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Exhibit 2.2
EXECUTION COPY
AMENDMENT AGREEMENT
THIS AMENDMENT AGREEMENT (this "Agreement") is dated as of February 4,
2001 and is made by and among Presencia en Medios, S.A., a Mexican corporation,
Xxxxxxx Xxxx, Xxxxx Xxxx and Xxxxxxx Xxxxxxxx, Presence in Media LLC, a Delaware
limited liability company, Virtual Advertisement LLC, a Delaware limited
liability company, PVI LA, LLC, a Delaware limited liability company, Princeton
Video Image, Inc., a New Jersey corporation, and Princeton Video Image Latin
America, LLC, a New Jersey limited liability company.
PRELIMINARY STATEMENTS
A. The parties hereto are parties to a Reorganization Agreement dated
as of December 28, 2000 (the "Reorganization Agreement").
B. The Purchaser (as defined in the Reorganization Agreement) has asked
members of the Seller Group (as defined in the Reorganization Agreement) to
waive certain rights provided to them by the Reorganization Agreement and to
become parties to a Shareholders Agreement to be executed in connection with a
transaction between the Purchaser and a third party.
C. In consideration of the matters set forth in Paragraph B of these
Preliminary Statements, the parties hereto wish to amend certain sections of the
Reorganization Agreement and to provide for the issuance by the Purchaser to the
Seller (as defined in the Reorganization Agreement) of warrants to purchase the
Purchaser's common stock.
In consideration of the premises and the mutual promises hereinafter
set forth, the parties hereby agree as follows:
1. Definitions. All capitalized terms used in this Agreement shall have
the meanings assigned to them in the Reorganization Agreement.
2. Amendment of Section 2.6(a). Section 2.6(a) of the Reorganization
Agreement is hereby amended to read in its entirety as follows:
"(a) Subject to payment to the Purchaser of claims
under the indemnity provisions or Section 8.7 of this Agreement and subject
further to Section 9.4 hereof and except as provided in this Section 2.6, the
Purchaser shall hold the Escrow Shares for the exclusive benefit of the
Purchaser until released as provided in this Section 2.6 (provided that the
Escrow Shares shall remain in escrow for such additional time as is necessary to
permit the resolution of any disputes). The parties further agree that the
Purchaser shall be entitled to set off from the Escrow Shares a number of Escrow
Shares having a Fair Market Value at the time of setoff equal to any amounts
that any member of the Seller Group is required to pay to the Purchaser or its
officers, directors, employees, agents or Subsidiaries under this Agreement, or
in the case of a violation of Section 8.7 of this Agreement, all of
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the Escrow Shares, provided that (i) any Escrow Shares that the Purchaser seeks
to set off shall remain in escrow until the resolution of any disputes relating
to the amount at issue, and (ii) prior to setting off any Escrow Shares under
this Section 2.6, the Purchaser shall send to the Seller a written notice
setting forth with reasonable specificity the nature of the claim, the amount
claimed and any additional information reasonably necessary to allow the Seller
to evaluate the validity of the claim under the terms of this Agreement.
Following receipt of such written notice, the Seller shall have thirty (30)
calendar days to evaluate and, at its own expense and at no cost or unreasonable
burden to the Purchaser or its officers, directors, employees, agents or
Subsidiaries, investigate the merits of the claim. If the Seller fails to
deliver a written notice to the Purchaser challenging such claim within such
30-day period, and if the Seller does not pay such claim in cash, the parties
agree that the Purchaser shall be entitled to deduct from the Escrow Shares a
number of Escrow Shares with a Fair Market Value equal to the entire unpaid
amount of such claim, or in the case of a violation of Section 8.7 of this
Agreement, all of Escrow Shares, such shares shall no longer be part of the
Escrow Shares and the Seller and LLC-1 shall have no further right, title or
interest in or to such shares. In the event that the Seller delivers to the
Purchaser a written notice within such 30-day period challenging the validity or
amount of such claim, the parties agree to make a good faith effort to resolve
the dispute through negotiation within ten (10) days of the date on which such
written notice is delivered to the Purchaser. In the event that no resolution is
reached within such 10-day period (or such longer period as the parties agree to
in writing), either party may refer such dispute to arbitration in accordance
with Section 20 of this Agreement. On the second anniversary of the Closing
Date, the Escrow Sale Shares and the Escrow Merger Shares shall be delivered to
the Seller and LLC-1, respectively; provided, however, that the Purchaser shall
at all times retain a number of Escrow Shares with a Fair Market Value equal to
one hundred ten percent (110%) of any amount that is in dispute (or all of the
Escrow Shares if the Fair Market Value of the Escrow Shares is less than one
hundred ten percent (110%) of such amount); provided further, that as soon as
reasonably possible following the resolution of any dispute, the Purchaser shall
deliver the Escrow Sale Shares and the Escrow Merger Shares which were withheld
in connection with such dispute but not set-off by the Purchaser to the Seller
and LLC-1, respectively. Notwithstanding anything to the contrary contained in
this Section 2.6(a), the Seller may, at its option, pay in cash any amounts due
to the Purchaser hereunder with respect to which the Purchaser would otherwise
be entitled to retain Escrow Shares."
3. Amendment of Section 7.1(a). Section 7.1(a) of the Reorganization
Agreement is hereby amended to read in its entirety as follows:
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"(a) Board Representation. As used herein "Required
Number of Directors" shall mean a number of members of the PVI Board determined
as follows:
From and after the Closing
Date, if the number of shares
of PVI Common Stock held by
the Seller Group represents a
percentage of all outstanding then the number of Required
PVI Common Stock that is Directors is
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Greater than 10% 3
Greater than 3% but less than or equal to 10% 1
provided that from and after the first date after the Closing Date on which the
number of shares of PVI Common Stock held by the Seller Group is less than fifty
percent (50%) of the number of shares of PVI Common Stock held by the Seller
Group immediately following the Closing, the Required Number of Directors shall
be reduced to zero. From and after the Closing Date, the Purchaser agrees to
take such action as may be necessary to (i) nominate and recommend for election
the Required Number of Directors designated by the Seller; (ii) as long as the
Required Number of Directors is at least one (1), nominate as a director of each
of (w) the Corporation, (x) any entity of which the Corporation is a Subsidiary
(other than any entity of which the Purchaser is a direct or indirect
Subsidiary), (y) any entity which is a Subsidiary of the Corporation and (z) any
Subsidiary of the Purchaser as to which a member of the PVI Board who is not a
full-time employee of the Purchaser is then serving as a director which
Subsidiary is actively undertaking business or has conducted or proposes to
conduct any debt or equity financing other than with the Purchaser or any of its
Subsidiaries, one (1) individual designated by the Seller and at any time when
the Purchaser or any of its Subsidiaries owns a majority of the voting
securities of such entity cause the election as a director of such designee at
each annual meeting of shareholders of such entity, provided that this
subsection (ii) of this Section 7.1(a) shall not apply to the board of directors
of the Corporation at any time when Xxxxx Xxxx or Xxxxxxx Xxxxxxxx is a member
of such board of directors; and (iii) as long as the Required Number of
Directors is at least one (1), appoint to such committees of the PVI Board as
the Seller shall request and the nominating committee shall approve, such
approval not to be unreasonably withheld (provided that such committees shall
constitute not less than one-half of the committees of the PVI Board and shall
include the nominating committee and the executive committee at any time when
such committees exist) one (1) of the members of the PVI Board that was
designated by the Seller. The initial designees of the Seller to the PVI Board
shall be Xxxxxx Xxxxxx, Xxxxx Xxxxx Xxxxx and Xxxxxxx Xxxx. The Purchaser or its
Subsidiary, as applicable, shall provide the Seller with not less than 75 days'
prior notice of any meeting at which directors are to be elected. The Seller
Shall give notice to the Purchaser or its Subsidiary no later than 60 days prior
to such meeting of the persons
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designated by it as nominees for election as directors. If the Seller fails to
give notice to the Purchaser or its Subsidiary as provided above, the designees
of the Seller then serving as directors shall be its designees for re-election.
In the event a designee of the Seller is unwilling or unable to serve as a
director of a Subsidiary of the Purchaser or on the PVI Board or a committee
thereof, the Seller shall be entitled to designate a replacement member as a
director of such Subsidiary or to the PVI Board or a committee thereof, as the
case may be, which the Purchaser agrees to recommend for election or appointment
at any applicable meeting of the PVI Board or shareholders of the Purchaser or
such Subsidiary. All members of the Seller Group shall vote all shares over
which they exercise voting control in favor of the designees of the Seller. If
the shareholders of the Purchaser do not elect the designee(s) of the Seller as
director(s) of the Purchaser, the Purchaser shall take all action required to
increase the size of its Board of Directors by the number of designees not
elected and shall appoint such designees to fill such newly-created
directorships. The Seller agrees that it may not designate an employee of the
Purchaser or any Subsidiary of the Purchaser for election to the board of
directors of a Subsidiary of the Purchaser, the PVI Board, or any committee
thereof, unless such board of directors or the PVI Board already contains an
employee of the Purchaser other than the Chairman and the Chief Executive
Officer of the Purchaser. So long as the Required Number of Directors is at
least one (1), a designee of the Seller shall be entitled to receive prompt
notice of, and to attend, meetings of all committees of the PVI Board of which a
designee of the Seller is not a member."
4. Amendment of Section 8.9. Section 8.9 of the Reorganization
Agreement is hereby amended to read in its entirety as follows:
"8.9 Termination. Subject to Section 9.4 hereof, the
obligations of the members of the Seller Group pursuant to Sections 8.4 and 8.5
of this Agreement shall terminate on the earliest of (i) the consummation of the
Second Closing (as such term is defined in the Stock and Warrant Purchase
Agreement dated as of February 4, 2001 among the Purchaser and XXX Xxxxxxx,
XXX), (xx) Xxxxxxxx 0, 0000, (xxx) the first date on which the Seller Group owns
in the aggregate less than ten percent (10%) of the outstanding PVI Common
Stock, (iv) the date on which Xxxxxx X. Xxxxxxxxx ceases to be the chief
executive officer of the Purchaser and (v) the date on which any third party or
"group" (within the meaning of Section 13(d)(3) of the Securities Exchange Act
of 1934, as amended) (other than the Seller Group) acquires thirty percent (30%)
or more of PVI Common Stock except in a transaction approved by the PVI Board,
the obligations of the members of the Seller Group pursuant to Section 8.6 of
this Agreement and the proxy referred to in the last sentence of Section 8.6
shall terminate on the earliest to occur of the dates set forth in the preceding
subsections (ii) through (v), and the obligations of the members of the Seller
Group pursuant to the remainder of Section 8 of this Agreement shall terminate
on the fourth anniversary of the date of this Agreement, provided that the
obligations of the members of the Seller Group pursuant to Section 8.7 will
terminate if Purchaser or any of its Affiliates breaches an obligation under the
Transaction Documents and fails to cure such breach within 10 days after notice
from the Seller."
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5. Amendment of Section 10.2. Section 10.2 of the Reorganization
Agreement is hereby amended to read in its entirety as follows:
"10.2 Cut-Off Date. By the Purchaser or the Seller upon five
(5) days' notice to the other if the Closing shall not have occurred on or
before July 31, 2001 or such other date, if any, as the Seller and the Purchaser
shall agree upon in writing;"
6. Warrants. Concurrently with the consummation of the Second Closing,
the Purchaser will deliver to the Seller warrants (the "Warrants") which entitle
the Seller to purchase 500,000 shares of the Purchaser's common stock at any
time after the date of issuance (the "Issuance Date") until and including the
third anniversary of the Issuance Date (the "Expiration Date") at the following
prices:
(A) $8.00 per share from the Issuance Date until and including the
first anniversary of the Issuance Date;
(B) $9.00 per share from the first anniversary of the Issuance Date
until and including the second anniversary of the Issuance Date; and
(C) $10.00 per share from the second anniversary of the Issuance Date
until and including the Expiration Date,
on the terms set forth in the form of the warrant certificate attached hereto as
Exhibit A.
7. Delivery of Shareholders Agreement and Side Agreement. Concurrently
with the execution of this Agreement, the members of the Seller Group have
delivered to the Purchaser the Shareholders Agreement and the Side Agreement,
each dated as of February 4, 2001 and each among the Purchaser and the other
parties named therein.
8. Remainder of Agreement Unaffected. Except as specifically provided
herein, the Reorganization Agreement shall remain in full force and effect and
shall be unaffected by this Agreement.
9. Counterparts. This Agreement 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.
10. Effective Date. This Agreement shall become effective immediately
prior to the consummation of the First Closing (as such term is defined in the
Stock and Warrant Purchase Agreement dated as of February 4, 2001 between the
Purchaser and PVI Holding, LLC).
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on their behalf.
PRINCETON VIDEO IMAGE, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxx
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Title: CEO
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PRINCETON VIDEO IMAGE
LATIN AMERICA, LLC
By: /s/ Xxxxxx X. Xxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxx
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Title: CEO
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SELLER:
PRESENCIA EN MEDIOS, S.A.
By: /s/ Xxxxx Xxxx
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Name: Xxxxx Xxxx
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Title: Director General
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PRESENCE IN MEDIA LLC
By: /s/ Xxxxx Xxxx
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Name: Xxxxx Xxxx
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Title: Director General
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VIRTUAL ADVERTISEMENT LLC
By: /s/ Xxxxx Xxxx
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Name: Xxxxx Xxxx
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Title: Director General
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PVI LA, LLC
By: /s/ Xxxxx Xxxx
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Name: Xxxxx Xxxx
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Title: Director General
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DESIGNATED PARTIES:
/s/ By Power of Attorney Xxxxx Xxxx
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Xxxxxxx Xxxx
/s/ Xxxxx Xxxx
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Xxxxx Xxxx
/s/ Xxxxxxx Xxxxxxxx
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Xxxxxxx Xxxxxxxx
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EXHIBIT A
FORM OF WARRANT
As attached to the Reorganization Agreement as Schedule 1.1A , Form of
Warrant for Groups A-F, with modifications to provide for the purchase price
provided in this Agreement and to delete Section 10 thereof regarding parallel
warrants.
