Execution Copy
SECOND AMENDMENT TO
-------------------
NOTE PURCHASE AND SECURITY AGREEMENT
------------------------------------
THIS SECOND AMENDMENT TO NOTE PURCHASE AND SECURITY AGREEMENT (this
"Second Amendment") is dated as of April 4, 2003 and is made by and among
Princeton Video Image, Inc., a Delaware corporation (the "Seller"),
Presencia en Medios, S.A. de C.V., a Mexican corporation ("Presencia"), and
PVI Holding, LLC, a Delaware limited liability company ("PVI Holding"), as
a creditor to the Seller and as collateral agent.
RECITALS:
WHEREAS, Seller, Presencia and PVI Holding are parties to that certain
Note Purchase and Security Agreement, dated as of February 18, 2003, as
amended by the Amendment to Note Purchase and Security Agreement among the
parties thereto dated March 20, 2003 (as so amended, the "Agreement"); and
WHEREAS, Presencia delivered an Election Notice on March 31, 2003 (the
"March Election Notice") indicating that Xxxxxx X. Xxxxxxxx and Xxxxxxxx
Xxxx (together the "Designees") and Presencia would purchase an aggregate
of $1,000,000 of Convertible Notes at the Third Closing; and
WHEREAS, the Agreement provided that the Third Closing was to occur
within five (5) days after Presencia gave the March Election Notice; and
WHEREAS, notwithstanding delivery of the March Election Notice,
Presencia has requested that the parties to the Agreement agree that: (i)
Presencia shall purchase $650,000 of Convertible Notes at the Third
Closing, (ii) the Designees shall not be required to purchase any
Convertible Notes at the Third Closing, (iii) the Third Closing be held not
later than ten (10) days following its delivery of the March Election
Notice, and (iv) Presencia shall have the option to purchase an additional
$350,000 of Convertible Notes at a Fourth Closing (as hereinafter defined)
to be held five (5) days after it delivers a second notice of election; and
WHEREAS, the parties to the Agreement wish to amend the Agreement to
reduce the amount of the Third Closing Purchase Price to $650,000, to
extend the time in which the Third Closing may occur, and to provide
Presencia with an option to purchase $350,000 of Convertible Notes at a
Fourth Closing pursuant to a notice of election to be delivered within
thirty (30) days after the Third Closing Date;
NOW, THEREFORE, for good and adequate consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereby agree as
follows:
1. All defined terms used herein and not otherwise defined shall have
the meaning ascribed thereto in the Agreement.
2. The following definitions set forth in Section 1 of the Agreement
are hereby amended by deleting such definitions in their entirety and
substituting in lieu thereof the following:
"Convertible Notes" shall mean (i) the promissory note in the amount
of $1,500,000 executed and delivered by the Seller to the Purchaser at the
First Closing (as hereinafter defined), (ii) the promissory note in the
amount of $500,000 executed and delivered by the Seller to the Purchaser at
the Second Closing (as hereinafter defined), (iii) the promissory note(s),
if any, in the aggregate amount of $650,000 executed and delivered by the
Seller to the Purchasers at the Third Closing (as hereinafter defined), and
(iv) the promissory note(s), if any, in the aggregate amount of $350,000
executed and delivered by the Seller to the Purchasers at the Fourth
Closing all in substantially the form attached hereto as Annex A.
"Election Notice" shall mean (i) for purposes of the Third Closing, a
notice by Presencia to the Seller in which Presencia agrees that it or its
designees will purchase $650,000 of Convertible Notes at the Third Closing,
and (ii) for purposes of the Fourth Closing, a notice by Presencia to the
Seller in which Presencia agrees that it or its designees will purchase
$350,000 of Convertible Notes at the Fourth Closing.
"Purchaser" shall mean, (i) for purposes of the First Closing and the
Second Closing, Presencia, and (ii) for purposes of the Third Closing and
Fourth Closing, Presencia and/or its designee(s) as specified in the
applicable Election Notice and approved by PVI Holding, such approval not
to be unreasonably withheld or delayed.
3. Section 2 of the Agreement is hereby amended and restated in its
entirety as follows:
"2. Sale and Purchase of Convertible Notes.
2.1 Agreement to Purchase and Sell. Upon the terms and subject to
the conditions set forth in this Agreement and upon the representations and
warranties made herein, the Seller agrees to sell to the Purchasers, and
the Purchasers agree to purchase from the Seller, the Convertible Notes,
provided, however, that the Purchasers shall have no obligation to
purchase, and shall not otherwise be in breach or violation of this
Agreement as a result of their decision not to deliver an Election Notice,
and the Seller shall have no obligation to sell, Convertible Notes at the
Third Closing (as hereinafter defined) unless Presencia gives an Election
Notice to the Seller on or before March 31, 2003 or at the Fourth Closing,
unless Presencia gives an Election Notice to the Seller within thirty (30)
days of the Third Closing Date.
2.2 Purchase Price. The aggregate purchase price to be delivered
at the First Closing is $1,500,000 (the "First Closing Purchase Price"),
the aggregate purchase price to be delivered at the Second Closing is
$500,000 (the "Second Closing Purchase Price"), the aggregate purchase
price to be delivered at the Third Closing is $650,000 (the "Third Closing
Purchase Price") and the aggregate purchase price to be delivered at the
Fourth Closing (as such terms are defined below) is $350,000 (the "Fourth
Closing Purchase Price").
2.3 Closings. The closing of the purchase and sale of a
Convertible Note in the principal amount equal to the First Closing
Purchase Price is occurring simultaneously with the execution of this
Agreement (the "First Closing") at the offices of Smith, Stratton, Wise,
Xxxxx & Xxxxxxx, LLP, 000 Xxxxxxx Xxxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx on the
date hereof. The closing of the purchase and sale of a Convertible Note in
the principal amount equal to the Second Closing Purchase Price (the
"Second Closing") will occur at the offices of Smith, Stratton, Wise, Xxxxx
& Xxxxxxx, LLP, 000 Xxxxxxx Xxxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx on March 20,
2003 (the "Second Closing Date"). The closing of the purchase and sale of
one or more additional Convertible Notes in the aggregate principal amount
equal to the Third Closing Purchase Price (the "Third Closing") shall occur
within ten (10) days after Presencia gives an Election Notice (the "Third
Closing Date") to the Seller and shall be held at the offices of Smith,
Stratton, Wise, Xxxxx & Xxxxxxx, LLP, 000 Xxxxxxx Xxxx Xxxx, Xxxxxxxxx, Xxx
Xxxxxx. The closing (the "Fourth Closing") of the purchase and sale of one
or more additional Convertible Notes in the aggregate principal amount
equal to the Fourth Closing Purchase Price shall occur within five (5) days
after Presencia gives an Election Notice (the "Fourth Closing Date") to the
Seller and shall be held at the offices of Smith, Stratton, Wise, Xxxxx &
Xxxxxxx, LLP, 000 Xxxxxxx Xxxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx.
2.4 Closing Actions. Subject to the terms of this Agreement,
(a) at the First Closing,
(i) the Purchaser is delivering the First Closing Purchase
Price in the amount of $1,500,000 to the Seller by wire transfer to such
account previously specified by the Seller;
(ii) the Seller is delivering a Convertible Note in the face
amount of the First Closing Purchase Price to the Purchaser;
(iii) the Seller is delivering to each of Presencia and PVI
Holding a check in the amount of $25,000 payable to it in immediately
available funds for the reimbursement of fees and expenses described in
Section 19 hereof.
(iv) the Purchaser and PVI Holding are delivering to each
other an intercreditor agreement (the "Intercreditor Agreement");
(v) the Seller and Cablevision are delivering to each other
an amendment to the Option Agreement by and between the Seller and
Cablevision dated as of June 25, 2002 (the "Option Agreement");
(vi) the Seller and Cablevision are delivering to each other
an amendment to the Proprietary Information Escrow Agreement by and among
the Seller, Cablevision and Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP, dated as
of June 25, 2002 (the "Escrow Agreement");
(vii) the Seller and each of Xxxxx Xxxx and Xxxxxxx Xxxxxxxx
are delivering to each other employment and stock option agreements;
(viii) the Seller is delivering to PVI Holding an amended
and restated convertible promissory note against delivery by PVI Holding of
the Convertible Promissory Note dated as of June 25, 2002 previously issued
to PVI Holding by the Seller (the "Amended and Restated PVI Holding Note");
(ix) PVI Holding is delivering to the Seller its waiver and
consent with respect to the transactions contemplated hereunder to the
extent required under the Stock Purchase Agreement or the PVI Holding Note
Purchase Agreement, including without limitation its waiver of its rights
pursuant to Section 6.2 of the Stock Purchase Agreement as such rights
relate to the issuance of shares of common stock upon exercise of the
warrant described in Section 2.4(d)(vi) that may be delivered in connection
with the Fourth Closing;
(x) the Seller is delivering to the Purchaser an opinion of
the Seller's counsel in a form as agreed to by the parties;
(xi) the Seller is delivering to the Purchaser a
certificate, executed on behalf of the Seller by its Secretary, dated as of
the Closing Date, certifying the resolutions of the Seller's Board
approving the transactions contemplated by this Agreement and the other
Transaction Documents;
(xii) the Seller and the parties to the Reorganization
Agreement are delivering to each other an amendment thereto and their
consent to the transactions contemplated hereby;
(xiii) Cablevision is delivering to the Seller its waiver
and consent with respect to the transactions contemplated hereunder to the
extent required under the Option Agreement; and
(xiv) following its receipt of the First Closing Purchase
Price, the Seller is delivering to Presencia $150,000 to be applied to the
principal amounts outstanding as of the date of such closing with respect
to the Contingent Service Fee (as such term is defined in the Consultant
Services Agreement) for 2001.
(b) at the Second Closing:
(i) Purchaser will deliver an amount equal to the Second
Closing Purchase Price by wire transfer to such account previously
specified by the Seller:
(ii) the Seller will deliver a Convertible Note in the
aggregate principal amount of the Second Closing Purchase Price to the
Purchaser;
(iii) the Seller will deliver to the Purchaser a
certificate, executed on behalf of the Seller by its Secretary, dated as of
the Second Closing Date, certifying the resolutions of the Seller's Board
and any duly authorized committee thereof, approving the transactions
contemplated by this Agreement and the other Transaction Documents; and
(iv) the Seller will deliver to the Purchaser an opinion of
the Seller's counsel in substantially the form delivered at the First
Closing.
(c) at the Third Closing, subject to Presencia's delivery of an
Election Notice, which shall be in Presencia's sole discretion, and PVI
Holding's approval of Presencia's designee(s) (if any) designated therein,
which approval will not be unreasonably withheld or delayed:
(i) to the extent it is not already a party to this
Agreement and the Intercreditor Agreement, each Purchaser will deliver a
joinder agreement in the form attached hereto as Annex B;
(ii) each Purchaser will deliver an amount equal to the face
amount of the Convertible Note to be issued to it to the Seller by wire
transfer to such account previously specified by the Seller, it being
agreed that the Purchasers will deliver an aggregate amount equal to the
Third Closing Purchase Price at the Third Closing;
(iii) the Seller will deliver Convertible Notes in the
aggregate principal amount of the Third Closing Purchase Price to the
Purchasers;
(iv) the Seller will deliver to Presencia amended Presencia
Warrant Certificates (the "Amended Presencia Warrant Certificates") against
delivery of the Presencia Warrant Certificates;
(v) the Seller will deliver to PVI Holding warrants to
purchase 2,658 and 106,329 shares of the Seller's common stock
substantially in the form of the Special Warrants, as amended;
(vi) following its receipt of the Third Closing Purchase
Price, the Seller will deliver to Presencia an amount equal to the excess
of $300,645 plus accrued interest, if any, over $150,000, on account of
amounts accrued as of the date of such closing with respect to the
Contingent Service Fee (as such term is defined in the Consultant Services
Agreement) for 2001;
(vii) the Seller and PVI Holding will deliver to each other
an amendment to the Stock Purchase Agreement in the form attached hereto as
Exhibit 2.4(b)(vii);
(viii) the Seller will deliver to the Purchasers an opinion
of the Seller's counsel in substantially the form delivered at the First
Closing;
(ix) if neither Xxxxx Xxxx nor Xxxxxxx Xxxxxxxx is then
serving as a co-CEO of the Seller (or as the sole CEO if one of them shall
cease to so serve), the Seller shall have delivered to the Purchasers and
PVI Holding a certificate executed by one of its officers stating that the
representations and warranties made by the Seller in Section 4 hereof are
true and correct as of the Third Closing Date with the same force and
effect as if they had been made on and as of said date; and
(x) the Seller will deliver to the Purchaser a certificate,
executed on behalf of the Seller by its Secretary, dated as of the Third
Closing Date, certifying the resolutions of the Seller's Board approving
the transactions contemplated by this Agreement and the other Transaction
Documents.
(d) at the Fourth Closing, subject to Presencia's delivery of an
Election Notice, which shall be in Presencia's sole discretion, and PVI
Holding's approval of Presencia's designee(s) (if any) designated therein,
which approval will not be unreasonably withheld or delayed:
(i) to the extent it is not already a party to this
Agreement and the Intercreditor Agreement, each Purchaser will deliver a
joinder agreement in the form attached hereto as Annex B;
(ii) each Purchaser will deliver an amount equal to the face
amount of the Convertible Note to be issued to it to the Seller by wire
transfer to such account previously specified by the Seller, it being
agreed that the Purchasers will deliver an aggregate amount equal to the
Fourth Closing Purchase Price at the Fourth Closing;
(iii) the Seller will deliver Convertible Notes in the
aggregate principal amount of the Fourth Closing Purchase Price to the
Purchasers;
(iv) the Seller will deliver to the Purchaser a certificate,
executed on behalf of the Seller by its Secretary, dated as of the Fourth
Closing Date, certifying the resolutions of the Seller's Board and any duly
authorized committee thereof, approving the transactions contemplated by
this Agreement and the other Transaction Documents;
(v) the Seller will deliver to the Purchasers an opinion of
the Seller's counsel in substantially the form delivered at the First
Closing;
(vi) if neither Xxxxx Xxxx nor Xxxxxxx Xxxxxxxx is then
serving as a co-CEO of the Seller (or as the sole CEO if one of them shall
cease to so serve), the Seller shall have delivered to the Purchasers and
PVI Holding a certificate executed by one of its officers stating that the
representations and warranties made by the Seller in Section 4 hereof are
true and correct as of the Fourth Closing Date with the same force and
effect as if they had been made on and as of said date; and
(vii) if Presencia requests, the Seller will deliver to one
or more of the Purchasers who are Presencia's designees (including, without
limitation, directors, officers and direct or indirect shareholders of
Presencia, other than Xxxxxxx Xxxx, Xxxxx Xxxx or Xxxxxxx Xxxxxxxx)
warrants to purchase up to an aggregate of 100,000 shares of the Seller's
common stock at an exercise price of $1.50 per share and with a term of
four (4) years, substantially in the form of the Amended Presencia Warrant
Certificates."
3. All references to the "First Closing" and the "Second Closing" in
the waiver and consents delivered by each of PVI Holding, LLC and Presencia
en Medios, S.A. de C.V. at the First Closing shall be deemed to mean the
"First and Second Closings" and the "Third and Fourth Closings",
respectively.
4. By signing this Second Amendment, the parties to the Agreement
acknowledge and agree that: (i) the March Election Notice shall be deemed
to be an Election Notice by Presencia for the purchase by Presencia of
$650,000 of Convertible Notes, (ii) Presencia has no obligation to purchase
Convertible Notes in excess of $650,000 at the Third Closing, and (iii) the
designees designated in the March Election Notice have no obligation to
purchase Convertible Notes at the Third Closing nor any liability to the
Seller as a result of Presencia's delivery of the March Election Notice.
5. Except as amended hereby, the Agreement shall remain in full force
and effect.
6. This Second Amendment may be executed in any number of
counterparts, and each such counterpart hereof shall be deemed to be an
original instrument, but all such counterparts together shall constitute
but one agreement.
***
IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to Note Purchase and Security Agreement to be duly executed on
their behalf.
PRINCETON VIDEO IMAGE, INC.
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
-----------------------------------
Title: COO
----------------------------------
PRESENCIA EN MEDIOS, S.A. DE C.V.
By: /s/ Xxxxx Xxxx
-------------------------------------
Name: Xxxxx Xxxx
-----------------------------------
Title:
----------------------------------
PVI HOLDING, LLC
By: /s/ Xxxx Xxxxxxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxxxxxx
-----------------------------------
Title: EVP Engineering & Technology
----------------------------------
Cablevision Systems Corporation hereby consents to the execution and
delivery of this Second Amendment and to the transactions contemplated
hereby and waives any breach or violation of the Option Agreement that may
result from such actions. This waiver is limited to the actions
contemplated by this Second Amendment and shall not be deemed to be a
waiver of any rights not specifically set forth herein.
CABLEVISION SYSTEMS CORPORATION
By: /s/ Xxxx Xxxxxxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxxxxxx
-----------------------------------
Title: EVP Technology
----------------------------------
