SPORTSLINE USA, INC.
PLACEMENT AGENCY AGREEMENT
November __, 1997
Sportsline USA, Inc.
▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
This placement agency agreement ("the Agreement") outlines the
terms upon which BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ & Company and NationsBanc
▇▇▇▇▇▇▇▇▇▇ Securities, Inc. (collectively, the "Placement Agents") are engaged
by Sportsline USA, Inc., a Delaware corporation (the "Company"), to act as its
financial advisors and exclusive placement agents in connection with the
offering by the Company (the "Concurrent Offering") of up to $7 million (the
"Concurrent Shares") of its stock, par value $0.01 per share (the "Common
Stock"). The Concurrent Offering of Concurrent Shares is registered on
Registration Statement No. 333-25259 (as such Registration Statement may be
amended from time to time, the "Registration Statement") under the Securities
Act of 1933, as amended (the "Act"), filed by the Company with the Securities
and Exchange Commission (the "Commission"). The Company will also enter into an
underwriting agreement with BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ & Company and
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities, Inc., as representatives of the several
underwriters to be named in SCHEDULE A thereto (collectively, the
"Underwriters"), relating to the offering of Common Stock by the Underwriters
(the "Initial Public Offering" and, together with the Concurrent Offering, the
"Offerings"). The Initial Public Offering is also registered on the Registration
Statement. To the extent designated herein, portions of the underwriting
agreement relating to the Initial Public Offering, in the form filed as Exhibit
1.1 to the Registration Statement and attached hereto as ANNEX A (as such
Underwriting Agreement my be amended from time to time, the "Underwriting
Agreement"), shall be deemed to be incorporated by reference herein and form a
part hereof. All capitalized terms not defined herein shall have the meaning
ascribed to them in the Underwriting Agreement.
1. SERVICES.
A. The Company hereby appoints the Placement Agents as the
Company's exclusive placement agents in connection with the Concurrent Offering
and, subject to the terms and conditions contained or incorporated by reference
herein, the Placement Agents hereby accept such appointment.
B. The Placement Agents agree to provide advisory services to
the Company as to the structure of the Concurrent Offering. Except as
specifically set forth herein, the Placement Agents
do not assume any additional duties or responsibilities with respect to the
Concurrent Offering and no other duties shall be implied from this Agreement.
The Company acknowledges that purchasers of the Concurrent Offering are not, and
will not be treated as, "customers" of the Placement Agents for purposes of the
rules of the National Association of Securities Dealers, Inc. (the "NASD") and
that the Placement Agents shall have no responsibility for the performance or
non-performance of any purchaser in the Concurrent Offering or for the
performance or non-performance of the Company.
2. REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
A. The Company hereby makes to the Placement Agents the representations
and warranties and agrees to the agreements set forth in Section 2 and 4 of the
Underwriting Agreement.
B. The Company agrees with the Placement Agents to provide the
Placement Agents with such copies of the Registration Statement, Prospectus, any
Preliminary Prospectus and such other documents and instruments as the Placement
Agents may reasonably request; and
C. (i) The Company agrees with each Placement Agent that:
(a) The Company will pay and bear all costs and expenses in
connection with the preparation, printing and filing of the
Registration Statement (including financial statements, schedules and
exhibits), Preliminary Prospectuses and the Prospectus and any
amendments or supplements thereto; the printing of this Agreement, the
Preliminary Blue Sky Survey and any Supplemental Blue Sky Survey, and
any instruments related to any of the foregoing; the cost of all
certificates representing the Shares and transfer agents' and
registrars' fees; the fees and disbursements of counsel for the
Company; all fees and other charges of the Company's independent
certified public accountants; the cost of furnishing to the several
Placement Agents copies of the Registration Statement (including
appropriate exhibits), Preliminary Prospectus and the Prospectus, and
any amendments or supplements to any of the foregoing; NASD filing fees
and the cost of qualifying the Shares under the laws of such
jurisdictions as you may designate (including filing fees and
reasonable fees and disbursements of the Placement Agents' counsel in
connection with such NASD filings and Blue Sky qualifications); and all
other expenses directly incurred by the Company in connection with the
performance of their obligations hereunder.
(b) In addition to its other obligations under Section 4.A.
hereof, the Company agrees that, as an interim measure during the
pendency of any claim, action, investigation, inquiry or other
proceeding described in Section 4.A. hereof, it will reimburse the
Placement Agents on a monthly basis for all reasonable legal or other
expenses incurred in connection with investigating or defending any
such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the
propriety and enforceability of the Company's obligation to reimburse
the Placement Agents for such expenses and the possibility that such
payments might later be held to have been improper by a court of
competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, the Placement
Agents shall promptly return such payment to the Company together with
interest, compounded daily, determined on the basis of the prime rate
(or other commercial lending rate for borrowers of the highest credit
standing) listed from time to time in The Wall Street Journal which
represents the base rate on corporate loans posted by a substantial
majority of the nation's thirty (30) largest banks (the "Prime Rate").
Any such interim reimbursement payments which are not made to the
Placement Agents within thirty (30) days of a request for reimbursement
shall bear interest at the Prime Rate from the date of such request.
(ii) In addition to their other obligations under Section 4.C. hereof,
the Placement Agents severally and not jointly agree that, as an interim measure
during the pendency of
2
any claim, action, investigation, inquiry or other proceeding described in
Section 4.C. hereof, they will reimburse the Company on a monthly basis for all
reasonable legal or other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Placement Agents' obligation to reimburse the Company for
such expenses and the possibility that such payments might later be held to have
been improper by a court of competent jurisdiction. To the extent that any such
interim reimbursement payment is so held to have been improper, the Company
shall promptly return such payment to the Placement Agents together with
interest, compounded daily, determined on the basis of the Prime Rate. Any such
interim reimbursement payments which are not made to the Company within thirty
(30) days of a request for reimbursement shall bear interest at the Prime Rate
from the date of such request.
(iii) It is agreed that any controversy arising out of the operation of
the interim reimbursement arrangements set forth in Sections 2.C.(i)(b) and
2.C(ii) hereof, including the amounts of any requested reimbursement payments,
the method of determining such amounts and the basis on which such amounts shall
be apportioned among the reimbursing parties, shall be settled by arbitration
conducted under the provisions of the Constitution and Rules of the Board of
Governors of the New York Stock Exchange, Inc. or pursuant to the Code of
Arbitration Procedure of the NASD. Any such arbitration must be commenced by
service of a written demand for arbitration or a written notice of intention to
arbitrate, therein electing the arbitration tribunal. In the event the party
demanding arbitration does not make such designation of an arbitration tribunal
in such demand or notice, then the party responding to said demand or notice is
authorized to do so. Any such arbitration will be limited to the operation of
the interim reimbursement provisions contained in Sections 2.C.(i)(b) and
2.C.(ii) hereof and will not resolve the ultimate propriety or enforceability of
the obligation to indemnify for expenses which is created by the provisions of
Sections 4.A. and 4.B. hereof or the obligation to contribute to expenses which
is created by the provisions of Section 8.D. hereof.
D. The obligations of the Placement Agents hereunder and the
closing of the sale of the Concurrent Shares in the Concurrent Offering (the
"Concurrent Time of Delivery") shall be subject to the satisfaction of the
conditions set forth in Section 6 of the Underwriting Agreement. For purposes of
this Section 6, all references to "Underwriters" and "Shares" in the
introductory paragraph of Section 6 of the Underwriting Agreement shall be
deemed to refer to the Placement Agents and Concurrent Shares, respectively.
Also for purposes of this Section 2.D., (a) the opinions of counsel for the
Company, (b) the letter or letters of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP and (c) the
certificates of officers of the Company (provided for the Section 6(g) of the
Underwriting Agreement), shall each also be addressed and furnished to the
Placement Agents at the Concurrent Time of Delivery and all references in
Section 6 of the Underwriting Agreement to "your reasonable satisfaction,"
"satisfactory to you," "judgment of the Representatives" or similar language
shall be deemed to refer to a determination by the Placement Agents.
3. FEES.
A. As compensation for their services under this Agreement, the
Placement Agents will receive at the Concurrent Time of Delivery a fee (the
"Placement Fee") from the Company relating to the Concurrent Shares equal to 7%
of the amount equal to Initial Public Offering Price, multiplied by the number
of Shares sold in the Concurrent Offering, by wire transfer in immediately
available funds to a bank account or accounts designated by the Placement
Agents. Payment of such Placement Fee shall be a condition of the Concurrent
Time of Delivery. In the event the Concurrent Offering is terminated by the
Placement Agents because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of this Agreement, the
Company agrees to reimburse the Placement Agents for all out-of-pocket expenses
(including the fees and disbursements of counsel) reasonably incurred by them in
connection with the transactions contemplated by this Agreement.
4. INDEMNIFICATION AND EXCULPATION.
3
A. The Company agrees to indemnify and hold harmless each Placement
Agent against any losses, claims, damages or liabilities, joint or several, to
which such Placement Agent may become subject, under the Act, the Exchange Act
or otherwise, specifically including, but not limited to, losses, claims,
damages or liabilities (or actions in respect thereof) arising out of or based
upon (i) any breach of any representation, warranty, agreement or covenant of
the Company herein contained or incorporated, (ii) any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement or any amendment or supplement thereto, or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (iii) any untrue
statement or alleged untrue statement of any material fact contained in any
Preliminary Prospectus or the Prospectus or any amendment or supplement thereto,
or the omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, and agrees to
reimburse each Placement Agent for any legal or other expenses reasonably
incurred by it in connection with investigating or defending any such loss,
claim, damage, liability or action; PROVIDED, HOWEVER, that the Company shall
not be liable in any such case to the extent that any such loss, claim, damage,
liability or action arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in the
Registration Statement, such Preliminary Prospectus or the Prospectus, or any
such amendment or supplement thereto, in reliance upon, and in conformity with,
written information relating to any Placement Agent furnished to the Company by
such Placement Agent, directly or through you, specifically for use in the
preparation thereof and, PROVIDED FURTHER, that the indemnity agreement provided
in this Section 4.A. with respect to any Preliminary Prospectus shall not inure
to the benefit of any Placement Agent from whom the person asserting any losses,
claims, damages, liabilities or actions based upon any untrue statement or
alleged untrue statement of material fact or omission or alleged omission to
state therein a material fact purchased Shares, if a copy of the Prospectus in
which such untrue statement or alleged untrue statement or omission or alleged
omission was corrected had not been sent or given to such person within the time
required by the Act and the Rules and Regulations, unless such failure is the
result of noncompliance by the Company with Section 4(d) of the Underwriting
Agreement.
The indemnity agreement in this Section 4.A. shall extend upon the same
terms and conditions to, and shall inure to the benefit of, each person, if any,
who controls any Placement Agent within the meaning of the Act or the Exchange
Act. This indemnity agreement shall be in addition to any liabilities which the
Company may otherwise have.
B. Each Placement Agent, severally and not jointly, agrees to indemnify
and hold harmless the Company against any losses, claims, damages or
liabilities, joint or several, to which the Company may become subject under the
Act or otherwise, specifically including, but not limited to, losses, claims,
damages or liabilities (or actions in respect thereof) arising out of or based
upon (i) any breach of any representation, warranty, agreement or covenant of
such Placement Agent herein contained or incorporated, (ii) any untrue statement
or alleged untrue statement of any material fact contained in the Registration
Statement or any amendment or supplement thereto, or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (iii) any untrue
statement or alleged untrue statement of any material fact contained in any
Preliminary Prospectus or the Prospectus or any amendment or supplement thereto,
or the omission or alleged omission to state therein a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, in the case of subparagraphs (ii) and (iii) of
this Section 4.C. to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company by such Placement Agent, directly or through you, specifically for use
in the preparation thereof, and agrees to reimburse the Company for any legal or
other expenses reasonably incurred by the Company in connection with
investigating or defending any such loss, claim, damage, liability or action.
4
The indemnity agreement in this Section 4.B. shall extend upon the same
terms and conditions to, and shall inure to the benefit of, each officer of the
Company who signed the Registration Statement and each director of the Company,
and each person, if any, who controls the Company within the meaning of the Act
or the Exchange Act. This indemnity agreement shall be in addition to any
liabilities which each Placement Agent may otherwise have.
C. Promptly after receipt by an indemnified party under this Section 4
of notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against any indemnifying party under this
Section 4, notify the indemnifying party in writing of the commencement thereof
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than under
this Section 4. In case any such action is brought against any indemnified
party, and it notified the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it shall elect by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party; PROVIDED, HOWEVER, that if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel to assume such
legal defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of the indemnifying party's
election so to assume the defense of such action and approval by the indemnified
party of counsel, the indemnifying party will not be liable to such indemnified
party under this Section 4 for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (together with appropriate local counsel) approved by the
indemnifying party representing all the indemnified parties under Sections 4.A.
and 4.B. hereof who are parties to such action), (ii) the indemnifying party
shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action or (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party. In no event shall any indemnifying party be liable in
respect of any amounts paid in settlement of any action unless the indemnifying
party shall have approved the terms of such settlement; PROVIDED that such
consent shall not be unreasonably withheld. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
has been threatened to be named a party and indemnification has been sought
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on all claims
that are the subject matter of such proceeding.
D. In order to provide for just and equitable contribution in any
action in which a claim for indemnification is made pursuant to this Section 4
but it is judicially determined (by the entry of a final judgment or decree by a
court of competent jurisdiction and the expiration of time to appeal or the
denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 4 provides for
indemnification in such case, all the parties hereto shall contribute to the
aggregate losses, claims, damages or liabilities to which they may be subject
(after contribution from others) in such proportion so that the Placement Agents
severally and not jointly are responsible pro rata for the portion represented
by the percentage of the Placement Fee received by each Placement Agent, and the
Company are responsible for the remaining portion, PROVIDED, HOWEVER, that (i)
no Placement Agent shall be required to contribute any amount in excess of the
amount by which the underwriting discount applicable to the Shares purchased by
such Placement
5
Agent exceeds the amount of damages which such Placement Agent has otherwise
required to pay and (ii) no person guilty of a fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who is not guilty of such fraudulent
misrepresentation. The contribution agreement in this Section 4.E. shall extend
upon the same terms and conditions to, and shall inure to the benefit of, each
person, if any, who controls any Placement Agent, the Company within the meaning
of the Act or the Exchange Act and each officer of the Company who signed the
Registration Statement and each director of the Company.
E. The parties to this Agreement hereby acknowledge that they are
sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof including, without limitation, the
provisions of this Section 4, and are fully informed regarding said provisions.
They further acknowledge that the provisions of this Section 4 fairly allocate
the risks in light of the ability of the parties to investigate the Company and
its business in order to assure that adequate disclosure is made in the
Registration Statement and Prospectus as required by the Act and the Exchange
Act.
The provisions of this Agreement relating to reimbursement,
indemnification and contribution shall survive termination, modification or
completion of the engagement of the Placement Agents and shall be binding upon
any successors or assigns of the Company.
5. OTHER.
A. The Company represents and warrants that no person or organization,
other than the Placement Agents, are, as a result of any action by the Company,
entitled to compensation for services as a finder, broker, placement agent or
investment banker in connection with the Concurrent Offering.
B. This Agreement shall be deemed to be effective as of the date hereof
and the term of this engagement shall be from the date hereof until the earlier
of (i) termination of the Concurrent Offering and (ii) the completion of the
Offerings. Notwithstanding the foregoing if at any time the Company violates any
of its covenants and agreements contained herein or in any of the conditions set
forth in Section 2.D. are not satisfied, the Placement Agents shall have the
right to terminate their obligations hereunder upon prior notice to the Company.
In the event of any termination of this Agreement or if for any reason the
Concurrent Offering is terminated, the Company shall be responsible for (i) the
reimbursement of all fees, disbursements, costs and expenses, as provided in
Section 2.C., and (ii) its obligations arising under Section 4.
C. The Company agrees that the Placement Agents shall have the right to
advertise their participation in the Concurrent Offering in "tombstone" or other
appropriate financial advertisements in newspapers, magazines, trade periodicals
or other publications. The Placement Agents agree that such tombstone or other
advertisements shall not be published without the prior approval of the Company,
provided that such approval is not unreasonably withheld or delayed.
D. The invalidity or unenforceability of any provisions of this
Agreement shall in no way offset the validity or enforceability of any other
provision. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York. The term and provisions of
this Agreement are solely for the benefit of the Company and the Placement
Agents and the other indemnified parties and their respective successors,
assigns, heirs and personal representatives, and no other person shall acquire
or have any right by virtue of this letter.
E. All notices or communications hereunder, except as herein otherwise
specifically provided, shall be in writing and if sent to the Placement Agency
shall be mailed, delivered, telegraphed (and confirmed by letter) or telecopied
(and confirmed by letter) to BancAmerica ▇▇▇▇▇▇▇▇▇
6
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
telecopier number (▇▇▇) ▇▇▇-▇▇▇▇, Attention: General Counsel, with a copy to
▇▇▇▇▇▇▇, Phleger & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, telecopier number (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.; if
sent to the Company, such notice shall be mailed, delivered, telegraphed (and
confirmed by letter) or telecopied (and confirmed by letter) to ▇▇▇▇ ▇.▇. ▇▇▇
▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, telecopier number (▇▇▇) ▇▇▇-▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇, Chief Executive Officer, with a copy to ▇▇▇▇▇▇▇▇▇
Traurig ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.A., ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, telecopier number (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Esq.
F. This Agreement shall inure to the benefit of and be binding upon the
several Placement Agents and the Company and their respective executors,
administrators, successors and assigns. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person or entity, other
than the parties hereto and their respective executors, administrators,
successors and assigns, and the controlling persons within the meaning of the
Act or the Exchange Act, officers and directors referred to in Section 4 hereof,
any legal or equitable right, remedy or claim in respect of this Agreement or
any provisions herein contained, this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of the parties hereto and their respective executors, administrators,
successors and assigns and said controlling persons and said officers and
directors, and for the benefit of no other person or entity.
G. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK.]
7
Please confirm that the terms described here are in accordance with
your understanding by signing and returning to use the enclosed duplicate of
this letter.
Very truly yours,
BANCAMERICA ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ & COMPANY
NATIONSBANC ▇▇▇▇▇▇▇▇▇▇ SECURITIES, INC.
By: BANCAMERICA ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
By:
-----------------------------------
Authorized Signatory
ACCEPTED as of the date first
written above:
SPORTSLINE USA, INC.
By:
--------------------------
8
