<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 16, 1997.
REGISTRATION NO. 333-37725
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 3
TO
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
PRINCETON VIDEO IMAGE, INC.
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<S> <C> <C>
NEW JERSEY 8999 22-3062052
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification No.)
</TABLE>
------------------------
<TABLE>
<S> <C>
15 PRINCESS ROAD BROWN F WILLIAMS
LAWRENCEVILLE, NJ 08648 PRINCETON VIDEO IMAGE, INC.
(609) 912-9400 15 PRINCESS ROAD
(Address, Including Zip Code, and Telephone LAWRENCEVILLE, NJ 08648
Number, Including Area Code, of Registrant's (609) 912-9400
Principal Executive Office) (Name, Address, Including Zip Code, and
Telephone
Number, Including Area Code, of Agent for
Service)
</TABLE>
------------------------
COPIES TO:
<TABLE>
<S> <C>
RICHARD J. PINTO, ESQ. ROBERT H. WERBEL, ESQ.
Smith, Stratton, Wise, Heher & Brennan GUY N. MOLINARI, ESQ.
600 College Road East Werbel & Carnelutti
Princeton, NJ 08540 A Professional Corporation
(609) 924-6000 711 Fifth Avenue
New York, NY 10022
(212) 832-8300
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS POSSIBLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 14A:3-5 of the New Jersey Business Corporation Act (the "Act") gives
a corporation the power, without a specific authorization in its certificate of
incorporation or by-laws, to indemnify a corporate agent, including a director
and/or officer, against expenses and liabilities incurred in connection with
certain proceedings involving such corporate agent by reason of his or her being
or having been a corporate agent, provided that with regard to a proceeding
other than one by or in the right of the corporation, the corporate agent must
have acted in good faith and in a manner reasonably believed to be in or not
opposed to the best interests of the corporation and, with respect to any
criminal proceeding, have had no reasonable cause to believe his or her conduct
was unlawful. In any such proceeding, the termination of a proceeding by
judgment, order, settlement, conviction or upon plea of nolo contendere or its
equivalent does not of itself create a presumption that any corporate agent
failed to meet the above applicable standards of conduct. The indemnification
provided by the Act does not exclude any rights to which a corporate agent may
be entitled under a certificate of incorporation, by-law, agreement, vote of
shareholders or otherwise. No indemnification, other than that required when a
corporate agent is successful on the merits or otherwise in any of the above
proceedings shall be allowed if such indemnification would be inconsistent with
a provision of the certificate of incorporation, a by-law, a resolution of the
board of directors or of the shareholders, an agreement or other proper
corporate action in effect at the time of the accrual of the alleged cause of
action which prohibits, limits or otherwise conditions the exercise of
indemnification powers by the corporation or the rights of indemnification to
which a corporate agent may be entitled.
The Company currently carries liability insurance for the benefit of its
directors and officers which provides coverage for losses of directors and
officers for liabilities arising out of claims against such persons acting as
directors or officers of the Company (or any subsidiary thereof) due to any
breach of duty, neglect, error, misstatement, misleading statement, omission or
act done by such directors and officers, except as prohibited by law. The total
coverage under the insurance policy is $1,000,000, with a deductible of $35,000.
The Company's current policy specifically excludes coverage for any claim made
against the directors and officers based upon (i) the purchase, sale, or offer
of any security of the Company, or (ii) any claim brought by a security holder
of the Company. Such exclusion includes claims which allege a violation of the
Securities Act of 1933 (the "Securities Act"), as amended, and the Securities
Exchange Act of 1934, as amended. The Company has also purchased additional
directors and officers liability insurance policies which provide coverage with
respect to various securities related matters.
In addition, the Underwriting Agreement, a proposed form of which is filed
as Exhibit 1.1 hereto, contains provisions for indemnification by the
Underwriters of the Company and its officers, directors and certain other
persons, against certain civil liabilities, including certain liabilities under
the Securities Act.
II-1
<PAGE>
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the Registrant's costs and expenses, other
than underwriting discounts and commissions, expected to be incurred in
connection with the issuance and distribution of the securities being
registered. Except for the SEC registration fee, the NASD Filing Fee and the
Nasdaq National Market Fees, the amounts listed below are estimates:
<TABLE>
<S> <C>
SEC Registration Fee.............................................. $ 16,773
NASD Filing Fee................................................... $ 6,035
Nasdaq Listing Applications Fee................................... $ 35,772
Legal fees and expenses........................................... $ 185,000
Blue Sky fees and expenses........................................ $ 35,000
Accounting fees and expenses...................................... $ 165,000
Printing and Engraving expenses................................... $ 120,000
Transfer Agent and Registrar Fees................................. $ 2,500
Miscellaneous expenses............................................ $ 38,920
---------
Total......................................................... $ 605,000
</TABLE>
All expenses of registration incurred in connection herewith are being borne
by the Company. In addition, the Company has purchased directors and officers
liability insurance for $250,000.
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
In the three years preceding the filing of this Registration Statement, the
Company has sold the following securities that were not registered under the
Securities Act. All share information and per share amounts have been adjusted
to reflect a 2-for-1 Common Stock split effective on September 3, 1997.
(1) During the period January 1, 1994 through October 1, 1997 the
Company granted stock options to employees, directors and consultants under
its 1993 Amended Stock Option Plan covering an aggregate of 1,277,030 shares
of the Company's Common Stock. Of these, options covering approximately
141,000 shares have been canceled without being exercised. The weighted
average exercise price of the stock options outstanding as of October 1,
1997 was $14.16 per share. During the same period, the Company did not sell
any shares of its Common Stock to employees, directors and consultants upon
the exercise of outstanding stock options.
(2) On May 31, 1995, the Company sold 105,300 shares of Common Stock to
40 accredited investors for an aggregate purchase price of $1,316,250
pursuant to the exercise of warrants.
(3) Between September 1995 and the date of this Registration Statement,
the Company issued warrants to purchase an aggregate of up to 21,572 shares
of Common Stock at an exercise price of $15.00 per share to T.J. Koellhoffer
& Associates in partial consideration for services rendered to the Company.
(4) In October 1995, the Company sold 2,000 shares of Common Stock to
Sheldon S. Wilson for an aggregate purchase price of $25,000, pursuant to
the exercise of warrants.
(5) In October 1995, the Company sold to Presencia 0.041 units, each
unit consisting of 2,000 shares of Common Stock, 1,000 shares of Series B
Redeemable Preferred Stock and warrants to purchase 2,000 shares of Common
Stock at an exercise price of $12.50 per share, 1,016 shares of Common
Stock, and warrants to purchase 10,932 shares of Common Stock at an exercise
price of $12.50 per share, for an aggregate purchase price of $13,930,
pursuant to the exercise of Presencia's right of co-investment.
(6) On February 9, 1996, the Company sold 282,266 shares of Common
Stock to 49 accredited investors for an aggregate purchase price of
$4,939,655. In addition, the Company granted Allen &
II-2
<PAGE>
Company Incorporated warrants to purchase 28,226 shares of Common Stock at
an exercise price of $19.25 per share in consideration of placement agent
services provided by Allen & Company Incorporated in connection with such
private placement.
(7) On March 28, 1996, the Company issued warrants to purchase up to
24,000 shares of Common Stock at an exercise price of $15.00 per share to
Presencia in consideration of its continued efforts and certain expenses
incurred by Presencia in helping to promote use of the L-VIS System in the
Mexican market.
(8) On April 23, 1996, the Company sold 938 shares of Common Stock to
Glen S. Lewy for an aggregate purchase price of $1,055 pursuant to the
exercise of warrants.
(9) On May 2, 1996, the Company sold 170,000 shares of Common Stock to
19 accredited investors for an aggregate purchase price of $1,062,500
pursuant to the exercise of warrants.
(10) On August 31, 1996, the Company sold 8,000 shares of Common Stock
to Richard Khaleel for an aggregate purchase price of $20,000 pursuant to
the exercise of warrants.
(11) On September 10, 1996, the Company sold 4,000 shares of Common
Stock to Richard Cheney for an aggregate purchase price of $10,000 pursuant
to the exercise of warrants.
(12) On June 15, 1997, the Company sold 295,758 shares of Common Stock
to 119 accredited shareholders and warrantholders of the Company for an
aggregate purchase price of $1,109,093, and the Company sold 97,930 shares
of Common Stock to several such warrantholders for an aggregate purchase
price of $110,171, pursuant to the exercise of warrants. In connection with
this sale, Presencia was issued 18,610 shares of Common Stock in July 1997
for no consideration pursuant to its anti-dilution rights which terminate
upon the closing of this Offering. See Note 9 of Notes to Financial
Statements.
(13) As of June 30, 1997, the Company had received subscriptions for
291,756 shares of Common Stock from 42 accredited shareholders of the
Company for an aggregate purchase price of $1,094,085, which shares were
issued by the Company on July 15, 1997. In connection with this sale,
Presencia was issued 18,360 shares of Common Stock in July 1997 for no
consideration pursuant to its anti-dilution rights which terminate upon the
closing of this Offering. See Note 9 of Notes to Financial Statements.
(14) On July 31, 1997, the Company sold 48,550 shares of Common Stock to
7 accredited warrantholders of the Company for an aggregate purchase price
of $82,119, pursuant to the exercise of warrants.
(15) On July 31, 1997, the Company sold 190,000 shares of Common Stock
to Mr. Williams and 72,000 shares of Common Stock to Mr. McCleery pursuant
to the exercise of warrants, in exchange for Mr. Williams' and Mr.
McCleery's delivery of non-recourse promissory notes in the principal amount
of $475,000 and $180,000, respectively, the aggregate exercise price of
their respective warrants.
(16) On August 8, 1997, the Company sold 5,896 shares of Common Stock to
Richard Cheney for an aggregate purchase price of $6,633, pursuant to the
exercise of warrants.
(17) On August 25, 1997, the Company sold 15,678 shares of Common Stock
to Leigh A. Wilson for an aggregate purchase price of $17,638 and 938 shares
of Common Stock to Brown F Williams for an aggregate purchase price of
$1,055, pursuant to the exercise of warrants.
(18) On September 3, 1997, the Company issued a warrant to purchase up
to 20,000 shares of Common Stock at an exercise price of $4.50 per share to
PVR in consideration of consulting services PVR previously provided to the
Company.
II-3
<PAGE>
(19) On October 20, 1997, the Company issued 30 units, each consisting
of a $100,000, 10% senior secured promissory note and warrants to purchase
up to 10,000 shares of Common Stock, to 28 accredited investors for an
aggregate purchase price of $3,000,000.
The sales and issuances of securities in the transactions described in
paragraph (1) above were deemed to be exempt from registration under the
Securities Act by virtue of Rule 701 promulgated thereunder in that they were
offered and sold either pursuant to a written compensatory benefit plan or
pursuant to a written contract relating to compensation, as provided by Rule
701, or were deemed to be exempt from registration under the Securities Act by
virtue of Section 4(2) as transactions not involving any public offering.
The sale and issuance of securities in the transaction described in
paragraphs (10), (11) and (16) above were deemed to be exempt from registration
under the Securities Act by virtue of Section 4(2) as transactions not involving
any public offering. The Company believes that each of the parties was
sophisticated within the meaning of Section 4(2) based upon his business
experience and relationship with the Company. The transactions described in
paragraphs (2) through (9), (12) through (15) and (17) through (19) were deemed
to be exempt from registration under the Securities Act by virtue of Rule 506 as
transactions not involving any public offering. The purchasers in each
transaction represented their intention to acquire the securities for investment
only and not with a view to the distribution thereof. Appropriate legends are
affixed to the stock certificates issued in such transactions. All recipients
either received adequate information about the Company or had access, through
employment or other relationships, to such information.
ITEM 27. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ---------- -------------------------------------------------------------------------------------------------------
<C> <S>
1.1+ --Form of Underwriting Agreement
3.1+ --Restated Certificate of Incorporation
3.2+ --Bylaws
4.1+ --Specimen Common Stock Certificate
4.2+ --Form of Warrant for the purchase of 400,000 shares of Common Stock issued to the Representatives
4.3+ --Form of Warrant for the purchase of shares of Common Stock issued in connection with the Company's
bridge financing in October 1997
4.4+ --Form of warrant for the purchase of shares of Common Stock issued by the Company
5.1 --Opinion of Smith, Stratton, Wise, Heher & Brennan
10.1+ --Amended 1993 Stock Option Plan
10.2+ --Form of Employee Confidentiality, Invention Assignment and Non-Compete Agreement
10.3+ --Form of Consultant Confidentiality, Invention Assignment and Non-Compete Agreement
10.4+** --Research Agreement dated November 1, 1990 between the Company and David Sarnoff Research Center,
Inc., as amended by Agreement dated August 9, 1991, letter dated July 1, 1992, Letter Agreement dated
July 9, 1992, letter dated November 30, 1992 and Agreement dated June 26, 1995 and effective as of
December 31, 1993
10.5+** --License Agreement dated as of July 24, 1996 between the Company and the General Electric Company
10.6+ --Letter Agreement dated May 1, 1993 between the Company and Grupo Sitt, as amended by Letter Agreement
dated June 25, 1993
10.7+ --License Agreement dated as of March 1, 1994 between the Company and Publicidad Virtual, S.A. de C.V.
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ---------- -------------------------------------------------------------------------------------------------------
<C> <S>
10.8+ --Letter Agreement dated February 3, 1995 between the Company and Capital Cities/ABC, Inc., as amended
by Letter Agreement dated August 29, 1996 between the Company and ESPN, Inc. and by letter dated
April 22, 1996
10.9+ --License Agreement dated December 18, 1995 between the Company and Theseus Research, Inc.
10.10+ --Second Amended and Restated Registration Rights Agreement dated as of February 2, 1996, as amended by
agreement dated October 20, 1997 and by agreement dated October 30, 1997
10.11+ --Employment Agreement dated January 24, 1997 between the Company and Brown F Williams
10.12+ --Employment Agreement dated January 24, 1997 between the Company and Douglas J. Greenlaw
10.13+ --Employment Agreement dated March 4, 1997 between the Company and Samuel A. McCleery
10.14+ --Lease Agreement dated April 21, 1997 between the Company and 1325 Limited Partnership
10.15+ --Promissory Note dated May 31, 1997 of Princeton Venture Research, Inc. in favor of the Company
10.16+ --Promissory Note dated May 31, 1997 of John B. Torkelsen in favor of the Company
10.17+ --Promissory Note dated May 31, 1997 of Pamela R. Torkelsen in favor of the Company
10.18+ --Promissory Note dated July 15, 1997 of Princeton Venture Research, Inc. in favor of the Company
10.19+ --Promissory Note dated July 15, 1997 of Pamela R. Torkelsen in favor of the Company
10.20+ --Lease Agreement dated July 16, 1997 between the Company and Princeton South at Lawrenceville One
10.21+ --Nonrecourse Promissory Note dated July 31, 1997 of Brown F Williams in favor of the Company
10.22+ --Pledge Agreement dated July 31, 1997 between the Company and Brown F Williams
10.23+ --Nonrecourse Promissory Note dated July 31, 1997 of Samuel A. McCleery in favor of the Company
10.24+ --Pledge Agreement dated July 31, 1997 between the Company and Samuel A. McCleery
10.25+ --Assignment dated January 22, 1992 by Roy Jonathon Rosser and Martin Leach to the Company regarding a
patent
10.26+ --Assignment dated October 22, 1993 by Roy Jonathon Rosser and Brown F Williams to the Company
regarding a patent
10.27+ --Assignment dated January 30, 1995 by Roy Rosser, Subhodev Das, Yi Tan and Peter von Kaenel to the
Company regarding a patent
11.1+ --Statement regarding computation of per share earnings
21.1+ --Subsidiaries of the Registrant
23.1 --Consent of Coopers & Lybrand L.L.P., independent public accountants
23.2 --Consent of Smith, Stratton, Wise, Heher & Brennan (contained in Exhibit 5.1)
24.1+ --Power of Attorney
27.1+ --Financial Data Schedule
</TABLE>
- ------------------------
** Confidential treatment has been requested with respect to a portion of this
Exhibit.
+ Previously filed.
II-5
<PAGE>
FINANCIAL STATEMENT SCHEDULES
No schedules are required because the information is either not applicable
or is presented elsewhere herein.
ITEM 28. UNDERTAKINGS.
The undersigned Registrant hereby undertakes that it will:
(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in the volume and price represent no more than 20 percent change
in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) Include any additional of changed material information on plan
of distribution.
(2) For the purpose of determining liability under the Securities Act,
treat each post-effective amendment as a new registration statement of the
securities offered, and the offering of the securities at that time to be
the initial bona fide offering.
(3) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
The undersigned Registrant hereby undertakes to provide to the Underwriters
at the closing specified in the Underwriting Agreement, certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
(the "Commission") such indemnification is against public policy as expressed in
the Securities Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that it will:
(1) For determining any liability under the Securities Act, treat the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act as part of this Registration Statement as of
the time the Commission declared it effective.
(2) For determining any liability under the Securities Act, treat each
post-effective amendment that contains a form of prospectus as a new
registration statement for the securities offered in the Registration
Statement, and that offering of the securities at that time as the initial
bona fide offering of those securities.
II-6
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this Amendment No. 3
to the Registration Statement to be signed on its behalf by the undersigned, in
the Township of Lawrence, State of New Jersey, on December 15, 1997.
PRINCETON VIDEO IMAGE, INC.
By: /s/ BROWN F WILLIAMS
-----------------------------------------
Brown F Williams
CHAIRMAN OF THE BOARD
AND TREASURER
In accordance with the requirements of the Securities Act of 1933, this
Amendment No. 3 to the Registration Statement has been signed by the following
persons in the capacities and on the dates stated.
SIGNATURE TITLE DATE
- ------------------------------ --------------------------- -------------------
Chairman of the Board and
/s/ BROWN F WILLIAMS Treasurer (principal
- ------------------------------ executive officer and December 15, 1997
Brown F Williams principal financial
officer)
/s/ DOUGLAS J. GREENLAW President, Chief Executive
- ------------------------------ Officer and Director December 15, 1997
Douglas J. Greenlaw
/s/ ELIZABETH A. DUMONT Controller (Controller)
- ------------------------------ December 15, 1997
Elizabeth A. Dumont
* Director
- ------------------------------ December 15, 1997
Lawrence Lucchino
* Director
- ------------------------------ December 15, 1997
Jerome J. Pomerance
* Director
- ------------------------------ December 15, 1997
Enrique F. Senior
* Director
- ------------------------------ December 15, 1997
Eduardo Sitt
* Director
- ------------------------------ December 15, 1997
John B. Torkelsen
* By his signature set forth below, the undersigned, pursuant to duly authorized
powers of attorney filed with the Securities and Exchange Commission, has signed
this Amendment No. 3 to the Registration Statement on behalf of the persons
indicated.
By: /s/ BROWN F WILLIAMS
-------------------------
Brown F Williams
ATTORNEY-IN-FACT
II-7
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ---------- ------------------------------------------------------------------------------------------------------
<S> <C>
1.1+ --Form of Underwriting Agreement
3.1+ --Restated Certificate of Incorporation
3.2+ --Bylaws
4.1+ --Specimen Common Stock Certificate
4.2+ --Form of Warrant for the purchase of 400,000 shares of Common Stock issued to the Representatives
4.3+ --Form of Warrant for the purchase of shares of Common Stock issued in connection with the Company's
bridge financing in October 1997
4.4+ --Form of warrant for the purchase of shares of Common Stock issued by the Company
5.1 --Opinion of Smith, Stratton, Wise, Heher & Brennan
10.1+ --Amended 1993 Stock Option Plan
10.2+ --Form of Employee Confidentiality, Invention Assignment and Non-Compete Agreement
10.3+ --Form of Consultant Confidentiality, Invention Assignment and Non-Compete Agreement
10.4+** --Research Agreement dated November 1, 1990 between the Company and David Sarnoff Research Center,
Inc., as amended by Agreement dated August 9, 1991, letter dated July 1, 1992, Letter Agreement
dated July 9, 1992, letter dated November 30, 1992, and Agreement dated June 26, 1995 and effective
as of December 31, 1993
10.5+** --License Agreement dated as of July 24, 1996 between the Company and the General Electric Company
10.6+ --Letter Agreement dated May 1, 1993 between the Company and Grupo Sitt, as amended by Letter
Agreement dated June 25, 1993
10.7+ --License Agreement dated as of March 1, 1994 between the Company and Publicidad Virtual, S.A. de C.V.
10.8+ --Letter Agreement dated February 3, 1995 between the Company and Capital Cities/ABC, Inc., as amended
by Letter Agreement dated August 29, 1996 between the Company and ESPN, Inc. and by letter dated
April 22, 1996
10.9+ --License Agreement dated December 18, 1995 between the Company and Theseus Research, Inc.
10.10+ --Second Amended and Restated Registration Rights Agreement dated as of February 2, 1996, as amended
by agreement dated October 20, 1997 and by agreement dated October 30, 1997
10.11+ --Employment Agreement dated January 24, 1997 between the Company and Brown F Williams
10.12+ --Employment Agreement dated January 24, 1997 between the Company and Douglas J. Greenlaw
10.13+ --Employment Agreement dated March 4, 1997 between the Company and Samuel A. McCleery
10.14+ --Lease Agreement dated April 21, 1997 between the Company and 1325 Limited Partnership
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ---------- ------------------------------------------------------------------------------------------------------
<S> <C>
10.15+ --Promissory Note dated May 31, 1997 of Princeton Venture Research, Inc. in favor of the Company
10.16+ --Promissory Note dated May 31, 1997 of John B. Torkelsen in favor of the Company
10.17+ --Promissory Note dated May 31, 1997 of Pamela R. Torkelsen in favor of the Company
10.18+ --Promissory Note dated July 15, 1997 of Princeton Venture Research, Inc. in favor of the Company
10.19+ --Promissory Note dated July 15, 1997 of Pamela R. Torkelsen in favor of the Company
10.20+ --Lease Agreement dated July 16, 1997 between the Company and Princeton South at Lawrenceville One
10.21+ --Nonrecourse Promissory Note dated July 31, 1997 of Brown F Williams in favor of the Company
10.22+ --Pledge Agreement dated July 31, 1997 between the Company and Brown F Williams
10.23+ --Nonrecourse Promissory Note dated July 31, 1997 of Samuel A. McCleery in favor of the Company
10.24+ --Pledge Agreement dated July 31, 1997 between the Company and Samuel A. McCleery
10.25+ --Assignment dated January 22, 1992 by Roy Jonathon Rosser and Martin Leach to the Company regarding a
patent.
10.26+ --Assignment dated October 22, 1993 by Roy Jonathon Rosser and Brown F Williams to the Company
regarding a patent.
10.27+ --Assignment dated January 30, 1995 by Roy Rosser, Subhodev Das, Yi Tan and Peter von Kaenel to the
Company regarding a patent.
11.1+ --Statement regarding computation of per share earnings
21.1+ --Subsidiaries of the Registrant
23.1 --Consent of Coopers & Lybrand L.L.P., independent public accountants
23.2 --Consent of Smith, Stratton, Wise, Heher & Brennan (contained in Exhibit 5.1)
24.1+ --Power of Attorney (included on the signature page to the Registration Statement)
27.1+ --Financial Data Schedule
</TABLE>
- ------------------------
** Confidential treatment has been requested with respect to a portion of this
Exhibit.
+ Previously filed.
<PAGE>
[Smith, Stratton, Wise, Heher & Brennan
Letterhead]
December 12, 1997
Princeton Video Image, Inc.
15 Princess Road
Lawrenceville, New Jersey 08648
Ladies and Gentlemen:
We have acted as counsel to Princeton Video Image, Inc., a New Jersey
corporation, (the "Company") in connection with the filing by the Company of
a Registration Statement on Form SB-2 (the "Registration Statement") under
the Securities Act of 1933, as amended (the "Act"), relating to the
registration of shares of the Company's Common Stock, no par value, and
400,000 warrants granted to the representatives of the underwriters (the
"Representatives' Warrants"). The shares registered include 4,000,000 shares
to be purchased by the underwriters from the Company, up to 600,000 shares
which may be purchased by the underwriters from the Company if the
underwriters exercise the option granted to them by the Company to cover
over-allotments (collectively with the 4,000,000 shares to be purchase by the
underwriters, the "Underwritten Shares"), 400,000 shares issuable upon
exercise of the Representatives' Warrants, and 300,000 shares issuable upon
exercise of warrants issued in October 1997 (collectively with the 400,000
shares issuable upon exercise of the Representatives' Warrants, the "Selling
Shareholder Shares").
In connection with the Registration Statement, we have examined such
corporate records, other documents, and questions of law as we have
considered necessary or appropriate for the
<PAGE>
Princeton Video Image, Inc
December 12, 1997
Page -2-
purposes of this opinion. Subject to the foregoing and on the basis of such
examinations, we are of the opinion that:
(i) The Underwritten Shares, when issued, sold and delivered in the
manner contemplated by, and in accordance with, the Registration Statement
and the underwriting agreement (the "Underwriting Agreement") filed as an
exhibit to the Registration Statement and upon receipt by the Company of
payment therefor as provided in the Underwriting Agreement, will be legally
issued, fully paid and nonassessable.
(ii) The Representatives' Warrants, when issued, sold and delivered
in the manner contemplated by, and in accordance with, the Registration
Statement and the Underwriting Agreement and upon receipt by the Company of
payment therefor as provided in the Underwriting Agreement, will be legally
issued, fully paid and nonassessable.
(iii) The Selling Shareholder Shares, when issued, sold and delivered
in the manner contemplated by, and in accordance with, the Registration
Statement, the applicable warrants and, with respect to the shares issuable
upon exercise of the Representatives' Warrants, the Underwriting Agreement
and upon receipt by the Company of payment therefor as provided in the
applicable warrant, will be legally issued, fully paid and nonassessable.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the caption
"Legal Matters" in the Prospectus contained therein and elsewhere in the
Registration Statement and Prospectus. By filing this consent we do not
admit that we come within the categories of persons whose consent is
required under Section 7 of the Act or the rules and regulations of the
Securities and Exchange Commission.
Very truly yours,
/s/ Smith, Stratton, Wise,
Heher & Brennan
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this registration statement on Form SB-2
(File No. 333-37725) of our report, which includes an explanatory paragraph with
respect to the Company's ability to continue as a going concern, dated September
11, 1997, except for Note 14, for which the date is October 1, 1997, on our
audits of the financial statements of Princeton Video Image, Inc. We also
consent to the references to our firm under the captions "Experts" and "Summary
Financial Information".
Coopers & Lybrand L.L.P.
Princeton, New Jersey
December 16, 1997
