EXHIBIT 1
AVID TECHNOLOGY, INC.
COMMON STOCK PURCHASE AGREEMENT
AVID TECHNOLOGY, INC.
COMMON STOCK PURCHASE AGREEMENT
This Common Stock Purchase Agreement (this "Agreement") is made
and entered into as of March 22, 1997, by and between Avid
Technology, Inc., a Delaware corporation (the "Company"), and
Intel Corporation, a Delaware corporation (the "Investor").
R E C I T A L
WHEREAS, the Company desires to sell to the Investor, and the
Investor desires to purchase from the Company, shares of the
Company's Common Stock, $0.01 par value per share ("Common
Stock"), on the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the foregoing recital, the
mutual promises hereinafter set forth, and other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. AGREEMENT TO PURCHASE AND SELL STOCK.
1.1 Authorization. As of the Closing (as defined below),
the Company's Board of Directors will have authorized the
issuance, pursuant to the terms and conditions of this Agreement,
of 1,552,632 shares (the "Purchase Shares") of the Company's
Common Stock.
1.2 Agreement to Purchase and Sell Common Stock. The
Company hereby agrees to sell to the Investor at the Closing, and
the Investor agrees to purchase from the Company at the Closing,
the Purchased Shares at a price per share equal to the Per Share
Purchase Price.
1.3 Per Share Purchase Price. The "Per Share Purchase
Price" shall be $9.50 per share.
2. CLOSING
2.1 The Closing. The purchase and sale of the Purchased
Shares will take place at the offices of Venture Law Group, A
Professional Corporation, 0000 Xxxx Xxxx Xxxx, Xxxxx Xxxx,
Xxxxxxxxxx 00000 at 10:00 a.m. California time, within three (3)
business days after the conditions set forth in Articles 5 and 6
have been satisfied, or at such other time and place as the
Company and the Investor mutually agree upon (which time and
place are referred to in this Agreement as the "Closing"). At
the Closing, the Company will send to the Investor via
appropriate overnight courier mutually agreeable to the Company
and the Investor, a certificate representing the Purchased
Shares, , and will cause the delivery of such certificate to the
Investor on the first business day following the Closing, against
delivery to the Company by the Investor at the Closing of the
full purchase price of the Purchased Shares, paid by wire
transfer of funds to the Company.
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3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents and warrants to the Investor that the
statements in this Section 3 are true and correct, except as set
forth in the SEC Documents or the Disclosure Letter from the
Company dated March 22, 1997 (the "Disclosure Letter").
3.1 Organization, Good Standing and Qualification. The
Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all
corporate power and authority required to (a) carry on its
business as presently conducted, and (b) enter into this
Agreement, the Investor Rights Agreement (as defined in Section
5.8) and the Development Agreement (as defined in Section 5.9)
and to consummate the transactions contemplated hereby and
thereby. The Company is qualified to do business and is in good
standing in each jurisdiction in which the failure to so qualify
would have a Material Adverse Effect. As used in this Agreement,
"Material Adverse Effect" means a material adverse effect on, or
a material adverse change in, or a group of such effects on or
changes in, the business, operations, financial condition,
results of operations, assets or liabilities of the Company and
its subsidiaries taken as a whole.
3.2 Capitalization. As of the date of this Agreement the
capitalization of the Company is as follows:
(a) Preferred Stock. A total of 1,000,000 authorized
shares of Preferred Stock, $0.01 par value per share (the
"Preferred Stock"), none of which is issued or outstanding.
(b) Common Stock. A total of 50,000,000 authorized
shares of Common Stock, $0.01 par value, of which 21,450,894
shares are issued and outstanding as of March 17, 1997. All of
such outstanding shares are validly issued, fully paid and non-
assessable. No such outstanding shares were issued in violation
of any preemptive right.
(c) Options, Warrants, Reserved Shares. Except for
the plans set forth in the SEC Documents (as defined below) (the
"Plans"), there are no outstanding options, warrants, rights
(including conversion or preemptive rights) or agreements for the
purchase or acquisition from the Company of any shares of its
capital stock or any securities convertible into or ultimately
exchangeable or exercisable for any shares of the Company's
capital stock. Except for any stock repurchase rights of the
Company under its plans described in the SEC Documents, no shares
of the Company's outstanding capital stock, or stock issuable
upon exercise, conversion or exchange of any outstanding options,
warrants or rights, or other stock issuable by the Company, are
subject to any rights of first refusal or other rights to
purchase such stock (whether in favor of the Company or any other
person), pursuant to any agreement, commitment or other
obligation of the Company.
3.3 Subsidiaries. The Company does not presently own or
control, directly or indirectly, any interest in any other
corporation, partnership, trust, joint venture, association or
other entity other than as set forth in the SEC Documents (the
"Subsidiaries"). The Company
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holds of record or beneficially all of the issued and outstanding
capital stock of each of the Subsidiaries.
3.4 Due Authorization. All corporate action on the part of
the Company, its officers, directors and shareholders necessary
for the authorization, execution, delivery of, and the
performance of all obligations of the Company under, this
Agreement, the Investor Rights Agreement and the Development
Agreement, and the authorization, issuance, reservation for
issuance and delivery of all of the Purchased Shares being sold
under this Agreement has been taken or will be taken prior to the
Closing, and this Agreement constitutes, and the Investor Rights
Agreement and the Development Agreement when executed, will
constitute, valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their
respective terms, except as may be limited by (i) applicable
bankruptcy, insolvency, reorganization or others laws of general
application relating to or affecting the enforcement of
creditors' rights generally, (ii) the effect of rules of law
governing the availability of equitable remedies and (iii) the
fact that any indemnification or contribution provision contained
in the Investor Rights Agreement or this Agreement may be
unenforceable insofar as the enforceability of such provision may
be sought under federal or state securities laws.
3.5 Valid Issuance of Stock.
(a) The Purchased Shares, when issued, sold and
delivered in accordance with the terms of this Agreement for the
consideration provided for herein, will be duly and validly
issued, fully paid and nonassessable.
(b) Based in part on the representations made by the
investors in Section 4 hereof, the Purchased Shares will be
issued in compliance with the registration and prospectus
delivery requirements of the Securities Act of 1933, as amended
(the "1933 Act"), or in compliance with applicable exemptions
therefrom, and the registration and qualification requirements of
all applicable securities laws of the states of the United
States.
3.6 Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation,
declaration or filing with, any federal, state or local
governmental authority on the part of the Company is required in
connection with the consummation of the transactions contemplated
by this Agreement, except for the filing of such qualifications
or filings under the 1933 Act and the regulations thereunder and
all applicable state securities laws as may be required in
connection with the transactions contemplated by this Agreement.
All such qualifications and filings will, in the case of
qualifications, be effective on the Closing and will, in the case
of filings, be made within the time prescribed by law.
3.7 Non-Contravention. The execution, delivery and
performance of this Agreement, the Investor Rights Agreement and
the Development Agreement by the Company, and the consummation by
the Company of the transactions contemplated hereby and thereby,
do not and will not (i) contravene or conflict with the
Certificate of Incorporation or Bylaws of the Company; (ii)
constitute a material violation of any provision of any federal,
state, local or foreign law binding upon or applicable to the
Company; or (iii) constitute a default or require any consent
under, give rise to any right of termination, cancellation or
acceleration of, or to a loss of
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any benefit to which the Company is entitled under, or result in
the creation or imposition of any lien, claim or encumbrance on
any assets of the Company under, any contract to which the
Company is a party or any permit, license or similar right
relating to the Company or by which the Company may be bound or
affected in such a manner as would have a Material Adverse
Effect.
3.8 Litigation. There is no action, suit, proceeding,
claim, arbitration or investigation ("Action") pending: (a)
against the Company, its activities, properties or assets or, to
the best of the Company's knowledge, against any officer,
director or employee of the Company in connection with such
officer's, director's or employee's relationship with, or actions
taken on behalf of, the Company which is reasonably likely to
have a Material Adverse Effect, or (b) that seeks to prevent,
enjoin, alter or delay the transactions contemplated by this
Agreement, the Investor Rights Agreement or the Development
Agreement. Except as individually or in the aggregate is not
reasonably likely to have a Material Adverse Effect (i) there is
no Action pending or, to the best of the Company's knowledge,
threatened, relating to the current or prior employment of any of
the Company's current or former employees or consultants, their
use in connection with the Company's business of any information,
technology or techniques allegedly proprietary to any of their
former employers, clients or other parties, or their obligations
under any agreements with prior employers, clients or other
parties; and (ii) the Company is not a party to or subject to the
provisions of any order, writ, injunction, judgment or decree of
any court or government agency or instrumentality.
3.9 Intellectual Property.
(a) Ownership or Right to Use. To the best of the
Company's knowledge, the Company has sole title to and owns, or
is licensed or otherwise possesses legally enforceable rights to
use, all patents or patent applications, software, know-how,
registered or unregistered trademarks and service marks and any
applications therefor, registered or unregistered copyrights,
trade names, and any applications therefor, trade secrets or
other confidential or proprietary information ("Intellectual
Property") necessary to enable the Company to carry on its
business as currently conducted or proposed to be conducted under
the Development Agreement, except where any deficiency therein
would not have a Material Adverse Effect. For so long as
Investor holds all the Purchased Shares, the Company covenants
that it will, where the Company in the exercise of its good faith
judgment deems it appropriate, use reasonable business efforts to
seek copyright and patent registration, and other appropriate
intellectual property protection, for Intellectual Property of
the Company.
(b) Licenses; Other Agreements. The Company has not
granted to any third party any exclusive licenses (whether such
exclusivity is temporary or permanent) to any material portion of
the Intellectual Property of the Company. To the best of the
Company's knowledge, there are not outstanding any licenses or
agreements of any kind relating to any Intellectual Property of
the Company, except for agreements with OEM's and other customers
of the Company entered into in the ordinary course of the
Company's business, where a breach thereof would have a Material
Adverse Effect. The Company is not obligated to pay any
royalties or other payments to third parties with respect to the
marketing, sale, distribution,
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manufacture, license or use of any Intellectual Property, except
as the Company may be so obligated in the ordinary course of its
business or where the failure to make such payments would not
have a Material Adverse Effect.
(c) No Infringement. To the best of the Company's
knowledge, the Company has not violated or infringed and is not
currently violating or infringing, and the Company has not
received any communications alleging that the Company (or any of
its employees or consultants) has violated or infringed, any
Intellectual Property of any other person or entity, to the
extent that any such violation or infringement, either
individually or together with all other such violations and
infringements, would have a Material Adverse Effect.
(d) Employees and Consultants. To the best of the
Company's knowledge, no employee of or consultant to the Company
is in default under any term of any employment contract,
agreement or arrangement relating to Intellectual Property of the
Company or any non-competition arrangement, other contract, or
any restrictive covenant relating to the Intellectual Property of
the Company, which default would have a Material Adverse Effect.
3.10 Compliance with Law and Charter Documents. The Company
is not in violation or default of any provisions of its
Certificate of Incorporation or Bylaws, both as amended, and
except for any violations that would not, either individually or
in the aggregate, have a Material Adverse Effect. The Company
has complied and is in compliance with all applicable statutes,
laws, and regulations and executive orders of the United States
of America and all states, foreign countries and other
governmental bodies and agencies having jurisdiction over the
Company's business or properties except where such noncompliance
would not, either individually or in the aggregate, have a
Material Adverse Effect.
3.11 Title to Property and Assets. The properties and
assets of the Company which are owned by the Company are owned
free and clear of all mortgages, deeds of trust, liens, charges,
encumbrances and security interests except for statutory liens
for the payment of current taxes that are not yet delinquent and
liens and encumbrances and security interests that arise in the
ordinary course of business and do not affect material properties
and assets of the Company in a way reasonably likely to have
Material Adverse Effect. With respect to the property and assets
it leases, the Company is in compliance with such leases in all
material respects.
3.12 Registration Rights. Except as provided in the
Investor Rights Agreement effective upon the Closing, the Company
is not currently subject to any grant or agreement to grant to
any person or entity any rights (including piggyback registration
rights) to have any securities of the Company registered with the
United States Securities and Exchange Commission ("SEC") or any
other governmental authority.
3.13 SEC Documents.
(a) The Company has furnished to the Investor on or
prior to the date hereof copies of its Annual Report on Form 10-K
for the fiscal year ended December 31, 1996 ("Form 10-K"), and
all other registration statements, reports and proxy statements
filed by the Company with the Securities and Exchange Commission
("Commission") on or after
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December 31, 1996 (the Form 10-K and such registration
statements, reports and proxy statements, are collectively
referred to herein as the "SEC Documents"). Each of the SEC
Documents, as of the respective date thereof, did not, and each
of the registration statements, reports and proxy statements
filed by the Company with the Commission after the date hereof
and prior to the Closing will not, as of the date thereof,
contain any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were
made, not misleading, except as may have been corrected in a
subsequent SEC Document. The Company is not a party to any
material contract, agreement or other arrangement which was
required to have been filed as an exhibit to the SEC Documents
that is not so filed.
(b) Since December 31, 1996, the Company has duly
filed with the Commission all registration statements, reports
and proxy statements required to be filed by it under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and the 1933 Act. The audited and unaudited consolidated
financial statements of the Company included in the SEC Documents
filed prior to the date hereof fairly present, in conformity with
generally accepted accounting principles ("GAAP") applied on a
consistent basis (except as may be indicated in the notes
thereto), the consolidated financial position of the Company and
its consolidated subsidiaries as at the date thereof and the
consolidated results of their operations and cash flows for the
periods then ended.
(c) Except as and to the extent reflected or reserved
against in the Company's Financial Statements (including the
notes thereto), the Company has no material liabilities (whether
accrued or unaccrued, liquidated or unliquidated, secured or
unsecured, joint or several, due or to become due, vested or
unvested, executory, determined or determinable) other than: (i)
liabilities incurred in the ordinary course of business since the
Balance Sheet Date that are consistent with the Company's past
practices, (ii) liabilities with respect to agreements to which
the Investor is a party, and (iii) other Liabilities that either
individually or in the aggregate, would not result in a Material
Adverse Effect.
3.14 Absence of Certain Changes Since Balance Sheet Date.
Since December 31, 1996, the business and operations of the
Company have been conducted in all material respects in the
ordinary course consistent with past practice, and there has not
been:
(a) any declaration, setting aside or payment of any
dividend or other distribution of the assets of the Company with
respect to any shares of capital stock of the Company, or any
repurchase, redemption or other acquisition by the Company or any
subsidiary of the Company of any outstanding shares of the
Company's capital stock;
(b) any damage, destruction or loss, whether or not
covered by insurance, except for such occurrences that have not
resulted, and are not expected to result, in a Material Adverse
Effect;
(c) any waiver by the Company of a valuable right or
of a material debt owed to it, except for such waivers that have
not resulted, and are not expected to result, in a Material
Adverse Effect;
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(d) any material change or amendment to, or any waiver
of any material rights under, a material contract or arrangement
by which the Company or any of its assets or properties is bound
or subject, except for changes, amendments, or waivers that are
expressly provided for or disclosed in this Agreement or that
have not resulted, and are not expected to result, in a Material
Adverse Effect;
(e) any change by the Company in its accounting
principles, methods or practices or in the manner it keeps its
accounting books and records, except any such change required by
a change in GAAP; and
(f) any other event or condition of any character,
except for such events and conditions that have not resulted, and
are not expected to result, in a Material Adverse Effect.
3.15 Tax Matters. The Company and each of its subsidiaries
have filed all material tax returns required to be filed, which
returns are true and correct in all material respects, and
neither the Company nor any of its subsidiaries is in default in
the payment of any taxes, including penalties and interest,
assessments, fees and other charges, shown thereon due or
otherwise assessed, other than those being contested in good
faith and for which adequate reserves have been provided or those
currently payable without interest which were payable pursuant to
said returns or any assessments with respect thereto.
3.16 Real Property Holding Corporation Status. Since its
inception the Company has not been a "United States real property
holding corporation", as defined in Section 897(c)(2) of the U.S.
Internal Revenue Code of 1986, as amended, and in Section 1.897-
2(b) of the Treasury Regulations issued thereunder (the
"Regulations"), and the Company has filed with the Internal
Revenue Service all statements, if any, with its United States
income tax returns which are required under Section 1.897-2(h) of
the Regulations.
3.17 Full Disclosure. The information contained in this
Agreement, the Disclosure Letter and the SEC Documents with
respect to the business, operations, assets, results of
operations and financial condition of the Company, and the
transactions contemplated by this Agreement, the Investor Rights
Agreement and the Development Agreement, are true and complete in
all material respects and do not omit to state any material fact
necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
4. REPRESENTATIONS, WARRANTIES AND CERTAIN AGREEMENTS OF THE
INVESTOR. The Investor hereby represents and warrants to the
Company, and agrees that:
4.l Authorization. This Agreement and the Investor Rights
Agreement have been duly authorized by all necessary corporate
action on the part of the Investor. This Agreement and the
Investor Rights Agreement constitute the Investor's valid and
legally binding obligations, enforceable in accordance with their
respective terms, except as may be limited by (a) applicable
bankruptcy, insolvency, reorganization or other laws of general
application relating
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to or affecting the enforcement of creditors' rights generally
and (b) the effect of rules of law governing the availability of
equitable remedies. The Investor has full corporate power and
authority to enter into this Agreement and the Investor Rights
Agreement
4.2 Purchase for Own Account. The Purchased Shares are
being acquired for investment for the Investors own account, not
as a nominee or agent, and not with a view to the public resale
or distribution thereof within the meaning of the 1933 Act, and
the Investor has no present intention of selling, granting any
participation in, or otherwise distributing the same. The
Investor also represents that it has not been formed for the
specific purpose of acquiring the Purchased Shares.
4.3 Disclosure of Information. The Investor has received
or has had full access to all the information it considers
necessary or appropriate to make an informed investment decision
with respect to the Purchased Shares to be purchased by the
Investor under this Agreement. The Investor further has had an
opportunity to ask questions and receive answers from the Company
regarding the terms and conditions of the offering of the
Purchased Shares and to obtain additional information (to the
extent the Company possessed such information or could acquire it
without unreasonable effort or expense) necessary to verify any
information furnished to the investor or to which the Investor
had access. The foregoing, however, does not in any way limit or
modify the representations and warranties made by the Company in
Article 3.
4.4 Investment Experience. The Investor understands that
the purchase of the Purchased Shares involves substantial risk.
The Investor: (a) has experience as an investor in securities of
companies and acknowledges that it is able to fend for itself,
can bear the economic risk of its investment in the Purchased
Shares and has such knowledge and experience in financial or
business matters that it is capable of evaluating the merits and
risks of this investment in the Purchased Shares and protecting
its own interests in connection with this investment and/or (b)
has a preexisting personal or business relationship with the
Company and certain of its officers, directors or controlling
persons of a nature and duration that enables the Investor to be
aware of the character, business acumen and financial
circumstances of such persons.
4.5 Accredited Investor Status. The Investor is an
"accredited investor" within the meaning of Regulation D
promulgated under the 0000 Xxx.
4.6 Restricted Securities. The Investor understands that
the Purchased Shares to be purchased by the Investor hereunder
are characterized as "restricted securities" under the 1933 Act
inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and that under the
1933 Act and applicable regulations thereunder such securities
may be resold without registration under the 1933 Act only in
certain limited circumstances. The Investor is familiar with
Rule 144 of the SEC, as presently in effect, and understands the
resale limitations imposed thereby and by the 1933 Act. The
Investor understands that the Company is under no obligation to
register any of the securities sold hereunder except as provided
in the Investor Rights Agreement.
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4.7 Further Limitations on Disposition. Without in any way
limiting the representations set forth above, the Investor
further agrees not to make any disposition of all or any portion
of the Purchased Shares unless and until:
(a) there is then in effect a registration statement
under the 1933 Act covering such proposed disposition and such
disposition is made in accordance with such registration
statement; or
(b) the Investor has notified the Company of the
proposed disposition and has furnished the Company with a
statement of the circumstances surrounding the proposed
disposition, and the Investor has furnished the Company, at the
expense of the Investor or its transferee, with an opinion of
counsel, reasonably satisfactory to the Company, that such
disposition will not require registration of such securities
under the 1933 Act.
Notwithstanding the provisions of paragraphs (a) and (b) of this
Section 4.7, no such registration statement or opinion of counsel
will be required for any transfer of any Purchased Shares in
compliance with SEC Rule 144, Rule 144A or Rule 145(d), or if
such transfer otherwise is exempt, in the view of the Company's
legal counsel, from the registration requirements of the 0000
Xxx.
4.8 Legends. Certificates evidencing the Purchased Shares
will bear each of the legends set forth below:
(a) THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE
SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED
UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT
TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE
AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF
THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF
THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO THE ISSUER TO THE EFFECT
THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE
ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
(b) Any Legends required by any applicable state
securities laws.
The legend set forth in Section 4.8(a) hereof will be removed by
the Company from any certificate evidencing Purchased Shares upon
delivery to the Company of an opinion of counsel, reasonably
satisfactory to the Company, that such security can be freely
transferred pursuant to Rule 144(k) without a registration
statement being in effect and that such transfer will not
jeopardize the exemption or exemptions from registration pursuant
to which the Company issued the Purchased Shares.
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5. CONDITIONS TO THE INVESTOR'S OBLIGATIONS AT CLOSING. The
obligations of the Investor under Sections l and 2 of this
Agreement are subject to the fulfillment or waiver, on or before
the Closing, of each of the following conditions:
5.1 Representations and Warranties True. Except for
representations and warranties expressed to be as of a specified
date (which shall be true and correct as of such date), each of
the representations and warranties of the Company contained in
Section 3 will be true and correct on and as of the date hereof
and on and as of the date of the Closing, except as set forth in
the Disclosure Letter, as amended through the Closing, with the
same effect as though such representations and warranties had
been made as of the Closing.
5.2 Performance. The Company will have performed and
complied with all agreements, obligations and conditions
contained in this Agreement that are required to be performed or
complied with by it on or before the Closing and will have
obtained all approvals, consents and qualifications necessary to
complete the purchase and sale described herein.
5.3 Compliance Certificate. The Company will have
delivered to the Investor at the Closing a certificate signed on
its behalf by its Chief Executive Officer or Chief Financial
Officer certifying that the conditions specified in Sections 5.1
and 5.2 hereof have been fulfilled.
5.4 Securities Exemptions. The offer and sale of the
Purchased Shares to the Investor pursuant to this Agreement will
be exempt from the registration requirements of the 1933 Act and
the registration and/or qualification requirements of all
applicable state securities laws.
5.5 Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated at
the Closing and all documents incident thereto will be reasonably
satisfactory in form and substance to the Investor, and the
Investor will have received all such counterpart originals and
certified or other copies of such documents as it may reasonably
request. Such documents shall include (but not be limited to)
the following:
(a) Certified Charter Documents. A copy of (i) the
Certificate of Incorporation certified as of a recent date by the
Secretary of State of Delaware as a complete and correct copy
thereof, and (ii) the Bylaws of the Company (as amended through
the date of the Closing) certified by the Secretary of the
Company as true and correct copies thereof as of the Closing.
(b) Board Resolutions. A copy, certified by the
Secretary of the Company, of the resolutions of the Board of
Directors of the Company providing for the approval of this
Agreement, the Investor Rights Agreement and the Development
Agreement and the issuance of the Purchased Shares and the other
matters contemplated hereby.
5.6 Opinion of Company Counsel. The Investor will have
received an opinion on behalf of the Company, dated as of the
date of the Closing, from Xxxx and Xxxx, in form and substance
reasonably satisfactory to the Investor.
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5.7 Investor Rights Agreement. The Company will have
executed and delivered the Investor Rights Agreement
substantially in the form attached to this Agreement as Exhibit A
(the "Investor Rights Agreement").
5.8 Development Agreement. The Company will have executed
and delivered the Software and Hardware Development, License and
Distribution Agreement (the "Development Agreement") in a form
reasonably satisfactory to the Investor.
5.9 No Material Adverse Effect. Between the date hereof
and the Closing, there shall not have occurred any Material
Adverse Effect.
6. CONDITIONS TO THE COMPANY'S OBLIGATIONS AT CLOSING. The
obligations of the Company to the Investor under this Agreement
are subject to the fulfillment or waiver on or before the Closing
(defined in Section 2.1), of each of the following conditions:
6.1 Representations and Warranties True. The
representations and warranties of the Investor contained in
Section 4 will be true and correct on and as of the date hereof
and on and as of the date of the Closing with the same effect as
though such representations and warranties had been made as of
the Closing.
6.2 Payment of Purchase Price. The Investor will have
delivered to the Company the full purchase price of the Purchased
Shares as specified in Section 1.2.
6.3 Securities Exemptions. The offer and sale of the
Purchased Shares to the Investor pursuant to this Agreement will
be exempt from the registration requirements of the 1933 Act and
the registration and/or qualification requirements of all
applicable state securities laws.
6.4 Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated at
the Closing and all documents incident thereto will be reasonably
satisfactory in form and substance to the Company and to the
Company's legal counsel, and the Company will have received all
such counterpart originals and certified or other copies of such
documents as it may reasonably request.
6.5 Investor Rights Agreement. The Investor will have
executed and delivered the Investor Rights Agreement.
6.6 Development Agreement. Investor will have executed and
delivered the Development Agreement.
7. INDEMNIFICATION.
7.1 Agreement to Indemnify.
(a) Company Indemnity. The Investor, its Affiliates
and Associates, and each officer, director, shareholder,
employer, representative and agent of any of the
12
foregoing (collectively, the "Investor Indemnitees") shall each
be indemnified and held harmless to the extent set forth in this
Section 7 by the Company with respect to any and all Damages (as
defined below) incurred by any Investor Indemnitee as a proximate
result of any inaccuracy or misrepresentation in, or breach of,
any representation, warranty, covenant or agreement made by the
Company in this Agreement or the Investor Rights Agreement
(including any Exhibits and Schedules hereto).
(b) Investor Indemnity. The Company, its respective
Affiliates and Associates, and each officer, director,
shareholder, employer, representative and agent of any of the
foregoing (collectively, the "Company Indemnitees") shall each be
indemnified and held harmless to the extent set forth in this
Section 7, by the Investor, in respect of any and all Damages
incurred by any Company Indemnitee as a result of any inaccuracy
or misrepresentation in, or breach of, any representation,
warranty, covenant or agreement made by the Investor in this
Agreement or the Investor Rights Agreement.
(c) Equitable Relief. Nothing set forth in this
Section 7 shall be deemed to prohibit or limit any Investor
Indemnitee's or Company Indemnitee's right at any time before, on
or after the Closing Date, to seek injunctive or other equitable
relief for the failure of any Indemnifying Party to perform or
comply with any covenant or agreement contained herein.
7.2 Survival. All representations and warranties of the
Investor and the Company contained herein or in the Investor
Rights Agreement, and all claims of any Investor Indemnitee or
Company Indemnitee in respect of any inaccuracy or
misrepresentation in or breach thereof, shall survive the Closing
until the second anniversary of the date of this Agreement,
regardless of whether the applicable statute of limitations,
including extensions thereof, may expire (except to the extent
any such covenant or agreement shall expire by its terms). All
covenants and agreements of the Investor and the Company
contained herein or in the Investor Rights Agreement shall
survive the Closing in perpetuity (except to the extent any such
covenant or agreement shall expire by its terms). All claims of
any Investor Indemnitee or Company Indemnitee in respect of any
breach of such covenants or agreements shall survive the Closing
until the expiration of two years following the non-breaching
party's obtaining actual knowledge of such breach.
7.3 Claims for Indemnification. If any Investor Indemnitee
or Company Indemnitee (an "Indemnitee") shall believe that such
Indemnitee is entitled to indemnification pursuant to this
Section 7 in respect of any Damages, such Indemnitee shall give
the appropriate Indemnifying Party (which for purposes hereof, in
the case of an Investor Indemnitee, means the Company, and in the
case of a Company Indemnitee, means the Investor) prompt written
notice thereof. Any such notice shall set forth in reasonable
detail and to the extent then known the basis for such claim for
indemnification. The failure of such Indemnitee to give notice
of any claim for indemnification promptly shall not adversely
affect such Indemnitee's right to indemnity hereunder except to
the extent that such failure adversely affects the right of the
Indemnifying Party to assert any reasonable defense to such
claim. Each such claim for indemnity shall expressly state that
the Indemnifying Party shall have only the twenty (20) business
day period referred to in the next sentence to dispute or deny
such claim. The
13
Indemnifying Party shall have twenty (20) business days following
its receipt of such notice either (a) to acquiesce in such claim
by giving such Indemnitee written notice of such acquiescence or
(b) to object to the claim by giving such Indemnitee written
notice of the objection. If Indemnifying Party does not object
thereto within such twenty (20) business day period, such
Indemnitee shall be entitled to be indemnified for all Damages
reasonably and proximately incurred by such Indemnitee in respect
of such claim. If the Indemnifying Party objects to such claim
in a timely manner, the senior management of the Company and the
Investor shall meet to attempt to resolve such dispute. If the
dispute cannot be resolved by the senior management either party
may make a written demand for formal dispute resolution and
specify therein the scope of the dispute. Within thirty days
after such written notification, the parties agree to meet for
one day with an impartial mediator and consider dispute
resolution alternatives other than litigation. If an alternative
method of dispute resolution is not agreed upon within thirty
days after the one day mediation, either party may begin
litigation proceedings. Nothing in this section shall be deemed
to require arbitration.
7.4 Defense of Claims. In connection with any claim that
may give rise to indemnity under this Section 7 resulting from or
arising out of any claim or Proceeding against an Indemnitee by a
person or entity that is not a party hereto, the Indemnifying
Party may but shall not be obligated to (unless such Indemnitee
elects not to seek indemnity hereunder for such claim), upon
written notice to the relevant Indemnitee, assume the defense of
any such claim or proceeding if the Indemnifying Party with
respect to such claim or Proceeding acknowledges to the
Indemnitee the Indemnitee's right to indemnity pursuant hereto to
the extent provided herein (as such claim may have been modified
through written agreement of the parties or arbitration
hereunder) and provides assurances, satisfactory to such
Indemnitee, that the Indemnifying Party will be financially able
to satisfy such claim to the extent provided herein if such claim
or Proceeding is decided adversely; provided, however, that
nothing set forth herein shall be deemed to require the
Indemnifying Party to waive any crossclaims or counterclaims the
Indemnifying Party may have against the Indemnified Party for
damages. The Indemnified Party shall be entitled to retain
separate counsel, reasonably acceptable to the Indemnifying
Party, if the Indemnified Counsel shall determine, upon the
written advice of counsel, that claims of or defenses available
to the Indemnifying Party and the Indemnified Party in connection
with such Proceeding may differ. The Indemnifying Party shall be
obligated to pay the reasonable fees and expenses of such
separate counsel to the extent the Indemnified Party is entitled
to indemnification by the Indemnifying Party with respect to such
claim or Proceeding under this Section 7.4. If the Indemnifying
Party assumes the defense of any such claim or Proceeding, the
Indemnifying Party shall select counsel reasonably acceptable to
such Indemnitee to conduct the defense of such claim or
Proceeding, shall take all steps necessary in the defense or
settlement thereof and shall at all times diligently and promptly
pursue the resolution thereof. If the Indemnifying Party shall
have assumed the defense of any claim or Proceeding in accordance
with this Section 7.4, the Indemnifying Party shall be authorized
to consent to a settlement of, or the entry of any judgment
arising from, any such claim or Proceeding, but only with the
prior written consent of such Indemnitee, which consent shall not
be unreasonably withheld; provided, however, that the
Indemnifying Party shall pay or cause to be paid all amounts
arising out of such settlement or judgment concurrently with the
effectiveness thereof; provided, further, that the Indemnifying
Party shall not be authorized to encumber any of the assets of
any Indemnitee
14
or to agree to any restriction that would apply to any Indemnitee
or to its conduct of business; and provided, further, that a
condition to any such settlement shall be a complete release of
such Indemnitee and its Affiliates, directors, officers,
employees and agents with respect to such claim, including any
reasonably foreseeable collateral consequences thereof. Such
Indemnitee shall be entitled to participate in (but not control)
the defense of any such action, with its own counsel and at its
own expense. Each Indemnitee shall, and shall cause each of its
Affiliates, directors, officers, employees and agents to,
cooperate fully with the Indemnifying Party in the defense of any
claim or Proceeding being defended by the Indemnifying Party
pursuant to this Section 7.4. If the Indemnifying Party does not
assume the defense of any claim or Proceeding resulting therefrom
in accordance with the terms of this Section 7.4, such Indemnitee
may defend against such claim or Proceeding in such manner as it
may deem appropriate, including settling such claim or proceeding
after giving notice of the same to the Indemnifying Party, on
such terms as such Indemnitee may deem appropriate, but only with
the prior written consent of Indemnitee which consent shall not
be unreasonably withheld. If any Indemnifying Party seeks to
question the manner in which such Indemnitee defended such claim
or Proceeding or the amount of or nature of any such settlement,
such Indemnifying Party shall have the burden to prove by a
preponderance of the evidence that such Indemnitee did not defend
such claim or Proceeding in a reasonably prudent manner.
7.5 Certain Definitions. As used in this Section 7, (a)
"Affiliate" means, with respect to any person or entity, any
person or entity directly or indirectly controlling, controlled
by or under direct or indirect common control with such other
person or entity; (b) "Associate" means, when used to indicate a
relationship with any person or entity, (l) any other person or
entity of which such first person or entity is an officer,
director or partner or is, directly or indirectly, the beneficial
owner of ten percent (10%) or more of any class of equity
securities, membership interests or other comparable ownership
interests issued by such other person or entity, (2) any trust or
other estate in which such first person or entity has a ten
percent (10%) or more beneficial interest or as to which such
first person or entity serves as trustee or in a similar
fiduciary capacity, and (3) any relative or spouse of such first
person or entity who has the same home as such first person or
entity or who is a director or officer of such first person or
entity; (c) "Damages" means all demands, claims, actions or
causes of action, assessments, losses, damages, costs, expenses,
liabilities, judgments, awards, fines, response costs, sanctions,
taxes, penalties, charges and amounts paid in settlement,
including reasonable out-of-pocket costs, fees and expenses
(including reasonable costs, fees and expenses of attorneys,
accountants and other agents of, or other parties retained by,
such party), and (d) "Proceeding" means any action, suit,
hearing, arbitration, audit, proceeding (public or private) or
investigation that is brought or initiated by or against any
federal, state, local or foreign governmental authority or any
other person or entity.
7.6 Limitations on Indemnities. Notwithstanding any other
provision in this Section 7, neither party shall have any
obligation to indemnify the other party under Section 7.1 unless
the aggregate for all such claims exceeds $500,000, in which case
to the full extent of Damages (including such initial $500,000)
up to a maximum aggregate indemnity of $14,750,000. NEITHER
PARTY TO THIS AGREEMENT NOR ANY OF ITS AFFILIATES SHALL BE LIABLE
FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES SUFFERED
15
BY A PARTY OR ITS AFFILIATES WITH RESPECT TO ANY TERM OR THE
SUBJECT MATTER OF THIS AGREEMENT.
8. STANDSTILL. The Investor hereby agrees that the Investor
(together with all of its subsidiaries in which Investor owns
beneficially or of record a majority of the outstanding Voting
Stock of such subsidiary ("Majority Owned Subsidiaries")) shall
not acquire "beneficial ownership" (as defined in Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as
amended) of any Voting Stock (as defined below), any securities
convertible into or exchangeable for Voting Stock, or any other
right to acquire Voting Stock (except, in any case, by way of
stock dividends or other distributions or offerings made
available to holders of any Voting Stock generally) without the
prior written consent of the Company, if the effect of such
acquisition would be to increase the Voting Power of all Voting
Stock then beneficially owned by the Investor or which it has a
right to acquire (together with all Majority Owned Subsidiaries)
to a percentage greater than nineteen and ninety-nine one
hundredths percent (19.99%) (the "Standstill Percentage") of the
Total Voting Power (as defined below) of the Company at the time
in effect; provided that:
(a) The Investor may acquire Voting Stock without
regard to the foregoing limitation, and such limitation shall be
suspended, but not terminated, if and for as long as (i) a tender
or exchange offer is made and is not withdrawn or terminated by
another person or group to purchase or exchange for cash or other
consideration any Voting Stock that, if accepted or if otherwise
successful, would result in such person or group beneficially
owning or having the right to acquire shares of Voting Stock with
aggregate Voting Power of more than nineteen and ninety-nine one
hundredths percent (19.99%) of the Total Voting Power of the
Company then in effect (not counting for these purposes any
shares of Voting Stock of the Company originally acquired (where
such Shares or shares exchanged with the Company in respect
thereof, are still held) by such person or group from the
Investor or any Majority Owned Subsidiary), and such offer is not
withdrawn or terminated prior to the Investor making an offer to
acquire Voting Stock or acquiring Voting Stock; provided,
however, that the foregoing standstill limitation will be
reinstated once any such tender or exchange offer is withdrawn or
terminated, (ii) another person or group hereafter acquires
Voting Stock with aggregate Voting Power of twenty percent (20%)
or more of the Total Voting Power of the Company then in effect
(not counting for these purposes any shares of Voting Stock of
the Company originally acquired (where such Shares or shares
exchanged with the Company in respect thereof, are still held) by
such person or group from the Investor or any Majority Owned
Subsidiary), where such person or group files a Schedule 13D
(under the rules promulgated under Section 13(d) under the
Securities and Exchange Act of 1934, as such rules and section
are in effect on the date hereof), or other similar or successor
schedule or form, indicating that such person's or group's
holdings equal or exceed twenty percent (20%); provided, however,
that the foregoing standstill limitation will be reinstated once
the percentage of Total Voting Power beneficially owned by such
other person or group falls below twenty percent (20%); (iii)
another person or group hereafter acquires Voting Stock that
results in such person or group being required to file a Schedule
13G, or other similar or successor schedule or form, indicating
that such other person or group beneficially owns or has the
right to acquire Voting Stock with aggregate Voting Power equal
to or more than twenty percent (20%) of the Total Voting Power of
the Company (not counting for these purposes any
16
shares of Voting Stock of the Company originally acquired (where
such Shares or shares exchanged with the Company in respect
thereof, are still held) by such person or group from the
Investor or any Majority Owned Subsidiary); provided, however,
that the foregoing standstill limitation will be reinstated once
the percentage of Total Voting Power beneficially owned by such
other person or group falls below twenty percent (20%); or (iv)
another person or group orally or in writing contacts the Company
and advises the Company of such person's or group's intention to
commence a tender or exchange offer that, if so commenced, would
result in a suspension pursuant to clause (i) above (e.g., a
"bear hug" offer) and such contact by such person or group is
publicly disclosed or otherwise becomes publicly known; provided,
further, that if such a bear hug offer is not publicly disclosed
or known to the public then the Company shall notify Investor of
such bear hug and from time to time of its ongoing status (which
information Investor shall treat as confidential); provided,
however, that the foregoing standstill limitation will be
reinstated if such intention is withdrawn in writing or other
reasonable evidence of such withdrawal is provided to the
Investor. The Company shall notify the Investor in writing of
the occurrence of any event described in clauses (i) through (iv)
of the immediately preceding sentence as soon as practicable
following the Company's becoming aware of any such event, and in
any case, shall provide the Investor written notice of any such
event within two (2) business days of the Company's being aware
of the occurrence of any such event.
(b) The Investor will not be obliged to dispose of any
Voting Stock to the extent that the aggregate percentage of the
Total Voting Power of the Company represented by Voting Stock
beneficially owned by the Investor or which the Investor has a
right to acquire is increased beyond the Standstill Percentage
(i) as a result of a recapitalization of the Company or a
repurchase or exchange of securities by the Company or any other
action taken by the Company or its affiliates; (ii) as the result
of acquisitions of Voting Stock made during the period when the
Investor's "standstill" obligations are suspended pursuant to
Section 8.1(a); (iii) as a result of an equity index transaction,
provided that Investor shall not vote such shares; (iv) by way of
stock dividends or other distributions or rights or offerings
made available to holders of shares of Voting Stock generally;
(v) with the consent of a simple majority of the independent
authorized members of the Company's Board of Directors; or (vi)
as part of a transaction on behalf of Investor's Defined Benefit
Pension Plan, Profit Sharing Retirement Plan, 401(k) Savings
Plan, Sheltered Employee Retirement Plan and Sheltered Employee
Retirement Plan Plus, or any successor or additional retirement
plans thereto (collectively, the "Retirement Plans") where the
Company's shares in such Retirement Plans are voted by a trustee
for the benefit of Investor employees or, for those Retirement
Plans where Investor controls voting, where Investor agrees not
to vote any shares of such Retirement Plan Voting Stock that
would cause Investor to exceed the Standstill Percentage.
(c) As used in this Section 8, (i) the term "Voting
Stock" means the Common Stock and any other securities issued by
the Company having the ordinary power to vote in the election of
directors of the Company (other than securities having such power
only upon the happening of a contingency that has not occurred),
(ii) the term "Voting Power" of any Voting Stock means the number
of votes such Voting Stock is entitled to cast for directors of
the Company at any meeting of shareholders of the Company, and
(ii) the term "Total Voting Power" means the total number of
votes which may be cast in the election of directors of the
17
Company at any meeting of shareholders of the Company if all
Voting Stock was represented and voted to the fullest extent
possible at such meeting, other than votes that may be cast only
upon the happening of a contingency that has not occurred. For
purposes of this Section 8, the Investor shall not be deemed to
have beneficial ownership of any Voting Stock held by a pension
plan or other employee benefit program of the Investor if the
Investor does not have the power to control the investment
decisions of such plan or program.
9. MISCELLANEOUS.
9.1 Successors and Assigns. Neither party may assign this
Agreement or any rights hereunder without the consent of the
other party except to a Majority Owned Subsidiary. In the event
of a permitted assignment, the terms and conditions of this
Agreement will inure to the benefit of and be binding upon the
respective successors and assigns of the parties.
9.2 Governing Law. This Agreement will be governed by and
construed under the internal laws of the State of Delaware as
applied to agreements among Delaware residents entered into and
to be performed entirely within Delaware, without reference to
principles of conflict of laws or choice of laws.
9.3 Counterparts. This Agreement may be executed in two or
more counterparts, each of which will be deemed an original, but
all of which together will constitute one and the same
instrument.
9.4 Headings. The headings and captions used in this
Agreement are used for convenience only and are not to be
considered in construing or interpreting this Agreement. All
references in this Agreement to sections, paragraphs, exhibits
and schedules will, unless otherwise provided, refer to sections
and paragraphs hereof and exhibits and schedules attached hereto,
all of which exhibits and schedules are incorporated herein by
this reference.
9.5 Notices. Any notice required or permitted under this
Agreement will be given in writing, shall be effective when
received, and shall in any event be deemed received and
effectively given upon personal delivery to the party to be
notified or three (3) business days after deposit with the United
States Post Office, by registered or certified mail, postage
prepaid, or one (1) business day after deposit with a nationally
recognized courier service such as Federal Express for next
business day delivery, or one (1) business day after facsimile
with copy delivered by registered or certified mail, postage
prepaid and addressed to the party to be notified at the address
indicated for such party on the signature page hereof or at such
other address as the Investor or the Company may designate by
giving at least ten (10) days advance written notice pursuant to
this Section 9.5.
9.6 No Finder's Fees. Each party represents that it
neither is nor will be obligated for any finder's or broker's fee
or commission in connection with this transaction. The Investor
will indemnify and hold harmless the Company from any liability
for any commission or compensation in the nature of a finders' or
broker's fee for which the Investor or any of its officers,
partners, employees or consultants, or representatives is
responsible. The Company will indemnify and hold harmless the
Investor from any liability for any commission or compensation
18
in the nature of a finder's or broker's fee for which the Company
or any of its officers, employees or consultants or
representatives is responsible.
9.7 Amendments and Waivers. This Agreement may be amended
and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of
the Company and the Investor. Any amendment or waiver effected
in accordance with this Section 9.7 will be binding upon the
Investor, the Company and their respective successors and
assigns.
9.8 Severability. If any provision of this Agreement is
held to be unenforceable under applicable law, such provision
will be excluded from this Agreement and the balance of the
Agreement will be interpreted as if such provision were so
excluded and will be enforceable in accordance with its terms.
9.9 Entire Agreement. This Agreement and the Investor
Rights Agreement, together with all Exhibits and schedules
hereto, constitutes the entire agreement and understanding of the
parties with respect to the subject matter hereof and supersedes
any and all prior negotiations, correspondence, agreements,
understandings duties or obligations between the parties with
respect to the subject matter hereof.
9.10 Further Assurances. From and after the date of this
Agreement upon the request of the Investor or the Company, the
Company and the Investor will execute and deliver such
instruments, documents or other writings as may be reasonably
necessary or desirable to confirm and carry out and to effectuate
fully the intent and purposes of this Agreement.
9.11 Meaning of Include and Including. Whenever in this
Agreement the word "include" or "including" is used, it shall be
deemed to mean "include, without limitation" or "including,
without limitation," as the case may be, and the language
following "include" or "including" shall not be deemed to set
forth an exhaustive list.
9.12 Fees, Costs and Expenses. All fees, costs and expenses
(including attorneys' fees and expenses) incurred by either party
hereto in connection with the preparation, negotiation and
execution of this Agreement, the Investor Rights Agreement and
the Development Agreement and the consummation of the
transactions contemplated hereby and thereby, shall be the sole
and exclusive responsibility of such party.
9.13 Limitation. The entire liability of either party to
the other party shall not exceed the aggregate amount of
consideration received by the Company for the Purchased Shares
pursuant to Section 1 of this Agreement.
[Signature Page Follows]
19
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
AVID TECHNOLOGY, INC. INTEL CORPORATION
By: /s/Xxxxxxx X. Xxxxxxxx By: /s/Xxxxxx Xxxxxxx
Name: Xxxxxxx X. Xxxxxxxx Name: Xxxxxx Xxxxxxx
Title: Senior Vice Title: Vice President and
President of Finance Treasurer
and Chief Financial
Officer
Address: Metropolitan Address: 2200 Mission College
Technology Park Boulevard
One Park West M/S XX0-000
Xxxxxxxxx, Xxxxx Xxxxx,
Xxxxxxxxxxxxx 00000 California 95052
Attention: General Counsel Attention: Treasurer
Telephone No.: (000) 000-0000 Telephone No.:(000) 000-0000
Facsimile No.: (000) 000-0000 Facsimile No.:(000) 000-0000
with a copy to
Address: SC4-203
0000 Xxxxxxx Xxxxxxx Xxxx.
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
[Signature Page to Common Stock Purchase Agreement]
20
COMMON STOCK AGREEMENT
LIST OF EXHIBITS
Exhibit A - Form of Investor Rights Agreement
