BUYER PARENT GUARANTY
EXECUTION
VERSION
This BUYER PARENT GUARANTY (the “Guaranty”) is made
and entered into as of October 25, 2008, by HAUPPAUGE DIGITAL, INC., a Delaware
corporation (the “Guarantor”), to and
for the benefit of AVID TECHNOLOGY, INC., a Delaware corporation (the “Parent”), PINNACLE
SYSTEMS, INC., a California corporation and a wholly owned subsidiary
of the Parent (“Pinnacle”), AVID
TECHNOLOGY GMBH, a limited liability company organized under the laws of
Germany, AVID DEVELOPMENT GMBH, a limited liability company organized under the
laws of Germany, AVID TECHNOLOGY INTERNATIONAL BV who are parties to that
certain Asset Purchase Agreement and the Ancillary Agreements (collectively, the
“Sellers”).
Capitalized terms used and not otherwise defined herein shall have the
respective meanings assigned to them in the Asset Purchase Agreement referred to
in the first recital below.
WHEREAS, concurrently with the
execution of this Guaranty, the Buyer and the Sellers are entering into an asset
purchase agreement (the “Asset Purchase
Agreement”), pursuant to which the Sellers have agreed, in reliance,
among other things, on this Guaranty, to sell to the Buyer, and the Buyer has
agreed to purchase, certain assets and properties of the Sellers, and the Buyer
has agreed to assume certain liabilities of the Sellers;
WHEREAS, the Asset Purchase Agreement
provides that, at the Closing, the Buyer and the Sellers shall enter into (i) an
intellectual property license agreement (the “License Agreement”),
pursuant to which the Sellers will license certain intellectual property to the
Buyer; (ii) an agreement relating to certain inventory (the “Inventory
Agreement”), pursuant to which the Sellers will consign to the Buyer or
its Affiliates, and the Buyer or its Affiliates have agreed to sell, certain
inventory of the Sellers subject to the terms and conditions set forth therein,
and (iii) a transition services agreement (the “Transition Services
Agreement”) relating to the provision of certain services by and to the
Buyer and the provision of certain services by and to the Sellers.
WHEREAS, the Guarantor is receiving a
substantial benefit from the transactions contemplated by the Asset Purchase
Agreement, and will be receiving a substantial benefit from the transactions
contemplated by the License Agreement, the Inventory Agreement and the
Transition Services Agreement;
WHEREAS, in order to induce the Sellers
to enter into the Asset Purchase Agreement, the License Agreement, the Inventory
Agreement and the Transition Services Agreement, the Guarantor desires to
guarantee the complete and timely performance of all duties, liabilities and
obligations of the Buyer under the Asset Purchase Agreement and the Ancillary
Agreements (the “Guaranteed
Obligations”), and as a condition of the Sellers’ willingness to enter
into the Asset Purchase Agreement, the License Agreement, the Inventory
Agreement and the Transition Services Agreement, the Sellers desire that the
Guarantor guarantee the Guaranteed Obligations, upon the terms set forth herein;
and
WHEREAS, it is a condition precedent to
the Sellers’ obligations at the Closing to consummate the transactions
contemplated by the Asset Purchase Agreement this Guaranty be in full force and
effect.
NOW, THEREFORE, in consideration of the
foregoing premises and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, and intending to be legally
bound hereby, the Guarantor and the Sellers hereby agree as
follows:
1.
Guaranty. The
Guarantor hereby absolutely, unconditionally and irrevocably guarantees to the
Sellers the complete and timely performance and payment of each and every
Guaranteed Obligation. Without limiting the foregoing, the Guarantor
hereby covenants and agrees that, if the Buyer shall fail to pay or perform in
full when due any Guaranteed Obligations, the Guarantor shall promptly pay or
perform the same in full, without demand or notice whatsoever.
2. Unconditional
Obligations. The obligations of the Guarantor
under this Guaranty shall be absolute, unconditional and irrevocable, shall not
be subject to offset or counterclaim, and shall remain in full force and effect
until all of the Guaranteed Obligations have been satisfied and discharged in
full, in each case irrespective of the validity or enforceability of the Asset
Purchase Agreement or any Ancillary Agreement. The guarantee
hereunder shall constitute a continuing guarantee and shall apply to all
Guaranteed Obligations whenever and wherever arising, and shall survive any
termination of the Asset Purchase Agreement or any Ancillary Agreement with
respect to any obligations of the Buyer that survive the termination
thereof. Notwithstanding the foregoing, the Guarantor shall have such
rights, remedies and defenses (including without limitation, defenses of
wrongful conduct of the Sellers that affect the validity or enforceability of
the Asset Purchase Agreement and the Ancillary Agreements against the Buyer)
that are available to the Buyer under the Asset Purchase Agreement and the
Ancillary Agreements and under applicable law.
3. Waivers by the
Guarantor. The Guarantor hereby expressly waives any and all
(i) notice or proof of reliance by the Sellers or any other person or entity
upon this Guaranty, (ii) any requirement of acceptance of this Guaranty or
notice of such acceptance, (iii) notice of the creation, renewal, extension,
amendment, modification or accrual of any of the Guaranteed Obligations, (iv)
diligence, presentment, demand, protest, notice or other requirements whatsoever
relating to the Guaranteed Obligations, or (v) requirement that the Sellers file
a claim with a court in the event of the bankruptcy, insolvency, rehabilitation,
liquidation, dissolution or receivership of the Guarantor or any of its
Affiliates. The Guarantor covenants and agrees that this Guaranty shall not be
satisfied or discharged except by complete and timely performance of all of the
Guaranteed Obligations; provided, however that in no event shall the obligations
of the Guarantor hereunder be greater than those of the Buyer pursuant to the
Asset Purchase Agreement and the Ancillary Agreements.
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4. Representations and
Warranties. The Guarantor hereby represents and warrants to
each Seller that:
(a) The
Guarantor is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware, and has all requisite power and
authority to execute and deliver this Guaranty and to perform its obligations
hereunder.
(b) The
execution, delivery and performance by the Guarantor of this Guaranty and the
consummation by the Guarantor of the transactions contemplated hereby have been
duly and validly authorized by all necessary corporate action on the part of the
Guarantor and no other corporate proceedings on the part of the Guarantor are
necessary to authorize the execution, delivery and performance of this
Guaranty. This Guaranty has been duly and validly executed and
delivered by the Guarantor and constitutes the legal, valid and binding
obligation of the Guarantor, enforceable against the Guarantor in accordance
with its terms.
(c) The
execution and delivery by the Guarantor of this Guaranty, the performance by the
Guarantor of its obligations hereunder, and the consummation by the Guarantor of
the transactions contemplated hereby do not and will not conflict with, result
in any breach or violation of, constitute a default under (or an event which
with the giving of notice or the lapse of time or both would constitute a
default under), give rise to any right of termination or acceleration of any
right or obligation of the Guarantor under, or result in the creation or
imposition of any lien or other encumbrance upon any material assets or
properties of the Guarantor by reason of the terms of, (i) the memorandum and
articles of association, by-laws or other charter or organization documents of
the Guarantor, (ii) any material contract, agreement or instrument to which the
Guarantor is a party or by which it or its assets or properties may be bound or
subject, (iii) any applicable order, writ, injunction, award, decree, law,
statute, ordinance, rule or regulation, or (iv) any material Permit of the
Guarantor.
(d) No
consent, authorization, approval, license, Permit, waiver, registration, filing
or notice is necessary to be obtained, made or given by the Guarantor or its
affiliates in connection with this Guaranty, except those that have been
obtained, made or given prior hereto and are in full force and
effect.
(e) All
of the representations and warranties of the Buyer contained in the Asset
Purchase Agreement, the Ancillary Agreements and the certificates, documents and
instruments delivered expressly pursuant to the Asset Purchase Agreement and the
Ancillary Agreements are true and correct as of the date thereof and will be
true and correct as of the Closing as though made on and as of the Closing
(except to the extent any such representations and warranties are specifically
made as of a particular date, in which case such representations and warranties
are and will be true and correct as of such date); it being understood that the
Guarantor’s obligations to guarantee the indemnification obligations of the
Buyer under the Asset Purchase Agreement shall be subject to the limitations
contained in Article VI of the Asset Purchase Agreement.
5. Covenants. Guarantor
shall be bound by the same restrictions and provisions of Article VII (entitled
“Tax Matters”), Article X (entitled “Post-Closing Covenants”) and Section 11.1
(entitled “Press Releases and Announcements”) of the Asset Purchase Agreement
applicable to the Buyer thereunder, to the same extent as if the Guarantor were
a party thereto in the same position as the Buyer.
6. Notices. All
notices and other communications hereunder shall be in writing and shall be
effective upon delivery by hand or upon receipt if sent by certified or
registered mail (postage prepaid and return receipt requested) or by a
nationally recognized overnight courier service (appropriately marked for
overnight delivery) or upon transmission if sent by facsimile or e-mail (with
confirmation of receipt and with physical delivery of the communication being
made by one of the other means specified in this paragraph as promptly as
practicable thereafter). Notices are to be addressed (a) to
Guarantor, in the manner provided in Section 12.6 of the Asset Purchase
Agreement for notices to the Buyer and (b) to the Sellers in the manner provided
in Section 12.6 of the Asset Purchase Agreement for notices to the Sellers, or
in the case of clauses (a) and (b) to such other respective addresses as the
Guarantor or the Sellers, as the case may be, may designate by written notice to
the other by like notice, provided that notice of a change of address shall be
effective only upon receipt thereof.
7. Amendments and Waivers;
Remedies. No amendment, modification or waiver of any
provision of this Guaranty nor consent to any departure herefrom shall in any
event be effective unless the same shall be in writing and signed by the Sellers
and, in the case of an amendment or modification, the Guarantor, and then any
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given. No failure on the part of the
Sellers to exercise, and no delay in exercising, and no course of dealing with
respect to, any right, power or remedy hereunder shall operate as a waiver
thereof or of any default hereunder, nor shall any single or partial exercise by
the Sellers of any right, power or remedy hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or remedy of
the Sellers.
8. Specific Performance.
The Guarantor acknowledges and agrees that in the event of any breach or default
under this Guaranty, the Sellers would be irreparably and immediately harmed and
may not be made whole by monetary damages. The Guarantor accordingly
agrees that (i) it will waive, in any action, suit or proceeding for specific
performance or other relief referred to in this Guaranty, the defense of
adequacy of money damages or a remedy at law, and (ii) the Sellers will be
entitled, in addition to any other remedy to which it may be entitled at law or
in equity, to compel specific performance of this Guaranty or to obtain a
temporary restraining order, preliminary and permanent injunction or other
equitable relief or remedy in any action, suit or proceeding instituted in any
state or federal court.
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9. Consent to Jurisdiction;
Service of Process. Each party to this Guaranty (a) submits to
the exclusive jurisdiction of U.S. District Court for the Southern District of
New York (and the federal appellate courts with reviewing jurisdiction
thereover) and, if such courts do not have subject matter jurisdiction of such
matter, either the Supreme Court (Commercial Division) of the State of New York
sitting in the City and County of New York (and the state appellate courts of
the State of New York with reviewing jurisdiction thereover), in any action or
proceeding arising out of or relating to this Guaranty (including any action or
proceeding for the enforcement of any arbitral award made in connection with any
arbitration of a dispute hereunder), (b) agrees that all claims in respect of
such action or proceeding may be heard and determined in any such court, (c)
waives any claim of inconvenient forum or other challenge to venue in such
court, (d) agrees not to bring any action or proceeding arising out of or
relating to this Guaranty in any other court, and (e) waives any right it may
have to a trial by jury with respect to any action or proceeding arising out of
or relating to this Guaranty. Each party to this Guaranty agrees to
accept service of any summons, complaint or other initial pleading made in the
manner provided for the giving of notices in Section 6 above,
provided that
nothing in this Section 9 shall
affect the right of any party to this Guaranty to serve such summons, complaint
or other initial pleading in any other manner permitted by law.
10. Governing
Law. This Guaranty shall be governed by and construed in
accordance with the internal laws of the State of New York, without giving
effect to the principles
of conflicts of law thereof.
11. Miscellaneous. This
Guaranty (a) is for the benefit of the Sellers and the other Indemnified Seller
Parties and is not intended to confer any rights or remedies upon any person or
entity other than the Sellers and the other Indemnified Seller Parties and their
respective successors, assigns and legal representatives; (b) represents the
entire understanding and agreement between the parties hereto with respect to
the subject matter hereof and supersedes all prior oral and written and all
contemporaneous oral negotiations, commitments and understandings between the
parties; and (c) may be executed in counterparts, each of which shall be deemed
an original but both of which together shall constitute one and the same
instrument. This Guaranty may not be assigned or delegated, in whole
or in part, by either party hereto without the prior written consent of the
other party, and the Guarantor shall not exercise any right or remedy arising by
reason of any performance by it of its guarantee in Section 1 above,
whether by subrogation or otherwise, against the
Sellers. Notwithstanding anything herein to the contrary, the
provisions of this Guaranty shall survive any direct or indirect sale or
exchange of capital stock, merger, consolidation, sale, or transfer of assets,
business combination or other change in control or, or change in the form of
business conducted by, Guarantor or the Sellers. Section headings are
inserted for convenience only and shall not affect the interpretation of this
Guaranty. Any provision of this Guaranty which is declared or found
to be invalid, illegal or unenforceable in any jurisdiction shall, as to that
jurisdiction, only affect such provision, and shall not affect in any way the
remaining provisions hereof in such jurisdiction or the Agreement in any other
jurisdiction. Subject to the foregoing, this Guaranty shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
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IN
WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed on its
behalf by its duly authorized officers as of the date first written
above.
Hauppauge
Digital, Inc.
/s/
Xxx Xxxxxxx
Xxx Xxxxxxx
Chief Executive Officer
THE
SELLERS:
Avid
Technology, Inc.
/s/
Xxx Xxxxxx
Xxx
Xxxxxx
Executive
Vice President, Chief
Administrative
Officer and Chief Financial
Officer
THE
SELLERS:
Pinnacle
Systems, Inc.
/s/
Xxx Xxxxxx
Xxx Xxxxxx
President
THE
SELLERS:
Avid
Technology International BV
/s/
Xxxx Xxxxx
Xxxx
Xxxxx
Director
THE
SELLERS:
Avid
Development GmbH
/s/
Xxxxx Xxxxx
Xxxxx
Xxxxx
Managing
Director
THE
SELLERS:
Avid
Technology GmbH
/s/
Xxxxx Xxxxx
Xxxxx
Xxxxx
Procura
