This Co-Sale Agreement (this "Agreement") is made and entered into as of
March 5, 1997 by and between SportsLine USA, Inc., a Delaware corporation (the
"Company"), (ii) CBS, Inc. ("CBS") and (iii) Michael Levy ("Levy").
R E C I T A L S
A. Concurrently herewith, CBS and the Company are entering into that
certain Agreement, dated as of the date hereof (the "Principal Agreement;"
capitalized terms used herein and not otherwise defined shall have the meanings
defined in the Principal Agreement), pursuant to which, among other things, CBS
will acquire shares of Common Stock and Warrants in consideration of the
license by CBS of the CBS Logos and the CBS Content and provision by CBS of
certain broadcast advertising and promotion.
B. To induce CBS to enter into the Principal Agreement, Levy has agreed
to enter into this Agreement and offer CBS the opportunity to participate in
certain sales of his shares of Common Stock of the Company.
NOW THEREFORE, in consideration of the above recitals and the mutual
covenants made herein, the parties hereby agree as follows:
1. RIGHT OF CO-SALE.
1.1 Notice of Sales. In the event Levy proposes to accept one or more
bona fide offers (collectively, the "Purchase Offer") from any persons to
purchase from him shares of the Common Stock of the Company, he promptly shall
give written notice (the "Notice") to CBS describing fully the Purchase Offer,
including the number of shares of Common Stock proposed to be transferred (the
"Shares"), the proposed bona fide transfer price and the name and address of
the proposed transferee. The Notice may be included as a part of any notice
required to be given by Levy under Article Eight, Section 1 of the Company's
1.2 Participation Right. To the extent that the Company and other
stockholders of the Company have not exercised their respective rights of first
refusal to purchase the Shares in accordance with Article Eight of the
Company's Bylaws, CBS shall have the right (the "Participation Right") to
participate in Levy's sale of the Shares under the terms and conditions
specified in the Purchase Offer. To the extent CBS exercises its Participation
Rights, the number of Shares which Levy may sell pursuant to the Purchase Offer
shall be correspondingly reduced. The Participation Right of CBS is subject to
the following terms and conditions:
(a) Number of Shares. CBS may sell its Pro Rata Share of the Shares
covered by the Purchase Offer. CBS's "Pro Rata Share" for purposes of this
Agreement is that number of shares of Common Stock equal to the product obtained
by multiplying (i) the aggregate number of Shares covered by the Purchase
Offer, times (ii) a fraction, the numerator of which is the sum of the number
of shares of Common Stock at the time owned by CBS and the
denominator of which is the aggregate number of shares of Common Stock at the
time outstanding, assuming conversion of all outstanding preferred stock of the
Company and the exercise of all options and warrants then outstanding.
(b) Exercise Notice. If CBS desires to exercise its Participation
Rights, CBS shall provide Levy, within thirty (30) days after CBS's receipt of
the Notice, a written notice of such election ("Exercise Notice") specifying
the number of shares of Common Stock that CBS elects to sell pursuant to the
Participation Rights. Each Exercise Notice shall be irrevocable, unless
otherwise consented to by Levy.
(c) Delivery of Certificates. CBS shall effect its participation in
the sale by delivering to the Company promptly following exercise of its
Participation Right, for delivery to the purchaser of the Shares at the closing
of the transaction contemplated by the Purchase Offer, one or more
certificates, properly endorsed for transfer, representing the number of shares
of Common Stock which CBS has elected to sell pursuant to the Participation
(d) Transfer of Shares. The stock certificate or certificates which
CBS delivers to the Company pursuant to Section 1.2(c) shall be delivered by
the Company to the purchaser under the Purchase offer at the closing of the
transaction contemplated by the Purchase Offer; and the Company shall receive
on behalf of, and promptly remit to CBS, that portion of the sale proceeds
which CBS is entitled to receive by reason of its participation in the sale.
(e) Closing. Whether or not CBS exercises its Participation Rights,
the closing of the sale of the Shares subject to the Purchase Offer shall take
place not later than one hundred twenty (120) days following the date the Notice
was first delivered to CBS. At the closing, Levy may sell any Shares subject to
the Purchase Offer as to which CBS has not exercised its Participation Rights;
and, if CBS has exercised its Participation Rights, the consummation of such
sale shall be subject to the sale by CBS at the closing of all shares of Common
Stock which CBS has elected to sell pursuant to the Participation Rights. Any
proposed sale on terms and conditions materially different from those described
in the Notice, as well as any subsequent proposed sale by Levy, will again
require compliance by Levy with the provisions of this Agreement.
1.3 Termination. This Agreement and the Participation Rights granted
hereunder shall terminate upon the first to occur of the following: (a) the
tenth anniversary of the date of this Agreement; (b) the execution of a written
agreement to terminate this Agreement by Levy and CBS; (c) the consummation of
the first sale of securities of the Company to the public pursuant to an
effective registration statement filed by the Company under the Securities Act
of 1933, as amended; (d) the first date on which CBS or any assignee to which
such Participation Rights have been assigned pursuant to Section 2.1 hereof (i)
own Common Stock representing less than 10% of the number of shares of the
Company's Common Stock that would be outstanding if all then outstanding shares
of the Company's convertible preferred stock were then converted into shares of
Common Stock or (ii) hold less than 50% of the number of such Common Stock
equivalent shares as are issuable to CBS pursuant to the Principal Agreement or
issuable thereunder; or (e) upon the closing of (i) any consolidation or merger
of the Company with or into any other corporation or corporations in which the
holders of the Company's outstanding shares immediately before such
consolidation or merger do not, immediately after such consolidation or merger,
retain stock representing a majority of the voting power of the surviving
corporation of such consolidation or merger or stock representing a majority of
the voting power of a corporation that wholly owns, directly or indirectly, the
surviving corporation of such consolidation or merger; (ii) the sale, transfer
or assignment of securities of the Company representing a majority of the
voting power of all the Company's outstanding voting securities by the holders
thereof to an acquiring party in a single transaction or series of related
transactions; or (iii) the sale of all or substantially all the Company's
2. ASSIGNMENT OF PARTICIPATION RIGHTS. The Participation Rights of CBS under
Section 1 hereof may be assigned only to a CBS Assignee; provided, however,
that no such assignment of any of such Participation Rights shall be effective
against the Company or Levy until such time as the Company and Levy are given
written notice by the assigning party stating the name and address of the
assignee and identifying the securities of the Company as to which the rights
in question are being assigned; and provided further, that any such assignee
shall receive such assigned Participation Rights subject to all the terms and
conditions of this Agreement, including without limitation the provisions of
this Section 2.
3. LEGENDED CERTIFICATES.
3.1 Legend. Each certificates representing shares of the Common
Stock now or hereafter owned by Levy shall be endorsed with the following
"THE SALE OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS OF A
CERTAIN CO-SALE AGREEMENT BY AND AMONG THE SHAREHOLDER, THE
CORPORATION AND CBS, INC. COPIES OF SUCH AGREEMENT MAY BE
OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE
3.2 Removal of Legend. The legend required by Section 3.1 shall be
removed upon termination of this Agreement in accordance with the provisions of
4. GENERAL PROVISIONS.
4.1 Notices. All notices hereunder (including the Exercise Notice) shall
be in writing and shall be given by (i) certified or registered mail, return
receipt requested; (ii) hand delivery; or (iii) nationally recognized overnight
courier service; a notice shall be deemed to have been given (a) when delivered
by hand; (b) three days after mailing, in the case of certified or registered
mail; and (c) one business day after being forwarded to a nationally recognized
overnight courier service for overnight delivery; in each case correctly
addressed to such party
at its address set forth below or such other address as such party may specify
by notice to the other parties hereto:
(a) if to the Company or Levy, at 6340 N.W. 5th Way, Fort
Lauderdale, Florida 33309; and
(b) if to CBS, at CBS Sports, 51 West 52nd Street, New York, New
York 10019, Attention: President.
4.2 Entire Agreement. This Agreement, together with all the Exhibits
hereto, constitutes and contains the entire agreement and understanding of the
parties with respect to the subject matter hereof and supersedes any and all
prior negotiations, correspondence, agreements, understandings, duties or
obligations between the parties respecting the subject matter hereof.
4.3 Amendments and Waivers. Any terms of this Agreement may be amended and
the observance of any term of the Agreement may be waived (either generally or
in a particular) instance and either retroactively or prospectively), with the
written consent of Levy and CBS. Any amendment or waiver effected in accordance
with this Section shall be binding upon the Company, Levy, CBS and their
respective permitted transferees and assignees.
4.4 Governing Law. This Agreement shall be governed by and construed
exclusively in accordance with the internal laws of the State of Delaware as
applied to agreements among Delaware residents entered into and to be performed
entirely within Delaware, excluding that body of law relating to conflict of
laws and choice of law.
4.5 Severability. If one or more provisions of this Agreement are held to
be unenforceable under applicable law, then such provision(s) shall be excluded
from this Agreement and the balance of this Agreement shall be interpreted as if
such provision(s) were so excluded and shall be enforceable in accordance with
4.6 Third Parties. Nothing in this Agreement, expressed or implied, is
intended to confer upon any person, other than the parties hereto and their
successors and assigns, any rights or remedies under or by reason of this
4.7 Successors And Assigns. Subject to the provisions of Section 2, the
provisions of this Agreement shall inure to the benefit of, and shall be binding
upon, the successors and permitted assigns of the parties hereto.
4.8 Captions. The captions to sections of this Agreement have been
inserted for identification and reference purposes only and shall not be used
to construe or interpret this Agreement.
4.9 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Co-Sale
Agreement as of the date and year first above written.
SPORTSLINE USA, INC.
By: MICHAEL LEVY
By: FREDRIC G. REYNOLDS