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Exhibit 10.3
PRINCETON VIDEO IMAGE, INC.
PLACEMENT AGENCY AGREEMENT
October 13, 1999
Xxxxx & Company Incorporated
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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
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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 Xxxxx & Company Incorporated, 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 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
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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 Xxxxxx Xxxxxx White & XxXxxxxxx, 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
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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, Xxxxx & Xxxxxxx, 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 counsel may reasonably request.
(d) You shall have received the Warrant in form and substance
acceptable to you and your counsel.
10. Indemnification. (a) The Company will indemnify and hold harmless
the Placement Agent, the directors and officers of the Placement Agent and each
person, if any, who controls the Placement Agent within the meaning of the Act
against any losses, claims, damages or liabilities, joint or several, to which
the Placement Agent or any such directors, officers or controlling persons may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon (i) any untrue statement or alleged untrue statement of any material fact
contained in the Offering Materials, as of their respective dates, or arise out
of or are 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 not
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misleading; or (ii) the Company's engagement of Xxxxx & Company Incorporated as
Placement Agent or any service the Placement Agent performs for the Company or
on its behalf pursuant to this Agreement, except to the extent that any such
loss, claim, damage or liability is found by a court of competent jurisdiction
in a judgment that has become final (in that it is no longer subject to appeal
or review) to have resulted directly and primarily from such Indemnified
Person's gross negligence or willful misconduct. Subject to subsection (c)
below, the Company will reimburse the Placement Agent or any such directors,
officers or controlling persons for any legal or other expenses reasonably
incurred by the Placement Agent or any such directors, officers or controlling
persons in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Company will not be
liable in any case to the extent that any such loss, claim, damage, liability or
action arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in the Offering Materials, as of
their respective dates, in reliance upon and in conformity with written
information furnished by and with respect to the Placement Agent specifically
for use in the preparation thereof. The Company shall not be required to
indemnify the Placement Agent or any such directors, officers or controlling
persons for any payment made to any claimant in settlement of any suit or claim
unless such payment is approved by the Company, which approval shall not be
unreasonably withheld or delayed. This indemnity agreement will be in addition
to any liability which the Company may otherwise have, but in no event shall an
indemnified party receive more than the amount of his claim.
(b) The Placement Agent will indemnify and hold harmless the
Company, its officers and directors and each person, if any, who controls the
Company within the meaning of the Act against any losses, claims, damages or
liabilities, joint or several, to which the Company, or any such directors,
officers or controlling persons may be or become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Offering Materials, as of
their respective dates, or arise out of or are 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 not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Offering Materials in
reliance upon and in conformity with written information furnished by and with
respect to the Placement Agent specifically for use in the preparation thereof;
and (subject to subsection (c) below) will reimburse the Company or any such
directors, officers or controlling persons for any legal or other expenses
reasonably incurred by the Company or any such director, officer or controlling
person in connection with investigating or defending any such loss, claim,
damage, liability or actions. The Placement Agent shall not be required to
indemnify the Company or any such directors, officers or controlling persons for
any payment made to any claimant in settlement of any suit or claim unless
payment is approved by the
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Placement Agent, which approval shall not be unreasonably withheld or delayed.
This indemnity agreement will be in addition to any liability the Placement
Agent may otherwise have, but in no event shall an indemnified party receive
more than the amount of his claim.
(c) Promptly after receipt by an indemnified party under
subparagraphs 10(a) or (b) of notice of the commencement of any action or other
proceeding (including governmental investigations) in respect of which indemnity
may be sought, such indemnified party will, if a claim in respect thereof is to
be made against the indemnifying party under such subparagraphs, promptly notify
the indemnifying party in writing of the commencement thereof; but the omission
to so notify the indemnifying party will not relieve it from any liability which
it may have to any indemnified party otherwise than under such subparagraph. In
case any such action shall be brought against any indemnified party, and it
shall promptly notify the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate in, and, to the extent that
it may wish, assume and control the defense thereof with counsel chosen by it
and after notice from the indemnifying party to such indemnified party of its
election so to assume and control such defense with counsel chosen by it, it
shall bear all expenses of such defense. Any such indemnified party shall have
the right to employ separate counsel in any such action and to participate in
the defense thereof, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless:
(i) the indemnifying party has agreed to pay such fees and
expenses; or
(ii) the indemnifying party shall have failed to assume the
defense of such action or proceeding and employ counsel reasonably
satisfactory to such indemnified party in any such action or
proceeding; or
(iii) the named parties to any such action or proceeding
(including any impleaded parties) include both such indemnified party
and the indemnifying party, and such indemnified party shall have been
advised by counsel that there may be one or more legal defenses
available to such party which are different from or additional to those
available to the indemnifying party (in which case, if such indemnified
party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of
such action or proceeding on behalf of such indemnified party).
The indemnifying party shall not, in connection with any one such
action or proceeding or separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the reasonable fees and expenses of more than
one separate firm of attorneys at any
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time for the indemnified party, which firm shall be designated in writing by the
indemnified party.
11. Contribution. In order to provide for contribution in circumstances
in which the indemnification provided for in Section 10(a) or 10(b) hereof is
for any reason held to be unavailable to any party entitled to such
indemnification, each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of losses, claims, damages and
liabilities of the nature contemplated by such indemnification provisions
(including any investigation, legal and other expenses incurred in connection
with, and amounts paid in settlement of, any action, suit or proceeding or any
claims asserted) to which the Company and the Placement Agent may be subject, in
such proportions so that the Placement Agent is responsible for that portion in
each case represented by the percentage that the respective placement fee
appearing in Section 4(c) of this Agreement bears to the offering price of the
Shares, and the Company is responsible for the remaining portion; provided,
however, that no person guilty of fraudulent misrepresentation shall be entitled
to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purpose of this Section 11, each person, if any, who
controls the Placement Agent within the meaning of Section 15 of the Act shall
have the same rights to contribution as the Placement Agent, and each person, if
any, who controls the Company within the meaning of Section 15 of the Act, each
officer of the Company and each director of the Company shall have the same
right to contribution as the Company, subject in each case to the prior
sentence. Any party entitled to contribution will, promptly after receipt of
notice of commencement of any action, suit or proceeding against such party in
respect of which claim for contribution may be sought, promptly notify the other
party or parties in writing of the commencement thereof, but the omission to so
notify such party or parties shall not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this Section 11. No party shall be liable for
contribution with respect to any action or claim settled without its consent.
12. Representations and Agreements to Survive Delivery. All
representations, warranties or agreements of the Company or of the Placement
Agent herein or in certificates delivered pursuant hereto shall remain operative
and in full force and effect regardless of any investigation made by or on
behalf of the Placement Agent or any controlling person, the Company, or any of
its officers, directors or controlling persons, and shall survive delivery of
the Shares.
13. Termination. Each of the Company's and the Placement Agent's
obligation to proceed hereunder is conditioned upon its continuing judgment that
market conditions in general, and as they relate to the Company's securities in
particular, are such as to continue to make appropriate the offering and sale of
the Shares in the manner provided for herein. Notwithstanding the foregoing,
this Agreement shall terminate if the
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sale of all of the Shares is not completed on or before November 15, 1999,
unless extended by the mutual agreement of the Company and the Placement Agent.
Upon any termination of this Agreement whether by the Company or the Placement
Agent, the obligations of the parties set forth in Sections 6(c), 10 and 11
shall survive termination of this Agreement.
14. Notices. All notices or communications hereunder, except as herein
otherwise specifically provided, shall be in writing and if sent to you shall be
mailed, delivered or telegraphed and confirmed to you c/o Allen & Company
Incorporated, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Xxxxxxx Senior,
with a copy to Xxxxxx Xxxxxx White & XxXxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX
00000, Attn: Xxx X. Xxxxxxxx, Esq., or, if sent to the Company, at 00 Xxxxxxxx
Xxxx, Xxxxxxxxxxxxx, XX 00000, Attn: Xxxxx Xxxxxxxx, with a copy to 000 Xxxxxxx
Xxxx Xxxx, Xxxxxxxxx, XX 00000, Attn: Xxxxxxx Xxxxx.
15. Benefits of the Agreement. This Agreement shall inure to the
benefit of and be binding upon the Company and the Placement Agent and their
respective successors and permitted assigns. This Agreement may not be assigned
by any party without the consent of the other party.
16. Applicable Law. This Agreement shall be governed by, construed and
enforced in accordance with the laws of the State of New York.
17. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
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Very truly yours,
PRINCETON VIDEO IMAGE, INC.
By:/s/ Xxxxxxxx X. Xxxxxxx
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Name: Xxxxxxxx X. Xxxxxxx
Title: Vice President of Finance and
Chief Financial Officer
XXXXX & COMPANY INCORPORATED
By: /s/ Xxx X. Xxxxxxx
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Name: Xxx X. Xxxxxxx
Title: Managing Director and
Chief Financial Officer
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