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Princeton Video Image - Placement Agency Agreement
PRINCETON VIDEO IMAGE, INC.
PLACEMENT AGENCY AGREEMENT
October 13, 1999
Allen & Company Incorporated 711 Fifth Avenue New York, New York 10022
Gentlemen:
Princeton Video Image, Inc., a New Jersey corporation (the "Company") hereby confirms its agreement with you as follows:
1. The Offering. The Company is offering to persons who qualify as "accredited investors," as that term is defined in Regulation D under the Securities Act of 1933 as amended (the "Act"), up to 1,634,547 shares of the Company's Common Stock (the "Shares"). The foregoing offer and sale of the Shares is hereinafter referred to as the "Offering." The Company has the right, in its sole discretion, to reject or cut back any subscription or any offer to purchase shares.
2. Appointment of Placement Agent. You are hereby appointed the exclusive placement agent of the Company (the "Placement Agent") during the Offering Period (as defined herein) for the purpose of assisting the Company in identifying qualified subscribers to purchase Shares (the "Subscribers"). The "Offering Period" shall commence on the date the Offering Materials (as defined herein) are first made available to you by the Company for delivery in connection with the Offering and shall terminate on or before the close of business on the earliest to occur of the closing of the sale of Shares or the termination of this Agreement. You hereby accept such agency and agree to assist the Company in identifying qualified Subscribers on a "best efforts" basis. Your agency hereunder may not be terminated by the Company, except upon termination of the Offering, upon the Placement Agent's failure to perform its obligations hereunder in all material respects, upon the Placement Agent's material breach of any of its representations and warranties contained in Section 7 hereof or upon gross negligence or willful misconduct on the part of the Placement Agent. It is understood that the offering and sale of the Shares is intended by all parties to be exempt from the registration requirements of the Act pursuant to Section 4(2) thereof and the rules and regulations of the Securities and Exchange Commission thereunder, including Rule 506 of Regulation D (the "Rules and Regulations").
3. Offering Materials. The Company has prepared and delivered to the Placement Agent a reasonable number of copies of (i) the Company's Annual Report on 2 Form 10-KSB for the fiscal year ended June 30, 1999; (ii) the Company's Current Reports on Form 8-K since June 30, 1999; (iii) the Company's press releases since June 30, 1999; (iv) certain risk factors relating to the transactions contemplated hereunder which are attached as Exhibit A to the Subscription Agreements relating to the Shares (the "Subscription Agreements"); and (v) such other documents, including exhibits to the foregoing reports on Forms 10-KSB and 8-K, as Subscriber (and Subscriber's attorney, accountant and/or other advisors) deemed pertinent in order for Subscriber to make an informed investment decision. Such documents are referred to herein as the "Offering Materials," except that if the Offering Materials shall be amended, the term "Offering Materials" shall refer to the Offering Materials as so amended from and after the time of delivery to you of such amendment. The Placement Agent shall deliver the Offering Materials to each Subscriber prior to investment.
4. Closing; Delivery; Placement Fees.
(a) It is anticipated that the closing of the purchase and sale of the Shares to Investors may be effected at a closing (the "Closing"), which shall take place at the offices of Allen & Company Incorporated, 711 Fifth Avenue, New York, New York 10022 at 10:00 a.m. on three business days' notice or such other time, date or place as shall be agreed upon by you and the Company (the "Closing Date").
(b) At the Closing, there shall be delivered to the Company on behalf of each applicable Subscriber executed copies of the Subscription Agreement to be entered into by the Company and each such Subscriber (the "Purchasers") as of such Closing Date, and there shall also be delivered to the Company on behalf of each applicable Purchaser the proportionate share of the purchase price of the Shares which such Purchaser is to purchase. Upon the Closing, the Company will deliver, or cause to be delivered, to the Purchasers certificates representing the Shares purchased by them.
(c) Simultaneous with the Closing, as provided in paragraph (b) above, the Company shall pay or cause to be paid to the Placement Agent a placement fee equal to 5% of the aggregate purchase price paid for the Shares by the Subscribers and warrants exercisable for 200,000 shares of the Company's Common Stock on terms mutually acceptable to the Company and the Placement Agent (the "Warrant") and shall reimburse the Placement Agent for its out-of-pocket expenses as provided in Section 6(c) hereof, against the presentation of bills therefor. If such bills are not available for presentation at the time of the Closing, then the Company shall reimburse the amount of the Placement Agent's reasonable estimate of such out-of-pocket expenses; in such event, the Placement Agent shall promptly provide the Company with an accounting of actual expenses when known, and the parties shall reconcile any amounts still owing among them.
5. Representations and Warranties of the Company. The Company hereby confirms for the benefit of the Placement Agent the representations and warranties
2 3 made by it to the Subscribers in the Subscription Agreements, to the extent applicable, and hereby further represents and warrants that this Agreement and the Warrant have been duly authorized, executed and delivered on behalf of the Company and constitute valid and binding agreements of the Company, enforceable against the Company in accordance with their terms, subject to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors' rights generally and to general principles of equity and except as rights to indemnity or contribution hereunder may be limited by Federal or state securities laws.
6. Covenants of the Company. The Company covenants and agrees with the Placement Agent that:
(a) During the Offering Period, the Company will notify the Placement Agent of any event of which it is aware as a result of which any of the Offering Materials would include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein in light of the circumstances under which they were made not misleading; and it will provide you with any amendment or supplement to the Offering Materials during the Offering Period. The Company will conduct the Offering in compliance with Section 4(2) of the Act and the Rules and Regulations and all applicable state securities laws and regulations.
(b) If required by law, the Company will use its best efforts to qualify the Shares for offer and sale under the Blue Sky or securities laws of such jurisdictions as you may designate and to continue such qualifications in effect for so long as may be required for purposes of the private placement of the Shares, except that the Company shall not be required in connection therewith or as a condition thereof to qualify as a foreign corporation or to execute a general consent to service of process in any state or to subject itself to taxation in any jurisdiction where it is not already subject to such taxation.
(c) The Company covenants and agrees with you that it will pay all expenses, fees and taxes in connection with (i) the preparation and delivery of the Offering Materials and all other materials delivered to prospective Subscribers, (ii) the furnishing of opinions of counsel for the Company and closing documents, and (iii) the qualification of the Shares for offer or sale under the securities laws of such jurisdictions as you may reasonably designate. The Company also agrees that it will reimburse you for your out-of-pocket expenses in connection with the Offering, and will pay the fees and expenses not to exceed $50,000 in the aggregate of Heller Ehrman White & McAuliffe, special counsel to the Placement Agent.
(d) The Company agrees to cooperate with the Placement Agent and its special counsel with respect to their due diligence investigation.
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7. Representations, Warranties and Covenants of the Placement Agent. The Placement Agent represents, warrants and covenants as follows:
(a) This Agreement has been duly authorized, executed and delivered by the Placement Agent and constitutes a valid and binding obligation of the Placement Agent, enforceable against it in accordance with its terms, subject to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors' rights generally and to general principles of equity and except as rights to indemnity or contribution hereunder may be limited by Federal or state securities laws.
(b) The Placement Agent will not make an offer of Shares by any form of general solicitation or general advertising in violation of Rule 502(c) of Regulation D under the Act, and the Placement Agent will conduct the Offering in accordance with all Federal and state securities laws applicable to the offering of the Shares.
(c) The Placement Agent shall not deliver to any offeree without the consent of the Company any information concerning the Offering other than the Offering Materials. The Placement Agent shall deliver, or cause to be delivered, the Offering Materials to each offeree prior to the sale of any Shares to such offeree.
(d) The Placement Agent is a registered broker dealer in good standing in every state in which offers and sales of the Shares will be made.
(e) The Placement Agent acknowledges that the Company has the right, in its sole discretion, to reject any Subscriber.
8. Conditions of the Company's Performance. The sale by the Company of the Shares and the obligations of the Company as provided herein shall be subject to the following conditions:
(a) The Company shall not have terminated the Offering, which shall be the decision of the Company in its sole discretion;
(b) The representations and warranties of the Placement Agent contained in Section 7 hereof are true and correct in all material respects as of the date hereof and as of each Closing Date (as if made on and as of such Closing Date); and
(c) The Placement Agent shall have performed its obligations hereunder in all material respects.
9. Conditions of Placement Agent's Performance. The purchase and sale of the Shares and the obligations of the Placement Agent as provided herein shall be subject to the accuracy in all material respects, as of the date hereof and each Closing
4 5 Date (as if made on and as of such Closing Date), of the representations and warranties of the Company herein, to the performance in all material respects by the Company of its obligations hereunder, and to the following additional conditions:
(a) You shall have received the opinion of Smith, Stratton, Wise, Heher & Brennan, counsel to the Company, in form and substance acceptable to your counsel; and
(b) You shall have received a certificate, dated as of each Closing Date, of an authorized executive officer of the Company to the effect that:
(i) The representations and warranties of the Company in this
Agreement and in the Subscription Agreements are true and correct in
all material respects as if made on and as of such Closing Date; and
the Company has complied with all the agreements and satisfied all the
conditions in all material respects on its part required by this
Agreement and the Subscription Agreements to be performed or satisfied
at or prior to such Closing Date; and
(ii) Except as set forth in the Offering Materials or in the
Subscription Agreements and subsequent to the date of the most recent
financial statements included with the Offering Materials, there has
not been any material adverse change in the condition (financial or
otherwise), business or results of operations of the Company and its
subsidiaries taken as a whole.
(c) The Company shall have furnished to you such certificates, in addition to those specifically mentioned herein, as you or your counsel may have reasonably requested, as to the accuracy and completeness at such Closing Date of any statement in the Offering Materials (other than statements provided by the Placement Agent for the Offering Materials) and as to such other matters as you or your counse...
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