wholly owned subsidiary of Holding. The address of the
principal office and principal business address of Broadcasting is 51 West 52nd
Street, New York, NY 10019. Broadcasting is a party to the Agreement, the
Stockholder Agreement and the Co-Sale Agreement, as defined in Item 3.
The operations of CBS, Holding and Broadcasting principally relate to
television and radio broadcasting and cable programming.
During the last five years, neither CBS, Holding, Broadcasting nor, to the
knowledge of CBS, Holding and Broadcasting, any executive officer or director
of CBS, Holding or Broadcasting, has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or was a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
-2-
<PAGE> 9
activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
The attached Schedule I is a list of the directors and executive officers of
CBS, Holding and Broadcasting which contains the following information with
respect to each such person:
(a) name;
(b) business address; and
(c) present principal occupation or employment and the name, principal
business and address of any corporation or other organization in which
such employment is conducted.
Except for Robert E. Cawthorn and David K. P. Li, who are both British
citizens, each person identified on Schedules 1-A, 1-B, 1-C hereto is a United
States citizen.
-3-
<PAGE> 10
Item 3. Source and Amount of Funds or Other Consideration
Broadcasting has acquired, and will in the future acquire, Common Stock and
warrants to purchase Common Stock from the Issuer pursuant to an Agreement
dated as of March 5, 1997 between the Issuer and Broadcasting as amended by
Amendment No. 1 to Agreement (collectively the Agreement), as further described
in the response to Item 4. Broadcasting's parent companies, CBS and Holding,
may be deemed to be the beneficial owner of any shares of Common Stock
beneficially held by Broadcasting. In the event Broadcasting exercises a
warrant to purchase Common Stock, the funds for such exercise will come from
general corporate funds.
-4-
<PAGE> 11
Item 4. Purpose of Transaction
The Agreement provides that Broadcasting grants the right to the Issuer to
change the name of its Internet Site to "CBS SportsLine" and to display certain
CBS sports related content on such site and that such Internet Site will be
promoted on the CBS Television Network. In consideration of such actions by
Broadcasting, the Issuer agrees to issue to Broadcasting (1) a certain amount
of shares on the first business day of each of the years that the Agreement is
in force and (2) on the first business day of each of the years that the
Agreement is in force, a warrant to purchase all or any part of the numbers of
shares of Common Stock set forth in the warrant and the Agreement. A form of
the warrant is attached to the Agreement as Exhibit H. A copy of the March 5,
1997 warrant and the amendment are attached hereto as Exhibits 5 and 6
respectively. Any description of a warrant contained herein is qualified in its
entirety by reference to the applicable warrant or form of warrant. Issuer has
granted and will grant shares and warrants to Broadcasting under the Agreement
as follows:
Shares Warrant Shares Warrant Exercise Price
------ -------------- ----------------------
1997 752,273 380,000 $10.00
1998 735,802 380,000 $15.00
1999 558,988 380,000 $20.00
2000 567,579 380,000 $25.00
2001 485,358 380,000 $30.00
-5-
<PAGE> 12
The number of Shares, Warrant Shares and Warrant Exercise Price have been
restated to give effect to a 1-for-2.5 reverse stock split described on page
F21 and F-22 of the Issuer's Prospectus dated November 1997.
In addition to the Agreement, the Issuer and Broadcasting entered into two (2)
related agreements, CBS/SportsLine Stockholder Agreement (Stockholder
Agreement) and the Co-Sale Agreement (Co-Sale Agreement). The Stockholder
Agreement provides, among other things, that the Issuer provide to Broadcasting
certain financial information and allow, under certain circumstances, for board
representation and/or observer rights. In addition, the Stockholder Agreement
provides that Broadcasting will in certain instances have the right of first
refusal to purchase new securities of the Issuer and will have demand
registration rights, piggyback registration rights and Form S-3 registration
rights. The Co-Sale Agreement provides Broadcasting with participation rights
in the event that Michael Levy, CEO of the Issuer, accepts any purchase offers
for shares of Common Stock owned by him. Any description of the Agreement, the
Stockholder Agreement and the Co-Sale Agreement contained herein are qualified
in their entirety by reference to the applicable agreements, which are attached
as Exhibits 1, 2, 3 and 4 respectively.
-6-
<PAGE> 13
4(a), (b), (c), (e), (f), (g), (h), (i) and (j). Pursuant to the Agreement,
Broadcasting will acquire additional shares of Common Stock over the term of
the Agreement as set forth above and may acquire additional shares upon the
exercise of the warrants described above.
Broadcasting, CBS and Holding have no present plans or proposals with respect
to the disposition of any Common Stock or with respect to the matters set forth
in Items 4(b), (c), (e), (f), (g), (h), (i) and (j); but Broadcasting, CBS and
Holding do reserve their right to implement a different course of action at any
time in the future, depending upon such criteria as may be significant to
Broadcasting, CBS and Holding.
4(d) There are currently two (2) directors on the Issuer's Board of Directors
that were designated by Broadcasting pursuant to the Stockholders Agreement. As
long as it maintains a CBS Percentage (as defined in Section 1.4 on page 2 of
the Stockholder Agreement) of at least 10%, Broadcasting will have the right,
under the Stockholder Agreement, to designate a number of individuals equal to
the product of the total number of members of the Board of Directors of the
Issuer times the CBS Percentage. The Issuer will then use its best efforts,
including obtaining certain voting agreements, to cause the nomination and
election, from time to time, of Broadcasting's nominees. In the event that
Broadcasting is not entitled to so designate director nominees, it will be
entitled, under the Stockholder Agreement, to have a representative attend the
Issuer's Board of Directors meetings in a nonvoting, observer, capacity as long
as Broadcasting owns not
-7-
<PAGE> 14
less than 250,000 shares of Common Stock. Broadcasting, CBS and Holding have no
current plans or proposals regarding representation on the Issuer's Board of
Directors other than as set forth above; but Broadcasting, CBS and Holding
reserve the right to implement a different course of action at any time in the
future depending upon their assessment of such criteria as may be significant
to Broadcasting, CBS and Holding.
-8-
<PAGE> 15
Item 5. Interest in Securities of the Issuer.
5 (a) and(b) As of January 2, 1998, Broadcasting has voting and investment
power over 1,488,075 shares of Common Stock held by Broadcasting. Broadcasting
also has the right to acquire (i) 380,000 shares of Common Stock under a
warrant dated March 5, 1997 and amended December 30, 1997, which warrant is
exercisable in whole but not in part at any time up to and including January
21, 1998 (a copy of the warrant is attached as Exhibit 5 and a copy of the
extension is attached as Exhibit 6) and (ii) an additional 380,000 shares of
Common Stock under a warrant dated January 2, 1998, which warrant is presently
exercisable in whole or part at any time prior to December 31, 1998. CBS and
Holding may be deemed to beneficially own all the Common Stock beneficially
owned by Broadcasting.
In the aggregate, Broadcasting, CBS and Holding share voting and investment
power over 2,248,075 shares of Common Stock (includes 760,000 shares covered by
the two outstanding warrants) or 14.8% of the Common Stock of Issuer as of
January 2, 1998 (assuming the exercise of both warrants and assuming 15,128,325
shares of Common Stock outstanding for purposes of this calculation, based on
information from the Issuer that there were outstanding shares of 13,632,523
after Issuer's public offering in November 1997; plus the 735,802 issued to
Broadcasting on January 2, 1998, plus the two warrants held by Broadcasting for
760,000 shares).
5 (c) Broadcasting received, pursuant to the Agreement, 735,802 shares of
Common Stock and a warrant for 380,000 shares of Common Stock on January 2,
1998.
-9-
<PAGE> 16
On December 30, 1997, Issuer and Broadcasting entered into an amendment to the
warrant dated March 5, 1997. The amendment provided for this warrant to be
exercisable in whole but not in part at any time up to and including January
21, 1998.
Except as described above, neither CBS, Broadcasting, Holding nor, to their
knowledge, any person named in Schedules 1-A, 1-B or 1-C beneficially owns any
shares of Common Stock or has effected any transactions in the Common Stock
during the past 60 days.
5(d) None.
5(e) Not applicable.
-10-
<PAGE> 17
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
The information set forth under Items 3 and 4 above and the Exhibits attached
hereto are incorporated herein by reference.
-11-
<PAGE> 18
Item 7. Materials to be Filed as Exhibits
Exhibit 1: Agreement dated as of March 5, 1997 between the Issuer and
Broadcasting.
Exhibit 2: Amendment No. 1 dated April 1997 to the Agreement.
Exhibit 3: CBS/SportsLine Stockholder Agreement dated as of March 5,
1997 between Issuer and Broadcasting.
Exhibit 4: Co-Sale Agreement dated as of March 5, 1997 among Issuer,
Broadcasting and Michael Levy.
Exhibit 5: Warrant dated March 5, 1997 from Issuer to Broadcasting.
Exhibit 6: Letter Agreement dated December 30, 1997 extending the
exercise date of the warrant dated March 5, 1997.
-12-
<PAGE> 19
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
January 9, 1998
CBS CORPORATION
By: /s/ FREDRIC G. REYNOLDS
------------------------------
Name: Fredric G. Reynolds
Title: Executive Vice President and
Chief Financial Officer
WESTINGHOUSE CBS HOLDING
COMPANY, INC.
By: /s/ SUSAN J. HOLLIDAY
------------------------------
Name: Susan J. Holliday
Title: Vice President and Secretary
CBS BROADCASTING, INC.
By: /s/ FREDRIC G. REYNOLDS
------------------------------
Name: Fredric G. Reynolds
Title: Executive Vice President and
Chief Financial Officer
-13-
<PAGE> 20
SCHEDULE 1-A
Name, Business Address and Present Principal Occupation
or Employment of the Directors and Executive Officers
of CBS Corporation
Directors
---------
Name and Business Address Present Principal Occupation
- ------------------------- and Address of Employment
-------------------------
Frank C. Carlucci Chairman
The Carlyle Group The Carlyle Group
1001 Pennsylvania Avenue, N.W. 1001 Pennsylvania Avenue, N.W.
Washington, DC 20004-2505 Washington, DC 20004-2505
Robert E. Cawthorn Chairman Emeritus
Rhone-Poulenc Rorer, Inc. Rhone-Poulenc Rorer, Inc.
500 Arcola Road 500 Arcola Road
Collegeville, PA 19426 Collegeville, PA 19426
and
Managing Director
Global Health Care Partners
DLJ Merchant Banking Partners LP
Donaldson, Lufkin & Jenrette
401 City Line Avenue, 2nd Floor
Bala Cynwyd, PA 19004-1122
George H. Conrades President and Executive Vice President
GTE Internetworking GTE Internetworking
150 Cambridge Park 150 Cambridge Park
Cambridge, MA 02140 Cambridge, MA 02140
William H. Gray III President and Chief Executive Officer
The College Fund/UNCF The College Fund/UNCF
8260 Willow Oaks Corporate Drive 8260 Willow Oaks Corporate Drive
P.O. Box 10444 P.O. Box 10444
Fairfax, VA 22031 Fairfax, VA 22031
<PAGE> 21
Michael H. Jordan Chairman and Chief Executive Officer
CBS Corporation CBS Corporation
51 West 52nd Street 51 West 52nd Street
New York, NY 10019 New York, NY 10019
Mel Karmazin Chairman and CEO
CBS Station Group CBS Station Group
40 W. 57th Street 40 West 57th Street
New York, NY 10019 New York, NY 10019
David K.P. Li Chairman and Chief Executive
The Bank of East Asia, Limited The Bank of East Asia, Limited
Bank of East Asia Building Bank of East Asia Building
22nd Floor 22nd Floor
10 Des Voeux Road Central 10 Des Voeux Road Central
Hong Kong Hong Kong
David T. McLaughlin Chairman Emeritus
The Gallery - Suite 203 The Aspen Institute
46 Newport Road Carmichael Road
New London, NH 03257 Queenstown, MD 21658
Richard R. Pivirotto President
Richard R. Pivirotto Co., Inc. Richard R. Pivirotto Co., Inc.
111 Clapboard Ridge Rd. 111 Clapboard Ridge Rd.
Greenwich, CT 06830 Greenwich, CT 06830
Raymond W. Smith Chairman & CEO
Bell Atlantic Corporation Bell Atlantic Corporation
1717 Arch Street, 32nd Floor 1717 Arch Street, 32nd Floor
Philadelphia, PA 19103 Philadelphia, PA 19103
Paula Stern President
The Stern Group, Inc. The Stern Group, Inc.
3314 Ross Place NW 3314 Ross Place NW
Washington, DC 20008 Washington, DC 20008
Robert D. Walter Chairman and Chief Executive Officer
Cardinal Health, Inc. Cardinal Health, Inc.
5555 Glendon Court 5555 Glendon Court
Dublin, OH 43016 Dublin, OH 43016
<PAGE> 22
SCHEDULE 1-A
Name, Business Address and Present Principal Occupation
or Employment of the Directors and Executive Officers
of CBS Corporation
Executive Officers
------------------
Name and Business Address Present Principal Occupation
- ------------------------- and Address of Employment
-------------------------
Michael H. Jordan Chairman and Chief Executive Officer
CBS Corporation CBS Corporation
51 West 52nd Street 51 West 52nd Street
New York, NY 10019 New York, NY 10019
Louis J. Briskman Senior Vice President and General Counsel
CBS Corporation CBS Corporation
51 West 52nd Street 51 West 52nd Street
New York, NY 10019 New York, NY 10019
Carol V. Savage Vice President and Chief Accounting Officer
CBS Corporation CBS Corporation
11 Stanwix Street 11 Stanwix Street
Pittsburgh, PA 15222 Pittsburgh, PA 15222
Randy H. Zwirn President - Power Generation
Westinghouse Electric Corporation Westinghouse Electric Corporation
The Quadrangle The Quadrangle
4400 Alafaya Trail 4400 Alafaya Trail
Orlando, FL 32826-2399 Orlando, FL
Charles W. Pryor, Jr. Vice President
CBS Corporation CBS Corporation
4350 Northern Pike 4350 Northern Pike
Monroeville, PA 15146 Monroeville, PA 15146
<PAGE> 23
Fredric G. Reynolds Executive Vice President and
CBS Corporation Chief Financial Officer
51 West 52nd Street CBS Corporation
New York, NY 10019 51 West 52nd Street
New York, NY 10019
Mel Karmazin Chairman & CEO
CBS Station Group CBS Station Group
40 W. 57th Street 40 W. 57th Street
New York, NY 10019 New York, NY 10019
Leslie Moonves President, CBS Television
CBS Corporation CBS Corporation
7800 Beverly Boulevard 7800 Beverly Boulevard
Los Angeles, CA 90036 Los Angeles, CA 90036
<PAGE> 24
SCHEDULE 1-B
Name, Business Address and Present Principal Occupation
or Employment of the Directors and Executive Officers
of Westinghouse CBS Holding Company, Inc.
Directors
---------
Name and Business Address Present Principal Occupation
- ------------------------- and Address of Employment
-------------------------
Michael H. Jordan Same as Schedule 1-A
Same as Schedule 1-A
Louis J. Briskman Same as Schedule 1-A
Same as Schedule 1-A
Fredric G. Reynolds Same as Schedule 1-A
Same as Schedule 1-A
<PAGE> 25
SCHEDULE 1-B
Westinghouse CBS Holding Company, Inc.
Executive Officers
------------------
<TABLE>
<CAPTION>
Name/Title and Business Address Present Principal Occupation
- ------------------------------- and Address of Employment
-------------------------
<S> <C>
Charles Cappleman President of
President West Coast Operations
Westinghouse CBS Holding Company, Inc. and Engineering
7800 Beverly Boulevard Westinghouse CBS Holding Company, Inc.
Los Angeles, CA 90036 7800 Beverly Boulevard
Los Angeles, CA 90036
Susan J. Holiday Deputy General Counsel
Vice President and Secretary Westinghouse CBS Holding Company, Inc.
Westinghouse CBS Holding Company, Inc. West Coast Operations
7800 Beverly Boulevard and Engineering Los Angeles, CA
Los Angeles, CA 90036 Westinghouse CBS Holding Company, Inc.
7800 Beverly Boulevard
Los Angeles, CA 90036
Gary McCarthy Vice President of
Vice President West Coast Finance
Westinghouse CBS Holding Company, Inc. Westinghouse CBS Holding Company, Inc
7800 Beverly Boulevard 7800 Beverly Boulevard
Los Angeles, CA 90036 Los Angeles, CA 90036
Georgette Morrow Controller of West Coast
Treasurer C.T.N. Accounting
Westinghouse CBS Holding Company, Inc. Westinghouse CBS Holding Company, Inc.
7800 Beverly Boulevard 7800 Beverly Boulevard
Los Angeles, CA 90036 Los Angeles, CA 90036
</TABLE>
<PAGE> 26
SCHEDULE 1-C
Name, Business Address and Present Principal Occupation
or Employment of the Directors and Executive Officers
of CBS Broadcasting Company, Inc.
Directors
---------
Name and Business Address Present Principal Occupation
- ------------------------- and Address of Employment
-------------------------
Michael H. Jordan Same as Schedule 1-A
Same as Schedule 1-A
Louis J. Briskman Same as Schedule 1-A
Same as Schedule 1-A
Fredric G. Reynolds Same as Schedule 1-A
Same as Schedule 1-A
<PAGE> 27
SCHEDULE 1-C
CBS Broadcasting, Inc.
Executive Officers
------------------
Name and Business Address Present Principal Occupation
- ------------------------- and Address of Employment
----------------------------
Michael H. Jordan
Same as Schedule 1-A Same as Schedule 1-A
Louis J. Briskman
Same as Schedule 1-A Same as Schedule 1-A
Mel Karmazin
Same as Schedule 1-A Same as Schedule 1-A
Leslie Moonves
Same as Schedule 1-A Same as Schedule 1-A
Fredric G. Reynolds
Same as Schedule 1-A Same as Schedule 1-A
<PAGE> 1
EXHIBIT 1
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 "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;
1.16 "Deficit Ad Amount" shall have the meaning ascribed to it in
subparagraph 10.3
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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;
1.25 "Other Securities" shall have the meaning ascribed to it in
subparagraph 11.1
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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.
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
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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 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
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(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 work 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 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
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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
(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
Patty 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
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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 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
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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 he
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 he 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, 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
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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 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
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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 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,
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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
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
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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 he 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.
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
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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 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
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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 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
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(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
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.
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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 he 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 "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
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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
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
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reorganization of SportsLine USA Inc. (or any other corporation, the securities
of which arc 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, 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
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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.
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
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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 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,
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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.
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
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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 arid 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 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
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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 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
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<PAGE> 25
(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 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
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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 parry 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 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
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<PAGE> 27
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 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
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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.
(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.
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(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 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
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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 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
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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 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
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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 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
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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 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
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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 Indemnified 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 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
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<PAGE> 35
(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 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
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<PAGE> 36
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 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
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<PAGE> 37
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
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.
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<PAGE> 38
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:_________________________ Name:___________________________
Title:________________________ Title:__________________________
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<PAGE> 39
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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<PAGE> 40
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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<PAGE> 41
EXHIBIT B
CBS LOGOS
[LOGO]
[LOGO]
[LOGO]
[LOGO]
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<PAGE> 42
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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<PAGE> 43
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> 44
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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<PAGE> 45
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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<PAGE> 46
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:
<TABLE>
<CAPTION>
TOTAL SHARES OF
YEAR(1) AMOUNT(2) CONVERSION PRICE COMMON STOCK
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
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
</TABLE>
- --------------
(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 1998
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<PAGE> 47
EXHIBIT F
SIGNATURE EVENTS
o The 1998 Winter Olympics
o 1997 - 2000 NCAA Basketball
Final Four Tournament
o 1997 - 1998 PGA Golf Championship and all
PGA Tour events
o 1997 - 1998 The Masters Golf Tournament
o 1997 - 2001 Daytona 500
o 1997 - 2000 U.S. Open Tennis
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<PAGE> 48
EXHIBIT G
CONTENT SHARES
<TABLE>
<CAPTION>
CONTENT CONVERSION SHARES OF
DATE* PAYMENT PRICE COMMON STOCK
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
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
</TABLE>
* Each payment shall be made on the first business day of each Contract Year
commencing in 1997.
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<PAGE> 49
EXHIBIT H
FORM OF WARRANT
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<PAGE> 50
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 exercisability of the Warrants shall be subject to the
condition that the Agreement dated as of March 5, 1997 between
<PAGE> 51
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.
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.
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<PAGE> 52
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 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;
-3-
<PAGE> 53
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 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.
-4-
<PAGE> 54
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
-5-
<PAGE> 55
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 ______________________________
-6-
<PAGE> 56
EXHIBIT I
WARRANT SHARES
--------------
<TABLE>
<CAPTION>
WARRANT SHARES OF
GRANT* TOTAL COST PRICE COMMON STOCK
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
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
</TABLE>
* 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.
-50-
<PAGE> 57
EXHIBIT J
STOCKHOLDER AGREEMENT
---------------------
-51-
<PAGE> 58
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
<PAGE> 59
copies of all notices, minutes, consents and other materials it provides to
members of the Board of Directors; provided, that the 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 unanimously 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"),
2
<PAGE> 60
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 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 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
3
<PAGE> 61
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 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.
4
<PAGE> 62
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 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
5
<PAGE> 63
(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.
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
6
<PAGE> 64
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.
(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
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<PAGE> 65
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.
(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 stare 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 he paid
by the indemnifying parry, if representation of such indemnified party by the
counsel retained by the indemnifying parry 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
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<PAGE> 66
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 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:
9
<PAGE> 67
(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 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
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<PAGE> 68
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 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.
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<PAGE> 69
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 Stocks 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.
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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<PAGE> 70
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 1st - 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> 71
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
-53-
<PAGE> 1
EXHIBIT 2
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 NW 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 March 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: Michael Levy By: Fredric G. Reynolds
-------------------- -------------------
Name: Michael Levy Name: Fredric G. Reynolds
------------------ -------------------
Title: President Title: Executive/Vice President, CFO
<PAGE> 2
EXHIBIT G
CONTENT SHARES
SportsLine USA Inc. will pay CBS for the use of CBS Sports Content pursuant to
the following schedule:
<TABLE>
<CAPTION>
CONTENT CONVERSION SHARES OF
DATE* PAYMENT PRICE COMMON STOCK
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
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
</TABLE>
*Each payment shall be made on the first business day of each Contract Year
commencing in 1997.
<PAGE> 1
EXHIBIT 3
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 acquired 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
<PAGE> 2
copies of all notices, minutes, consents and other materials it provides to
members of the Board of Directors; provided, that the 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 unanimously 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"),
2
<PAGE> 3
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 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 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
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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
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.
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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 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
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(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.
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
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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.
(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
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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.
(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, claim, 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
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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 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 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:
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(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 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 an 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
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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 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.
11
<PAGE> 12
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 by proportionally adjusted
to reflect the affect on the outstanding shares of such class or series of
stock by such subdivision, combination or stock dividend.
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: Michael Levy
---------------------
Title: President
CBS INC.
By: Fredric G. Reynolds
---------------------
Title:
12
<PAGE> 1
EXHIBIT 4
CO-SALE AGREEMENT
This Co-Sale Agreement (this "Agreement") is made and entered into as of
March 5, 1997 by and between SportsLine USA, Inc., a Delaware corporation (the
"Company"), (ii) CBS, Inc. ("CBS") and (iii) Michael Levy ("Levy").
R E C I T A L S
A. Concurrently herewith, CBS and the Company are entering 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. To induce CBS to enter into the Principal Agreement, Levy has agreed
to enter into this Agreement and offer CBS the opportunity to participate in
certain sales of his shares of Common Stock of the Company.
NOW THEREFORE, in consideration of the above recitals and the mutual
covenants made herein, the parties hereby agree as follows:
1. RIGHT OF CO-SALE.
1.1 Notice of Sales. In the event Levy proposes to accept one or more
bona fide offers (collectively, the "Purchase Offer") from any persons to
purchase from him shares of the Common Stock of the Company, he promptly shall
give written notice (the "Notice") to CBS describing fully the Purchase Offer,
including the number of shares of Common Stock proposed to be transferred (the
"Shares"), the proposed bona fide transfer price and the name and address of
the proposed transferee. The Notice may be included as a part of any notice
required to be given by Levy under Article Eight, Section 1 of the Company's
Bylaws.
1.2 Participation Right. To the extent that the Company and other
stockholders of the Company have not exercised their respective rights of first
refusal to purchase the Shares in accordance with Article Eight of the
Company's Bylaws, CBS shall have the right (the "Participation Right") to
participate in Levy's sale of the Shares under the terms and conditions
specified in the Purchase Offer. To the extent CBS exercises its Participation
Rights, the number of Shares which Levy may sell pursuant to the Purchase Offer
shall be correspondingly reduced. The Participation Right of CBS is subject to
the following terms and conditions:
(a) Number of Shares. CBS may sell its Pro Rata Share of the Shares
covered by the Purchase Offer. CBS's "Pro Rata Share" for purposes of this
Agreement is that number of shares of Common Stock equal to the product obtained
by multiplying (i) the aggregate number of Shares covered by the Purchase
Offer, times (ii) a fraction, the numerator of which is the sum of the number
of shares of Common Stock at the time owned by CBS and the
<PAGE> 2
denominator of which is the aggregate number of shares of Common Stock at the
time outstanding, assuming conversion of all outstanding preferred stock of the
Company and the exercise of all options and warrants then outstanding.
(b) Exercise Notice. If CBS desires to exercise its Participation
Rights, CBS shall provide Levy, within thirty (30) days after CBS's receipt of
the Notice, a written notice of such election ("Exercise Notice") specifying
the number of shares of Common Stock that CBS elects to sell pursuant to the
Participation Rights. Each Exercise Notice shall be irrevocable, unless
otherwise consented to by Levy.
(c) Delivery of Certificates. CBS shall effect its participation in
the sale by delivering to the Company promptly following exercise of its
Participation Right, for delivery to the purchaser of the Shares at the closing
of the transaction contemplated by the Purchase Offer, one or more
certificates, properly endorsed for transfer, representing the number of shares
of Common Stock which CBS has elected to sell pursuant to the Participation
Rights.
(d) Transfer of Shares. The stock certificate or certificates which
CBS delivers to the Company pursuant to Section 1.2(c) shall be delivered by
the Company to the purchaser under the Purchase offer at the closing of the
transaction contemplated by the Purchase Offer; and the Company shall receive
on behalf of, and promptly remit to CBS, that portion of the sale proceeds
which CBS is entitled to receive by reason of its participation in the sale.
(e) Closing. Whether or not CBS exercises its Participation Rights,
the closing of the sale of the Shares subject to the Purchase Offer shall take
place not later than one hundred twenty (120) days following the date the Notice
was first delivered to CBS. At the closing, Levy may sell any Shares subject to
the Purchase Offer as to which CBS has not exercised its Participation Rights;
and, if CBS has exercised its Participation Rights, the consummation of such
sale shall be subject to the sale by CBS at the closing of all shares of Common
Stock which CBS has elected to sell pursuant to the Participation Rights. Any
proposed sale on terms and conditions materially different from those described
in the Notice, as well as any subsequent proposed sale by Levy, will again
require compliance by Levy with the provisions of this Agreement.
1.3 Termination. This Agreement and the Participation Rights granted
hereunder shall terminate upon the first to occur of the following: (a) the
tenth anniversary of the date of this Agreement; (b) the execution of a written
agreement to terminate this Agreement by Levy and CBS; (c) the consummation of
the first sale of securities of the Company to the public pursuant to an
effective registration statement filed by the Company under the Securities Act
of 1933, as amended; (d) the first date on which CBS or any assignee to which
such Participation Rights have been assigned pursuant to Section 2.1 hereof (i)
own Common Stock representing less than 10% of the number of shares of the
Company's Common Stock that would be outstanding if all then outstanding shares
of the Company's convertible preferred stock were then converted into shares of
Common Stock or (ii) hold less than 50% of the number of such Common Stock
equivalent shares as are issuable to CBS pursuant to the Principal Agreement or
any Warrants
2
<PAGE> 3
issuable thereunder; or (e) upon the closing of (i) any consolidation or merger
of the Company with or into any other corporation or corporations in which the
holders of the Company's outstanding shares immediately before such
consolidation or merger do not, immediately after such consolidation or merger,
retain stock representing a majority of the voting power of the surviving
corporation of such consolidation or merger or stock representing a majority of
the voting power of a corporation that wholly owns, directly or indirectly, the
surviving corporation of such consolidation or merger; (ii) the sale, transfer
or assignment of securities of the Company representing a majority of the
voting power of all the Company's outstanding voting securities by the holders
thereof to an acquiring party in a single transaction or series of related
transactions; or (iii) the sale of all or substantially all the Company's
assets.
2. ASSIGNMENT OF PARTICIPATION RIGHTS. The Participation Rights of CBS under
Section 1 hereof may be assigned only to a CBS Assignee; provided, however,
that no such assignment of any of such Participation Rights shall be effective
against the Company or Levy until such time as the Company and Levy are given
written notice by the assigning party stating the name and address of the
assignee and identifying the securities of the Company as to which the rights
in question are being assigned; and provided further, that any such assignee
shall receive such assigned Participation Rights subject to all the terms and
conditions of this Agreement, including without limitation the provisions of
this Section 2.
3. LEGENDED CERTIFICATES.
3.1 Legend. Each certificates representing shares of the Common
Stock now or hereafter owned by Levy shall be endorsed with the following
legend:
"THE SALE OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS OF A
CERTAIN CO-SALE AGREEMENT BY AND AMONG THE SHAREHOLDER, THE
CORPORATION AND CBS, INC. COPIES OF SUCH AGREEMENT MAY BE
OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE
CORPORATION."
3.2 Removal of Legend. The legend required by Section 3.1 shall be
removed upon termination of this Agreement in accordance with the provisions of
Section 1.3.
4. GENERAL PROVISIONS.
4.1 Notices. All notices hereunder (including the Exercise Notice) shall
be in writing and shall be given by (i) certified 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
3
<PAGE> 4
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 or Levy, at 6340 N.W. 5th Way, Fort
Lauderdale, Florida 33309; and
(b) if to CBS, at CBS Sports, 51 West 52nd Street, New York, New
York 10019, Attention: President.
4.2 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.
4.3 Amendments and Waivers. Any terms of this Agreement may be amended and
the observance of any term of the Agreement may be waived (either generally or
in a particular) instance and either retroactively or prospectively), with the
written consent of Levy and CBS. Any amendment or waiver effected in accordance
with this Section shall be binding upon the Company, Levy, CBS and their
respective permitted transferees and assignees.
4.4 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.
4.5 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.
4.6 Third Parties. Nothing in this Agreement, expressed 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.
4.7 Successors And Assigns. Subject to the provisions of Section 2, 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.
4.8 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.
4
<PAGE> 5
4.9 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.
IN WITNESS WHEREOF, the parties hereto have executed this Co-Sale
Agreement as of the date and year first above written.
SPORTSLINE USA, INC.
By: MICHAEL LEVY
--------------------
Title: President
CBS, INC.
By: FREDRIC G. REYNOLDS
---------------------
Title:
MICHAEL LEVY
--------------------
Michael Levy
5
<PAGE> 1
EXHIBIT 5
950,000 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.
March 5, 1997
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 950,000 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 $4.00.
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, 1997; provided, however, that the
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
<PAGE> 2
"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 shares 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.
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 adjustments shall be the record date therefor.
- 2 -
<PAGE> 3
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 these
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 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;
- 3 -
<PAGE> 4
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, 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 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.
- 4 -
<PAGE> 5
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: /s/ MICHAEL LEVY
----------------
Title: President
- 5 -
<PAGE> 6
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
-------------------------------
- 6 -
<PAGE> 1
EXHIBIT 6
[LOGO] [SPORTSLINE LETTERHEAD]
December 30, 1997
Sean McManus and
Derek Reisfield
CBS Inc.
51 West 52nd Street
New York, NY 10019
Dear Sean and Derek:
Reference is made to the Warrants dated March 5, 1997 ("Warrants"), issued
by SportsLine USA, Inc. ("SportsLine") to CBS Inc. ("CBS"). As of the date
hereof, the Warrants represent the right to purchase 380,000 shares of
SportsLine common stock at an exercise price of $10.00 per share.
This is to confirm our agreement that the time prior to which the Warrants
may be exercised shall be extended until 5:00 p.m., Fort Lauderdale time on
January 21, 1998 (the "Extended Expiration Time"); provided, that after December
31, 1997, the Warrants may only be exercised in whole, and not in part. Until
the Extended Expiration Time, and except as amended by this letter agreement,
all of the other terms and conditions of the Warrants shall remain in full force
and effect in accordance with their terms. At the Extended Expiration Time,
unless exercised in accordance with their terms, the Warrants shall expire and
be null and void and of no further force and effect.
Please acknowledge your agreement to the foregoing by signing below where
indicated.
Very truly yours,
/s/ MICHAEL LEVY
Michael Levy
President
Agreed this 30 day of December, 1997:
------
CBS Inc.
By: /s/ Howard F Jaeckel
------------------------
Title: Assistant Secretary
