<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 9, 1998.
REGISTRATION NO. 333-37725
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
POST-EFFECTIVE AMENDMENT NO. 1
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>
------------------------
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
4.5 --Warrant Certificate dated as of December 19, 1997 for the purchase of 380,000 shares of Common Stock
issued to Allen & Company Incorporated
4.6 --Warrant Certificate dated as of December 19, 1997 for the purchase of 20,000 shares of Common Stock
issued to Barington Capital Group, L.P.
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 granted 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
Post-Effective Amendment No. 1 to the Registration Statement to be signed on
its behalf by the undersigned, in the Township of Lawrence, State of New
Jersey, on January 8, 1998.
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
Post-Effective Amendment No. 1 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 January 8, 1998
Brown F Williams principal financial
officer)
/s/ DOUGLAS J. GREENLAW President, Chief Executive
- ------------------------------ Officer and Director January 8, 1998
Douglas J. Greenlaw
/s/ ELIZABETH A. DUMONT Controller (Controller)
- ------------------------------ January 8, 1998
Elizabeth A. Dumont
* Director
- ------------------------------ January 8, 1998
Lawrence Lucchino
* Director
- ------------------------------ January 8, 1998
Jerome J. Pomerance
* Director
- ------------------------------ January 8, 1998
Enrique F. Senior
* Director
- ------------------------------ January 8, 1998
Eduardo Sitt
* Director
- ------------------------------ January 8, 1998
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 Post-Effective Amendment No. 1 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
4.5 --Warrant Certificate dated as of December 19, 1997 for the purchase of 380,000 shares of Common Stock
issued to Allen & Company Incorporated
4.6 --Warrant Certificate dated as of December 19, 1997 for the purchase of 20,000 shares of Common Stock
issued to Barington Capital Group, L.P.
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 granted with respect to a portion of this
Exhibit.
+ Previously filed.
<PAGE>
EXHIBIT 4.5
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 OR THE LAWS OF ANY
STATE. THEY MAY NOT BE SOLD OR OTHERWISE TRANS-
FERRED UNLESS THEY ARE REGISTERED UNDER SUCH ACT
AND APPLICABLE STATE SECURITIES LAWS OR AN
EXEMPTION FROM REGISTRATION IS AVAILABLE.
380,000 Warrants
PRINCETON VIDEO IMAGE, INC.
WARRANT CERTIFICATE
This warrant certificate ("Warrant Certificate") certifies that for
value received in consideration for certain services rendered, and for other
good and valuable consideration, the sufficiency of which is hereby
acknowledged, Allen & Company Incorporated or registered permitted assigns (the
"Holder") is the owner of the number of warrants ("Warrants") specified above,
each of which entitles the Holder thereof to purchase, at any time on or before
the Expiration Date (hereinafter defined), one fully paid and non-assessable
share of Common Stock, no par value ("Common Stock"), of Princeton Video Image,
Inc., a New Jersey corporation (the "Company"), at a purchase price of $8.40 per
share of Common Stock in lawful money of the United States of America in cash or
by certified or cashier's check or a combination of cash and certified or
cashier's check (subject to adjustment as hereinafter provided).
1. WARRANT; PURCHASE PRICE
Each Warrant shall entitle the Holder initially to purchase one share
of Common Stock of the Company and the purchase price payable upon exercise of
the Warrants (the "Purchase Price") shall initially be $8.40 per share of Common
Stock. The Purchase Price and number of shares of Common Stock issuable upon
exercise of each Warrant are subject to adjustment as provided in Article 6.
The shares of Common Stock issuable upon exercise of the Warrants (and/or other
shares of common stock so issuable by reason of any adjustments pursuant to
Article 6) are sometimes referred to herein as the "Warrant Shares."
2. EXERCISE; EXPIRATION DATE
2.1 The Warrants are exercisable, at the option of the Holder, in
whole or in part at any time and from time to time on or after the date hereof
and on or before the Expiration Date, upon surrender of this Warrant Certificate
to the Company together with
<PAGE>
a duly completed Notice of Exercise, in the form attached hereto as Exhibit A,
and payment of an amount equal to the Purchase Price times the number of
Warrants to be exercised. In the case of exercise of less than all the Warrants
represented by this Warrant Certificate, the Company shall cancel the Warrant
Certificate upon the surrender thereof and shall execute and deliver a new
Warrant Certificate for the balance of such Warrants.
2.2 The term "Expiration Date" shall mean 5:00 p.m. New York time on
the fifth anniversary of the date hereof, or if such day shall in the State of
New York be a holiday or a day on which banks are authorized to close, then 5:00
p.m. New York time the next following day which in the State of New York is not
a holiday or a day on which banks are authorized to close.
3. REGISTRATION AND TRANSFER ON COMPANY BOOKS
3.1 The Company shall maintain books for the registration and transfer
of the Warrants and the registration and transfer of the Warrant Shares.
3.2 Prior to due presentment for registration of transfer of this
Warrant Certificate, or the Warrant Shares, the Company may deem and treat the
registered Holder as the absolute owner thereof.
3.3 Neither this Warrant Certificate, nor the Warrants represented
hereby, may be sold, assigned or otherwise transferred voluntarily by the
Holder, other than to successors, partners, officers or directors of the Holder
(a "Permitted Transfer"), without the consent of the Company. The Company shall
register upon its books any Permitted Transfer of a Warrant Certificate, upon
surrender of same to the Company with a written instrument of transfer duly
executed by the registered Holder or by a duly authorized attorney. Upon any
such registration of Permitted Transfer, new Warrant Certificate(s) shall be
issued to the transferee(s) and the surrendered Warrant Certificate shall be
canceled by the Company. A Warrant Certificate may also be exchanged, at the
option of the Holder, for new Warrant Certificates of different denominations
representing in the aggregate the number of Warrants evidenced by the Warrant
Certificate surrendered.
4. RESERVATION OF SHARES
The Company covenants that it will at all times reserve and keep
available out of its authorized capital stock, solely for the purpose of issue
upon exercise of the Warrants, such number of shares of capital stock as shall
then be issuable upon the exercise of all outstanding Warrants. The Company
covenants that all shares of capital stock which shall be issuable upon exercise
of the Warrants shall be duly and validly issued and fully paid and non-
assessable and free from all taxes, liens and charges with respect to the issue
thereof, and that upon issuance such shares shall be listed on each national
securities exchange or automated over-the-counter trading system, if any, on
which the other shares of such outstanding capital stock of the Company are then
listed.
- 2 -
<PAGE>
5. LOSS OR MUTILATION
Upon receipt by the Company of reasonable evidence of the ownership of
and the loss, theft, destruction or mutilation of any Warrant Certificate and,
in the case of loss, theft or destruction, of indemnity reasonably satisfactory
to the Company, or, in the case of mutilation, upon surrender and cancellation
of the mutilated Warrant Certificate, the Company shall execute and deliver in
lieu thereof a new Warrant Certificate representing an equal number of Warrants.
6. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF
SHARES DELIVERABLE
6.1 The number of Warrant Shares purchasable upon the exercise of each
Warrant and the Purchase Price with respect to the Warrant Shares shall be
subject to adjustment as follows:
(a) In case the Company shall (i) declare a dividend or make a
distribution on its Common Stock payable in shares of its capital stock,
(ii) subdivide its outstanding shares of Common Stock through stock split
or otherwise, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock, or (iv) issue by reclassification
of its Common Stock (including any reclassification in connection with a
consolidation or merger in which the Company is the continuing corporation)
other securities of the Company, the number and/or nature of Warrant Shares
purchasable upon exercise of each Warrant immediately prior thereto shall
be adjusted so that the Holder shall be entitled to receive the kind and
number of Warrant Shares or other securities of the Company which he would
have owned or have been entitled to receive after the happening of any of
the events described above, had such Warrant been exercised immediately
prior to the happening of such event or any record date with respect
thereto. Any adjustment made pursuant to this paragraph (a) shall become
effective retroactively as of the record date of such event.
(b) In the event of any capital reorganization or any reclassification
of the capital stock of the Company or in case of the consolidation or
merger of the Company with another corporation (other than a consolidation
or merger in which the outstanding shares of the Company's Common Stock are
not converted into or exchanged for other rights or interests), or in the
case of any sale, transfer or other disposition to another corporation of
all or substantially all the properties and assets of the Company (any such
event, a "Triggering Event"), the Holder of each Warrant shall thereafter
be entitled to purchase (and it shall be a condition to the consummation of
any such reorganization, reclassification, consolidation, merger, sale,
transfer or other disposition that appropriate provisions shall be made so
that such Holder shall thereafter be entitled to purchase) the kind and
amount of shares of stock and other securities and property (including
cash) which the Holder would
- 3 -
<PAGE>
have been entitled to receive had such Warrants been exercised immediately
prior to the effective date of such reorganization, reclassification,
consolidation, merger, sale, transfer or other disposition; and in any such
case appropriate adjustments shall be made in the application of the
provisions of this Article 6 with respect to rights and interest thereafter
of the Holder of the Warrants to the end that the provisions of this
Article 6 shall thereafter be applicable, as near as reasonably may be, in
relation to any shares or other property thereafter purchasable upon the
exercise of the Warrants. The provisions of this Section 6.1(b) shall
similarly apply to successive reorganizations, reclassifications,
consolidations, mergers, sales, transfers or other dispositions.
(c) Whenever the number of Warrant Shares purchasable upon the
exercise of each Warrant is adjusted, as provided in this Section 6.1, the
Purchase Price with respect to the Warrant Shares shall be adjusted by
multiplying such Purchase Price immediately prior to such adjustment by a
fraction, of which the numerator shall be the number of Warrant Shares
purchasable upon the exercise of each Warrant immediately prior to such
adjustment, and of which the denominator shall be the number of Warrant
Shares so purchasable immediately thereafter.
6.2 No adjustment in the number of Warrant Shares purchasable under
the Warrants, or in the Purchase Price with respect to the Warrant Shares, shall
be required unless such adjustment would require an increase or decrease of at
least 1% in the number of Warrant Shares issuable upon the exercise of such
Warrant, or in the Purchase Price thereof; provided, however, that any
adjustments which by reason of this Section 6.2 are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All final results of adjustments to the number of Warrant Shares and the
Purchase Price thereof shall be rounded to the nearest one thousandth of a share
or the nearest cent, as the case may be. Anything in this Section 6 to the
contrary notwithstanding, the Company shall be entitled, but shall not be
required, to make such changes in the number of Warrant Shares purchasable upon
the exercise of each Warrant, or in the Purchase Price thereof, in addition to
those required by such Section, as it in its discretion shall determine to be
advisable in order that any dividend or distribution in shares of Common Stock,
subdivision, reclassification or combination of shares of Common Stock, issuance
of rights, warrants or options to purchase Common Stock, or distribution of
shares of stock other than Common Stock, evidences of indebtedness or assets
(other than distributions of cash out of retained earnings) or convertible or
exchangeable securities hereafter made by the Company to the holders of its
Common Stock shall not result in any tax to the holders of its Common Stock or
securities convertible into Common Stock.
6.3 Whenever the number of Warrant Shares purchasable upon the
exercise of each Warrant or the Purchase Price of such Warrant Shares is
adjusted, as herein provided, the Company shall mail to the Holder, at the
address of the Holder shown on the books of the Company, a notice of such
adjustment or adjustments, prepared and signed by the Chairman of the Board,
Chief Financial Officer or Secretary of the Company, which sets
- 4 -
<PAGE>
forth the number of Warrant Shares purchasable upon the exercise of each Warrant
and the Purchase Price of such Warrant Shares after such adjustment, a brief
statement of the facts requiring such adjustment and the computation by which
such adjustment was made.
6.4 The Company shall give notice to the Holder by registered mail, if
at any time prior to the expiration or exercise in full of the Warrants, any of
the following events shall occur:
(a) The Company shall authorize the payment of any dividend payable in any
securities upon shares of Common Stock or authorize the making of any
distribution to the holders of shares of Common Stock;
(b) The Company shall authorize the issuance to all holders of Common
Stock of any additional shares of Common Stock or of rights, options or warrants
to subscribe for or purchase Common Stock or any of any other subscription
rights, options or warrants;
(c) A dissolution, liquidation or winding up of the Company (other than in
connection with a consolidation, merger, or sale or conveyance of the property
of the Company as an entirety or substantially as an entirety); or
(d) A capital reorganization or reclassification of the Common Stock
(other than a subdivision or combination of the outstanding Common Stock and
other than a change in the par value of the Common Stock) or any consolidation
or merger of the Company with or into another corporation (other than a
consolidation or merger in which the Company is the continuing corporation and
that does not result in any reclassification or change of Common Stock
outstanding) or any sale or conveyance to another corporation of the property of
the Company as an entirety or substantially an entirety.
Such giving of notice shall be initiated at least 10 Business Days prior to the
date fixed as a record date or effective date or the date of closing of the
Company's stock transfer books for the determination of the shareholders
entitled to such dividend, distribution, or subscription rights, or for the
determination of the shareholders entitled to vote on such proposed merger,
consolidation, sale, conveyance, dissolution, liquidation or winding up. Such
notice shall specify such record date or the date of the closing of the stock
transfer books, as the case may be. Failure to provide such notice shall not
affect the validity of any action taken in connection with such dividend,
distribution or subscription rights, or proposed merger, consolidation, sale,
conveyance, dissolution, liquidation or winding up.
7. CONVERSION RIGHTS
7.1 In lieu of exercise of any portion of the Warrants as provided
in Section 2.1 hereof, the Warrants represented by this Warrant Certificate (or
any portion thereof) may, at the election of the Holder, be converted into the
nearest whole number of shares of Common Stock equal to: (1) the product of (a)
the number of shares of Common
- 5 -
<PAGE>
Stock then issuable upon the exercise of the Warrants to be so converted and (b)
the excess, if any, of (i) the Market Price Per Share (as determined pursuant to
Section 9.2) with respect to the date of conversion over (ii) the Purchase Price
in effect on the business day next preceding the date of conversion, divided by
(2) the Market Price Per Share with respect to the date of conversion. For
example, if the Market Price per Share on the date of conversion is $4.00 and
the Purchase Price is $2.00, then the Holder would be entitled to receive 15,000
shares of Common Stock upon conversion of 30,000 Warrants.
7.2 The conversion rights provided under this Section 7 may be
exercised in whole or in part and at any time and from time to time while any
Warrants remain outstanding. In order to exercise the conversion privilege, the
Holder shall surrender to the Company, at its offices, this Warrant Certificate
accompanied by a duly completed Notice of Conversion in the form attached hereto
as Exhibit B. The Warrants (or so much thereof as shall have been surrendered
for conversion) shall be deemed to have been converted immediately prior to the
close of business on the day of surrender of such Warrant Certificate for
conversion in accordance with the foregoing provisions. As promptly as
practicable on or after the conversion date, the Company shall issue and shall
deliver to the Holder (i) a certificate or certificates representing the number
of shares of Common Stock to which the Holder shall be entitled as a result of
the conversion, and (ii) if the Warrant Certificate is being converted in part
only, a new certificate of like tenor and date for the balance of the
unconverted portion of the Warrant Certificate.
8. VOLUNTARY ADJUSTMENT BY THE COMPANY
The Company may, at its option, at any time during the term of the
Warrants, reduce the then current Purchase Price to any amount deemed
appropriate by the Board and/or extend the date of the expiration of the
Warrants.
9. FRACTIONAL SHARES AND WARRANTS; DETERMINATION OF
MARKET PRICE PER SHARE
9.1 Anything contained herein to the contrary notwithstanding, the
Company shall not be required to issue any fraction of a share of Common Stock
in connection with the exercise of Warrants. Warrants may not be exercised in
such number as would result (except for the provisions of this paragraph) in the
issuance of a fraction of a share of Common Stock unless the Holder is
exercising all Warrants then owned by the Holder. In such event, the Company
shall, upon the exercise of all of such Warrants, issue to the Holder the
largest aggregate whole number of shares of Common Stock called for thereby upon
receipt of the Purchase Price for all of such Warrants and pay a sum in cash
equal to the remaining fraction of a share of Common Stock, multiplied by its
Market Price Per Share (as determined pursuant to Section 9.2 below) as of the
last business day preceding the date on which the Warrants are presented for
exercise.
- 6 -
<PAGE>
9.2 As used herein, the "Market Price Per Share" with respect to any
class or series of Common Stock on any date shall mean the average closing price
per share of Company's Common Stock for the 20 trading days immediately
preceding such date. The closing price for each such day shall be the last sale
price regular way or, in case no such sale takes place on such day, the average
of the closing bid and asked prices regular way, in either case on the principal
securities exchange on which the shares of such Common Stock of the Company are
listed or admitted to trading or, if applicable, the last sale price, or in case
no sale takes place on such day, the average of the closing bid and asked prices
of such Common Stock on NASDAQ or any comparable system, or if such Common Stock
is not reported on NASDAQ, or a comparable system, the average of the closing
bid and asked prices as furnished by two members of the National Association of
Securities Dealers, Inc. selected from time to time by the Company for that
purpose. If such bid and asked prices are not available, then "Market Price Per
Share" shall be equal to the fair market value of such Common Stock as
determined in good faith by the Board.
10. REGISTRATION RIGHTS
10.1 No sale, transfer, assignment, hypothecation or other disposition
of the Warrant Shares shall be made unless any such transfer, assignment or
other disposition will comply with the rules and statutes administered by the
Securities and Exchange Commission (the "Commission") and (i) a registration
statement under the Securities Act of 1933, as amended (the "Act"), including
such shares is currently in effect, or (ii) in the opinion of counsel
satisfactory to the Company a current registration statement is not required for
such disposition of the shares.
10.2(a) The Company agrees that the Holder shall have the one-time
right, beginning on the first anniversary of the date of this Warrant
Certificate, upon written notice to the Company, to require that the Company
prepare and promptly file a registration statement, as may be required under the
Act, in connection with the public offering, on a time-to-time basis or
otherwise, of not less than 50% of the then outstanding Warrant Shares (which,
for purposes of such calculation, shall include shares of Common Stock issuable
upon exercise of any warrants of even date herewith initially issued to
Barington Capital Group, L.P.). In connection therewith, the Company shall be
obligated to prepare and file such registration statement within 45 days of
receipt of any such initial notice and shall be further obligated to use its
reasonable best efforts, including the filing of any amendments or supplements
thereto, to have any such registration statement declared effective under the
Act and the rules and regulations promulgated thereunder as soon as practicable
after the filing date thereof. The Company shall also use its reasonable best
efforts to keep any such registration statement, and the accompanying
prospectus, effective and current under the Act at its expense for such period
of time as is not otherwise burdensome to the Company, in no event to exceed 90
days.
(b) Notwithstanding the foregoing, the Company shall not be required
to effect any registration pursuant to paragraph (a) above (i) during the twelve
(12)
- 7 -
<PAGE>
consecutive months following the effective date of a registration statement
filed in connection of any previous registration pursuant to Section 10.3 below,
or (ii) at any time when another registration statement (other than on Form S-8)
of the Company (A) is reasonably foreseen by the Board to be filed with the
Commission within thirty (30) days after the request pursuant to paragraph (a)
above, (B) has been filed and not yet become effective, or (C) has become
effective less than six (6) months prior to the date of the request for
registration pursuant to paragraph (a) above.
(c) The Company may postpone for 180 days the filing of a registration
statement pursuant to paragraph (a) above if the Company has delivered a
certificate to the holders of the Warrant Shares stating that the Board, acting
in good faith, has determined that pursuance of such registration statement
would be seriously detrimental to the Company and its shareholders; PROVIDED,
HOWEVER, that in the event of any such postponement the Holder(s) shall be
entitled to withdraw the request for such registration and, if such request is
withdrawn, such request shall not count as exercise of the Holder's one-time
right pursuant to paragraph (a) above.
10.3 In addition to the rights of the Holder pursuant to Section 10.2,
the Company agrees that, at any time or times hereafter, as and when it intends
to register any of its securities under the Act other than pursuant to a
registration requested pursuant to Section 10.2 hereof, whether for its own
account and/or on behalf of selling stockholders (except in connection with an
offering on Form S-8 or an offering solely related to an acquisition or exchange
on a Form S-4 or any subsequent similar form) the Company will notify the Holder
of such intention and, upon request from the Holder, will use its reasonable
best efforts to cause the Underlying Shares designated by the Holder to be
registered under the Securities Act. The number of Underlying Shares to be
included in such offering may be reduced if and to the extent that the
underwriter of securities included in the registration statement and offered by
the Company shall be of the opinion that such inclusion would adversely affect
the marketing of the securities to be sold by the Company therein; provided,
however, that the percentage of the reduction of such Underlying Shares shall be
no greater than the percentage reduction of securities of other selling
stockholders, as such percentage reductions are determined in the good faith
judgment of the Company. The Company will use its reasonable best efforts to
keep each such registration statement current for such period of time as is not
otherwise burdensome to the Company, in no event to exceed 90 days.
10.4 Any registration statement referred to in subsection 10.2 or 10.3
hereof shall be prepared and processed in accordance with the following terms
and conditions:
(i) the Holder will cooperate in furnishing promptly to the Company in
writing any information requested by the Company in connection with the
preparation, filing and processing of such registration statement.
- 8 -
<PAGE>
(ii) To the extent requested by an underwriter of securities included
in a registration statement referred to in Subsection 10.3 hereof and
offered by the Company, the Holder will defer the sale of Underlying Shares
for a period commencing twenty (20) days prior and terminating one hundred
twenty (120) days after the effective date of the registration statement,
provided that any principal shareholders of the Company who also have
shares included in the registration statement will also defer their sales
for a similar period.
(iii) The Company will furnish to the Holder such number of
prospectuses or other documents incident to such registration as may from
time to time be reasonably requested, and cause its shares to be qualified
under the blue-sky laws of those states reasonably requested by the Holder.
(iv) The Company will indemnify the Holder (and any officer, director
or controlling person of the Holder) and any underwriters acting on behalf
of the Holder against all claims, losses, expenses, damages and liabilities
(or actions in respect thereof) to which they may become subject under the
Securities Act or otherwise, arising out of or based upon any untrue or
alleged untrue statement of any material facts contained in any
registration statement filed pursuant hereto, or any document relating
thereto, including all amendments and supplements, or arising out of or
based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein contained not misleading, and will reimburse the Holder (or such
other aforementioned parties) or such underwriters for any legal and all
other expenses reasonably incurred in accordance with investigating or
defending any such claim, loss, damage, liability or action; provided,
however, that the Company will not be liable where the untrue or alleged
untrue statement or omission or alleged omission is based upon information
furnished in writing to the Company by the Holder or any underwriter
obtained by the Holder expressly for use therein, or as a result of the
Holder's or any such underwriter's failure to furnish to the Company
information duly requested in writing by counsel for the Company
specifically for use therein. This indemnity agreement shall be in
addition to any other liability the Company may have. The indemnity
agreement of the Company contained in this paragraph (iv) shall remain
operative and in full force and effect regardless of any investigation made
by or on behalf of any indemnified party and shall survive the delivery of
and payment for the Underlying Shares.
(v) The Holder will indemnify the Company (and any officer, director
or controlling person of the Company) and any underwriters acting on behalf
of the Company against all claims, losses, expenses, damages and
liabilities (or actions in respect thereof) to which they may become
subject under the Securities Act or otherwise, arising out of or based upon
any untrue or alleged untrue statement filed pursuant hereto, or any
document relating thereto, including all amendments, and supplements, or
arising out of or based upon the omission or alleged omission to
- 9 -
<PAGE>
state therein a material fact required to be stated therein or necessary to
make the statements therein contained not misleading, and, will reimburse
the Company (or such other aforementioned parties) or such underwriters for
any legal and other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability, or
action; provided, however, that the Holder will be liable as aforesaid only
to the extent that such untrue or alleged untrue statement or omission or
alleged omission is based upon information furnished in writing to the
Company by the Holder or any underwriter obtained by the Holder expressly
for use therein, or as a result of its or such underwriter's failure to
furnish the Company with information duly requested in writing by counsel
for the Company specifically for use therein. This indemnity agreement
contained in this paragraph (v) shall remain operative and in full force
and effect regardless of any investigation made by or on behalf of any
indemnified party and shall survive the delivery of and payment for the
Underlying Shares.
(vi) Promptly after receipt by an indemnified party under this
subsection 10.4 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against
the indemnifying party, promptly notify the indemnifying party 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 subsection 10.4. In case any such action
is brought against any indemnified party, and it notifies the indemnifying
party of the commencement thereof, the indemnifying party will be entitled
to participate in, and, to the extent that it may wish jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party, and after
notice from the indemnifying party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified
party under this subsection 10.4 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof, other than reasonable costs of investigation or
out-of-pocket expenses or losses or cost incurred in collaborating in the
defense.
(vii) Except as set forth in subsection 10.4(viii), the Company shall
bear all costs and expenses incident to any registration pursuant to this
Section 10.
(viii) The Holder shall pay any and all underwriters' discounts,
brokerage fees and transfer taxes incident to the sale of any securities
sold by such Holder pursuant to this Section 10, and shall pay the fees and
expenses of any attorneys or accountants retained by it.
11. GOVERNING LAW
This Warrant Certificate shall be governed by and construed in
accordance with the laws of the State of New York.
- 10 -
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed by its officers thereunto duly authorized and its corporate
seal to be affixed hereon, as of this 19th day of December, 1997.
PRINCETON VIDEO IMAGE, INC.
By: /s/ Brown F Williams
------------------------------
Name: Brown F Williams
Title: Chairman
[SEAL]
Attest:
ALLEN & COMPANY INCORPORATED
By: /s/ James W. Quinn
---------------------
Name: James W. Quinn
Title: Vice President
<PAGE>
EXHIBIT A
NOTICE OF EXERCISE
The undersigned hereby irrevocably elects to exercise, pursuant to
Section 2 of the Warrant Certificate accompanying this Notice of Exercise,
_______ Warrants of the total number of Warrants owned by the undersigned
pursuant to the accompanying Warrant Certificate, and herewith makes payment of
the Purchase Price of such shares in full.
----------------------------
Name of Holder
----------------------------
Signature
Address:
----------------------------
----------------------------
----------------------------
<PAGE>
EXHIBIT B
NOTICE OF CONVERSION
The undersigned hereby irrevocably elects to convert, pursuant to Section 7 of
the Warrant Certificate accompanying this Notice of Conversion, _______ Warrants
of the total number of Warrants owned by the undersigned pursuant to the
accompanying Warrant Certificate into shares of the Common Stock of the Company
(the "Shares").
The number of Shares to be received by the undersigned shall be calculated in
accordance with the provisions of Section 7.1 of the accompanying Warrant
Certificate.
---------------------------
Name of Holder
---------------------------
Signature
Address:
---------------------------
---------------------------
---------------------------
<PAGE>
EXHIBIT 4.6
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 OR THE LAWS OF ANY
STATE. THEY MAY NOT BE SOLD OR OTHERWISE TRANS-
FERRED UNLESS THEY ARE REGISTERED UNDER SUCH ACT
AND APPLICABLE STATE SECURITIES LAWS OR AN
EXEMPTION FROM REGISTRATION IS AVAILABLE.
20,000 Warrants
PRINCETON VIDEO IMAGE, INC.
WARRANT CERTIFICATE
This warrant certificate ("Warrant Certificate") certifies that for
value received in consideration for certain services rendered, and for other
good and valuable consideration, the sufficiency of which is hereby
acknowledged, Barington Capital Group, L.P. or registered permitted assigns (the
"Holder") is the owner of the number of warrants ("Warrants") specified above,
each of which entitles the Holder thereof to purchase, at any time on or before
the Expiration Date (hereinafter defined), one fully paid and non-assessable
share of Common Stock, no par value ("Common Stock"), of Princeton Video Image,
Inc., a New Jersey corporation (the "Company"), at a purchase price of $8.40 per
share of Common Stock in lawful money of the United States of America in cash or
by certified or cashier's check or a combination of cash and certified or
cashier's check (subject to adjustment as hereinafter provided).
12. WARRANT; PURCHASE PRICE
Each Warrant shall entitle the Holder initially to purchase one share
of Common Stock of the Company and the purchase price payable upon exercise of
the Warrants (the "Purchase Price") shall initially be $8.40 per share of Common
Stock. The Purchase Price and number of shares of Common Stock issuable upon
exercise of each Warrant are subject to adjustment as provided in Article 6.
The shares of Common Stock issuable upon exercise of the Warrants (and/or other
shares of common stock so issuable by reason of any adjustments pursuant to
Article 6) are sometimes referred to herein as the "Warrant Shares."
- 1 -
<PAGE>
13. EXERCISE; EXPIRATION DATE
13.1 The Warrants are exercisable, at the option of the Holder, in
whole or in part at any time and from time to time on or after the date hereof
and on or before the Expiration Date, upon surrender of this Warrant Certificate
to the Company together with a duly completed Notice of Exercise, in the form
attached hereto as Exhibit A, and payment of an amount equal to the Purchase
Price times the number of Warrants to be exercised. In the case of exercise of
less than all the Warrants represented by this Warrant Certificate, the Company
shall cancel the Warrant Certificate upon the surrender thereof and shall
execute and deliver a new Warrant Certificate for the balance of such Warrants.
13.2 The term "Expiration Date" shall mean 5:00 p.m. New York time on
the fifth anniversary of the date hereof, or if such day shall in the State of
New York be a holiday or a day on which banks are authorized to close, then 5:00
p.m. New York time the next following day which in the State of New York is not
a holiday or a day on which banks are authorized to close.
14. REGISTRATION AND TRANSFER ON COMPANY BOOKS
14.1 The Company shall maintain books for the registration and
transfer of the Warrants and the registration and transfer of the Warrant
Shares.
14.2 Prior to due presentment for registration of transfer of this
Warrant Certificate, or the Warrant Shares, the Company may deem and treat the
registered Holder as the absolute owner thereof.
14.3 Neither this Warrant Certificate, nor the Warrants represented
hereby, may be sold, assigned or otherwise transferred voluntarily by the
Holder, other than to successors, partners, officers or directors of the Holder
(a "Permitted Transfer"), without the consent of the Company. The Company shall
register upon its books any Permitted Transfer of a Warrant Certificate, upon
surrender of same to the Company with a written instrument of transfer duly
executed by the registered Holder or by a duly authorized attorney. Upon any
such registration of Permitted Transfer, new Warrant Certificate(s) shall be
issued to the transferee(s) and the surrendered Warrant Certificate shall be
canceled by the Company. A Warrant Certificate may also be exchanged, at the
option of the Holder, for new Warrant Certificates of different denominations
representing in the aggregate the number of Warrants evidenced by the Warrant
Certificate surrendered.
15. RESERVATION OF SHARES
The Company covenants that it will at all times reserve and keep
available out of its authorized capital stock, solely for the purpose of issue
upon exercise of the Warrants, such number of shares of capital stock as shall
then be issuable upon the exercise of all outstanding Warrants. The Company
covenants that all shares of capital stock which shall
- 2 -
<PAGE>
be issuable upon exercise of the Warrants shall be duly and validly issued and
fully paid and non-assessable and free from all taxes, liens and charges with
respect to the issue thereof, and that upon issuance such shares shall be listed
on each national securities exchange or automated over-the-counter trading
system, if any, on which the other shares of such outstanding capital stock of
the Company are then listed.
16. LOSS OR MUTILATION
Upon receipt by the Company of reasonable evidence of the ownership of
and the loss, theft, destruction or mutilation of any Warrant Certificate and,
in the case of loss, theft or destruction, of indemnity reasonably satisfactory
to the Company, or, in the case of mutilation, upon surrender and cancellation
of the mutilated Warrant Certificate, the Company shall execute and deliver in
lieu thereof a new Warrant Certificate representing an equal number of Warrants.
17. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF
SHARES DELIVERABLE
17.1 The number of Warrant Shares purchasable upon the exercise of
each Warrant and the Purchase Price with respect to the Warrant Shares shall be
subject to adjustment as follows:
(a) In case the Company shall (i) declare a dividend or make a
distribution on its Common Stock payable in shares of its capital stock,
(ii) subdivide its outstanding shares of Common Stock through stock split
or otherwise, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock, or (iv) issue by reclassification
of its Common Stock (including any reclassification in connection with a
consolidation or merger in which the Company is the continuing corporation)
other securities of the Company, the number and/or nature of Warrant Shares
purchasable upon exercise of each Warrant immediately prior thereto shall
be adjusted so that the Holder shall be entitled to receive the kind and
number of Warrant Shares or other securities of the Company which he would
have owned or have been entitled to receive after the happening of any of
the events described above, had such Warrant been exercised immediately
prior to the happening of such event or any record date with respect
thereto. Any adjustment made pursuant to this paragraph (a) shall become
effective retroactively as of the record date of such event.
(b) In the event of any capital reorganization or any reclassification
of the capital stock of the Company or in case of the consolidation or
merger of the Company with another corporation (other than a consolidation
or merger in which the outstanding shares of the Company's Common Stock are
not converted into or exchanged for other rights or interests), or in the
case of any sale, transfer or other disposition to another corporation of
all or substantially all the properties and assets
- 3 -
<PAGE>
of the Company (any such event, a "Triggering Event"), the Holder of each
Warrant shall thereafter be entitled to purchase (and it shall be a
condition to the consummation of any such reorganization, reclassification,
consolidation, merger, sale, transfer or other disposition that appropriate
provisions shall be made so that such Holder shall thereafter be entitled
to purchase) the kind and amount of shares of stock and other securities
and property (including cash) which the Holder would have been entitled to
receive had such Warrants been exercised immediately prior to the effective
date of such reorganization, reclassification, consolidation, merger, sale,
transfer or other disposition; and in any such case appropriate adjustments
shall be made in the application of the provisions of this Article 6 with
respect to rights and interest thereafter of the Holder of the Warrants to
the end that the provisions of this Article 6 shall thereafter be
applicable, as near as reasonably may be, in relation to any shares or
other property thereafter purchasable upon the exercise of the Warrants.
The provisions of this Section 6.1(b) shall similarly apply to successive
reorganizations, reclassifications, consolidations, mergers, sales,
transfers or other dispositions.
(c) Whenever the number of Warrant Shares purchasable upon the
exercise of each Warrant is adjusted, as provided in this Section 6.1, the
Purchase Price with respect to the Warrant Shares shall be adjusted by
multiplying such Purchase Price immediately prior to such adjustment by a
fraction, of which the numerator shall be the number of Warrant Shares
purchasable upon the exercise of each Warrant immediately prior to such
adjustment, and of which the denominator shall be the number of Warrant
Shares so purchasable immediately thereafter.
17.2 No adjustment in the number of Warrant Shares purchasable under
the Warrants, or in the Purchase Price with respect to the Warrant Shares, shall
be required unless such adjustment would require an increase or decrease of at
least 1% in the number of Warrant Shares issuable upon the exercise of such
Warrant, or in the Purchase Price thereof; provided, however, that any
adjustments which by reason of this Section 6.2 are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All final results of adjustments to the number of Warrant Shares and the
Purchase Price thereof shall be rounded to the nearest one thousandth of a share
or the nearest cent, as the case may be. Anything in this Section 6 to the
contrary notwithstanding, the Company shall be entitled, but shall not be
required, to make such changes in the number of Warrant Shares purchasable upon
the exercise of each Warrant, or in the Purchase Price thereof, in addition to
those required by such Section, as it in its discretion shall determine to be
advisable in order that any dividend or distribution in shares of Common Stock,
subdivision, reclassification or combination of shares of Common Stock, issuance
of rights, warrants or options to purchase Common Stock, or distribution of
shares of stock other than Common Stock, evidences of indebtedness or assets
(other than distributions of cash out of retained earnings) or convertible or
exchangeable securities hereafter made by the Company to the holders of its
Common Stock shall not result in any tax to the holders of its Common Stock or
securities convertible into Common Stock.
- 4 -
<PAGE>
17.3 Whenever the number of Warrant Shares purchasable upon the
exercise of each Warrant or the Purchase Price of such Warrant Shares is
adjusted, as herein provided, the Company shall mail to the Holder, at the
address of the Holder shown on the books of the Company, a notice of such
adjustment or adjustments, prepared and signed by the Chairman of the Board,
Chief Financial Officer or Secretary of the Company, which sets forth the number
of Warrant Shares purchasable upon the exercise of each Warrant and the Purchase
Price of such Warrant Shares after such adjustment, a brief statement of the
facts requiring such adjustment and the computation by which such adjustment was
made.
17.4 The Company shall give notice to the Holder by registered mail,
if at any time prior to the expiration or exercise in full of the Warrants, any
of the following events shall occur:
(a) The Company shall authorize the payment of any dividend payable in any
securities upon shares of Common Stock or authorize the making of any
distribution to the holders of shares of Common Stock;
(b) The Company shall authorize the issuance to all holders of Common
Stock of any additional shares of Common Stock or of rights, options or warrants
to subscribe for or purchase Common Stock or any of any other subscription
rights, options or warrants;
(c) A dissolution, liquidation or winding up of the Company (other than in
connection with a consolidation, merger, or sale or conveyance of the property
of the Company as an entirety or substantially as an entirety); or
(d) A capital reorganization or reclassification of the Common Stock
(other than a subdivision or combination of the outstanding Common Stock and
other than a change in the par value of the Common Stock) or any consolidation
or merger of the Company with or into another corporation (other than a
consolidation or merger in which the Company is the continuing corporation and
that does not result in any reclassification or change of Common Stock
outstanding) or any sale or conveyance to another corporation of the property of
the Company as an entirety or substantially an entirety.
Such giving of notice shall be initiated at least 10 Business Days prior to the
date fixed as a record date or effective date or the date of closing of the
Company's stock transfer books for the determination of the shareholders
entitled to such dividend, distribution, or subscription rights, or for the
determination of the shareholders entitled to vote on such proposed merger,
consolidation, sale, conveyance, dissolution, liquidation or winding up. Such
notice shall specify such record date or the date of the closing of the stock
transfer books, as the case may be. Failure to provide such notice shall not
affect the validity of any action taken in connection with such dividend,
distribution or subscription rights, or proposed merger, consolidation, sale,
conveyance, dissolution, liquidation or winding up.
18. CONVERSION RIGHTS
- 5 -
<PAGE>
18.1 In lieu of exercise of any portion of the Warrants as provided
in Section 2.1 hereof, the Warrants represented by this Warrant Certificate (or
any portion thereof) may, at the election of the Holder, be converted into the
nearest whole number of shares of Common Stock equal to: (1) the product of (a)
the number of shares of Common Stock then issuable upon the exercise of the
Warrants to be so converted and (b) the excess, if any, of (i) the Market Price
Per Share (as determined pursuant to Section 9.2) with respect to the date of
conversion over (ii) the Purchase Price in effect on the business day next
preceding the date of conversion, divided by (2) the Market Price Per Share with
respect to the date of conversion. For example, if the Market Price per Share
on the date of conversion is $4.00 and the Purchase Price is $2.00, then the
Holder would be entitled to receive 15,000 shares of Common Stock upon
conversion of 30,000 Warrants.
18.2 The conversion rights provided under this Section 7 may be
exercised in whole or in part and at any time and from time to time while any
Warrants remain outstanding. In order to exercise the conversion privilege, the
Holder shall surrender to the Company, at its offices, this Warrant Certificate
accompanied by a duly completed Notice of Conversion in the form attached hereto
as Exhibit B. The Warrants (or so much thereof as shall have been surrendered
for conversion) shall be deemed to have been converted immediately prior to the
close of business on the day of surrender of such Warrant Certificate for
conversion in accordance with the foregoing provisions. As promptly as
practicable on or after the conversion date, the Company shall issue and shall
deliver to the Holder (i) a certificate or certificates representing the number
of shares of Common Stock to which the Holder shall be entitled as a result of
the conversion, and (ii) if the Warrant Certificate is being converted in part
only, a new certificate of like tenor and date for the balance of the
unconverted portion of the Warrant Certificate.
19. VOLUNTARY ADJUSTMENT BY THE COMPANY
The Company may, at its option, at any time during the term of the
Warrants, reduce the then current Purchase Price to any amount deemed
appropriate by the Board and/or extend the date of the expiration of the
Warrants.
20. FRACTIONAL SHARES AND WARRANTS; DETERMINATION OF
MARKET PRICE PER SHARE
9.1 Anything contained herein to the contrary notwithstanding, the
Company shall not be required to issue any fraction of a share of Common Stock
in connection with the exercise of Warrants. Warrants may not be exercised in
such number as would result (except for the provisions of this paragraph) in the
issuance of a fraction of a share of Common Stock unless the Holder is
exercising all Warrants then owned by the Holder. In such event, the Company
shall, upon the exercise of all of such Warrants, issue to the Holder the
largest aggregate whole number of shares of Common Stock called for thereby upon
receipt of the Purchase Price for all of such Warrants and pay a sum in cash
equal to the remaining fraction of a share of Common Stock, multiplied by its
Market Price
- 6 -
<PAGE>
Per Share (as determined pursuant to Section 9.2 below) as of the last business
day preceding the date on which the Warrants are presented for exercise.
9.2 As used herein, the "Market Price Per Share" with respect to any
class or series of Common Stock on any date shall mean the average closing price
per share of Company's Common Stock for the 20 trading days immediately
preceding such date. The closing price for each such day shall be the last sale
price regular way or, in case no such sale takes place on such day, the average
of the closing bid and asked prices regular way, in either case on the principal
securities exchange on which the shares of such Common Stock of the Company are
listed or admitted to trading or, if applicable, the last sale price, or in case
no sale takes place on such day, the average of the closing bid and asked prices
of such Common Stock on NASDAQ or any comparable system, or if such Common Stock
is not reported on NASDAQ, or a comparable system, the average of the closing
bid and asked prices as furnished by two members of the National Association of
Securities Dealers, Inc. selected from time to time by the Company for that
purpose. If such bid and asked prices are not available, then "Market Price Per
Share" shall be equal to the fair market value of such Common Stock as
determined in good faith by the Board.
21. REGISTRATION RIGHTS
21.1 No sale, transfer, assignment, hypothecation or other disposition
of the Warrant Shares shall be made unless any such transfer, assignment or
other disposition will comply with the rules and statutes administered by the
Securities and Exchange Commission (the "Commission") and (i) a registration
statement under the Securities Act of 1933, as amended (the "Act"), including
such shares is currently in effect, or (ii) in the opinion of counsel
satisfactory to the Company a current registration statement is not required for
such disposition of the shares.
21.2(a) The Company agrees that the Holder shall have the one-time
right, beginning on the first anniversary of the date of this Warrant
Certificate, upon written notice to the Company, to require that the Company
prepare and promptly file a registration statement, as may be required under the
Act, in connection with the public offering, on a time-to-time basis or
otherwise, of not less than 50% of the then outstanding Warrant Shares (which,
for purposes of such calculation, shall include shares of Common Stock issuable
upon exercise of any warrants of even date herewith initially issued to Allen &
Company Incorporated). In connection therewith, the Company shall be obligated
to prepare and file such registration statement within 45 days of receipt of any
such initial notice and shall be further obligated to use its reasonable best
efforts, including the filing of any amendments or supplements thereto, to have
any such registration statement declared effective under the Act and the rules
and regulations promulgated thereunder as soon as practicable after the filing
date thereof. The Company shall also use its reasonable best efforts to keep
any such registration statement, and the accompanying prospectus, effective and
current under the Act at its expense for such period of time as is not otherwise
burdensome to the Company, in no event to exceed 90 days.
- 7 -
<PAGE>
(b) Notwithstanding the foregoing, the Company shall not be required
to effect any registration pursuant to paragraph (a) above (i) during the twelve
(12) consecutive months following the effective date of a registration statement
filed in connection of any previous registration pursuant to Section 10.3 below,
or (ii) at any time when another registration statement (other than on Form S-8)
of the Company (A) is reasonably foreseen by the Board to be filed with the
Commission within thirty (30) days after the request pursuant to paragraph (a)
above, (B) has been filed and not yet become effective, or (C) has become
effective less than six (6) months prior to the date of the request for
registration pursuant to paragraph (a) above.
(c) The Company may postpone for 180 days the filing of a registration
statement pursuant to paragraph (a) above if the Company has delivered a
certificate to the holders of the Warrant Shares stating that the Board, acting
in good faith, has determined that pursuance of such registration statement
would be seriously detrimental to the Company and its shareholders; PROVIDED,
HOWEVER, that in the event of any such postponement the Holder(s) shall be
entitled to withdraw the request for such registration and, if such request is
withdrawn, such request shall not count as exercise of the Holder's one-time
right pursuant to paragraph (a) above.
21.3 In addition to the rights of the Holder pursuant to Section 10.2,
the Company agrees that, at any time or times hereafter, as and when it intends
to register any of its securities under the Act other than pursuant to a
registration requested pursuant to Section 10.2 hereof, whether for its own
account and/or on behalf of selling stockholders (except in connection with an
offering on Form S-8 or an offering solely related to an acquisition or exchange
on a Form S-4 or any subsequent similar form) the Company will notify the Holder
of such intention and, upon request from the Holder, will use its reasonable
best efforts to cause the Underlying Shares designated by the Holder to be
registered under the Securities Act. The number of Underlying Shares to be
included in such offering may be reduced if and to the extent that the
underwriter of securities included in the registration statement and offered by
the Company shall be of the opinion that such inclusion would adversely affect
the marketing of the securities to be sold by the Company therein; provided,
however, that the percentage of the reduction of such Underlying Shares shall be
no greater than the percentage reduction of securities of other selling
stockholders, as such percentage reductions are determined in the good faith
judgment of the Company. The Company will use its reasonable best efforts to
keep each such registration statement current for such period of time as is not
otherwise burdensome to the Company, in no event to exceed 90 days.
21.4 Any registration statement referred to in subsection 10.2 or 10.3
hereof shall be prepared and processed in accordance with the following terms
and conditions:
(i) the Holder will cooperate in furnishing promptly to the Company in
writing any information requested by the Company in connection with the
preparation, filing and processing of such registration statement.
- 8 -
<PAGE>
(ii) To the extent requested by an underwriter of securities included
in a registration statement referred to in Subsection 10.3 hereof and
offered by the Company, the Holder will defer the sale of Underlying Shares
for a period commencing twenty (20) days prior and terminating one hundred
twenty (120) days after the effective date of the registration statement,
provided that any principal shareholders of the Company who also have
shares included in the registration statement will also defer their sales
for a similar period.
(iii) The Company will furnish to the Holder such number of
prospectuses or other documents incident to such registration as may from
time to time be reasonably requested, and cause its shares to be qualified
under the blue-sky laws of those states reasonably requested by the Holder.
(iv) The Company will indemnify the Holder (and any officer, director
or controlling person of the Holder) and any underwriters acting on behalf
of the Holder against all claims, losses, expenses, damages and liabilities
(or actions in respect thereof) to which they may become subject under the
Securities Act or otherwise, arising out of or based upon any untrue or
alleged untrue statement of any material facts contained in any
registration statement filed pursuant hereto, or any document relating
thereto, including all amendments and supplements, or arising out of or
based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein contained not misleading, and will reimburse the Holder (or such
other aforementioned parties) or such underwriters for any legal and all
other expenses reasonably incurred in accordance with investigating or
defending any such claim, loss, damage, liability or action; provided,
however, that the Company will not be liable where the untrue or alleged
untrue statement or omission or alleged omission is based upon information
furnished in writing to the Company by the Holder or any underwriter
obtained by the Holder expressly for use therein, or as a result of the
Holder's or any such underwriter's failure to furnish to the Company
information duly requested in writing by counsel for the Company
specifically for use therein. This indemnity agreement shall be in
addition to any other liability the Company may have. The indemnity
agreement of the Company contained in this paragraph (iv) shall remain
operative and in full force and effect regardless of any investigation made
by or on behalf of any indemnified party and shall survive the delivery of
and payment for the Underlying Shares.
(v) The Holder will indemnify the Company (and any officer, director
or controlling person of the Company) and any underwriters acting on behalf
of the Company against all claims, losses, expenses, damages and
liabilities (or actions in respect thereof) to which they may become
subject under the Securities Act or otherwise, arising out of or based upon
any untrue or alleged untrue statement filed pursuant hereto, or any
document relating thereto, including all amendments, and supplements, or
arising out of or based upon the omission or alleged omission to
- 9 -
<PAGE>
state therein a material fact required to be stated therein or necessary to
make the statements therein contained not misleading, and, will reimburse
the Company (or such other aforementioned parties) or such underwriters for
any legal and other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability, or
action; provided, however, that the Holder will be liable as aforesaid only
to the extent that such untrue or alleged untrue statement or omission or
alleged omission is based upon information furnished in writing to the
Company by the Holder or any underwriter obtained by the Holder expressly
for use therein, or as a result of its or such underwriter's failure to
furnish the Company with information duly requested in writing by counsel
for the Company specifically for use therein. This indemnity agreement
contained in this paragraph (v) shall remain operative and in full force
and effect regardless of any investigation made by or on behalf of any
indemnified party and shall survive the delivery of and payment for the
Underlying Shares.
(vi) Promptly after receipt by an indemnified party under this
subsection 10.4 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against
the indemnifying party, promptly notify the indemnifying party 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 subsection 10.4. In case any such action
is brought against any indemnified party, and it notifies the indemnifying
party of the commencement thereof, the indemnifying party will be entitled
to participate in, and, to the extent that it may wish jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party, and after
notice from the indemnifying party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified
party under this subsection 10.4 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof, other than reasonable costs of investigation or
out-of-pocket expenses or losses or cost incurred in collaborating in the
defense.
(vii) Except as set forth in subsection 10.4(viii), the Company shall
bear all costs and expenses incident to any registration pursuant to this
Section 10.
(viii) The Holder shall pay any and all underwriters' discounts,
brokerage fees and transfer taxes incident to the sale of any securities
sold by such Holder pursuant to this Section 10, and shall pay the fees and
expenses of any attorneys or accountants retained by it.
22. GOVERNING LAW
This Warrant Certificate shall be governed by and construed in
accordance with the laws of the State of New York.
- 10 -
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed by its officers thereunto duly authorized and its corporate
seal to be affixed hereon, as of this 19th day of December, 1997.
PRINCETON VIDEO IMAGE, INC.
By: /s/ Brown F Williams
-------------------------
Name: Brown F Williams
Title: Chairman
[SEAL]
Attest:
BARINGTON CAPITAL GROUP, L.P.
By: /s/ Carl Kleidman
-------------------------
Name: Carl Kleidman
Title: Managing Director
<PAGE>
EXHIBIT A
NOTICE OF EXERCISE
The undersigned hereby irrevocably elects to exercise, pursuant to
Section 2 of the Warrant Certificate accompanying this Notice of Exercise,
_______ Warrants of the total number of Warrants owned by the undersigned
pursuant to the accompanying Warrant Certificate, and herewith makes payment of
the Purchase Price of such shares in full.
---------------------------
Name of Holder
---------------------------
Signature
Address:
---------------------------
---------------------------
---------------------------
<PAGE>
EXHIBIT B
NOTICE OF CONVERSION
The undersigned hereby irrevocably elects to convert, pursuant to Section 7 of
the Warrant Certificate accompanying this Notice of Conversion, _______ Warrants
of the total number of Warrants owned by the undersigned pursuant to the
accompanying Warrant Certificate into shares of the Common Stock of the Company
(the "Shares").
The number of Shares to be received by the undersigned shall be calculated in
accordance with the provisions of Section 7.1 of the accompanying Warrant
Certificate.
--------------------------
Name of Holder
--------------------------
Signature
Address:
--------------------------
--------------------------
--------------------------
<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
January 9, 1998
