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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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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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(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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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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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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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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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