THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUED UPON
ITS EXERCISE ARE SUBJECT TO THE RESTRICTIONS ON TRANS-
FER SET FORTH IN SECTION 4 OF THIS WARRANT
Warrant No. 1 Number of Shares: 1,155,235
(subject to adjustment)
Date of Issuance: August 3, 1998
AVID TECHNOLOGY, INC.
COMMON STOCK PURCHASE WARRANT
(Void after August 3, 2008)
Avid Technology, Inc., a Delaware corporation (the "COMPANY"), for value
received, hereby certifies that Microsoft Corporation or, subject to Section 9,
its registered assigns (the "REGISTERED HOLDER"), is entitled, subject to the
terms set forth below, to purchase from the Company, at any time or from time to
time on or after August 3, 2000 and on or before August 3, 2008 at not later
than 5:00 p.m. (Boston, Massachusetts time), 1,155,235 shares of common stock,
$.01 par value per share (the "COMMON STOCK"), of the Company, at a purchase
price of $47.65 per share. The shares of Common Stock purchasable upon exercise
of this Warrant, and the purchase price per share, each as adjusted from time to
time pursuant to the provisions of this Warrant, are hereinafter referred to as
the "WARRANT SHARES" and the "PURCHASE PRICE," respectively.
1. EXERCISE
(1) This Warrant may be exercised by the Registered Holder, in whole or in part,
by surrendering this Warrant, with the purchase form appended hereto as EXHIBIT
I duly executed by such Registered Holder or by such Registered Xxxxxx's duly
authorized attorney, at the principal office of the Company, or at such other
office or agency as the Company may designate, accompanied by payment in full,
in lawful money of the United States, of the Purchase Price payable in respect
of the number of Warrant Shares purchased upon such exercise. The Purchase Price
shall be paid in the form of (i) cash, (ii) a check of the Registered Holder to
the Company, (iii) an electronic wire transfer of immediately available funds in
accordance with written instructions of the Company or, (iv) if approved by the
Company, any combination of the foregoing forms of payment.
(2) Each exercise of this Warrant shall be deemed to have been effected
immediately prior to the close of business on the day on which this Warrant
shall have been surrendered to the Company as provided in subsection 1(a) above.
At such time, the person or persons in whose name or names any certificates for
Warrant Shares shall be issuable upon such exercise as provided in subsection
1(c) below shall be deemed to have become the holder or holders of record of the
Warrant Shares represented by such certificates.
(3) As soon as practicable after the exercise of this Warrant in full or in
part, and in any event within 10 days thereafter, the Company, at its expense,
will cause to be issued in the name of, and delivered to, the Registered Holder,
or as such Holder (upon compliance with Section 9 and payment by such Holder of
any applicable transfer taxes) may direct:
(1) a certificate or certificates for the number of full Warrant Shares to which
such Registered Holder shall be entitled upon such exercise plus, in lieu of
any fractional share to which such Registered Holder would otherwise be
entitled, cash in an amount determined pursuant to Section 3 hereof; and
(2) in case such exercise is in part only, a new warrant or warrants (dated the
date hereof) of like tenor, calling in the aggregate on the face or faces
thereof for the number of Warrant Shares equal (without giving effect to any
adjustment therein) to the number of such shares called for on the face of this
Warrant minus the number of such shares purchased by the Registered Holder upon
such exercise.
2. ADJUSTMENTS
(1) If outstanding shares of the Company's Common Stock shall be subdivided into
a greater number of shares or a dividend in Common Stock shall be paid in
respect of Common Stock, the Purchase Price in effect immediately prior to such
subdivision or at the record date of such dividend shall simultaneously with the
effectiveness of such subdivision or immediately after the record date of such
dividend be proportionately reduced. If outstanding shares of Common Stock shall
be combined into a smaller number of shares, the Purchase Price in effect
immediately prior to such combination shall, simultaneously with the
effectiveness of such combination, be proportionately increased. When any
adjustment is required to be made in the Purchase Price, the number of Warrant
Shares purchasable upon the exercise of this Warrant shall be changed to the
quotient of (i) (A) the number of shares issuable upon the exercise of this
Warrant immediately prior to such adjustment multiplied by (B) the Purchase
Price in effect immediately prior to such adjustment, divided by (ii) the
Purchase Price in effect immediately after such adjustment.
(2) If there shall occur any capital reorganization or reclassification of the
Company's Common Stock (other than a change in par value or a subdivision or
combination as provided for in subsection 2(a) above), or any consolidation or
merger of the Company with or into another corporation, or a transfer of all or
substantially all of the assets of the Company, then, as part of any such
reorganization, reclassification, consolidation, merger or sale, as the case may
be, lawful provision shall be made so that the Registered Holder of this Warrant
shall have the right thereafter to receive upon the exercise hereof the kind and
amount of shares of stock or other securities or property which such Registered
Holder would have been entitled to receive if, immediately prior to any such
reorganization, reclassification, consolidation, merger or sale, as the case may
be, such Registered Holder had held the number of shares of Common Stock which
were then purchasable upon the exercise of this Warrant. In any such case,
appropriate adjustment (as reasonably determined in good faith by the Board of
Directors of the Company) shall be made in the application of the provisions set
forth herein with respect to the rights and interests thereafter of the
Registered Holder of this Warrant, such that the provisions set forth in this
Section 2 (including provisions with respect to adjustment of the Purchase
Price) shall thereafter be applicable, as nearly as is reasonably practicable,
in relation to any shares of stock or other securities or property thereafter
deliverable upon the exercise of this Warrant.
(3) When any adjustment is required to be made in the Purchase Price, the
Company shall promptly mail to the Registered Holder a certificate setting forth
the Purchase Price after such adjustment and setting forth a brief statement of
the facts requiring such adjustment. Such certificate shall also set forth the
kind and amount of stock or other securities or property into which this Warrant
shall be exercisable following the occurrence of any of the events specified in
subsection 2(a) or (b) above.
3. FRACTIONAL SHARES. The Company shall not be required upon the exercise of
this Warrant to issue any fractional shares, but shall make an adjustment
therefor in cash on the basis of the Fair Market Value per share of Common
Stock. For this purpose, The Fair Market Value per share of Common Stock shall
be determined as follows:
(1) If the Common Stock is listed on a national securities exchange, the Nasdaq
National Market or another nationally recognized exchange or trading system as
of the Exercise Date, the Fair Market Value per share of Common Stock shall be
deemed to be the last reported sale price per share of Common Stock thereon on
the Exercise Date; or, if no such price is reported on such date, such price on
the next preceding business day (provided that if no such price is reported on
the next preceding business day, the Fair Market Value per share of Common Stock
shall be determined pursuant to clause (ii)).
(2) If the Common Stock is not listed on a national securities exchange, the
Nasdaq National Market or another nationally recognized exchange or trading
system as of the Exercise Date, the Fair Market Value per share of Common Stock
shall be deemed to be the amount most recently determined by the Board of
Directors to represent the fair market value per share of the Common Stock
(including without limitation a determination for purposes of granting Common
Stock options or issuing Common Stock under an employee benefit plan of the
Company); and, upon request of the Registered Holder, the Board of Directors (or
a representative thereof) shall promptly notify the Registered Holder of the
Fair Market Value per share of Common Stock. Notwithstanding the foregoing, if
the Board of Directors has not made such a determination within the three-month
period prior to the effective date of exercise, as determined in pursuant to
Section 1(b) above (the "EXERCISE DATE"), then (A) the Fair Market Value per
share of Common Stock shall be the amount next determined by the Board of
Directors to represent the fair market value per share of the Common Stock
(including without limitation a determination for purposes of granting Common
Stock options or issuing Common Stock under an employee benefit plan of the
Company), (B) the Board of Directors shall make such a determination within 15
days of a request by the Registered Holder that it do so, and (C) the exercise
of this Warrant pursuant to this subsection 1(b) shall be delayed until such
determination is made.
4. SECURITIES LAW TRADING RESTRICTIONS
(1) This Warrant and the Warrant Shares shall not be sold or transferred unless
(i) the Company provides consent in accordance with Section 9, and (ii) either
(A) the Warrant or the Warrant Shares first shall have been registered under the
Securities Act of 1933, as amended (the "Act"), or (B) the Company first shall
have been furnished with an opinion of legal counsel, reasonably satisfactory to
the Company, to the effect that such sale or transfer is exempt from the
registration requirements of the Act.
(2) Each certificate representing Warrant Shares shall bear a legend
substantially in the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED
UNLESS AND UNTIL SUCH SECURITIES ARE REGISTERED UNDER SUCH ACT OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY IS
OBTAINED TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED.
The foregoing legend shall be removed from the certificates representing any
Warrant Shares, at the request of the holder thereof, at such time as they
become eligible for resale pursuant to Rule 144(k) under the Act, or any
successor provision thereto.
5. NO IMPAIRMENT. The Company will not, by amendment of its charter or through
reorganization, consolidation, merger, dissolution, sale of assets or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the holder of this
Warrant against impairment.
6. NOTICES OF RECORD DATE, ETC.
In case:
(1) the Company shall take a record of the holders of its Common Stock (or other
stock or securities at the time deliverable upon the exercise of this Warrant)
for the purpose of entitling or enabling them to receive any dividend or other
distribution, or to receive any right to subscribe for or purchase any shares of
stock of any class or any other securities, or to receive any other right; or
(2) of any capital reorganization of the Company, any reclassification of the
capital stock of the Company, any consolidation or merger of the Company with or
into another corporation (other than a consolidation or merger in which the
Company is the surviving entity), or any transfer of all or substantially all of
the assets of the Company; or
(3) of the voluntary or involuntary dissolution, liquidation or winding-up of
the Company, then, and in each such case, the Company will mail or cause to be
mailed to the Registered Holder of this Warrant a notice specifying, as the case
may be, (i) the date on which a record is to be taken for the purpose of such
dividend, distribution or right, and stating the amount and character of such
dividend, distribution or right, or (ii) the effective date on which such
reorganization, reclassification, consolidation, merger, transfer, dissolution,
liquidation or winding-up is to take place, and the time, if any is to be fixed,
as of which the holders of record of Common Stock (or such other stock or
securities at the time deliverable upon the exercise of this Warrant) shall be
entitled to exchange their shares of Common Stock (or such other stock or
securities) for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, transfer, dissolution,
liquidation or winding-up. Such notice shall be mailed at least ten (10) days
prior to the record date or effective date for the event specified in such
notice.
7. RESERVATION OF STOCK. The Company will at all times reserve and keep
available, solely for issuance and delivery upon the exercise of this Warrant,
such number of Warrant Shares and other stock, securities and property, as from
time to time shall be issuable upon the exercise of this Warrant.
8. REPLACEMENT OF WARRANTS. Upon receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction or mutilation of this Warrant and
(in the case of loss, theft or destruction) upon delivery of an indemnity
agreement (with surety if reasonably required) in an amount reasonably
satisfactory to the Company, or (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will issue, in lieu thereof, a new
Warrant of like tenor.
9. TRANSFER RESTRICTIONS
(1) Neither this Warrant nor any rights hereunder are transferable, in whole or
in part, without the written consent of the Company which the Company may
withhold in its sole discretion. To effect any such permitted transfer, the
Registered Holder must surrender this Warrant with a properly executed
assignment (in the form attached hereto as EXHIBIT II) at the principal office
of the Company. Such assignment shall not be effective unless and until
countersigned by the Company.
(2) Upon the surrender by the Registered Holder of this Warrant and an
assignment executed by the Registered Holder and countersigned by the Company to
the Company at the principal office of the Company, the Company will, subject to
the provisions of Section 4 hereof, issue and deliver to or upon the order of
such Holder a new Warrant of like tenor, in such name as the Registered Holder
(upon payment by such Registered Holder of any applicable transfer taxes) shall
direct, calling on the face thereof for the number of shares of Common Stock
called for on the face of the Warrant so surrendered. (3) Until any permitted
transfer of this Warrant is effected as provided above, the Company may treat
the Registered Holder of this Warrant as the absolute owner hereof for all
purposes.
10. MAILING OF NOTICES, ETC. All notices and other communications from the
Company to the Registered Holder of this Warrant shall be mailed by first-class
certified or registered mail, postage prepaid, to the address furnished to the
Company in writing by the last Registered Holder of this Warrant who shall have
furnished an address to the Company in writing. All notices and other
communications from the Registered Holder of this Warrant or in connection
herewith to the Company shall be mailed by first-class certified or registered
mail, postage prepaid, to the Company at its principal office set forth below.
If the Company should at any time change the location of its principal office to
a place other than as set forth below, it shall give prompt written notice to
the Registered Holder of this Warrant and thereafter all references in this
Warrant to the location of its principal office at the particular time shall be
as so specified in such notice.
11. NO RIGHTS AS STOCKHOLDER. Until the exercise of this Warrant, the Registered
Holder of this Warrant shall not have or exercise any rights by virtue hereof as
a stockholder of the Company.
12. CHANGE OR WAIVER. No term of this Warrant may be changed or waived other
than by an instrument in writing signed by the party against which enforcement
of the change or waiver is sought.
13. HEADINGS. The headings in this Warrant are for purposes of reference only
and shall not limit or otherwise affect the meaning of any provision of this
Warrant.
14. GOVERNING LAW. This Warrant shall be governed by and construed in accordance
with the laws of the State of Delaware applicable to contracts entered into and
performed entirely within Delaware.
AVID TECHNOLOGY, INC.
By: /S/XXXXXXX X. XXXXXXXX
--------------------------
Senior Vice President of Finance, Chief
Financial Officer, and Treasurer
ATTEST:
/S/XXXXX X. XXXXXXX
--------------------
EXHIBIT I
PURCHASE FORM
To:_________________ Dated:______________
The undersigned, pursuant to the provisions set forth in the attached
Warrant (No. ___), hereby irrevocably elects to purchase _____ shares of the
Common Stock covered by such Warrant. The undersigned herewith makes payment of
$____________, representing the full purchase price for such shares at the price
per share provided for in such Warrant. Such payment is in the form of (indicate
the applicable amount for each form of payment):
$___________ Cash
$___________ Check of the Registered Holder to the Company
$___________ Wire transfer of immediately available funds to the
Company
$___________ TOTAL PURCHASE PRICE
Signature:
Address:
EXHIBIT II
ASSIGNMENT FORM
FOR VALUE RECEIVED, ________________________________________
hereby sells, assigns and transfers all of the rights of the undersigned under
the attached Warrant (No. ____) with respect to the number of shares of Common
Stock covered thereby set forth below, unto:
Name of Assignee Address No. of Shares
REGISTERED HOLDER
Signature: Dated:
Witness: Dated:
On behalf and in the name of the Company, the undersigned consents to the
assignment of the attached Warrant by the Registered Holder to the assignee set
forth above.
COMPANY
By:
Name:
Title:
