1
EXHIBIT 1
JANUARY 1, 1999 AMENDMENT TO AGREEMENT
This Amendment to Agreement (the "Amendment"), effective as of January
1, 1999, is entered into between SPORTSLINE USA, INC., 0000 XX 0xx Xxx, Xx.
Xxxxxxxxxx, Xxxxxxx 00000 ("SportsLine USA") and CBS Broadcasting Inc. (formerly
known as CBS Inc.), 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("CBS").
WHEREAS, SportsLine USA and CBS have heretofore entered into that
certain Agreement dated as of March 5, 1997 (such agreement as amended, modified
or supplemented prior to the date hereof, the "Agreement," and capitalized terms
defined in the Agreement shall have the same meaning when used in this
Amendment). From and after the effective date hereof, each reference in the
Agreement to "this Agreement", "hereto", "hereunder" or words of like import,
and all references to the Agreement in any and all agreements, instruments,
documents, notes, certificates and other writings of every kind and nature shall
be deemed to mean the Agreement as modified and amended by this Amendment.
WHEREAS, SportsLine USA and CBS desire to extend the term of the
Agreement for a period of five (5) years through and including December 31, 2006
and to modify certain of the parties' obligations under the Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein and for other good and valuable consideration the
receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:
1. Amendments. The Agreement is hereby amended effective upon the
execution of this Amendment as follows:
(a) Subparagraph 1.3 is hereby deleted and replaced with
the following:
"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 program distribution (whether
free over-the-air, cable, telephone, local,
microwave, or direct broadcast satellite) in North
America. For the purpose of clarification, a CBS
Competitor shall not include (A) any person, firm or
corporation that is engaged in the transmission of
programming to the consumer and does not have any
interest in and/or rights in and to the programming
being transmitted (e.g. a cable MSO or a telephone
company that meets the criteria set forth in A) or
(B) any person, firm or corporation that is engaged
in the production of television programming or other
audio visual materials and does not engage in the
distribution or transmission of such materials (e.g.
a studio
- 1 -
2
that meets the criteria set forth in B). 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."
(b) The dates set forth in subparagraphs 3.1 and 3.2 are
hereby changed to reflect the five (5) year extension of the term to
include December 31, 2006. The revised subparagraphs 3.1 and 3.2 with
the new dates are contained in Schedule A attached hereto and made a
part hereof.
(c) Subparagraph 5.1 of the Agreement is hereby deleted and
replaced with the following:
"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 and SportsLine USA Inc. shall
work together in good faith in accordance with
standard CBS business practices, including such
editorial and financial considerations, as determined
by CBS, to attempt 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, including , but not limited to:
(i) live and archival audio and
video interviews, press conferences with sports
personalities (including, without limitation,
athletes, coaches and owners) and sports highlights
which CBS has the right to broadcast;
(ii) all statistics and historical
data relating to sports events and personalities that
CBS owns or has the right to use in connection with
its broadcasts;
(iii) live, real-time Internet-
broadcast of all sports events, sports-related
television programming broadcast by CBS where CBS
has obtained the right to broadcast such programming
in any and all media (e.g. thereby, including the
Internet); and
(iv) the right for SportsLine USA
Inc. to acquire/operate/manage the "official Internet
sites" affiliated with all domestic sporting event
rights holders (e.g., XXXXXX.XXX, XXX.XXX,
XXXXXXXXX.XXX, XxxxxxXxxxxxx.xxx etc.) "
- 2 -
3
(d) Subparagraphs 8.2, 8.3 and 8.4 are hereby deleted in their
entirety and replaced by the following new subparagraph 8.2, 8.3 and
8.4:
"8.2 Placements During CBS Television
Network Broadcasts. During the first two (2) Contract
Years and 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. Commencing with the third
Contract Year the advertisement and promotion to be
provided to SportsLine USA Inc. shall be placed in
accordance with Exhibit M, attached hereto and made a
part hereof, as said Exhibit may be revised from time
to time as mutually agreed by the parties. The
parties acknowledge that CBS's broadcast rights may
change during the Term. Accordingly, if during the
Term CBS acquires additional free over-the-air
broadcast rights in the United States for additional
sports events (whether as an extension or expansion
of broadcast rights for sports events held by CBS as
of the date hereof, or broadcast rights for sports
events to which it has no such rights today), then
CBS shall provide advertising and promotion to
SportsLine USA Inc., at no additional cost to
SportsLine USA Inc., during all such sports events
for which CBS hereafter acquires broadcast rights, in
a manner consistent with the promotional efforts set
forth in Exhibit M as of the date hereof. In this
regard CBS and SportsLine USA Inc. will mutually
adjust Exhibit M to accommodate such additional
sports events so that the aggregate number of
advertising and promotional placements set forth in
Exhibit M will remain constant. For purposes of
illustration (i) the advertising and promotion to be
provided by CBS for any golf, tennis, auto racing,
skating and similarly formatted sports events shall
be of similar type and amount as those specified on
Exhibit M as of the date hereof for golf events, and
(ii) the advertising and promotion to be provided by
CBS for any football, basketball, baseball and
similarly formatted sports events shall be of similar
type and amount
- 3 -
4
as those specified on Exhibit M as of the date
hereof for NFL and NCAA football and NCAA basketball
events.
8.3 Other Placements and Promotions. 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 following:
(i) 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.
(ii) CBS and SportsLine USA Inc.
will work together in good faith to address:
A. promotions of
integrated/enhanced Internet and television
features (e.g. CBS SportsLine polls,
celebrity and talent chats, contests and
promotions)
B. targeted CBS SportsLine
merchandise/e-commerce promotions.
C. promotions of CBS SportsLine
membership and premium services (e.g.
fantasy leagues and athletic fan clubs).
D. promotions of specific
programming on the CBS SportsLine Site
either on the day the promotion spot
appears or during the upcoming week and
E. such other promotions as
mutually agreed to by the parties.
(iii) CBS and SportsLine USA Inc.
will work together in good faith to evaluate the
promotion effort(s) (e.g. the quantity and quality,
etc.) from a competitive standpoint (i.e. taking into
consideration the promotional efforts of other
non-CBS sports related Internet Sites) on SportsLine
USA Inc.'s behalf and shall make such adjustments to
the promotion schedule as may be mutually agreed.
(iv) CBS and SportsLine USA Inc.
will work together in good faith to evaluate the
promotional vehicles as are used by CBS from time to
time to promote CBS Sports business and programs
generally (including, without limitation, billboards,
radio promotions, on-site hospitality) to promote the
CBS SportsLine Site.
- 4 -
5
(v) CBS will work together with
SportsLine USA Inc. in good faith to develop a
campaign to create an appropriate image for the CBS
SportsLine Site, including a number of promotional
spots (as mutually agreed and subject to
availability) to be aired during each Contract Year
at no additional cost to SportsLine USA Inc.
SportsLine USA Inc. shall select and, at its own
expense, retain an advertising agency to develop and
execute the image campaign. SportsLine USA Inc. shall
consult with CBS regarding any creative suggestions
CBS may have. CBS shall have the right to approve any
promotional spots for the image campaign that will
appear on any CBS Sports Event Broadcast or on any
other programming.
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. The advertising sales
strategy applicable to the sale of advertising on the
CBS SportsLine Site will be developed jointly by CBS
and SportsLine USA Inc. with annual
advertising/sponsorship revenue targets established
for all CBS Sports Event Broadcasts. 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. 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.".
(e) Subparagraphs 8.5 and 8.6 of the Agreement are hereby
deleted in their entirety.
(f) Subparagraph 8.7 of the Agreement is hereby amended by
deleting in their entirety the last three sentences of such
subparagraph (i.e., beginning with "CBS and SportsLine USA Inc. shall
share equally..." and ending with "...made in U.S. dollars."). The
revised subparagraph 8.7 is contained in Schedule A.
(g) Subparagraph 8.8 of the Agreement is hereby deleted in its
entirety.
(h) Subparagraph 8.9 of the Agreement is hereby amended by
deleting in their entirety the last three sentences of such
subparagraph (i.e., beginning with "CBS and SportsLine USA Inc. shall
share equally..." and ending with "...made in U.S. dollars."). The
revised subparagraph 8.9 is contained in Schedule A.
- 5 -
6
(i) Paragraph 9 of the Agreement is hereby deleted in its
entirety and replaced with the following:
"9.1 With respect to each sports event that
is the subject of a CBS Sports Event Broadcast, CBS shall use
commercially reasonable efforts to (a) assist SportsLine USA
Inc. personnel in obtaining full access and media credentials
to such sports event, including access to on-site hospitality
facilities maintained by or for CBS, (b) provide SportsLine
USA Inc. with a reasonable number of tickets to such sports
event (provided, that SportsLine USA Inc. acknowledges that
for certain major sports events, such as the Masters and the
NCAA Final Four, tickets and access may be difficult for CBS
to provide) and (c) to assist SportsLine USA in obtaining
permission to place on-site kiosks at each such sports event
for purposes of displaying and promoting the CBS SportsLine
Site.
9.2 CBS will use reasonable commercial
efforts to sublease to SportsLine USA Inc. office space within
its New York, Chicago, San Francisco, Los Angeles and Detroit
offices, on terms to be mutually agreed by the parties in good
faith. In New York and Chicago, CBS Sports' sales staff
offices and SportsLine USA Inc.'s sales staff offices will be
located together (i.e., co-located); and, the parties will use
their best efforts to co-locate their respective sales staff
offices in Detroit, Los Angeles and other locations.
9.3 (a) CBS shall include the CBS SportsLine
Site in all of its CBS Sports and CBS PLUS advertising and
sponsorship sales presentations and programs to third parties,
except as mutually agreed.
(b) CBS shall develop an incentive
program directed to its network sales staff to provide such
personnel incentives for assisting SportsLine USA Inc. in the
sale of advertisements and sponsorships for the CBS SportsLine
Site.
9.4 (a) CBS shall invite SportsLine USA Inc.
sales staff members to attend all weekly CBS Sports sales
meetings, it being understood that the information
communicated at such sales meetings shall be deemed
Confidential Information.
(b) CBS shall invite representatives
from SportsLine USA Inc.'s sales staff to attend all CBS
Sports sales conferences and seminars (both on- and off-site)
it being understood that the information communicated at such
conferences and seminars shall be deemed Confidential
Information. CBS and SportsLine will jointly develop internet
educational and informational meetings to be hosted by
SportsLine USA Inc. periodically throughout each Contract
Year. Attendance at such meetings will be encouraged by CBS
senior
- 6 -
7
management for all CBS Sports sales staff members. Information
communicated at such educational and informational meetings
shall be deemed Confidential Information.
9.5 CBS and SportsLine USA Inc. each shall
work together, in good faith, to maximize the benefits
afforded to each party under this agreement, including,
without limitation, seeking additional ways to capitalize on
new technologies and promotional and revenue opportunities for
the CBS SportsLine Site."
(j) Subparagraph 10.1 of the Agreement is hereby deleted in
its entirety and replaced with the following:
"In consideration of the grant by CBS of the
licenses set forth in subparagraphs 2.1 and 2.2 hereof, in
addition to the royalties set forth in subparagraph 10.5,
SportsLine USA Inc shall issue to CBS on the first business
day of each of the first three Contract Years during the term
hereof a stock certificate for the number of shares (as
adjusted pursuant to paragraph 11) of SportsLine USA Inc.
common stock, par value $.01 per share ("Common Stock")
specified in the Content Contribution schedule set forth in
Exhibit G. In addition, within ten (10) business days after
the date of the execution of this Amendment SportsLine USA
Inc. shall issue to CBS a stock certificate for the balance of
the shares of the Common Stock specified in the Content
Contribution schedule set forth in Exhibit G, as adjusted
pursuant to paragraph 11, (i.e., 88,486 shares of common
stock). Shares issued to CBS pursuant to this subparagraph
10.1 are sometimes hereafter referred to as "Content Shares".
The Content Shares will not be subject to forfeiture."
(k) Subparagraph 10.2 of the Agreement is hereby deleted in
its entirety and replaced with the following:
"(a) In consideration of CBS providing
advertising and promotion during each of the first three
Contract Years, on the first business day of each of the first
three Contract Years 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. In addition,
within ten (10) business days after the date of the execution
of this Amendment, SportsLine USA Inc. shall issue to CBS a
stock certificate for the balance of the shares of Common
Stock specified in Exhibit E as adjusted pursuant to paragraph
11, (i.e., 964,451 shares of Common Stock see Exhibit E-2
attached hereto and made a part hereof). Shares issued
pursuant to this subparagraph 10.2(a) shall not be subject to
forfeiture.
(b) In consideration of CBS providing
advertising and promotion time, pursuant to Exhibit M or as
such Exhibit M may be revised from
- 7 -
8
time to time as mutually agreed by the parties, for Contract
Years six through ten, SportsLine USA Inc. shall issue to CBS
on each of the issue dates prescribed below for such Contract
Years (the "Issue Dates"), a stock certificate for the number
of shares of Common Stock having a Fair Market Value (as
defined herein) of twenty million dollars ($20,000,000) on
such Issue Date. "Fair Market Value" shall mean the average of
the closing prices of the Common Stock on The NASDAQ National
Market (or if the Common Stock is listed on a stock exchange,
on the primary stock exchange, or exchanges, on which it is
traded) for the five (5) day period ending on the day prior to
the applicable Issue Date as reported by NASDAQ or such stock
exchange.
Contract Year Issue Date
------------- ----------
sixth Contract Year January 1, 2002
seventh Contract Year April 1, 2003
eighth Contract Year July 1, 2004
ninth Contract Year October 1, 2005
tenth Contract Year January 1, 2007
The shares to be issued pursuant to this paragraph are not
subject to forfeiture."
(l) Subparagraph 10.4 of the Agreement is hereby deleted in
its entirety and replaced with the following:
"On the first business day of each of the
first three Contract Years during the term hereof, SportsLine
USA Inc. shall grant to CBS a Warrant, in the form set forth
in Exhibit H, to purchase all or any part of the number of
shares of Common Stock set forth in Exhibit I at the price
specified in Exhibit I. Within ten (10) business days after
the execution of this Amendment, SportsLine USA Inc. shall
grant to CBS Warrants to purchase all or any part of the
number of shares of Common Stock set forth in Exhibit I at the
prices specified in Exhibit I for Contract Years 4 and 5,
provided that such Warrants will vest and become exercisable
on January 1, 2000 and January 1, 2001, respectively, and will
expire on December 31, 2000 and December 31, 2001,
respectively. CBS may exercise each such Warrant (once it has
vested in the case of the Warrants for Contract Years 4 and 5)
at such time or number of times as CBS shall elect, provided
that any such exercise is accomplished by written notice to
SportsLine USA Inc. on or prior to the expiration date for
such Warrant. In addition, in consideration for CBS's
execution of this Amendment, SportsLine USA Inc. shall, within
ten (10) business days after the execution of this Amendment,
grant to CBS Warrants in the forms set forth in Exhibit H to
purchase the number of shares of Common Stock set forth in
Exhibit I-2 (attached hereto and made a part hereof). Such
Warrants shall vest and become exercisable on the dates set
forth on Exhibit I-2. Once vested, CBS may exercise any such
Warrant at such time or number of times as CBS may elect,
provided that any such exercise shall be accomplished by
- 8 -
9
written notice to SportsLine USA Inc. on or prior to the
expiration date for such Warrant specified on Exhibit I-2.
Warrants issued pursuant to this subparagraph 10.4 are
referred to herein as "Warrants". Except as provided in
subdivision 19.2(iii), Warrants are not subject to
forfeiture."
(m) The following is hereby added as subparagraph 10.5 of the
Agreement.
"10.5 Royalties.
(a) Commencing with the third Contract Year
(i.e., calendar year 1999), in consideration of the
grant by CBS of the licenses set forth in
subparagraphs 2.1 and 2.2 hereof, SportsLine USA Inc.
shall pay CBS during each Contract Year the following
royalties with respect to the Net Revenues (as
hereinafter defined) received by SportsLine USA Inc.
during such Contract Year (the "Royalty"):
(i) during each of the third, fourth
and fifth Contract Years, an amount equal to
the sum of (A) twelve percent (12%) of
SportsLine USA Inc.'s Net Revenues up to and
including fifteen million dollars
($15,000,000), plus fifteen percent (15%) of
SportsLine USA Inc.'s Net Revenues, if any,
in excess of fifteen million dollars
($15,000,000).
(ii) during each of the sixth
through tenth Contract Years, an amount
equal to the sum of (A) twelve percent (12%)
of SportsLine USA Inc.'s net Revenues up to
and including thirty million dollars
($30,000,000), plus fifteen percent (15%) of
SportsLine USA Inc.'s Net Revenues, if any,
in excess of thirty million dollars
($30,000,000)."
(b) For purposes of this Agreement, the term
"Net Revenue" shall mean the sum of the following
except as provided in subdivision 10.5(c):
(i) gross revenue received by
SportsLine USA Inc. and its subsidiaries
from the sale of advertising and
sponsorships (excluding advertising agency
commissions) and excluding any such gross
revenues (A) received in the form of barter,
(B) from sales of advertising or sponsorship
for SportsLine USA Inc.'s Vegas Insider
Internet Site (or any successor Vegas
Insider Internet Site) and (C) from sales of
advertising or sponsorship for any Foreign
SportsLine Sites minus (x) advertising
agency commissions and (y) revenue splits
payable to third parties solely
- 9 -
10
with respect to Third Party Sites developed
after the effective date of this Amendment;
plus
(ii) gross revenue received by
SportsLine USA Inc. and its subsidiaries
from the sale of merchandise excluding any
such gross revenues (A) from sales of
merchandise through SportsLine USA, Inc.'s
Vegas Insider Internet Site (or any
successor Internet Site) and (B) from sales
of merchandise through any Foreign
SportsLine Site, minus fees, revenue splits
to third parties, SportsLine USA Inc.'s cost
of goods sold (payable to third parties),
third party credit card processing fees,
shipping and handling expenses; credit card
charge backs/off, sales returns and other
mutually agreed upon out-of-pocket
transaction costs incurred by SportsLine USA
Inc. and directly associated with the
generation of such revenues. In connection
with the aforementioned costs it is intended
that overhead costs, internal labor, rent
etc are to be excluded and in no event will
the costs of goods sold and out of pocket
transaction costs exceed the gross revenue
from merchandise (i.e. there will never be a
net loss from merchandise sales) ; plus
(iii) gross revenue received by
SportsLine USA Inc. and its subsidiaries
from the sale of memberships and premium
services, excluding any such gross revenues
(A) from sales of memberships or premium
services through SportsLine USA Inc.'s Vegas
Insider Internet Site (or any successor to
the Vegas Insider Internet Site) and (B)
from sales of memberships or premium
services through any Foreign SportsLine
Site, minus third party credit card
processing fees, and revenue splits payable
to third parties.
(c) Notwithstanding anything in Subparagraph
10.5(b) to the contrary, the parties agree that "Net
Revenue" shall not include the following: (i) any
revenues of SportsLine USA Inc. derived from Content
Licensing or Syndication not containing any CBS
Sports Content; (ii) any revenue of SportsLine USA
Inc. or any subsidiary thereof derived from
non-Internet activities, unless such activities use
or include the term "CBS"; and (iii) any revenue of a
SportsLine USA Inc. subsidiary, whether or not
related to Internet activities, which is derived from
the marketing and promotion of goods or services
under a brand that does not include the term "CBS",
provided that such goods and services do not receive
advertising promotion on the CBS SportsLine Site. For
purposes of this Agreement, (i) the term "Content
Licensing" means the licensing by SportsLine USA Inc.
to a third party of Content that is primarily
- 10 -
11
marketed and promoted by such third party and is
distributed to end-users under a brand that does not
include the term "CBS" and (ii) the term
"Syndication" means the sale, licensing or
syndication for distribution by a third party, of
programming produced by or on behalf of SportsLine
USA Inc and which programming is distributed to end
users with a brand that does not include the term
"CBS".
(d) Commencing with the calendar quarter
ended March 31, 1999, SportsLine USA Inc. shall pay
to CBS the Royalty with respect to its Net Revenues
received during each calendar quarter no later than
forty-five days (45) days following the end of such
calendar quarter. Each Royalty payment shall be
accompanied by a statement showing in reasonable
detail how such payment was computed.
(e) From time to time during the term of
this Agreement, SportsLine USA Inc. will provide CBS
with such forecasts or estimates of its projected Net
Revenues as are prepared by SportsLine USA Inc. in
the normal course of its operations."
(n) Subparagraphs 11.1. 11.2 and 11.3 of the Agreement are
hereby amended so that references to stock, shares and/or securities in
said subparagraphs shall include all securities to be issued to CBS
pursuant to this Agreement and references to SportsLine USA Inc. as the
issuer of securities shall mean the actual issuer of the securities,
whether it is SportsLine USA Inc. or another issuer.
(o) The first paragraph of Subparagraph 19.1 of the Agreement
is hereby deleted and replaced by the following.
"19.1 Termination. 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 this
Agreement will terminate, unless mutually agreed otherwise.
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:"
(p) The following sentence shall be added at the end of
paragraph 19:
"The exercise of a party's right of termination shall
be by notice and will be effective upon the date of said
notice."
(q) The following new provision is added as Paragraph 19A of
the Agreement:
- 11 -
12
"19A. CHANGE IN CONTROL
19A.1(a) Notwithstanding anything to the contrary contained in
the Agreement, upon a Change in Control of SportsLine USA Inc. as
defined in clause 19A.1(b) below:
(i) any Warrants to be issued to CBS pursuant to the
Agreement that have not yet been issued as of the date of such
Change in Control (the "CIC Date") will be issued to CBS on
the CIC Date and will be exercisable by CBS in whole or in
part from time to time at any time after the issue date and on
or prior to the first anniversary of the CIC Date; and
(ii) any shares of stock or other securities to be
issued to CBS pursuant to this Agreement (other than shares
issuable upon exercise of a Warrant by CBS) including, but not
limited to, all the shares to be issued to CBS pursuant to
subdivision 10.2(b) that have not yet been issued on the CIC
Date will be issued to CBS on the later of the CIC Date or the
date that is six (6) months after the date of the last sale of
Common Stock by CBS.
(b) "Change in Control" will mean the occurrence of one or
more of the following events:
(i) any person (as such term is defined in Section
13(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), corporation or other entity excluding (A)
SportsLine USA Inc., or its wholly owned subsidiaries or (B)
CBS or any Affiliate of CBS, becomes the "beneficial owner"
(as such term is defined in Rule 13d-3, or any successor rule,
under the Exchange Act), of securities representing forty
percent (40%) or more of the combined voting power of
SportsLine USA Inc.'s then outstanding securities entitled to
vote generally in the election of directors.; or
(ii) at any time during any period of two consecutive
years, individuals who at the beginning of such period
constituted the entire Board of SportsLine USA Inc. cease for
any reason to constitute at least a majority thereof, unless
the election or nomination for election of each new director
during such two-year period is approved by a vote of at least
a majority of the directors then still in office who were
directors at the beginning of such two-year period.
19.A.3 SportsLine USA Inc. shall require any
successor to agree to be bound by SportsLine USA Inc.'s
obligations under this Agreement, including, without
limitation, the provisions of this paragraph 19.A (Change in
Control)."
(r) Subdivisions 19.2(iii) and 19.2(iv) of the Agreement are
hereby deleted in their entirety and replaced by the following:
- 12 -
13
"19.2(iii) If at any time SportsLine USA terminates this
Agreement pursuant to subdivision 19.1, the following shall be
applicable:
(a) SportsLine USA shall not thereafter be obligated
to issue to CBS any shares that are to be issued to CBS
pursuant to subdivision 10.2(b), except those shares which
will have been issued or should be issued to CBS for a
Contract Year or part thereof prior to the effective date of
the termination.
(b) With respect to a termination in Contract Years
six through ten, CBS shall, pay to SportsLine USA a sum of
money equal to One Million Six Hundred Sixty Six Thousand Six
Hundred and Sixty Six Dollars ($1,666,666) per month for each
full month of the Contract Year after the effective
termination date. If the effective date of the termination is
prior to the date set forth in subparagraph 10.2(b) for the
issuance of shares for a Contract Year, and therefore
SportsLine USA Inc did not issue shares for the applicable
Contract Year in which the Agreement is being terminated,
SportsLine USA Inc. will issue shares to CBS at the rate of
$1,666,666 per month on the applicable scheduled date set
forth in 10.2(b).
(c) With respect to a termination in Contract Years
Three, Four, or Five CBS shall pay to SportsLine USA Inc. a
sum of money calculated as follows:
(i) If the Agreement is terminated during
the third Contract Year, CBS shall pay to SportsLine
USA Inc. an amount equal to $42,000,000 less
$1,000,000 for each full month of the third Contract
Year prior to the effective date of termination;
(ii) If the Agreement is terminated during
the fourth Contract Year, CBS shall pay to SportsLine
USA Inc. an amount equal to $30,000,000 less
$1,250,000 for each full month of the fourth Contract
Year prior to the effective date of termination;
(iii) If the Agreement is terminated during
the fifth Contract Year, CBS shall pay to SportsLine
USA Inc. an amount equal to $15,000,000 less
$1,250,000 for each full month of the fifth Contract
Year prior to the effective date of termination.
(d) If the Agreement is terminated during the third,
fourth or fifth Contract Year, then (i) any Warrants that were
scheduled to vest at any time after the date of terminations
shall expire and be forfeited by CBS, and (ii) if CBS then
holds any vested Warrants exercisable for the Contract Year
during which the Agreement is terminated, then a number of
such Warrant shares equal to the full
- 13 -
14
number of Warrant Shares exercisable during the Contract Year
during which the Agreement is terminated, less a number of
Warrant Shares equal to 1/12th of such number of Warrant
Shares for each full month of such Contract Year prior to the
date of termination, shall expire and be forfeited by CBS.
(e) If the effective date of a termination is not the
last day of a month, the payment to be made pursuant to this
paragraph shall be pro rated on the basis of a thirty (30) day
month."
2. Effective Date. This Amendment shall be effective upon its execution
by SportsLine USA Inc. and CBS.
3. Counterparts. This Amendment may be executed in counterparts and by
different parties hereto in separate counterparts each of which, when so
executed and delivered, shall be deemed to be an original and all of which, when
taken together, shall constitute one and the same instrument.
4. No Other Modifications. Except as otherwise expressly modified by
the terms and provisions of this Amendment, the Agreement shall remain in full
force and effect, and is hereby in all respects confirmed and ratified by the
parties hereto; and, except as expressly provided herein, nothing in this
Amendment will be construed as a waiver of any of the rights or obligations of
the parties under the Agreement.
IN WITNESS WHEREOF, CBS and SportsLine USA have executed this
Amendment to Agreement as of the dates set forth below.
CBS Broadcasting Inc.
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Title: Executive Vice President and
Chief Financial Officer
Dated: February 10, 1999
SportsLine USA, Inc.
By: /s/ Xxxxxxx Xxxx
------------------------------------
Title: President
Dated: February 10, 1999
- 14 -
15
EXHIBIT G
CONTENT SHARES
SHARES OF COMMON
DATE CONTENT PAYMENT STOCK(1)
---- --------------- --------
First Contract Year* $1 Million 72,329
Second Contract Year* $1 Million 46,885
Third Contract Year* $1 Million 42,300
Fourth & Fifth Contract Year** $2 Million 88,486
* SportsLine USA Inc. shall issue the Content Shares for the First, Second
and Third Contract Years on the first business day of each such Contract
Year.
** SportsLine USA Inc. shall issue the Fourth and Fifth Contract Year Content
Shares within ten (10) business days after the date the Amendment has been
executed by CBS and SportsLine USA Inc.
1. All share amounts have been adjusted to reflect a 1-for-2.5
share reverse stock split of the Common Stock effect by SportsLine USA
Inc. in November 1997.
- 1 -
16
EXHIBIT E-2
ADDITIONAL AD GUARANTEE SHARES
Contract Year Amount Price(1) Per Share Shares of Common Stock1
-------------
Fourth Contract Year* $14 Million 26.63 526,078
Fifth Contract Year* $14 Million 31.93 438,373
----------- -------
Total $28 Million 964,451
* SportsLine USA Inc. shall issue the Fourth and Fifth Contract Year Ad
Guarantee Shares within ten (10) business days after the date the Amendment
has been executed by CBS and SportsLine USA Inc.
1. The share amounts and the price per share have been adjusted to
reflect a 1-for-2.5 share reverse stock split of the Common Stock effect by
SportsLine USA Inc. in November 1997.
- 2 -
17
EXHIBIT I-2
ADDITIONAL WARRANT SHARES
SHARES OF COMMON STOCK PRICE PER SHARE VESTING DATE EXPIRATION DATE
---------------------- --------------- ------------ ---------------
500,000 $23.00 immediately **
400,000 $35.00 January 1, 2000 December 31, 2000
300,000 $45.00 January 1, 2001 December 31, 2001
** These Warrants shall be vested as of the date Amendment was executed by CBS
and SportsLine USA Inc. and shall be exercisable during the one-year period
following the date of such execution up to and including the first
anniversary of such execution.
- 1 -
18
EXHIBIT M
PROMOTION SCHEDULE
(ATTACHED HERETO)
Footnotes:
1. It is agreed that the duration of the promos and video roll ins set forth
on the Promotion Schedule will be approximately ten (10) seconds in length
(e.g. between 8-12 seconds).
2. SportsLine USA, Inc. and CBS shall work together in good faith to ensure
that each promotion takes full advantage of the latest
technologies/capabilities in commercial use throughout the Term.
- 1 -
19
SCHEDULE A
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, 2006,
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, 2005. 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, 2006, 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, 2006 (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 Party Offer. Except as otherwise expressly provided in
this Agreement, during the term of this Agreement and for a period of six (6)
months thereafter, SportsLine USA Inc. shall not use Television Related Sports
Content provided by any CBS Competitor on any Internet Site or use the logos or
tradenames of any CBS Competitor to brand any Internet Site, unless SportsLine
USA Inc.'s right to use such Television Related Sports Content or such logos or
tradenames is derived from (i) the acceptance by SportsLine USA Inc. of a Third
Party Offer which exceeds the CBS Offer by more than ten percent (10%), or (ii)
the acceptance by SportsLine USA Inc. of a Third Party Offer which does not
exceed the CBS Offer by more than ten percent (10%), which Third Party Offer CBS
declined to match within twenty (20) business days after receiving written
notice thereof from SportsLine USA Inc.
- 1 -
20
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.
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 .
- 2 -