ASSET PURCHASE AGREEMENT
AMONG
PINNACLE SYSTEMS, INC.,
PINNACLE SYSTEMS GmbH,
PINNACLE SYSTEMS, C.V.,
PINNACLE SYSTEMS LTD.,
MIRO COMPUTER PRODUCTS AG,
MIRO COMPUTER PRODUCTS INC.
AND
MIRO COMPUTER PRODUCTS LTD.
AUGUST 29, 1997
TABLE OF CONTENTS
Page
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I. DEFINITIONS 1
II. PURCHASE AND SALE TRANSACTION 9
Purchase and Sale of Assets 9
Excluded Assets 10
Assumption of Liabilities 10
Liabilities Not Assumed 11
Purchase Price 12
Earnout Payment 13
Transfer Tax 16
Allocation of Purchase Price 16
The Effective Date 16
Deliveries in the Context of the Effective Date 18
III. REPRESENTATIONS, WARRANTIES AND GUARANTEES OF THE SELLERS 19
Organization of Miro 19
Acquired Subsidiaries 20
Organization of Subsidiaries 21
Authority 21
No Conflict 22
Consents 22
Financial Statements 22
No Undisclosed Liabilities 23
No Changes 23
Tax Matters 25
Restrictions on Business Activities 26
Title of Assets; Condition of Equipment 26
Intellectual Property 26
Agreements, Contracts and Commitments 29
Interested Party Transactions 30
Governmental Authorization 30
Litigation 31
Accounts Receivable; Inventory 31
i
Environmental Matters 31
Brokers' and Finders' Fees; Third Party Expenses 32
Employee Benefit Plans and Compensation 32
Insurance 33
Compliance with Laws 33
Third Party Consents 33
Warranties; Indemnities 34
Affiliated Transactions 34
Government Contracts 34
Distributors, Customers, and Suppliers 34
No Illegal Payments, Etc. 34
Product Warranties; Defects; Liability 34
Complete Copies of Material 35
Board Approval 35
Acquisiton Entirely for Own Account 35
Reliance on Sellers' Representations 35
Receipt of Information 35
Investment Experience 35
Restricted Securities 35
Entire Assets 36
Representations Complete 36
IV. REPRESENTATIONS AND WARRANTIES OF THE BUYERS 36
Organization of Buyers 36
Authority for Agreement 36
Adequate Resources 37
Noncontravention 37
Brokers' Fees 37
Consents 37
SEC Filing; Financial Statements 37
Validity of Shares 38
Material Adverse Effect 38
V. [INTENTIONALLY OMITTED] 38
VI. ADDITIONAL AGREEMENTS 38
Shareholder Approval 38
ii
Employment and Non-Competition Agreement 38
Confidentiality 38
Expenses 38
Announcements 39
Consents 39
Reasonable Efforts 39
Notification of Certain Matters 39
Employee Matters 39
Pre-Effective Date Tax Returns 40
Covenant Not to Compete or Solicit 40
Additional Documents and Further Assurances 41
Quarterly Statements of Operating Profit, Revenues and Expenses 41
Compliance with Securities Laws 42
Rent Agreement 42
Certificate of the Buyer 42
Registration Rights Agreement 43
Legal Opinions 43
Certificate of the Seller 43
Legal Opinions 43
Additional Agreements 43
Accounts Receivable Agreement 43
Intercompany Balances 43
VII. [INTENTIONALLY OMITTED] 44
VIII. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND INDEMNIFICATION 44
Survival of Representations and Warranties 44
Indemnity and Setoff for Damages 44
IX. [INTENTIONALLY OMITTED] 47
X. GENERAL PROVISIONS 47
Notices 47
Interpretation 48
Notarizations 48
Entire Agreement; Assignment 48
Severability 48
Other Remedies 49
iii
Governing Law; Arbitration 49
Rules of Construction 49
No Third Party Beneficiaries 49
Amendment 49
iv
EXHIBITS
A-1 Asset Transfer Agreements
A-1A The Netherlands (transfer of stock of Miro Dutch
Subsidiary)
X-0X Xxxxxx (transfer of stock of Miro French Subsidiary)
A-2 Assignment and Assumption Agreement
A-3 Xxxx of Sale
A-4 Copyright Assignment (U.S.)
A-5 Patent Assignment (U.S.)
A-6 Trademark Assignments (U.S.)
B Form of Rent Agreement
C Form of Registration Rights Agreement
D-1 Form of Legal Opinion of U.S. Counsel to the Buyers and
Form of Legal Opinion of German Counsel to the Buyers
D-2 Form of Legal Opinion of U.S. Counsel to the Sellers and
Form of Legal Opinion of German Counsel to the Buyers
E Key Employees
F Form of Non-Competition Agreement
G-1 Certificate of Buyer
G-2 Certificate of Seller
v
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") is entered into on August
29, 1997 by and among Pinnacle Systems, Inc., a California corporation whose
principal place of business is in Mountain View, California, U.S.A.
("Pinnacle"), Pinnacle Systems GmbH, a corporation organized under the laws of
Germany and a subsidiary of Pinnacle ("German Sub"), Pinnacle Systems C.V., a
limited partnership formed under the laws of the Netherlands ("Dutch Sub"), and
Pinnacle Systems Ltd., a corporation formed under the laws of the United Kingdom
and a subsidiary of Pinnacle ("U.K. Sub," and, together with Pinnacle, German
Sub and Dutch Sub, the "Buyers"), and Miro Computer Products AG ("Miro"), a
corporation organized under the laws of Germany, Miro Computer Products Inc., a
California corporation and a subsidiary of Miro ("Miro U.S."), and Miro Computer
Products Ltd. a corporation organized under the laws of the United Kingdom and a
subsidiary of Miro ("Miro U.K." and, together with Miro U.S. and Miro, the
"Sellers").
RECITALS
WHEREAS, the Buyers desire to purchase from the Sellers, and the Sellers
desire to sell to the Buyers, certain of the assets and certain of the
liabilities of Sellers in consideration of the Purchase Price (as defined below)
on the terms and conditions set forth herein (the "Acquisition").
WHEREAS, in connection with the Acquisition, the Buyers and Sellers desire
to make certain representations, warranties, guarantees, covenants and other
agreements.
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, guarantees
and covenants herein contained, the parties hereto agree as follows.
ARTICLE I
DEFINITIONS
"AAA" shall mean the American Arbitration Association.
"Accountant" shall have the meaning set forth in Section 2.6.
"Accounting Fees" shall have the meaning set forth in Section 2.6.
"Accounts Receivable" shall have the meaning set forth in Section 3.18.
"Acquired Assets" shall have the meaning set forth in Section 2.1.
"Acquired Subsidiaries" shall have the meaning set forth in Section 2.1.
1
"Acquired Subsidiary Balance Sheet" shall have the meaning set forth in
Section 3.2.
"Acquisition" shall have the meaning set forth in the preamble above.
"Affiliate" shall have the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Securities Exchange Act of 1934, as amended,
of the United States.
"Agreement" shall have the meaning set forth in the preamble above.
"Allocation" shall have the meaning set forth in Section 2.8.
"Asset Transfer Agreements" shall mean those certain agreements set forth
as Exhibit A-1 attached hereto prior to Effective Date.
"Assignment and Assumption Agreement" shall mean that certain assignment
and assumption agreement set forth as Exhibit A-2 attached hereto prior to
Effective Date.
"Assumed Liabilities" shall have the meaning set forth in Section 2.3.
"Audited Financials" shall have the meaning set forth in Section 3.7.
"Base Amount" shall have the meaning set forth in Section 2.6.
"Basket Amount" shall have the meaning set forth in Section 8.2.
"Basis" shall mean any past or present fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act, or transaction that forms or could reasonably form the
basis for any specified consequence.
"Xxxx of Sale" shall mean that certain document set forth as Exhibit A-3
attached hereto prior to Effective Date.
"Buyers" shall have the meaning set forth in the preamble above.
"Business" shall mean the design, development, manufacture, marketing and
service of digital video products by the Sellers or any of their Subsidiaries,
including but not limited to the operations of the Sellers and/or any of their
Subsidiaries referred to as the Digital Video Group.
"Cash" shall mean cash and cash equivalents within the meaning of GAAP.
"Charter" shall have the meaning set forth in Section 3.1.
"COBRA" shall mean the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended.
"Code" shall mean the Internal Revenue Code of 1986, as amended, of the
United States.
2
"Competing Business Purpose" shall have the meaning set forth in Section
6.11.
"Confidentiality Agreement" shall mean the Confidential Disclosure
Agreement previously entered into between Miro and Pinnacle.
"Conflict" shall have the meaning set forth in Section 3.5.
"Continuing Employees" shall have the meaning set forth in Section 6.9.
"Contract" shall have the meaning set forth in Section 3.14.
"Copyright Assignment" shall mean that certain document set forth as
Exhibit A-4 attached hereto prior to Effective Date.
"Customer Information" shall have the meaning set forth in Section 3.12.
"Digital Video Group Assets" means the Products, Technology and other
assets, rights, business and operations that directly relate to, are
incorporated or embodied in, or are used in or necessary to the development,
manufacture, testing, marketing or sale of the Products.
"Digital Video Group Intellectual Property" shall mean any Intellectual
Property that: (i) is owned exclusively by or exclusively licensed to any of the
Sellers or any Subsidiary of any Seller and relates to the Business, or (ii)
which is necessary to the operation of the Business, including the design,
manufacture and use of the products of the Business as they currently are
operated or is reasonably anticipated to be operated in the future, but shall
specifically not include any rights in or to materials created for clients as
"work-made-for-hire" or which are subject to an exclusive assignment or license
in favor of clients of any Seller or any of its Subsidiaries.
"Earnout Payment" shall have the meaning set forth in Section 2.5.
"Earnout Period" shall have the meaning set forth in Section 2.6.
"Earnout Trading Price" shall have the meaning set forth in Section 2.6.
"Effective Date" shall mean August 31, 1997 24:00 hours.
"Employee" shall have the meaning set forth in Section 3.21.
"Employee Agreement" shall have the meaning set forth in Section 3.21.
"Employee Plan" shall have the meaning set forth in Section 3.21.
"Environmental Permits" shall have the meaning set forth in Section 3.19.
"Equipment" shall have the meaning set forth in Section 3.12.
3
"Excess Amount" shall have the meaning set forth in Section 2.6.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
of the United States.
"Excluded Assets" shall have the meaning set forth in Section 2.2.
"Excluded Liabilities" shall have the meaning set forth in Section 2.4.
"Existing Buyer Products" shall have the meaning set forth in Section 2.6
"Existing Products" shall have the meaning set forth in Section 2.6.
"Expenses" shall have the meaning set forth in Section 2.6.
"Extraordinary General Meeting" shall mean the extraordinary general
meeting of Miro which shall be held prior to the Effective Date for the purpose
of approving the Agreement and the Acquisition.
"GAAP" shall mean generally accepted accounting principles as in effect
from time to time in United States.
"Governmental Entity" shall have the meaning set forth in Section 3.6.
"Hazardous Material" shall have the meaning set forth in Section 3.19.
"Hazardous Materials Activities" shall have the meaning set forth in
Section 3.19.
"Initial Payment" shall have the meaning set forth in Section 2.5.
"Intellectual Property" shall mean any or all of the following and all
statutory and/or common law rights throughout the world in, arising out of, or
associated therewith: (i) all patents and applications therefor and all
reissues, divisions, renewals, extensions, provisionals, continuations and
continuations-in-part thereof; (ii) all inventions (whether patentable or not),
invention disclosures and improvements, all trade secrets, proprietary
information, know how and technology; (iii) all works of authorship, "moral
rights," copyrights (whether or not registered), mask works, copyright and mask
work registrations and applications; (iv) all industrial designs and any
registrations and applications therefor; (v) all trade names, logos, trademarks
and service marks; trademark and service xxxx registrations and applications;
(vi) all databases and data collections (including customer lists); (vii) all
computer software including all source code, object code, firmware, development
tools, files, records and data, all media on which any of the foregoing is
recorded; (viii) URLs, Web site addresses and domain names; (ix) any similar,
corresponding or equivalent rights to any of the foregoing; and (x) all
documentation related to any of the foregoing.
4
"Inventory" shall mean the inventory of Products, including all related raw
materials and supplies, manufactured and purchased parts, goods in progress,
finished goods and packaging, included in the Digital Video Group Assets.
"IRS" shall mean the Internal Revenue Service of the United States.
"Key Employees" shall mean those employees of the Sellers or any of their
Subsidiaries listed on Exhibit E hereto.
"Knowledge" shall mean what would be within the actual knowledge of a
prudent Person.
"Liability" shall mean any liability or obligation (whether known or
unknown, whether asserted or unasserted, whether absolute or contingent, whether
accrued or unaccrued, whether liquidated or unliquidated, whether incurred or
consequential and whether due or to become due), including any liability for
Taxes.
"Lien" shall mean any mortgage, pledge, lien, security interest, charge,
claim, equity, encumbrance, restriction on transfer, conditional sale or other
title retention device or arrangement (including, without limitation, a capital
lease), transfer for the purpose of subjection to the payment of any
indebtedness, or restriction on the creation of any of the foregoing, whether
relating to any property or right or the income or profits therefrom.
"Loss" and "Losses" shall have the respective meanings set forth in Section
8.2.
"Material Adverse Effect" shall mean a material adverse effect or change on
the business, assets (including intangible assets), condition (financial or
otherwise), results of operations or prospects of a party.
"Miro" shall mean Miro Computer Products AG.
"Miro Derivative Products" shall have the meaning set forth in Section 2.6.
"Most Recent Balance Sheet" shall mean the unaudited consolidated balance
sheet of Miro dated June 30, 1997 prepared in accordance with the Miro's
historical methods of accounting as set forth on Schedule 3.7.
"Nasdaq" shall mean the Nasdaq National Market.
"Noncompetition Agreements" shall have the meaning set forth in Section
6.11.
"Noncompetition Period" shall have the meaning set forth in Section 6.11.
"Nonprevailing Party" shall have the meaning set forth in Section 2.6.
"Officer's Certificate" shall mean the duly authorized and executed
certificate of any of the parties.
5
"Ordinary Course of Business" shall mean the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"Operating Profit" shall have the meaning set forth in Section 2.6.
"Patent" shall mean any: (i) patent, patent application, patent disclosure
or other patent right in any jurisdiction of the world; (ii) any division,
continuation, continuation-in-part, reissuance, reexamination, or extension of a
Patent; and (iii) any future patent or other patent right that issues or is
based upon a patent disclosure or upon an application that is a Patent.
"Patent Assignment" shall mean that certain document set forth as Exhibit
A-5 attached hereto prior to Effective Date.
"Person" shall mean an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).
"Permits" shall have the meaning set forth in Section 2.1(d).
"Pinnacle Common Stock" shall mean fully paid and nonassessable shares of
Common Stock, no par value, of Pinnacle.
"Products" means all current products and services of the Business, any
subsequent versions of such products currently being developed, any products
currently being developed by the Sellers or any of their Subsidiaries which are
designated to supersede, replace or function as a component of such Products,
and any upgrades, enhancements, improvements and modifications to the foregoing
currently being developed.
"Purchase Price" shall have the meaning set forth in Section 2.5.
"Registered Intellectual Property" shall mean all United States,
international and foreign: (i) patents, patent applications (including
provisional applications); (ii) registered trademarks, service marks or trade
names, applications to register trademarks, service marks or trade names,
intent-to-use applications, or other registrations or applications related to
trademarks, service marks or trade names; (iii) registered copyrights and
applications for copyright registration; (iv) any mask work registrations and
applications to register mask works; (v) URLs, web site addresses and domain
names and (vi) any other Intellectual Property that is the subject of an
application, certificate, filing, registration or other document issued by,
filed with, or recorded by, any state, government or other public legal
authority.
"Registration Rights Agreement" shall mean that certain document set forth
as Exhibit C attached hereto prior to Effective Date.
"Regulations" shall have meaning set forth in Section 6.9.
6
"Related Agreements" shall mean all such ancillary agreements required in
this Agreement to be executed and delivered in connection with the transactions
contemplated hereby, including the Registration Rights Agreement and the Rent
Agreement, but shall not include the Non-Competition Agreements.
"Rent Agreement" shall mean that certain document set forth as Exhibit B
attached hereto prior to Effective Date.
"Returns" shall have the meaning set forth in Section 3.10.
"Revenues" shall have the meaning set forth in Section 2.6.
"Schedules" shall have the meaning set forth in Article III.
"Securities Act" shall mean the Securities Act of 1933, as amended, of the
United States.
"SEC" shall mean the Securities and Exchange Commission of the United
States.
"SEC Reports" shall have the meaning set forth in Section 4.7.
"Sellers" shall have the meaning set forth in the preamble above.
"Sellers' Agreement" shall have the meaning set forth in Section 3.9.
"Sellers' Authorizations" shall have the meaning set forth in Section 3.16.
"Sellers' Products" shall have the meaning set forth in Section 2.6.
"Statement of Operating Profit" shall have the meaning set forth in Section
2.6.
"Subsidiary" means any corporation with respect to which a specified Person
(or a Subsidiary thereof) owns a majority of the common stock or has the power
to vote or direct the voting of sufficient securities to elect a majority of the
directors.
"Tax" or, collectively, "Taxes", means (i) any and all German, United
States federal, state and local and other non-U.S. taxes, assessments and other
governmental charges, duties, impositions and liabilities, including taxes based
upon or measured by gross receipts, income, profits, sales, use and occupation,
and value added, ad valorem, transfer, franchise, withholding, payroll,
recapture, employment, excise and property taxes, together with all interest,
penalties and additions imposed with respect to such amounts; (ii) any liability
for the payment of any amounts of the type described in clause (i) as a result
of being a member of an affiliated, consolidated, combined or unitary group for
any period; and (iii) any liability for the payment of any amounts of the type
described in clause (i) or (ii) as a result of any express or implied obligation
to indemnify any other Person or as a result of any obligations under any
agreements or arrangements with any other Person with respect to such amounts
and including any liability for taxes of a predecessor entity.
7
"Tax Return" shall mean any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"Technology" means all inventions, copyrightable works, integrated circuit
masks, discoveries, innovations, know-how, information (including ideas,
research and development, know-how, formulas, compositions, manufacturing and
production processes and techniques, technical data, designs, drawings,
specifications, customer and supplier lists, pricing and cost information,
business and marketing plans and proposals, documentation, and manuals),
computer software, computer hardware, integrated circuits, electronic,
electrical and mechanical equipment and all other forms of technology, including
improvements, modifications, derivatives or changes, whether tangible or
intangible, embodied in any form, whether or not protectible or protected by
patent, copyright, mask work right, trade secret law or otherwise, that are
incorporated, embodied or used in or are used to develop, manufacture, test,
market or sell the Products.
"Third Party Expenses" shall have the meaning set forth in Section 6.4.
"Trademarks" shall mean any trademarks, service marks, trade dress, logos,
trade names, and corporate names, together with all translations, adaptations,
derivations, and combinations thereof and including all goodwill associated
therewith.
"Trademark Assignments" shall mean those certain agreements with respect to
each registered trademark of the Sellers or any of their Subsidiaries set forth
as Exhibit A-6 attached hereto prior to Effective Date.
"Transfer Documents" shall mean the Asset Transfer Agreements, the Xxxx of
Sale, the Trademark Assignments, the Copyright Assignment and the Patent
Assignment, in the forms attached hereto, collectively.
"Transfer Taxes" shall have the meaning set forth in Section 2.7.
"Unaudited Financials" shall have the meaning set forth in Section 3.7.
"VAT" shall mean value-added tax.
All references herein to dollar amounts or $ shall be to United States
Dollars while all references herein to DM shall be to German deutsche marks.
8
ARTICLE II
PURCHASE AND SALE TRANSACTION
2.1 Purchase and Sale of Assets. On the terms and subject to the conditions
set forth in this Agreement, Sellers herewith sell, convey, transfer, assign and
deliver to Buyers, and Buyers herewith purchase and acquire from Sellers as of
the Effective Date, all right, title and interest in and to all Digital Video
Group Assets, as well as the capital stock of certain of Miro's Subsidiaries
(collectively the "Acquired Assets") free and clear of all Liens, including, but
not limited to, the following (provided, however that the Acquired Assets shall
not include any Excluded Assets.
(a) all tangible personal property (such as machinery, equipment,
Inventory, raw materials, supplies, manufactured and purchased parts, works in
progress, finished goods, furniture, automobiles and tools) relating to the
Digital Video Group Assets;
(b) the capital stock of (i) Miro Computer Products S.a.r.l., a
corporation organized under the laws of France and a wholly-owned subsidiary of
Miro, and (ii) Miro Computer Products B.V., a corporation organized under the
laws of The Netherlands and a wholly-owned subsidiary of Miro (the "Acquired
Subsidiaries");
(c) certain accounts receivable pertaining to the Digital Video Group
Assets in an amount equal to $150,000 as specified in 2.9(d);
(d) all licenses, permits, authorizations, orders, registrations,
certificates, variances, approvals, consents and franchises and similar rights,
primarily pertaining to or used primarily in connection with the Digital Video
Group Assets obtained from governments and governmental agencies or any pending
applications relating to any of the foregoing to the extent permitted by
applicable law to be transferred, including without limitation all governmental
permits, licenses, authorizations, approvals and consents described in Schedule
2.1(d) (the "Permits");
(e) all Digital Video Group Intellectual Property, goodwill associated
therewith, licenses and sublicenses granted in respect thereto and rights
thereunder, remedies against infringements thereof and rights to protection of
interests therein, including without limitation the Digital Video Group
Intellectual Property described on Schedule 3.13(a);
(f) all agreements, contracts, indentures, mortgages, instruments,
guarantees or other similar agreements, and rights thereunder relating to the
Digital Video Group Assets as set forth on Schedule 2.1(f).
(g) all customer, distribution, supplier and mailing lists relating to
the Products delivered on a diskette which Buyers acknowledge to have received;
9
(h) all claims, deposits, prepayments, refunds, causes of action,
choses in action, rights of recovery, rights of set off and rights of recoupment
(other than any such refund or similar item relating to the payment of Taxes)
relating to any right, property or asset included in the Acquired Assets, or
against any party to a Contract, including without limitation, unliquidated
rights under manufacturers' and vendors' warranties and guaranties;
(i) copies of all business and financial records, books, ledgers,
files, plans, documents, correspondence, lists, plats, architectural plans,
drawings, notebooks, specifications, creative materials, advertising and
promotional materials, marketing materials, studies, reports, equipment repair,
maintenance or service records relating to the Digital Video Group Assets,
whether written or electronically stored or otherwise recorded, which in the
case of electronically stored items shall be delivered on diskette which the
Buyers acknowledge to have received;
(j) all employee rosters and other employee-related documents that are
legally required under applicable law to be in possession of the Buyers, to the
extent permitted by applicable law to be transferred; and
(k) the right to the SAP software relating to the network computer
systems, including the MIS functions, of Miro's Braunschweig Facility.
2.2 Excluded Assets. There are excluded from the Acquired Assets to be
sold, assigned, transferred, conveyed and delivered to Buyers hereunder, and to
the extent in existence on the Effective Date, there shall be retained by the
Sellers, the following assets, properties and rights (collectively, the
"Excluded Assets"):
(a) cash and securities other than securities evidencing ownership
interests in the Acquired Subsidiaries;
(b) accounts receivable in excess of $150,000;
(c) land, buildings and related real property owned by the Sellers;
(d) furniture and fixtures of Miro's Braunschweig Facility as of the
date of this Agreement;
(e) the hardware portions of the network computer systems, including
the MIS functions, of Miro's Braunschweig Facility;
(f) the trade names and product names other than those set forth on
Schedule 2.9(d); and
(g) those other assets, properties and rights set forth on Schedule
2.2.
2.3 Assumption of Liabilities. The Buyers herewith assume, on the terms and
subject to the conditions set forth herein as of the Effective Date, only those
Liabilities of the
10
Sellers which are (i) listed below and (ii) which are not Excluded Liabilities
(the "Assumed Liabilities");
(a) all Liabilities of the Sellers under the Contracts listed in
Schedule 3.14 to the extent such Contracts are assumed by the Buyers at the
Effective Date pursuant to Section 2.1; and
(b) existing obligations of the Sellers to perform end user warranty
repair and replacement services for Products sold on or prior to the Effective
Date.
It is understood by all parties hereto that all Liabilities of the Acquired
Subsidiaries shall remain Liabilities of the Acquired Subsidiaries following the
Effective Date.
2.4 Liabilities Not Assumed. Except as expressly set forth in this
Agreement, the Buyers do not assume or perform any Liabilities or obligations
not specifically contemplated by Section 2.3 hereof nor any of the following
Liabilities and obligations (collectively the "Excluded Liabilities")
(a) Any Liability or obligation of the Sellers or any of their
Subsidiaries (other than the Acquired Subsidiaries) for Taxes for any taxable
period, any Liability or obligation of the Acquired Subsidiaries for any taxable
period or portion of any period ending on or prior to the Effective Date, and
any Liability or obligation for Taxes attributable to the Acquired Assets or
operations of the Sellers for any taxable period or portion of any period ending
on or prior to the Effective Date;
(b) Any Liability or obligation of the Sellers or any of their
Subsidiaries to indemnify any Person by reason of the fact that such Person was
a director, officer, employee or agent of any Seller or any of such Seller's
Subsidiaries or was serving at the request of such Seller or any of such
Seller's Subsidiaries as a partner, trustee, director, officer, employee or
agent of another entity;
(c) Any Liability or obligation of the Sellers or any of their
Subsidiaries as a result of any legal or equitable action or judicial or
administrative proceeding initiated at any time caused by any action that
occurred or condition that existed on or prior to the Effective Date and in
respect of anything done, suffered to be done or omitted to be done by the
Sellers or any of their Subsidiaries or any of their directors, officers,
employees or agents;
(d) Any Liability of the Sellers or any of their Subsidiaries for costs
and expenses incurred in connection with this Agreement and the transactions
contemplated hereby;
(e) Any Liability or obligation of the Sellers or any of their
Subsidiaries under this Agreement or incurred in connection with the making or
performance of this Agreement;
(f) Any Liability or obligation for products manufactured or sold or
services rendered on or prior to the Effective Date, including for product
returns or credits taken,
11
except only for those specific Liabilities for end user product warranty repair
and replacement as the Buyers have assumed pursuant to Section 2.3 above;
(g) Any Liability or obligation of any Seller or any of such Seller's
Subsidiaries arising out of any Employee Benefit Plan established or maintained
by such Seller or any of its Subsidiaries for the benefit of past or present
employees of such Seller or any of its Subsidiaries, or to which such Seller or
any of its Subsidiaries contributes, or any Liability on the termination of any
such plan;
(h) Any Liability or obligation of the Sellers or any of their
Subsidiaries for making payments or providing benefits of any kind to their
employees or former employees (including, without limitation, (A) as a result of
the sale of the Acquired Assets or as a result of the termination by the Sellers
or any of their Subsidiaries of any employees or, in the case of employees
located in the United States, decision by Buyers to hire or not to hire any such
employees, (B) any obligation to provide former employees (including individuals
who become former employees by reason of the consummation of the transactions
contemplated by this Agreement) so-called COBRA continuation coverage, (C) any
Liability or obligation in respect of medical and other benefits for existing
and future retirees and for claims made after Effective Date in respect of costs
and expenses incurred on or prior to the Effective Date, (D) any Liability or
obligation in respect of work-related employee injuries or worker's compensation
claims and (E) any Liability or obligation in respect of employee bonuses);
(i) Any Liability pertaining to the Sellers or any of their
Subsidiaries or their respective businesses and arising out of or resulting from
noncompliance on or prior to the Effective Date with any laws, statutes,
ordinances, rules, regulations, orders, determinations, judgments or directives,
whether legislatively, judicially or administratively promulgated (including,
without limitation, any Environmental Liabilities and Costs whether or not
arising out of or resulting from any of the Sellers' or any their Subsidiaries',
as the case may be, noncompliance with Environmental Laws);
(j) Any Liability or obligation of the Sellers or any of their
Subsidiaries under any licenses, leases, contracts or agreements not listed on
Schedule 2.1(f) and Schedule 3.14; and
(k) Any Liability or obligation in respect of accounts payable, or
payable obligations incurred prior to the Effective Date.
2.5 Purchase Price.
(a) Buyers herewith pay to Sellers (the "Purchase Price"): (i) an
aggregate initial payment of $19,950,000 (the "Initial Payment"), which Initial
Payment shall consist of (A) $15,150,000 cash payable pursuant to Section 2.5(b)
on October 3, 1997 and (B) the issuance of 203,565 shares of Pinnacle Common
Stock and (ii) the contingent right to receive additional shares of Pinnacle
Common Stock as provided in Section 2.6 hereof (the "Earnout Payment"). The
Purchase Price has to be paid plus German VAT, if applicable, to the extent that
such VAT is deductible as incoming VAT in Germany by the respective Buyer.
12
(b) At the request of each of the Sellers, the cash portion of the
Initial Payment referred to in Section 2.5(a)(i)(A) shall be paid into the
Pinnacle Bank account (No. 202358) with Norddeutsche Landesbank in Braunschweig
(Bank ID no. 250 500 00) with an irrevocable authorization providing that such
cash portion shall be paid on October 3, 1997 to bank account no. 202358 with
Norddeutsche Landesbank in Braunschweig (Bank ID no. 250 500 00) in favor of
Norddeutsche Landesbank acting for its own account and in its capacity as
nominee under the Pool Agreement as of December 1995 as amended. The shares of
Pinnacle Common Stock (unregistered) shall be issued in the name of Miro
Computer Products AG and delivered to its deposit account no. 800 152 1593 with
Norddeutsche Landesbank Braunschweig within 10 days of the Effective Date. Miro
has assigned the claim to the Purchase Price to Norddeutsche Landesbank and has
pledged the shares issued in connection with the Purchase Price.
2.6 Earnout Payment.
(a) Definitions For Determination of Earnout Payment.
(i) "Base Amount" shall mean $37,000,000;
(ii) "Earnout Period" shall mean the 12 month period commencing
on September 1, 1997;
(iii) "Earnout Trading Price" shall be the average of the last
sale prices of the Pinnacle Common Stock as reported on Nasdaq for the thirty
(30) trading days ending immediately prior to the last day of the Earnout
Period;
(iv) "Excess Amount" shall mean $59,000,000;
(v) "Expenses" shall mean (A) all cost of goods sold attributable
to Revenue, (B) all costs and expenses incurred by German Sub during the Earnout
Period, including selling, general and administrative expenses and engineering,
research and development expenses, (C) all selling, general and administrative
expenses incurred during the Earnout Period with respect to the generation of
Revenues and (D) all research and development expenses incurred by the United
States based engineers of the Sellers that are hired by Pinnacle in connection
with the transactions contemplated hereby and that are designing, developing and
improving Miro Products. With respect to clause (C) of the preceding sentence,
to the extent that certain selling, general and administrative expenses
attributable to the generation of Revenues cannot easily be separated from
selling, general and administrative expenses attributable to revenues of Buyers
that are not Revenues, such expenses shall be allocated to Expenses on a
percentage of total revenues basis (i.e., Revenues divided by total Buyers
revenues of the operating group for which expenses are being allocated).
(vi) "Operating Profit" shall mean the difference obtained by
subtracting Expenses from Revenues;
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(vii) "Revenues" shall mean gross revenues recognized by Buyers
which are attributable to sales of the following products during the Earnout
Period, net of customary and reasonable reserves established in connection with
potential returns of any such products: (A) Products that are currently being
sold by the Sellers or any of their Subsidiaries as of the Effective Date
("Existing Products"), (B) products that are enhancements, updates,
improvements, releases, new features and other modifications and all works which
constitute "derivative works" of the Existing Products, as such term is defined
in 12 U.S. Code Section 101 ("Miro Derivative Products") and (C) new products
that include significant amounts of the Intellectual Property that is included
in the Acquired Assets and more than 30% of the engineering efforts by any of
Miro's (or any of its Subsidiaries') engineers that are hired by Pinnacle in
connection with the transactions contemplated hereby (the products described in
clauses (A), (B) and (C) are collectively referred to as the "Sellers'
Products"). Revenues shall not include revenue attributable to sales of the
following products (A) products that are currently being sold by Buyers as of
the Effective Date ("Existing Buyer Products"), (B) products that are
enhancements, updates, improvements, releases, new features and other
modifications and all works that constitute "derivative works" of the Existing
Buyer Products, other than Miro Derivative Products, and (C) new Buyer products
that are not included within clause (C) of the preceding sentence.
(b) In the event that during the Earnout Period, Revenues exceed
the Base Amount and Operating Profit exceeds 3% of Revenues, Sellers shall be
entitled to receive a number of shares of Pinnacle Common Stock equal to the
quotient of (i) either (A) if Revenues are in excess of the Base Amount but less
than or equal to the Excess Amount, the product of $0.50 and the difference
between Revenues and the Base Amount or (B) if Revenues are greater than the
Excess Amount, the sum of (1) the product of $0.50 and the difference between
the Excess Amount and the Base Amount and (2) the product of $0.85 and the
difference between Revenues and the Excess Amount divided by (ii) the Earnout
Trading Price. Pinnacle shall not be obligated to issue shares of Pinnacle
Common Stock in satisfaction of the Earnout Payment if and to the extent that
such issuance would trigger a requirement of Pinnacle shareholder approval of
the transactions contemplated hereby under Section 903 of the California General
Corporation Law. In lieu of the issuance of such shares of Pinnacle Common
Stock, that portion of the Earnout Payment that would exceed the amount not
requiring shareholder approval shall be made in cash.
14
(c) Mechanics for Determination of Revenues, Expenses and Operating
Profit.
(i) Not later than 45 calendar days following the end of the
Earnout Period, Buyers shall deliver to Sellers a statement of the Revenues,
Expenses and Operating Profit for the Earnout Period (the "Statement of
Operating Profit"), which will be determined in accordance with GAAP applied on
a basis consistent with that used by Buyers (both historically and during the
Earnout Period) in preparation of Buyers' consolidated financial statements and
certified to such effect by Pinnacle's Chief Financial Officer. For purposes of
computing the Earnout Payment, Revenues shall be converted from DM into U.S.
dollars at a rate of DM 1.70 to U.S. $1.00. For the calculations of operating
profit, actual exchange values will be used.
(ii) If, within 30 days following receipt by Sellers of the
Statement of Operating Profit, Sellers determine in good faith that the amount
of Revenue, Expenses or Operating Profit as so computed on the Statement of
Operating Profit is inaccurate, Sellers shall give notice to Buyers within such
30 day period, (A) setting forth Miro's determination of Operating Profit and/or
Revenue and (B) specifying in reasonable detail the nature of Miro's basis for
its disagreement with Buyers' calculation; provided, however, that Sellers shall
be provided with full access to Buyers' financial records in connection with
Miro's determination of Operating Profit and/or Revenue. The failure of the
Buyers to provide the Sellers with full access to the Buyers' financial records
shall constitute Buyers' acceptance of Miro's determination of Operating Profit
and/or Revenues. The failure by Sellers to express its disagreement within such
30 day period shall constitute acceptance by Sellers of the amount of Operating
Profit and Revenue so computed on the Statement of Operating Income. If Buyers
and Sellers are unable to resolve their disagreement within 15 days after
receipt by Buyers of notice of such disagreement, the items in dispute will be
referred to a "big six" accounting firm mutually acceptable to Buyers and
Sellers (the "Accountant") within such 15 day period. The Accountant shall make
a determination as to each of the items in dispute, which determination shall be
(i) in writing, (ii) furnished to Buyers and Sellers as promptly as practicable
after the items in dispute have been referred to the Accountant, (iii) made in
accordance with the accounting principles and procedures provided for in Section
2.5(c)(i) above for the preparation of the Statement of Operating Income and
(iv) conclusive and binding on Buyers and Sellers. The fees and expenses of the
Accountant (the "Accounting Fees") shall be paid for by the Nonprevailing Party.
The "Nonprevailing Party" means that party whose calculation of the Revenues is
the least close to the Revenues as determined by the Accountant.
(d) It is the present intention of the parties to develop and actively
market the Sellers' Products to the mutual advantage of Buyers and Sellers.
Buyers agree to operate the business to be conducted with the Acquired Assets in
the ordinary cause of their other businesses and to provide reasonable support
to the development, sale and customer support of the Sellers' Products in such
areas as engineering, development, production, sales, marketing, quality
assurance, contract administration and public relations, all in accordance with
Buyers' standard policies and procedures for the allocation of such resources.
However, the sale of the Sellers' Products shall be accorded no special status
or priority by virtue of the Earnout provisions or otherwise. In addition, the
parties acknowledge that the industry in which Buyers operate is characterized
by rapidly changing technologies, evolving industry
15
standards, frequent new product introductions and short product life cycles and
that Buyers must be able to react, on a timely and cost-effective basis, to meet
changing customer requirements. Accordingly, except as provided in this Section
2.6(d) the operations of Buyers shall at all times be subject solely to the
management control of Buyers. Without limiting the generality of the foregoing,
except as specifically provided in this Section 2.6(d), Buyers shall not be
required to (i) devote more resources to the development, sale or licensing of
the Sellers' Products than is, in the sole opinion of Buyers' management,
prudent in the context of Buyers' overall operations or (ii) seek to maximize
Revenues if to do so, in the sole opinion of Buyers' management, would have an
adverse effect on Buyers' profitability or Buyers' strategic interests.
2.7 Transfer Tax. Sellers shall bear and pay any stamp duty, VAT (subject
to the last sentence of Section 2.5(a)), sales tax, documentation charges,
notary fees and recording fees or similar charges ("Transfer Taxes") that may
become payable in Germany, the United States or elsewhere in connection with the
sale of the Acquired Assets and the assumption of the Assumed Liabilities by
Buyers. The parties hereto shall cooperate with one another to the extent
reasonably requested and legally permitted to minimize any the Transfer Taxes.
The amounts paid pursuant to this Agreement shall be subject to all applicable
withholding Taxes.
2.8 Allocation of Purchase Price. At the Effective Date, the Buyers shall
determine the manner in which the Purchase Price referred to in Section 2.5 and
allocated among the Sellers and their Subsidiaries is to be allocated among the
Acquired Assets and such allocation shall be as set forth on Schedule 2.8. The
Parties agree that the allocation may be amended or modified by the Buyers at
any time within 60 days after the Effective Date (as so modified, the
"Allocation"). The Allocation shall be conclusive and binding upon the Buyers
and Sellers for all purposes, and the parties agree that all Returns and reports
and all financial statements shall be prepared in a manner consistent with (and
the parties shall not otherwise file a tax return position inconsistent with)
the Allocation unless required by the IRS, the German tax authorities or any
other applicable taxing authority.
2.9 The Effective Date. In order to consummate the transactions
contemplated by this Agreement the parties agree as follows:
(a) Transfer of Tangible Personal Property.
(i) Miro herewith transfers possession of the items of tangible
personal property listed in Schedule 2.9(a)(1) to German Sub which accepts such
transfer as of the Effective Date. Where such items of tangible personal
property are in direct possession of a third party, Miro hereby assigns its
claims for the transfer of possession of such assets against the third party to
German Sub which hereby accepts such assignment. At the request of German Sub,
Miro shall notify the third party of the assignment. Miro and German Sub hereby
agree on the transfer of title of such assets effective as of the Effective
Date.
(ii) Miro U.S. herewith transfers possession of the items of
tangible personal property listed in Schedule 2.9(a)(2) to Pinnacle which
accepts such transfer as of the Effective Date. Where such items of tangible
personal property are in direct possession of a third party, Miro U.S. hereby
assigns its claims for the transfer of possession of such assets
16
against the third party to Pinnacle which hereby accepts such assignment. At the
request of Pinnacle, Miro U.S. shall notify the third party of the assignment.
Miro U.S. and Pinnacle hereby agree on the transfer of title of such assets
effective as of the Effective Date.
(iii) Miro U.K. herewith transfers possession of the items of
tangible personal property listed in Schedule 2.9(a)(3) to U.K. Sub which
accepts such transfer as of the Effective Date. Where such items of tangible
personal property are in direct possession of a third party, Miro U.K. hereby
assigns its claims for the transfer of possession of such assets against the
third party to U.K. Sub which hereby accepts such assignment. At the request of
U.K. Sub, Miro U.K. shall notify the third party of the assignment. Miro U.K.
and U.K. Sub hereby agree on the transfer of title of such assets effective as
of the Effective Date.
(b) Assignment of Share(s) in Miro Computer Products B.V. Miro hereby
assigns to Dutch Sub all of the shares of Miro Computer Products B.V., which
assignment shall be effected under the laws of The Netherlands by execution of a
notarial deed in Amsterdam within 10 days of the Effective Date. The notarial
deed shall at such time be submitted to Miro and Dutch Sub as Exhibit A-1A. The
parties to this Agreement agree that as amongst themselves, the shares of Miro
Computer Products B.V. shall be for the account of Dutch Sub (beneficially
owned) as of the Effective Date, notwithstanding the date of the notarial deed.
(c) Assignment of Share(s) in Miro Computer Products S.a.r.l. Miro
assigned to Dutch Sub all of the shares in Miro Computer Products S.a.r.l. in a
separate French Assignment agreement a copy of which is enclosed as Exhibit A-1B
hereto. The assignment is effective as of the Effective Date.
(d) Accounts Receivable. The three items of Accounts Receivable to be
assigned by Miro U.S. to Pinnacle are shown in Schedule 2.9(d); all of which
items of accounts receivable shall be collected by Pinnacle, which pursuant to
Section 2.1(c) shall retain $150,000 of such amounts collected and shall remit
any amounts in excess thereof to Miro U.S. Miro U.S. hereby assigns and Pinnacle
hereby accepts the assignment of such Accounts Receivable, effective as of the
Effective Date.
(e) Digital Video Group Intellectual Property. The Digital Video Group
Intellectual Property comprises the items listed in Schedule 2.9(e) hereto. Miro
hereby assigns and Dutch Sub hereby accepts the assignment of the Digital Video
Group Intellectual Property set forth in Schedule 2.9(e). To the extent that
registration of Dutch Sub or any further action is required to perfect the
assignment, the parties agree to execute all such documents, take all such acts
and to make any declarations as may be necessary or expedient to permit Dutch
Sub, as the case may be, to be so registered or such further action to be taken.
The transfer of Digital Video Group Intellectual Property shall be effective as
of the Effective Date.
(f) Goodwill. The goodwill includes the distribution organization of
the Sellers, the benefit (subject to the burden) of all undischarged contracts,
pending contracts, engagements, quotations and orders relating to the Digital
Video Group, and represented, in particular, in all information and
documentation regarding suppliers, customers and the prospects and the customer
and supplier database, including all information on the history of
17
suppliers, customers, files, commercial and technical documentation in
connection with purchases as sales related to the Digital Video Group. Sellers
hereby accept the assignment of such goodwill effective as of the Effective
Date. To the extent that registration of German Sub or any further action is
required to perfect the assignment, the parties agree to execute all document ,
take all such acts and to make any such declarations as may be necessary or
expedient to permit German Sub to be so registered or such further action to be
taken.
(g) Continuation of Contracts. Sellers and Buyers hereby agree to
cooperate and use all reasonable endeavors to ensure that all of the Assigned
Contracts shall be assigned to the Buyers as of the Effective Date.
As the assignment of any Assigned Contract requires the consent of a
third party, Sellers and Buyer shall cooperate and use all reasonable endeavors
to cause to be executed and delivered to Buyers all documents of assignment
necessary to effect the assignment of such Assigned Contracts. In the event
that, for any reason, one or several third parties shall refuse to consent to
the assignment of an Assigned Contract to any of the Buyers, the Sellers shall
provide, or enter into such arrangements so as to provide the benefit of such
Assigned Contract to such Buyer under the terms and conditions and for the
duration of each such Assigned Contract.
(h) Responsibility for Contracts on or before the Effective Date.
Sellers shall indemnify and hold Buyers harmless from and against any and all
costs, claims, judgments, assessments, deficiencies, penalties and interest,
damages, losses, liabilities and expenses (including reasonable attorneys' fees
and disbursements), together with any such costs or expenses to investigate the
same or enforce the provisions hereof arising out of, based upon or resulting
from the non-performance or defective performance of the Assigned Contracts up
to and including the Effective Date.
2.10 Deliveries in the Context of the Effective Date. The parties confirm
the following:ontext of the Effective Date
(a) the Sellers will use their best efforts and take all action as may
be reasonably necessary to put the Buyers in ownership, possession, and
operating control of the Acquired Assets.
(b) the Sellers will execute, acknowledge (if appropriate), and deliver
to the Buyers (i) the deeds relating to any of the Acquired Assets, properly
endorsed, (ii) assignments of the Sellers (or any of their Subsidiaries')
Permits, leases, Digital Video Group Intellectual Property and Contracts
included in the Acquired Assets (including Digital Video Group Intellectual
Property transfer documents) and any third party consents necessary, to such
assignments described in this clause (ii), (iii) the Transfer Documents, and
(iv) such other instruments of sale, transfer, conveyance, and assignment as the
Buyers and their counsel may reasonably request; and
(c) the Buyers and the Sellers shall deliver or cause to be delivered
to one another such other instruments and documents necessary or appropriate to
evidence the due execution, delivery and performance of this Agreement.
18
At any time, and from time to time after the Effective Date, at the
reasonable request of the Buyers and without further consideration, the Sellers
will execute and deliver such other instruments of sale, transfer, conveyance,
assignment and confirmation and take such action as Buyers may reasonably
determine is necessary to transfer, convey and assign to the Buyers, and to
confirm the Buyers' title to or interest in the Acquired Assets, to put the
Buyers in actual possession and operating control thereof and to assist the
Buyers in exercising all rights with respect thereto.
At any time, and from time to time after the Effective Date, at the
reasonable request of the Sellers and without further consideration, the Buyers
will execute and deliver such other instruments of assumption and confirmation
and take such action as Sellers may reasonably determine is necessary to assume
the Assumed Liabilities and all obligations with respect thereto.
ARTICLE III
REPRESENTATIONS, WARRANTIES AND GUARANTEES OF THE SELLERS
With respect to this Article III the term "Sellers" shall refer to the
Sellers and their Subsidiaries (to the extent involved in the Business) taken
together as a whole. The Sellers hereby represent, warrant and guarantee to the
Buyers, subject to such exceptions as are specifically set forth in the
disclosure schedules (referencing the appropriate section and paragraph numbers,
if appropriate) supplied by the Sellers to the Buyers (the "Schedules") as of
the Effective Date hereof, as follows:
3.1 (a) Organization of Miro. Miro is duly organized, and validly existing
under the laws of Germany. Miro has the corporate power to own its properties
and to carry on its business as now being conducted. Miro is duly qualified to
do business and in good standing as a foreign corporation in each jurisdiction
in which the failure to be so qualified would have a Material Adverse Effect.
Miro has delivered a true and correct copy of its respective documents which
under its proper law are equivalents of a memorandum and/or certificate of
incorporation and by laws and an actual excerpt from the Commercial Register, as
amended to date (the "Charter"). Section 3.1(a) of the Schedules lists the
Managing Directors and Procurists [other titles] of Miro and the members of the
Supervisory Board of Miro. The operations now being conducted by Miro have not
been conducted under any other name.
(b) Organization of Miro U.S.. Miro U.S. is duly organized, and validly
existing under the laws of the state of California. Miro U.S. has the corporate
power to own its properties and to carry on its business as now being conducted.
Miro U.S. is duly qualified to do business and in good standing as a foreign
corporation in each jurisdiction in which the failure to be so qualified would
have a Material Adverse Effect. Miro U.S. has delivered a true and correct copy
of its bylaws and Articles of Incorporation. Section 3.1(b) of the Schedules
lists the Executive Officers and members of the Board of Directors of Miro U.S.
The operations now being conducted by Miro U.S. have not been conducted under
any other name.
19
(c) Organization of Miro U.K.. Miro U.K. is duly organized, and validly
existing under the laws of the United Kingdom. Miro U.K. has the corporate power
to own its properties and to carry on its business as now being conducted. Miro
U.K. is duly qualified to do business and in good standing as a foreign
corporation in each jurisdiction in which the failure to be so qualified would
have a Material Adverse Effect. Miro U.K. has delivered a true and correct copy
of its Memorandum of Association. Section 3.1(c) of the Schedules lists the
Executive Officers and members of the [Board of Directors of Miro U.K.]. The
operations now being conducted by Miro U.K. have not been conducted under any
other name.
3.2 Acquired Subsidiaries.
(a) Schedule 3.2(a) sets forth the unaudited balance sheets of each
Acquired Subsidiary as of June 30, 1997 (each a "Acquired Subsidiary Balance
Sheet"). Each Acquired Subsidiary Balance Sheet is correct in all material
respects and have been prepared in accordance with GAAP applied on a basis
consistent throughout the periods indicated and consistent with each other,
except that they do not contain footnotes as required by GAAP. Each Acquired
Subsidiary Balance Sheet presents fairly the financial condition, operating
results and cash flows of the Acquired Subsidiary as of the dates and during the
periods indicated therein, subject to normal year-end adjustments, which will
not be material in amount or significance.
(b) Except as set forth in Schedule 3.8, none of the Acquired
Subsidiaries has any liability, indebtedness, obligation, expense, claim,
deficiency, guaranty or endorsement of any type, whether accrued, absolute,
contingent, matured, unmatured or other (whether or not required to be reflected
in financial statements in accordance with GAAP), which (i) has not been
reflected in the relevant Acquired Subsidiary Balance Sheet, or (ii) is material
to such Acquired Subsidiary, whether or not arising in the Ordinary Course of
Business.
(c) Except as set forth on Schedule 3.14, none of the Acquired
Subsidiaries is party to any agreement, contract or commitment that is material
to such Acquired Subsidiary.
(d) Each Acquired Subsidiary is duly organized, and validly existing
under the laws of its respective jurisdiction. Each Acquired Subsidiary has the
corporate power to own its properties and to carry on its business as now being
conducted. Each Acquired Subsidiary is duly qualified to do business and in good
standing as a foreign corporation in each jurisdiction in which the failure to
be so qualified would have a Material Adverse Effect. Miro has delivered a true
and correct copy of the respective organizational documents of each Acquired
Subsidiary which under its proper law are equivalents of a memorandum and/or
certificate of incorporation and by laws and, as relevant, an actual excerpt
from the Commercial Register, as amended to date (the "Charter"). Schedule
3.2(d) lists the Managing Directors, executive officers and members of the Board
of Directors [other titles] of each Acquired Subsidiary.
(e) Each of the Acquired Subsidiaries has a positive net worth.
20
3.3 Organization of Subsidiaries. Each Subsidiary of Miro is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation. Each Subsidiary of Miro has the
corporate power to own its properties and to carry on its business as now being
conducted. Each Subsidiary of Miro is duly qualified to do business and in good
standing as a foreign corporation in each jurisdiction in which the failure to
be so qualified could have a Material Adverse Effect. Miro has delivered a true
and correct copy of each of its Subsidiaries' charter documents and Bylaws (or
like document), each as amended to date, to Buyers. Schedule 3.3 sets forth for
each Subsidiary of Miro (i) its name and jurisdiction of incorporation or
formation, (ii) the number of shares of authorized capital stock of each class
of its capital stock or other securities, (iii) the number of issued and
outstanding shares of each class of its capital stock or other securities, (iv)
the number of shares of its capital stock held in treasury and (v) its directors
and officers. The operations now being conducted by the Subsidiaries of Miro
have not been conducted under any other name. Other than the Subsidiaries
identified on Schedule 3.3, Miro does not have, and has never had, any
subsidiaries or affiliated companies and does not otherwise own, and has not
otherwise owned, any shares in the capital of or any interest in, or control,
directly or indirectly, any corporation, partnership, association, joint venture
or other business entity. All of the issued and outstanding shares of capital
stock of each Acquired Subsidiary have been duly authorized and are validly
issued, fully paid and nonassessable. All of the shares of capital stock of the
Acquired Subsidiaries are owned of record and beneficially by Miro. There are no
options, warrants, calls, rights, commitments or agreements of any character,
written or oral, to which any Acquired Subsidiary is a party or by which it is
bound obligating any Acquired Subsidiary to issue, deliver, sell, repurchase or
redeem, or cause to be issued, delivered, sold, repurchased or redeemed, any
shares of the capital stock of such Acquired Subsidiary or obligating such
Acquired Subsidiary, as the case may be, to grant, extend, accelerate the
vesting of, change the price of, otherwise amend or enter into any such option,
warrant, call, right, commitment or agreement. There are no outstanding or
authorized stock appreciation, phantom stock, profit participation, or other
similar rights with respect to any Acquired Subsidiary. There are no voting
trusts, proxies, or other agreements or understandings with respect to the
voting stock of any Acquired Subsidiary.
3.4 Authority. Each of the Sellers has all requisite power and authority to
enter into this Agreement and any Related Agreements to which it is a party and
to consummate the transactions contemplated hereby and thereby. The execution
and delivery of this Agreement and any Related Agreements to which a it is a
party and the consummation of the transactions contemplated hereby and thereby
have been duly authorized by all necessary corporate action on the part of each
of the Sellers and no further action is required on its part to authorize the
Agreement, any Related Agreements to which it is a party and the transactions
contemplated hereby and thereby. This Agreement and any Related Agreements to
which any Seller is a party have been duly executed and delivered by such Seller
and, assuming the due authorization, execution and delivery by the other parties
hereto and thereto, constitute the valid and binding obligation of such Seller
enforceable in accordance with their respective terms, subject to the laws of
general application relating to bankruptcy, insolvency and the relief of debtors
and to rules of law governing specific performance, injunctive relief or other
equitable remedies.
21
3.5 No Conflict. Except as set forth in Schedule 3.5, the execution and
delivery of this Agreement and any Related Agreements to which it is a party by
any of the Sellers do not, and, the consummation of the transactions
contemplated hereby and thereby will not, conflict with, or result in any
violation of, or default under (with or without notice or lapse of time, or
both), or give rise to a right of termination, cancellation, modification or
acceleration of any obligation or loss of any benefit under (any such event, a
"Conflict") (i) any provision of the charter documents or Bylaws (or their
equivalent) of any such Seller, (ii) any mortgage, indenture, lease, contract or
other agreement or instrument, permit, concession, franchise or license to which
any such Seller is subject and that relate to the Acquired Assets, or (iii) any
judgment, order, decree, statute, law, ordinance, rule or regulation applicable
to any such Seller or its properties or assets, other than any such conflicts,
violations, defaults, terminations, cancellations or accelerations which would
not have a Material Adverse Effect on the ability of any such Seller to
consummate the transactions contemplated hereby and thereby.
3.6 Consents. Except as set forth in Schedule 3.5, no consent, waiver,
approval, order or authorization of, or registration, declaration or filing
with, any court, administrative agency or commission or other U.S. or German
federal, state, county, local or other foreign governmental authority,
instrumentality, agency or commission ("Governmental Entity") or any third
party, including a party to any agreement with the Sellers included in the
Acquired Assets (so as not to trigger any Conflict), is required by or with
respect to the Sellers in connection with the execution and delivery of this
Agreement and any Related Agreements to which any of the Sellers is a party or
the consummation of the transactions contemplated hereby and thereby, except for
such consents, waivers, approvals, orders, authorizations, registrations,
declarations and filings as may be required under applicable securities laws
thereby.
3.7 Financial Statements. Schedule 3.7 sets forth an audited summary
consolidated balance sheet of Miro as at December 31, 1995 and 1996 (the
"Audited Financials"), and an unaudited summary consolidated balance sheet of
Miro as at June 30, 1997 (the "Unaudited Financials"). The Audited Financials
and the Unaudited Financials are correct in all material respects and have been
prepared in accordance with GAAP applied on a basis consistent throughout the
periods indicated and consistent with each other, except that the Unaudited
Financials do not contain footnotes as required by GAAP. The Unaudited
Financials present fairly the financial condition, operating results and cash
flows of Miro as of the dates and during the periods indicated therein, subject
to normal year-end adjustments, which will not be material in amount or
significance. At the Effective Date, Miro's current assets on a consolidated
basis including all Subsidiaries will be equal to or greater than its total
liabilities on a consolidated basis including all Subsidiaries as determined in
accordance with GAAP.
3.8 No Undisclosed Liabilities. Except as set forth in Schedule 3.8, none
of the Sellers has any liability, indebtedness, obligation, expense, claim,
deficiency, guaranty or endorsement of any type, whether accrued, absolute,
contingent, matured, unmatured or other (whether or not required to be reflected
in financial statements in accordance with GAAP), which (i) has not been
reflected in the Most Recent Balance Sheet, or (ii) has not arisen in the
Ordinary Course of Business consistent with past practices since June 30, 1997.
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3.9 No Changes. Except as set forth in Schedule 3.9, since June 30, 1997,
there has not been, occurred or arisen any:
(a) transaction by any Seller relating to the Acquired Assets except in
the Ordinary Course of Business;
(b) amendments or changes to the Charter of Miro or the organizational
documents of the Miro U.S., Miro U.K. or the Acquired Subsidiaries;
(c) capital expenditure or commitment by any Seller relating to the
Acquired Assets exceeding $30,000 individually or $100,000 in the aggregate.
(d) destruction of, damage to or loss of any material assets of any
Seller (whether or not covered by insurance);
(e) notification by any customer of the Business of termination of its
relationship with any Seller (except for customers generating less than $15,000
in revenues during the 12 months ended June 30, 1997);
(f) labor trouble or claim of wrongful discharge or other unlawful
labor practice or action;
(g) change in accounting methods or practices (including any change in
depreciation or amortization policies or rates) by any Seller;
(h) revaluation by any Seller of any of the Acquired Assets;
(i) declaration, setting aside or payment of a dividend or other
distribution with respect to the Miro Capital Stock or the capital stock of Miro
U.S., Miro U.K., or any Subsidiary of any Seller or any direct or indirect
redemption, purchase or other acquisition by any Seller of any of its capital
stock;
(j) increase in the salary or other compensation payable or to become
payable by any Seller to any of the Key Employees, or the declaration, payment
or commitment or obligation of any kind for the payment, by any Seller, of a
bonus or other additional salary or compensation to any such person;
(k) any agreement, contract, lease or commitment relating to the
Acquired Assets (each a "Sellers' Agreement") or any extension or modification
the terms of the Sellers' Agreement which (i) involves the payment of greater
than $25,000 per annum or which extends for more than one (1) year, (ii)
involves any payment or obligation to any affiliate of any Seller, other than in
the Ordinary Course of Business, or (iii) involves the sale of any material
assets;
(l) sale, lease, license or other disposition of any of the assets or
properties relating to the Acquired Assets, or any creation of any security
interest in such assets or properties, except in the Ordinary Course of
Business;
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(m) amendment or termination of any material contract, agreement or
license relating to the Acquired Assets to which any Seller is a party or by
which it is bound;
(n) loan by any Seller to any person or entity, incurring by any Seller
of any indebtedness, guaranteeing by any Seller of any indebtedness, issuance or
sale of any debt securities of any Seller or guaranteeing of any debt securities
of others, except for advances to employees for travel and business expenses in
the ordinary course of business, consistent with past practices;
(o) waiver or release of any right or claim of any Seller relating to
the Acquired Assets, including any write-off or other compromise of any account
receivable of any Seller;
(p) the commencement or notice or threat of commencement of any lawsuit
or proceeding relating to the Acquired Assets against any Seller or their
respective affairs or any investigation relating to the Acquired Assets of which
any Seller has received notice;
(q) notice of any claim of ownership by a third party of the Digital
Video Group Intellectual Property or of infringement by any Seller of any third
party's Intellectual Property rights;
(r) issuance or sale by any of any Seller of any of its shares of
capital stock, or securities exchangeable, convertible or exercisable therefor,
or of any other of their respective securities;
(s) change in pricing or royalties relating to the Acquired Assets set
or charged by any Seller to its customers or licensees or in pricing or
royalties set or charged by persons who have licensed to any Seller Intellectual
Property used in or relating to the Acquired Assets;
(t) any event or condition of any character that has or may have a
Material Adverse Effect on any Seller; or
(u) agreement by any Seller or any officer or employees thereof to do
any of the things described in the preceding clauses (a) through (t) (other than
negotiations with Buyers and their representatives regarding the transactions
contemplated by this Agreement).
Since June 30, 1997, Sellers have (except as contemplated by this Agreement
or to the extent that Buyers shall otherwise consent in writing) carried on the
Business in the usual, regular and ordinary course in substantially the same
manner as heretofore conducted, paid the debts and Taxes relating to the
Acquired Assets of the Sellers or any of their Subsidiaries when due, paid or
performed other obligations when due, and, to the extent consistent with such
Business, used its best efforts consistent with past practice and policies to
preserve intact the Business organizations, keep available the services of the
Sellers' and any of their Subsidiaries' present officers and key employees and
preserve the Sellers' and any of their Subsidiaries' relationships with
customers, suppliers, distributors, licensors, licensees, and
24
others having business dealings with it, all with the goal of preserving
unimpaired the Sellers' and any of their Subsidiaries' goodwill and ongoing
Businesses at the Effective Date.
3.10. Tax Matters.
(a) Tax Returns and Audits. Except as set forth in Schedule 3.10 of
this Agreement:
(i) Each of the Sellers as of the Effective Date will have
prepared and timely filed or made a timely request for extension for all
required federal, state, local and foreign returns, estimates, information
statements and reports ("Returns") relating to any and all Taxes concerning or
attributable to the Acquired Assets or its operations and such Returns are true
and correct and have been completed in accordance with applicable law.
(ii) Each of the Sellers as of the Effective Date (A) will have
paid or accrued all Taxes relating to the Acquired Assets it is required to pay
or accrue in accordance with the generally accepted accounting practices as in
effect in Germany from time to time and (B) will have withheld and timely
remitted with respect to its employees all income taxes and other Taxes relating
to the Acquired Assets required to be withheld and remitted.
(iii) None of the Sellers has been delinquent in the payment of
any Tax relating to the Acquired Assets nor is there any Tax deficiency relating
to the Acquired Assets outstanding, assessed or proposed against any of the
Sellers, nor has any Seller executed any waiver of any statute of limitations on
or extending the period for the assessment or collection of any Tax relating to
the Acquired Assets.
(iv) No audit or other examination of any Return of any Seller is
presently in progress, nor has any Seller been notified of any request for such
an audit or other examination.
(v) None of the Sellers has any liabilities for unpaid Taxes
relating to the Acquired Assets which have not been accrued or reserved against
in accordance with generally accepted accounting practices as in effect in
Germany from time to time on the Most Recent Balance Sheet, whether asserted or
unasserted, contingent or otherwise.
(vi) The Sellers have made available to Buyers or their legal
counsel, copies of all foreign, federal and state income and all state sales and
use Tax Returns filed for all years as to which any applicable statute of
limitations has not expired.
(vii) There are no Liens of any sort on the Acquired Assets
relating to or attributable to Taxes other than Liens for taxes not yet due and
payable nor will the transfer of the Acquired Assets trigger a secondary tax
liability for any of the Buyers.
(viii) There is no basis for the assertion of any claim relating
or attributable to Taxes which, if adversely determined, would result in any
Lien on any Acquired Asset.
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(ix) As of the Effective Date, there will not be any contract,
agreement, plan or arrangement, including but not limited to the provisions of
this Agreement, covering any employee or former employee of any Seller involved
in the Business that, individually or collectively, could give rise to the
payment of any amount that would not be deductible by such as an expense under
applicable law.
(x) None of the Sellers is a party to a tax sharing,
indemnification or allocation agreement nor does any Seller owe any amount under
any such agreement.
(xi) Each Seller's tax basis in its assets for purposes of
determining its future amortization, depreciation and other federal income tax
deductions is accurately reflected on such Seller's tax books and records.
(b) Executive Compensation Tax. None of the Sellers has, nor will have
as a result of the transactions contemplated by this Agreement, any liabilities
for Taxes as a result of the amount of remuneration paid or to be paid to its
respective executive employees.
3.11 Restrictions on Business Activities. There is no agreement (noncompete
or otherwise), commitment, judgment, injunction, order or decree to which any
Seller is a party or otherwise binding upon such Seller which has or reasonably
could be expected to have the effect of prohibiting or impairing any business
practice of such Seller with respect to the Business, any acquisition of
property (tangible or intangible) by such Seller relating to the Business or the
conduct of the Business by such Seller. None of the Sellers has entered into any
agreement under which it is restricted from providing services to customers or
potential customers or any class of customers of the Business, in any geographic
area, during any period of time or in any segment of the market.
3.12 Title of Assets; Condition of Equipment.
(a) The Sellers have good and valid title to, or, in the case of leased
properties and assets, valid leasehold interests in, and the power to sell the
Acquired Assets being sold by them free and clear of any Liens as of the
Effective Date.
(b) Schedule 3.12(b) lists all material items of equipment (the
"Equipment") leased by the Sellers and used in or necessary for the manufacture,
distribution and marketing of the Digital Video Group Assets and such Equipment
is, taken as a whole, (i) adequate for the conduct of the Business as currently
conducted and (ii) in good operating condition, regularly and properly
maintained, subject to normal wear and tear.
(c) The Sellers have sole and exclusive ownership, free and clear of
any Liens, of all customer files and other customer information relating to
current and former customers of the Business (the "Customer Information") as of
the Effective Date.
3.13 Intellectual Property.
(a) Schedule 3.13(a) list all items of United States, German, European
and/or foreign: (i) patent and patent applications relating to the Acquired
Assets; (ii) registered
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trademarks and trademark applications relating to the Acquired Assets; (iii)
registered copyrights and applications for copyright registration relating to
the Acquired Assets, if any, and all other rights corresponding thereto
throughout the world; (iv) mask work registrations and applications to register
mask works relating to the Acquired Assets; and (v) any other Digital Video
Group Intellectual Property that is the subject of an application, certificate
or registration issued by any state, government or other public legal authority,
and all other rights corresponding thereto throughout the world; (vi) and all
other items of Intellectual Property which are not required to be registered
and, in particular, software.
(b) The registrations of the Digital Video Group Intellectual Property
listed on Schedule 3.13(a) are valid and subsisting, all necessary registration
and renewal fees in connection with such registrations have been made and all
necessary documents and certificates in connection with such registrations have
been filed with the relevant patent, copyright and trademark authorities in the
United States, Germany, the European Trademark Authority and/or other foreign
authorities for the purposes of maintaining such Intellectual Property
registrations and all items of Intellectual Property listed on Schedule
3.13(a)(vi) enjoy valid and subsisting copyright protection.
(c) The contracts, licenses and agreements listed on Schedule 3.13(c)
include all contracts, licenses and agreement, to which any of the Sellers is a
party with respect to any Digital Video Group Intellectual Property with a value
or cost in excess of $10,000, other than "shrink wrap" and similar commercial
end-user licenses.
(d) The contracts, licenses and agreements listed on Schedule 3.13(c)
and included in the Acquired Assets are in full force and effect. The
consummation of the transactions contemplated by this Agreement will neither
violate nor result in the breach, modification, cancellation, termination, or
suspension of the contracts, licenses and agreements listed on Schedule 3.13(c)
and included in the Acquired Assets. Each of the Sellers is in compliance with,
and has not breached any material term of, the contracts, licenses and
agreements listed on Schedule 3.13(c) and included in the Acquired Assets, and,
to the Knowledge of the Sellers, all other parties to the contracts, licenses
and agreements listed on Schedule 3.13(c) and included in the Acquired Assets
are, in compliance with, and have not breached any material term of, the
contracts, licenses and agreements. Following the Effective Date, the Buyers
will be permitted to exercise all of the Sellers' rights under the contracts,
licenses and agreements listed in Schedule 3.13(c) and included in the Acquired
Assets without the payment of any additional amounts or consideration other than
ongoing fees, royalties or payments which the Sellers would otherwise be
required to pay.
(e) Except as set forth in Schedule 3.13(e), none of the Sellers has
granted to any Person, nor authorized any Person to retain, any rights in the
Digital Video Group Intellectual Property.
(f) Except as set forth on Schedule 3.13(f), each of the Sellers has
good and exclusive title to each item of Digital Video Group Intellectual
Property listed on Schedule 3.13(a), free and clear of any Lien or encumbrance.
27
(g) The operation of the Business as it currently is conducted or is
reasonably contemplated to be conducted, including the design, development,
manufacture and sale of its products (including with respect to products
currently under development) and provision of services, does not infringe the
Intellectual Property of any other person.
(h) None of the Sellers has received notice from any person that the
operation of the Business by such Seller, including its design, development,
manufacture and sale of the Products and provision of services, infringes the
Intellectual Property of any person.
(i) The Sellers own or have the right to use all Digital Video Group
Intellectual Property necessary to the conduct of the Business as it is
currently conducted or is reasonably contemplated to be conducted, including,
without limitation, the design, development, manufacture and sale of all
Products currently manufactured or sold by the Sellers or under development by
the Sellers. The exclusive rights to exploit and use all software (or other
"works" in the meaning of the German Copyright Act) developed by employees of
any Seller and its Subsidiaries or by freelance persons commissioned by such
Seller or its Subsidiaries have been validly transferred to such Seller to the
greatest extent legally permissible.
(j) Schedule 3.13(j) lists all contracts, licenses and agreements
included in the Acquired Assets between any Seller and any other person wherein
or whereby such Seller has agreed to, or assumed, any obligation or duty to
indemnify, hold harmless or otherwise assume or incur any obligation or
liability with respect to the infringement by such Seller or such other Person
of the Intellectual Property rights of any other person.
(k) Except as listed on Schedule 3.13(k), there are no contracts,
licenses and agreements between any Seller and any other person with respect to
Digital Video Group Intellectual Property which there is any dispute known to
such Seller regarding the scope of such agreement, or performance under such
agreement including with respect to any payments to be made or received by such
Seller thereunder.
(l) Except as listed on Schedule 3.13(l), to the Knowledge of the
Sellers, no person is infringing or misappropriating any of the Digital Video
Group Intellectual Property.
(m) Except as listed on Schedule 3.13(m), to the Knowledge of the
Sellers, there are no claims asserted against any of the Sellers or against any
customer of any of the Sellers, related to any Product or to the Business.
(n) No Digital Video Group Intellectual Property right or Product is
subject to any outstanding decree, order, judgment, or stipulation restricting
in any manner the use or licensing thereof by any of the Sellers.
(o) Each of the Sellers has, and enforces, a policy requiring each
employee and contractor of such Seller to execute proprietary information and
confidentiality agreements substantially in such Seller=s standard forms and all
current and former employees and contractors of such Seller have executed such
an agreement.
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3.14 Agreements, Contracts and Commitments. Schedule 3.14 lists the
following contracts and agreements related to the Acquired Assets to which any
of the Sellers is a party:
(a) any collective bargaining agreement, and/or shop agreements
(Betriebsvereinbarungen),
(b) any agreements or arrangements that contain any severance pay or
post-employment liabilities or obligations,
(c) any bonus, deferred compensation, pension, profit sharing or
retirement plans, or any other employee benefit plans or arrangements (other
than standard employment obligations imposed by the laws of Germany),
(d) any employment or consulting agreement, contract or commitment with
an employee or individual consultant or salesperson or consulting or sales
agreement, contract or commitment with a firm or other organization,
(e) any agreement or plan, including, without limitation, any stock
option plan, stock appreciation rights plan or stock purchase plan, any of the
benefits of which will be increased, or the vesting of benefits of which will be
accelerated, by the occurrence of any of the transactions contemplated by this
Agreement or the value of any of the benefits of which will be calculated on the
basis of any of the transactions contemplated by this Agreement,
(f) any fidelity or surety bond or completion bond,
(g) any lease of personal property having a value individually in
excess of $10,000,
(h) any agreement of indemnification or guaranty, other than as set
forth in agreements listed on Schedule 3.14(b),
(i) any agreement, contract or commitment containing any covenant
limiting the freedom of any of the Sellers to engage in any line of business or
to compete with any person,
(j) any agreement, contract or commitment relating to capital
expenditures and involving future payments in excess of $10,000,
(k) any agreement, contract or commitment relating to the disposition
or acquisition of assets or any interest in any business enterprise outside the
Ordinary Course of Business,
(l) any mortgages, indentures, loans or credit agreements, security
agreements or other agreements or instruments relating to the borrowing of money
or extension of credit, including guaranties referred to in clause (viii)
hereof,
29
(m) any purchase order or contract for the purchase of materials
involving $100,000 or more (except for purchase orders or contracts entered into
in the ordinary course of business),
(n) any construction contracts,
(o) any distribution, joint marketing or development agreement, or
(p) any other agreement, contract or commitment that involves $75,000
or more or is not cancelable without penalty within thirty (30) days.
The Sellers have delivered (or caused to be delivered) to the Buyers a
correct and complete copy of each contract listed on Schedule 3.14. Each of the
Sellers is in compliance with and has not breached, violated or defaulted under,
or received notice that it has breached, violated or defaulted under, any of the
terms or conditions of any agreement, contract or commitment included in the
Acquired Assets to which it is a party or by which it is bound (any such
agreement, contract or commitment, a "Contract"). Each Contract is in full force
and effect and, except as otherwise disclosed in Schedule 3.14, is not subject
to any default thereunder of which any of the Sellers is aware by any party
obligated to any of the Sellers pursuant thereto. The Sellers have obtained, or
will obtain prior to October 31, 1997, all necessary consents, waivers and
approvals of parties to any Contract as are required thereunder in connection
with the Acquisition or to remain in effect without modification after the
Effective Date, a list of which is set forth in Schedule 3.14. Following the
Effective Date, Buyers will be permitted to exercise all of the Sellers rights
under the Contracts without payment of additional amounts or consideration other
than ongoing fees, royalties or payments which the Sellers would otherwise be
required to pay had the transactions contemplated by this Agreement not
occurred.
3.15 Interested Party Transactions. Except as listed in Schedule 3.15, no
Managing Director, Procurist, Supervisory Board member, Director or shareholder
of any Seller (nor any ancestor, sibling, descendant or spouse of any of such
persons, or any trust, partnership or corporation in which any of such persons
has or has had an interest), has or has had, directly or indirectly, (i) an
interest in any entity which furnished or sold, or furnishes or sells, services
or products relating to the Business that the Sellers furnish or sell, or
propose to furnish or sell, or (ii) any interest in any entity that purchases
from or sells or furnishes to, the Sellers, any goods or services relating to
the Business or (iii) a beneficial interest in any Contract; provided, that
ownership of no more than one percent (1%) of the outstanding voting stock of a
publicly traded corporation shall not be deemed an "interest in any entity" for
purposes of this Section 3.15.
3.16 Governmental Authorization. Schedule 3.16 accurately lists each
consent, license, permit, grant or other authorization issued to any of the
Sellers by a Governmental Entity (i) pursuant to which the Sellers currently
operates or holds any interest in any of the Digital Video Group Assets or (ii)
which is required for the operation of the Business or the holding of any such
interest (herein collectively called "Sellers' Authorizations"). The Sellers'
Authorizations are in full force and effect and constitute all Sellers'
Authorizations required to
30
permit the Sellers to operate or conduct the Business or hold any interest in
its properties or assets.
3.17 Litigation. There is no action, suit or proceeding of any nature
pending or, to the Sellers' Knowledge, threatened against any of the Sellers,
its properties or any of its officers or directors, nor, to the Knowledge of any
of the Sellers, is there any reasonable basis therefor which could give rise to
any Liability relating to the Acquired Assets. There is no investigation pending
or, to the Sellers Knowledge, threatened against any of the Sellers, its
properties or any of its officers or directors (nor, to the best Knowledge of
any of the Sellers, is there any reasonable basis therefor) by or before any
Governmental Entity which could give rise to any Liability relating to the
Acquired Assets. No Governmental Entity has at any time challenged or questioned
the legal right of any of the Sellers to manufacture, offer or sell any of the
Products or related services in the present manner or style thereof.
3.18 Accounts Receivable; Inventory.
(a) All accounts receivable of the Sellers included in the Acquired
Assets ("Accounts Receivable") arose in the Ordinary Course of Business, are
carried at values determined in accordance with GAAP consistently applied. No
person has any Lien on any of such Accounts Receivable and no request or
agreement for deduction or discount has been made with respect to any of such
Accounts Receivable.
(b) All of the Inventory reflected on the Audited Financials and
Unaudited Financials and the Sellers' books and records on the date hereof were
purchased, acquired or produced in the ordinary and regular course of business
and in a manner consistent with the Sellers' regular inventory practices and are
set forth on the Sellers' books and records in accordance with the practices and
principles of the Sellers consistent with the method of treating said items in
prior periods. None of the Inventory of the Sellers reflected on the Audited
Financials and Unaudited Financials or on the Sellers' books and records as of
the date hereof (in either case net of the reserve therefor) is obsolete,
defective or in excess of the needs of the business of the Sellers reasonably
anticipated for the normal operation of the business consistent with past
practices and outstanding customer contracts. The presentation of Inventory on
the Audited Financials and Unaudited Financials conforms to GAAP and such
Inventory is stated at the lower of cost (determined using the first-in,
first-out method) or net realizable value.
3.19 Environmental Matters.
(a) Hazardous Material. None of the Sellers has (i) operated any
underground storage tanks at any property that such Seller has at any time
owned, operated, occupied or leased; or (ii) illegally released any material
amount of any substance that has been designated by any Governmental Entity or
by applicable federal, state or local law to be radioactive, toxic, hazardous or
otherwise a danger to health or the environment, including, without limitation,
PCBs, asbestos, petroleum, and urea-formaldehyde (a "Hazardous Material"), but
excluding office and janitorial supplies properly and safely maintained. No
Hazardous Materials are present as a result of the deliberate actions of any of
the Sellers or, to the Sellers' Knowledge, as a result of any actions of any
third party or otherwise, in, on or under any property,
31
including the land and the improvements, ground water and surface water thereof,
that any of the Sellers has at any time owned, operated, occupied or leased.
(b) Hazardous Materials Activities. None of the Sellers has
transported, stored, used, manufactured, disposed of, released or exposed its
employees or others to Hazardous Materials in violation of any law in effect on
or before the Effective Date, nor has any Seller disposed of, transported, sold,
or manufactured any product containing a Hazardous Material (any or all of the
foregoing being collectively referred to as "Hazardous Materials Activities") in
violation of any rule, regulation, treaty or statute promulgated by any
Governmental Entity in effect prior to or as of the date hereof to prohibit,
regulate or control Hazardous Materials or any Hazardous Material Activity.
(c) Permits. Each of the Sellers currently holds all environmental
approvals, permits, licenses, clearances and consents (the "Environmental
Permits") necessary for the conduct of such Seller's Hazardous Material
Activities and other businesses of such Seller as such activities and businesses
are currently being conducted.
(d) Environmental Liabilities. No action, proceeding, revocation
proceeding, amendment procedure, writ, injunction or claim is pending, or to the
Knowledge for any Seller, threatened concerning any Environmental Permit,
Hazardous Material or any Hazardous Materials Activity of the Sellers. None of
the Sellers is aware of any fact or circumstance which could involve the Sellers
in any environmental litigation or impose upon the Sellers any environmental
liability.
3.20 Brokers' and Finders' Fees; Third Party Expenses. None of the Sellers
has incurred, nor will incur, directly or indirectly, any liability for
brokerage or finders' fees or agents' commissions or any similar charges in
connection with this Agreement or any transaction contemplated hereby.
3.21 Employee Benefit Plans and Compensation.
(a) For purposes of this Section 3.21, the following terms shall have
the meanings set forth below:
(i) "Employee" shall mean any current, former, or retired
employee, officer, or director of any of the Sellers involved in the Business.
(ii) "Employee Agreement" shall refer to each employment,
severance, consulting or similar agreement or contract between any of the
Sellers and any Employee involved in the Business.
(iii) "Employee Plan" shall refer to any plan, program, policy,
practice (including "Betriebliche Ubung"), contract, agreement or other
arrangement providing for bonuses, severance, termination pay, performance
awards, stock or stock-related awards, fringe benefits or other employee
benefits of any kind, whether formal or informal, funded or unfunded and whether
or not legally binding, including without limitation, any plan which is or has
been maintained, contributed to, or required to be contributed to, by any of the
Sellers for
32
the benefit of any Employee, and pursuant to which any of the Sellers has or may
have any material liability, contingent or otherwise.
(b) Except as set forth on Schedule 3.21, following the Effective Date,
Buyers will not have any liabilities, responsibilities or obligations to the
Sellers or to any Affiliate of the Sellers, or to any current, retired, former
or inactive Employee of the Sellers with respect to any Employee Plan or
Employee Agreement. This applies in particular to the 1995 Option Plan which was
validly closed and terminated under German law on or before the Effective Date.
(c) Each of the Sellers has complied with, and will comply through the
Effective Date, (i) with all applicable notice and continuation requirements of
COBRA and the regulations thereunder applicable to any ERISA Benefit Plan, (ii)
with all applicable [German labor and employment laws] applicable to any
Employee Plan or Employment Agreement except where the failure of such
compliance would not individually or in the aggregate have a Material Adverse
Effect on such Seller.
(d) Each Seller, in its conduct of the Business, has complied in all
respects, and will comply through the Effective Date, with all applicable laws
respecting employment and employment practices, safety and training, terms and
conditions of employment, and wage and hour laws, except where the failure of
such compliance would not individually or in the aggregate have a Material
Adverse Effect on such Seller.
(e) Immediately following the Effective Date, Buyers will have no
obligation to maintain or to provide post-retirement health or medical benefits
for current, retired, former or inactive Employees of any of the Sellers under
any Employee Plan or Employment Agreement.
3.22 Insurance. Schedule 3.22 lists all insurance policies and fidelity
bonds covering the Digital Video Group Assets, the Equipment and properties,
operations, employees, officers and directors of the Sellers relating to the
Acquired Assets. There is no claim by the Sellers pending under any of such
policies or bonds as to which coverage has been questioned, denied or disputed
by the underwriters of such policies or bonds. All premiums due and payable
under all such policies and bonds have been paid and the Sellers is otherwise in
material compliance with the terms of such policies and bonds (or other policies
and bonds providing substantially similar insurance coverage). None of the
Sellers has Knowledge of any threatened termination of, or material premium
increase with respect to, any of such policies.
3.23 Compliance with Laws. Each of the Sellers has complied with, is not in
violation of, and has not received any notices of violation with respect to, any
foreign, federal, state or local statute, law or regulation, except where the
failure of such compliance would not individually or in the aggregate have a
Material Adverse Effect on such Seller.
3.24 Third Party Consents. Except as set forth on Schedule 3.24, no consent
or approval is needed from any third party in order to effect the Acquisition or
any of the transactions contemplated by this Agreement.
33
3.25 Warranties; Indemnities. Except for general conditions of sale used by
the Sellers in the Ordinary Course of Business, no warranty or indemnity has
been given by the Sellers. Schedule 3.25 indicates all warranty and indemnity
claims in excess of $10,000 made against the Sellers relating to the Digital
Video Group Assets.
3.26 Affiliated Transactions. Except as set forth on Schedule 3.26, no
Affiliate of any Seller owns any asset, tangible or intangible, which is used in
the Business.
3.27 Government Contracts. Except as set forth on Schedule 3.27, none of
the Sellers has been or is a party to any contract or arrangement with any
government agency relating to the Business.
3.28 Distributors, Customers, and Suppliers. Schedule 3.28 sets forth a
complete and accurate list of (a) the ten largest distributors for the Products
(based on sales volume over the 12 months ended June 30, 1997) and indicates any
existing contractual arrangements with each such distributor, and (b) all
suppliers of significant materials or services to the Business. All
distributorship agreements relating to the Business which grant exclusive rights
to the distributor are terminable at the election of the Sellers on not more
than 60 days notice.
3.29 No Illegal Payments, Etc. To the Knowledge of the Sellers, none of the
Sellers nor any of their respective officers, employees, agents or Affiliates
has: (a) directly or indirectly given or agreed to give any illegal gift,
contribution, payment or similar benefit to any supplier, customer, governmental
official or employee or other person who was or is in a position to help or
hinder the Business (or assist in connection with any actual transaction) or
made or agreed to make any illegal contribution, or reimbursed any illegal
political gift or contribution made by any other Person, to any candidate for
federal, state, local or foreign public office (i) which may subject the Sellers
to any damage or penalty in any civil, criminal or governmental litigation or
proceeding or (ii) the noncontinuation of which has had or might have,
individually or in the aggregate, an adverse impact on the Business, or (b)
established or maintained any unrecorded fund or asset or made any false entries
on any books or records for any purpose.
3.30 Product Warranties; Defects; Liability. Except as set forth on
Schedule 3.30, each Product manufactured, sold, leased, or delivered by the
Sellers has been in conformity with all applicable contractual commitments and
all express and implied warranties, and, to the best of Sellers' knowledge, the
Sellers has no Liability (and, to the Knowledge of the Sellers, there is no
Basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand against any of them giving
rise to any Liability) for replacement or repair thereof or other damages in
connection therewith, subject only to the reserve for product warranty claims
set forth on the face of the Most Recent Balance Sheet. No Product manufactured,
sold, leased, or delivered by the Sellers is subject to any guaranty, warranty,
or other indemnity beyond the applicable standard terms and conditions of sale
or lease or beyond that implied or imposed by applicable law
34
3.31 Complete Copies of Materials. The Sellers have delivered or made
available true and complete copies of each document (or summaries of same) that
has been requested by Buyers or their counsel.
3.32 Board Approval. The Board of Directors of Miro and the Boards of
Directors (or the equivalent body) of Miro U.S. and Miro U.K. have, as of the
date of this Agreement (i) determined that the Acquisition is in the bests
interests of the shareholders of the Sellers and (ii) recommended that the
shareholders of the Sellers approve this Agreement and the Acquisition.
3.33 Acquisition Entirely for Own Account. This Agreement is made with the
Sellers in reliance upon Sellers' representation to Buyers, which by execution
of this Agreement each of the Sellers hereby confirms, that the shares of
Pinnacle Common Stock to be acquired by such Seller will be acquired for
investment for the Seller's account, not as a nominee or agent, and not with a
view to the resale or distribution of any part thereof, and that such Seller has
no present intention of selling, granting any participation in, or otherwise
distributing the same. By executing this Agreement, each Seller further
represents that such Seller does not have any contract, undertaking, agreement
or arrangement with any person to sell, transfer or grant participations to such
person or to any third person, with respect to any of the shares of Pinnacle
Common Stock.
3.34 Reliance on Sellers' Representations. Each of the Sellers understands
that the shares of Pinnacle Common Stock being issued to such Seller are not
registered under the Securities Act on the ground that the sale provided for in
this Agreement and the issuance of securities hereunder is exempt from
registration under the Securities Act pursuant to section 4(2)thereof, and that
the Buyers' reliance on such exemption is based on such Seller's representations
set forth herein.
3.35 Receipt of Information. Each of the Sellers believes it has received
all the information it considers necessary or appropriate for deciding whether
to acquire the shares of Pinnacle Common Stock. Each of the Sellers further
represents that it has had an opportunity to ask questions and receive answers
from Buyers regarding the business, properties, prospects and financial
condition of the Buyers and to obtain additional information (to the extent the
Buyers possessed such information and could acquire it without unreasonable
effort or expense) necessary to verify the accuracy of any information furnished
to it or to which it had access. The foregoing, however, does not limit or
modify the representations and warranties of the Buyers in Article IV of this
Agreement or the right of each Seller to rely thereon.
3.36 Investment Experience. Each of the Sellers is experienced in
evaluating and investing in securities and acknowledges that it is able to fend
for itself, can bear the economic risk of its investment, and has such knowledge
and experience in financial and business matters that it is capable or
evaluating the merits and risks of the investment in the Pinnacle Common Stock.
3.37 Restricted Securities. Each of the Sellers understands that the
Pinnacle Common Stock being issued pursuant to this Agreement may not be sold,
transferred or
35
otherwise disposed of without registration under the Securities Act or an
exemption therefrom, and that in the absence of an effective registration
statement covering such shares or an exemption from registration under the
Securities Act, the shares of Pinnacle Common Stock issued to such Seller must
be held indefinitely. To the extent applicable, each certificate or other
document evidencing shares of Pinnacle Common Stock issued to such Seller shall
be endorsed with the restrictive legend set forth in Section 6.14.
3.38 Entire Assets. The Acquired Assets do not constitute all or
substantially all of the assets owned and held by the Seller for purposes of
Section 419 of the German Civil Code.
3.39 Representations Complete. None of the representations, warranties or
guarantees made by the Sellers (as modified by the Schedules), nor any statement
made in any Schedule or certificate furnished by the Sellers pursuant to this
Agreement or furnished in or in connection with documents mailed or delivered to
the Shareholders for use in soliciting their consent to this Agreement and the
Acquisition contains or will contain at the Effective Date, any untrue statement
of a material fact, or omits or will omit at the Effective Date to state any
material fact necessary in order to make the statements contained herein or
therein, in the light of the circumstances under which made, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYERS
Buyers represent and warrant to the Sellers as follows:
4.1 Organization of Buyers. Each of Pinnacle, German Sub and U.K. Sub are
duly organized, validly existing, and in good standing under the laws of the
jurisdiction of their respective incorporation or formation. Dutch Sub is duly
organized and validly existing as a limited partnership under the laws of the
Netherlands.
4.2 Authority for Agreement. Each of Pinnacle, German Sub and U.K. Sub has
all requisite corporate power and authority to enter into this Agreement and the
Related Agreements to which it is a party and to consummate the transactions
contemplated hereby and thereby. Dutch Sub has [partnership power] and authority
to enter into this Agreement and the Related Agreements to which is it a party
and to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and the Related Agreements and the
consummation of the transactions contemplated hereby (including the issuance of
shares of Pinnacle Common Stock in connection with the Initial Payment and the
Earnout Payment) and thereby have been duly authorized by all necessary
corporate action on the part of each of Pinnacle, German Sub and U.K. Sub, as
the case may be, and all [partnership action required by] Dutch Sub. This
Agreement has been duly executed and delivered by each of Pinnacle, German Sub,
Dutch Sub and U.K. Sub and constitutes, and the Related Agreements, when duly
executed and delivered by Sellers, will constitute, the valid and binding
obligations of each of Pinnacle, German Sub, Dutch Sub and U.K. Sub, enforceable
in accordance with their terms, except as such enforceability may be limited by
36
principles of public policy and subject to the laws of general application
relating to bankruptcy, insolvency and the relief of debtors and rules of law
governing specific performance, injunctive relief or other equitable remedies.
4.3 Adequate Resources. Each of the Buyers has adequate financial resources
to discharge its financial obligations set forth in this Agreement.
4.4 Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any provision of the respective charters or bylaws of the Buyers or
(ii) Conflict with any material agreement, contract, lease, license, instrument,
or other arrangement to which any of the Buyers is a party or by which it is
bound or to which any of its assets is subject except for such Conflicts which
would not have a Material Adverse Effect on such Buyer. None of the Buyers needs
to give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in order for the
parties hereto to consummate the transactions contemplated by this Agreement
(including the assignments and assumptions referred to in Article II above).
4.5 Brokers' Fees. None of the Buyers has any Liability or obligation to
pay any fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement for which the Sellers could become
liable or obligated.
4.6 Consents. No consent or approval of any Person is required in
connection with the acquisition by the Buyers of any of the Acquired Assets or
the payment by the Buyers of the Purchase Price.
4.7 SEC Filings; Financial Statements.
(a) Buyers have made available to Sellers a complete and correct copy
of each report, schedule, registration statement and definitive proxy statement
filed by Pinnacle with the SEC on or after June 30, 1996 and prior to the date
of this Agreement (the "SEC Reports"), which are all the forms, reports and
documents required to be filed by Pinnacle with the SEC since January 1, 1997.
The SEC reports (i) complied with the requirements of the Securities Act or the
Exchange Act, as the case may be, and (ii) did not at the time they were filed
(or if amended or superseded by a filing prior to the date of this Agreement
then on the date of such filing) contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. No Subsidiary of Pinnacle is required to file
any reports or other documents with the SEC.
(b) Each set of consolidated financial statements (including, in each
case, any related notes thereto) contained in the SEC Reports or contained in
Buyer's earnings announcement of July 16, 1997 was prepared or was derived from
consolidated financial statements prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved (except as may be indicated in
the notes thereto) and each fairly presents the consolidated financial position
of Pinnacle and its subsidiaries as at the respective dates thereof and the
consolidated results of its operations and cash flows for the periods indicated,
37
except that the unaudited interim financial statements were or are subject to
adjustments which were not or are not expected to be material in amount.
4.8 Validity of Shares. The shares of Pinnacle Common Stock issuable in
connection with the Initial Payment when issued, sold and delivered in
accordance with the terms and for the consideration expressed in this Agreement
will be duly and validly issued, fully paid and nonassessable. The shares of
Pinnacle Common Stock issuable in connection with the Earnout Payment have been
reserved, and assuming such shares of Pinnacle Common Stock are issued to the
Sellers, will be duly and validly issued, fully paid and nonassessable.
4.9 Material Adverse Effect. Since March 31, 1997 at all times up to the
date of this Agreement, except as disclosed by the Buyers in reports filed with
the SEC, there has not been any event or condition of any character that has or
may have a Material Adverse Effect on any of the Buyers.
ARTICLE V
[INTENTIONALLY OMITTED]
ARTICLE VI
ADDITIONAL AGREEMENTS
The parties hereto agree as follows:
6.1 Shareholder Approval. The Extraordinary General Meeting of the Miro
convened on August 28, 1997 approved with the affirmative vote of all
shareholders this Agreement and the transactions contemplated hereby. A
certified copy of the notarized minutes of such meeting is enclosed as Schedule
6.1. Each of Miro U.S. and Miro U.K. have obtained shareholder approval for the
transactions contemplated hereby.
6.2 Employment and Non-Competition Agreement. Xxxxx Xxxxx and the Buyer
have executed and delivered an Employment and Non-Competition Agreement which
was approved by the Supervisory Board of Miro. Copies of such Agreement and of
such approval are enclosed as Schedule 6.2.
6.3 Confidentiality. Each of the parties hereto hereby agrees that the
information obtained in any due diligence investigation by or on behalf of the
Buyers, or pursuant to the negotiation and execution of this Agreement or the
effectuation of the transaction contemplated hereby shall be governed by the
terms of the Confidentiality Agreement.
6.4 Expenses. Except as contemplated in the last sentence of this Section
6.4, whether or not the Acquisition is consummated, all fees and expenses
incurred in connection with this Agreement and the Acquisition including,
without limitation, all legal, accounting, financial advisory, consulting and
all other fees and expenses of third parties ("Third Party
38
Expenses") incurred by a party in connection with the negotiation and
effectuation of the terms and conditions of this Agreement and the transactions
contemplated hereby, shall be the obligation of the respective party incurring
such fees and expenses; provided, however, that, subject to the last sentence of
Section 2.7, Sellers shall pay all sales and other taxes that may be imposed by
reason of the transactions contemplated hereby in the United States, Germany or
elsewhere pursuant to Section 2.7. The Buyers shall pay all fees and expenses
incurred by the Sellers' independent public accountants in connection with
preparing any audit of the Business that will be required to satisfy the Buyers'
public reporting obligations.
6.5 Announcements. Upon execution of this Agreement, Pinnacle and the
Sellers will each issue a press announcement concerning the transactions
contemplated hereby, which announcements shall be approved by Pinnacle and the
Sellers. Neither party shall issue any other statement or communication to any
third party (other than their respective agents) regarding the transaction,
including, if applicable, its termination and the reasons therefore, without the
consent of the other party, which consent shall not be unreasonably withheld,
except that this restriction shall be subject to Pinnacle's and Sellers'
obligations to comply with applicable securities laws.
6.6 Consents. The Sellers shall use their best efforts to obtain the
consents, waivers and approvals under any of the Contracts as may be required in
connection with the Acquisition (all of such consents, waivers and approvals are
set forth in Schedule 3.14) so as to assign all rights of, and benefits to, the
Buyers thereunder.
6.7 Reasonable Efforts. Subject to the terms and conditions provided in
this Agreement, each of the parties hereto shall use commercially reasonable
efforts to take promptly, or cause to be taken, all actions, and to do promptly,
or cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the transactions
contemplated hereby, to obtain all necessary waivers, consents and approvals and
to effect all necessary registrations and filings and to remove any injunctions
or other impediments or delays, legal or otherwise, in order to consummate and
make effective the transactions contemplated by this Agreement for the purpose
of securing to the parties hereto the benefits contemplated by this Agreement.
6.8 Notification of Certain Matters. The Sellers shall give prompt notice
to Buyers of any failure of the Sellers to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder;
provided, however, that the delivery of any notice pursuant to this Section 6.8
shall not limit or otherwise affect any remedies available to the party
receiving such notice. The Buyers shall give prompt notice to the Sellers of any
failure of the Buyers to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder; provided, however,
that the delivery of any notice pursuant to this Section 6.8 shall not limit or
otherwise affect any remedies available the party receiving such notice.
6.9 Employee Matters.
(a) Subject and subsequent to the Effective Date, Buyers intend to
employ approximately 100 employees of the Business who are currently employed at
Miro's
39
Braunschweig facility (such employee to be employed by the Buyers referred to
collectively as "Continuing Employees"). The Sellers will use its commercially
reasonable efforts to assist Buyers in obtaining the continuing employment after
the Effective Date of each of the Continuing Employees.
(b) The Sellers and the Buyers hereby acknowledge that the transfer of
employees to the Buyers contemplated hereby is one to which Section 613 of the
German Civil Code (the "Regulations") applies and accordingly from the Effective
Date the Buyers shall continue that employment on terms and conditions in
accordance with the requirements of the Regulations and the Sellers shall not
prior to the Effective Date take any step to terminate the contract of
employment of any Continuing Employee.
(c) The Sellers undertakes to comply fully prior to Effective Date with
all consultation and other requirements of the Regulations, including without
limitation consultation of the workers' representatives and any other
formalities required including authorizations that may be required of any
Governmental Entity.
(d) All Employees who are employed by an Acquired Subsidiary as of the
Effective Date shall remain employees of such Acquired Subsidiary. All
Continuing Employees employed by the Sellers or any Subsidiary of the Sellers
(other than an Acquired Subsidiary) as of the Effective Date shall become
employees of German Sub. All other Continuing Employees not covered by the
previous three sentences shall be hired by Pinnacle.
6.10 Pre-Effective Date Tax Returns. The Sellers shall file all Returns in
accordance with applicable law and pay all Taxes due on or prior to the
Effective Date.
6.11 Covenant Not to Compete or Solicit.
(a) For a period commencing on the Effective Date and ending three
years later (the "Non-Competition Period"), the Sellers (and its successors and
assigns) shall not (nor shall it permit any of its Subsidiaries or Affiliates)
directly or indirectly, without the prior written consent of Buyers (i) engage
anywhere in any capacity (whether as an employee, agent, consultant, advisor,
independent contractor, proprietor, partner, officer, director or otherwise),
(ii) have any ownership interest in (except for passive ownership of five
percent (5%) or less of any entity whose securities are registered under the
Securities Act or Section 12 of the Exchange Act) or (iii) participate in the
financing, operation, management or control of, any firm, partnership,
corporation, entity or business that engages or participates in a "Competing
Business Purpose." The term Competing Business Purpose shall mean any business
that competes directly or indirectly with the Business or with the business of
the Buyers.
(b) During the Non-Competition Period, the Sellers (and its respective
successors and assigns) shall not (nor shall it permit any of its Subsidiaries
or Affiliates to) solicit or encourage any employee of Buyers (or its
consolidated subsidiaries) to terminate his or her employment with Buyers (or
its consolidated subsidiaries).
40
(c) In the event that the provisions of this Section 6.11 are deemed to
exceed the time, geographic or scope limitations permitted by applicable law,
then such provisions shall be reformed to the maximum time, geographic or scope
limitations, as the case may be, permitted by applicable laws.
(d) The Sellers acknowledges that (i) the goodwill associated with the
Business and customer relationships prior to the Acquisition is an integral
component of the value of the Business to Buyers and is reflected in the
Purchase Price for the Acquisition to be received by the Sellers and (ii) the
Sellers' Agreements as set forth herein are necessary to preserve the value of
the acquired Businesses including their goodwill and customer relationships, for
Buyers following the Acquisition. The Sellers also acknowledges that the
limitations of time, geographic scope and scope of activity agreed to in this
Agreement are reasonable because, among other things, (i) the Sellers and its
Subsidiaries and Buyers are engaged in a highly competitive industry, (ii)
management of the Sellers and its Subsidiaries has unique access to, and will
continue to have access to, the trade secrets and know-how of the Sellers and
its Subsidiaries, including without limitation the plans and strategy (and, in
particular, the competitive strategy) of the Sellers and its Subsidiaries and
(iii) the Sellers is receiving significant consideration in connection with the
Acquisition.
(e) Equitable Remedy. The Sellers agrees that it would be impossible or
inadequate to measure and calculate the Buyers' damages from any breach of the
covenants set forth in this Section 6.11. Accordingly, the Sellers agrees that
if it breaches any provision of this Section 6.11, Buyers will have available,
in addition to any other right or remedy otherwise available, the right to
obtain an injunction from a court of competent jurisdiction restraining such
breach or threatened breach and to specific performance of any such provision of
this Agreement. The Sellers further agrees that no bond or other security shall
be required in obtaining such equitable relief, nor will proof of actual damages
be required for such equitable relief. The Sellers hereby expressly consents to
the issuance of such injunctive relief, whether in the form of a temporary
restraining order or otherwise, and to the ordering of such specific
performance.
(f) The Sellers agrees to use commercially reasonable efforts to assist
Buyers in obtaining from each Key Employee the execution and delivery of a
Noncompetition Agreement in the form attached hereto as Exhibit F.
6.12 Additional Documents and Further Assurances. Each party hereto, at the
request of another party hereto, shall execute and deliver such other
instruments and do and perform such other acts and things as may be necessary or
desirable for effecting completely the consummation of this Agreement and the
transactions contemplated hereby.
6.13 Quarterly Statements of Operating Profit, Revenues and Expenses.
Within 30 calendar days of the end of each calendar quarter within the Earnout
Period, Buyers will provide Sellers with a Statement of Operating Profit,
Revenues and Expenses prepared in accordance with the accounting principles and
procedures provided for in Section 2.6(c)(i) above.
41
6.14 Compliance with Securities Laws.
(a) Each of the Sellers has been advised that the shares of Pinnacle
Common Stock issued to the Sellers pursuant to the Acquisition will be issued as
securities to the Sellers in a private placement transaction exempt from the
registration requirements of the U.S. Securities Act by virtue of Regulation D
thereunder, and may not be offered or sold except pursuant to an exemption or
pursuant to an effective registration statement under the Securities Act. The
Sellers accordingly agrees not to sell, transfer or otherwise dispose of any
shares of Pinnacle Common Stock issued to the Sellers pursuant to this Agreement
unless such sale, transfer or other disposition is made (w) in conformity with
the requirements of Rule 144 promulgated under the Securities Act, or (x)
pursuant to a resale registration statement on Form S-3 filed by Pinnacle with
the SEC which is then in effect; or (y) upon delivery to Pinnacle of a written
opinion of counsel, reasonably acceptable to Pinnacle in form and substance,
that such sale, transfer or other disposition is otherwise exempt from
registration under the Securities Act, or (z) an authorized representative of
the SEC shall have rendered written advice to the Sellers wishing to effect such
sale, transfer or other disposition (sought by the Sellers or counsel to the
Sellers, with a copy thereof and of all other related communications delivered
to Pinnacle) to the effect that the SEC would take no action or that the staff
of the SEC would not recommend that the SEC take action, with respect to the
proposed sale, transfer or other disposition, if consummated.
(b) Pinnacle will give stop transfer instructions to its transfer agent
with respect to any shares of Pinnacle Common Stock received by the Sellers
pursuant to the Acquisition and there will be placed on each certificate
representing such shares of Pinnacle Common Stock, or, any substitutions
therefor, legends stating in substance:
THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED, PLEDGED, OR HYPOTHECATED ABSENT AN EFFECTIVE
REGISTRATION THEREOF, OR EXEMPTION THEREUNDER, UNDER SUCH ACT OR
COMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH ACT.
The legend set forth above shall be removed (by delivery of a substitute
certificate without such legend) and Pinnacle agrees to so instruct its transfer
agent at such time as registration statement covering such shares is effective,
or at the request of the Sellers when one or more of the conditions set forth in
clauses (w), (x), (y) and (z) of subparagraph (a) hereof shall have occurred.
6.15 Rent Agreement. German Sub and Miro have entered into the Rent
Agreement a copy of which is enclosed as Exhibit B.
6.16 Certificate of the Buyer. Seller has been provided with an Officer's
certificate, a copy of which is enclosed as Exhibit G-1, executed on behalf of
Buyer to the effect that, as of the Effective Date;
42
(a) all representations and warranties made by the Buyer in this
Agreement are true and correct in all material respects; and
(b) all covenants and obligations of this Agreement to be performed by
the Buyer on or before such date have been so performed in all material
respects;
6.17 Registration Rights Agreement. Pinnacle and Seller shall have entered
into the Registration Rights Agreement a copy of which is attached as Exhibit C.
6.18 Legal Opinions. Seller has received legal opinions from Xxxxxx Xxxxxxx
Xxxxxxxx & Xxxxxx, Professional Corporation, United States legal counsel to the
Buyer, and Oppenhoff & Xxxxxx, local German counsel to the Buyer, copies of
which are enclosed in Exhibit D-1.
6.19 Certificate of the Seller. Buyer shall have been provided with a
certificate, a copy of which is enclosed as Exhibit G-2, executed by the chief
Executive Officer of the Seller to the effect that, as of the Effective Date;
(a) all representations and warranties made by the Seller in this
Agreement are true and correct in all material respects; and
(b) all covenants and obligations of this Agreement to be performed by
the Seller on or before such date have been so performed in all material
respects;
6.20 Legal Opinions. Buyer has received legal opinions from Venture Law
Group, a Professional Corporation, United States legal counsel to the Seller,
and Xxxxx & XxXxxxxx local German counsel to the Buyer, copies of which are
enclosed in Exhibit D-2.
6.21 Additional Agreements. Buyers shall have received from Norddeutsche
Landesbank, in its capacity as fiduciary under the Pool Agreement dated as of
November/December 1995, a letter regarding consent to the Acquisition and the
disposition of assets by Sellers hereunder as well as a waiver of certain claims
arising hereafter, a copy of which is enclosed in Schedule 6.21.
6.22 Accounts Receivable Agreement. Miro and Pinnacle shall have entered
into an agreement regarding the collection of certain accounts receivable
following the Effective Date, a copy of which is enclosed on Schedule 6.22.
6.23 Intercompany Balances. On or prior to the Effective Date, all accounts
payable or other forms of debt owed by the Acquired Subsidiaries to Miro (or any
Subsidiary of Miro) shall have been eliminated.
43
ARTICLE VII
[INTENTIONALLY OMITTED]
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS, WARRANTIES AND INDEMNIFICATION
8.1 Survival of Representations and Warranties. All of the representations,
warranties and guarantees of the Sellers and of the Buyers contained herein or
in any document certificate or other instrument required to be delivered
hereunder shall survive the Effective Date and continue in full force and effect
until 5:00 p.m., P.S.T. on the date twelve (12) months after the Effective Date,
except with respect to representations and warranties regarding Tax matters,
which shall survive until the expiration of the applicable statute of
limitations with respect thereto.
8.2 Indemnity and Setoff for Damages.
(a) Indemnification of Buyers. The Seller agrees to indemnify and hold
Buyers (and Buyers' officers, directors, shareholders and Affiliates), harmless
against all damages, claims, losses, liabilities, deficiencies, costs and
expenses, including reasonable attorneys' fees and expenses of investigation
(hereinafter individually a "Loss" and collectively "Losses"), incurred by
Buyers (and Buyers' officers, directors, or Affiliates) directly or indirectly
as a result of (i) any inaccuracy or breach of a representation, warranty or
guarantee of the Sellers contained in Article III herein, (ii) any failure by
the Sellers to perform or comply with any covenant contained herein, or (iii)
the assertion against the Buyers, the Acquired Assets or the Business of any
damages created by or attributable to any unknown, undisclosed or contingent
Liability of the Sellers (other than any of the Assumed Liabilities) arising out
of the conduct of the Sellers or any of its Subsidiaries prior to the Effective
Date. As partial security for the indemnity provided in this Section 8.2, Buyers
shall have the right to set off amounts from the Earnout Payments in the manner
provided in Section 8.2(f). In addition to setting off amounts from the Earnout
Payment, Buyers may, at their discretion, seek indemnification for Losses
directly from the Sellers in the manner and to the extent provided in Section
8.2(a), (g) and (h).
(b) Indemnification of Sellers. The Buyers agree to indemnify and hold
the Sellers (and Sellers' officers, directors, shareholders and Affiliates),
harmless against all Losses incurred by the Sellers (and the Sellers' officers,
directors or Affiliates) directly or indirectly as a result of (i) any
inaccuracy or breach of a representation, warranty or guaranty of the Buyers
contained in Article IV herein, (ii) any failure by the Buyers to perform or
comply with any covenant contained herein, or (iii) the assertion against the
Sellers of any damages arising out of the conduct of the Buyers or any of their
Subsidiaries following the Effective Date (including, without limitation, any
Assumed Liabilities).
44
(c) No Effect of Due Diligence Investigation. The fact that the Buyer
has conducted a due diligence examination shall not limit the liability of the
Sellers for any breach of any guarantee or covenant.
(d) Limitation on Indemnification.
(i) Notwithstanding Section 8.2(a), (b) or (c), there shall be no
right to indemnification pursuant to this Article VIII:
1) Unless and until Officer's Certificates identifying
Losses, the aggregate of which exceeds $50,000, (the "Basket Amount") have been
delivered to the indemnifying party.
2) With respect to any Loss for which an indemnified
party has previously been indemnified pursuant to this Article VIII.
(ii) Except for any willful or fraudulent breach of the
representations, warranties, guarantees or covenants contained herein, the
Buyers and Sellers hereby agree that an indemnified party's sole and exclusive
recourse against an indemnifying party for any loss or claim of loss arising out
of or relating to this Agreement shall be expressly limited to the
indemnification provisions of this Article VIII. The Buyers and Sellers further
agree that except for any willful or fraudulent breach of the representations,
warranties, guarantees or covenants of the Buyers or Sellers, as the case may
be, contained in this Agreement, the maximum aggregate amount of indemnification
that an indemnified party may obtain from an indemnifying party for all Losses
under this Agreement shall be $2,000,000.
(e) Delivery of Officer's Certificate. In the event an indemnified
party (or such indemnified party's officer, director, shareholders and
affiliates) shall have incurred any Losses for which indemnification pursuant to
this Article VIII is sought, such indemnified party shall deliver to the
indemnifying party an Officer's Certificate signed by any officer of the
indemnified party: (A) stating that the indemnified party has directly or
indirectly paid or properly accrued or reasonably anticipates that it will have
to pay or accrue Losses, (B) specifying in reasonable detail the individual
items of Losses included in the amount so stated, the date each such item was
paid or properly accrued, or the basis for such anticipated liability, and the
nature of the misrepresentation, breach of warranty, guarantee or covenant to
which such item is related and (C) if the indemnified party is a Buyer,
indicating that such Buyer is seeking to set off such Losses against Earnout
Payments or is seeking indemnification directly from the Sellers, or both.
(f) Set Off From Earnout Payments. Subject to the limitations set forth
in Section 8.2(d), in the event that a Buyer has elected a set off of Earnout
Payments in accordance with Section 8.2(e), upon delivery of Buyer's Officer's
Certificate to the Sellers, the Earnout Payment pursuant to Section 2.3(b)
hereof shall be reduced by the amount of the Losses incurred by such Buyer. To
the extent that the value of the Earnout Payment is less than the amount of the
unreimbursed Losses incurred, the Earnout Payment shall be zero.
(g) Resolution of Conflicts; Mandatory Arbitration.
45
(i) In case the indemnifying party shall object in writing to any
claim or claims made in any Officer's Certificate as described in Section
8.2(e), indemnified party shall have thirty (30) days to respond in a written
statement to such objection. If after such thirty (30) day period there remains
a dispute as to any claims, the indemnifying party and indemnified party and/or
their representative shall attempt in good faith for sixty (60) days to agree
upon the rights of the respective parties with respect to each of such claims.
If the indemnifying party and indemnified party should so agree, a memorandum
setting forth such agreement shall be prepared and signed by both parties.
(ii) If no such agreement can be reached after good faith
negotiation, either indemnifying party or indemnified party may, by written
notice to the other, demand arbitration of the matter in accordance with Section
10.7 hereof, unless the amount of the damage or loss is at issue in pending
litigation with a third party, in which event arbitration shall not be commenced
until such amount is ascertained or both parties agree to arbitration. The
decision of the arbitrators as to the validity and amount of any claim in such
Officer's Certificate shall be binding and conclusive on the parties to this
Agreement.
(h) Third-Party Claims. In the event an indemnified party becomes aware
of a third-party claim which it believes may result in Losses, the indemnified
party shall promptly notify the indemnifying party of such claim. The
indemnifying party shall have the right at its expense to employ counsel of its
choice to assume control of the defense of such claim and the indemnified party
shall be entitled, at its expense, to participate in the defense of such claim.
So long as the indemnifying party is defending such claim, the indemnifying
party shall employ reasonable efforts to inform the indemnified party of
material developments relating to such claim. So long as the indemnifying party
is defending such claim, in good faith, the indemnified party will not settle
such claim without the indemnifying party's written consent, which consent shall
not be unreasonably withheld, and the indemnifying party shall not settle any
claim on behalf of indemnified party without indemnified party's written
consent, which consent shall be not be unreasonably withheld. In the event that
the indemnifying party does not assume the defense of such claim or fails to
defend the claim in good faith, the indemnified party shall have the right in
its sole discretion to defend and settle any such claim; provided, however, that
except with the consent of the indemnifying party, no settlement of any such
claim with third-party claimants shall be determinative of the amount of any
claim for indemnification pursuant to Sections 8.1 and 8.2. In the event that
the Sellers is the indemnifying party and has consented to any such settlement,
the Sellers shall have no power or authority to object under any provision of
Sections 8.1 and 8.2 to the amount of any reduction by Buyers of the Earnout
Payment in accordance with such settlement.
46
ARTICLE IX
[INTENTIONALLY OMITTED]
ARTICLE X
GENERAL PROVISIONS
10.1 Notices. All notices and other communications hereunder shall be in
writing, shall be in English and shall be deemed given if delivered personally
or by commercial messenger or courier service, or mailed by registered or
certified mail (return receipt requested) or sent via facsimile (with
acknowledgment of complete transmission) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice), provided, however, that notices sent by mail will not be deemed given
until received:
(a) if to the Buyers, to:
Pinnacle Systems, Inc.
000 X. Xxxxxxxx Xxx.
Xxxxxxxx Xxxx, XX 00000
U.S.A.
Attention: Chief Financial Officer
Telephone No.: (000) 000-0000
Facsimile No: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
Professional Corporation
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
U.S.A.
Attention: Xxxxxx Xxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
47
(b) if to the Sellers to:
Miro Computer Products
Xxxx-Xxxxx Xxx. 0
X-00000 Xxxxxxxxxxxx
Xxxxxxx
Telephone No.: (00) 0 00 00 00-0 53
Facsimile No.: (00) 0 00 00 00-0 73
Attention: Xxxxx Xxxxx
with a copy to:
Venture Law Group
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
X.X.X.
Telephone No: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxxx Xxxxx, Esq.
10.2 Interpretation. The words "include," "includes" and "including" when
used herein shall be deemed in each case to be followed by the words "without
limitation." The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
10.3 Notarizations. This Agreement is notarized before a German notary and
each party is entitled to receive as many certified or simple copies as it
wishes to receive at its cost.
10.4 Entire Agreement; Assignment. This Agreement, the Exhibits hereto, the
Schedules, the Confidentiality Agreement, and the documents and instruments and
other agreements among the parties hereto referenced herein: (a) constitute the
entire agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings both written and oral, among
the parties with respect to the subject matter hereof; (b) are not intended to
confer upon any other Person any rights or remedies hereunder; and (c) except
for the assignment of the purchase price under Section 2.5(a), shall not be
assigned by operation of law or otherwise, except that the Buyers may assign
their rights and delegate their obligations hereunder to their affiliates.
10.5 Severability. In the event that any provision of this Agreement or the
application thereof, becomes or is declared by a court of competent jurisdiction
to be illegal, void or unenforceable, the remainder of this Agreement will
continue in full force and effect and the application of such provision to other
Persons or circumstances will be interpreted so as reasonably to effect the
intent of the parties hereto. The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the economic, business and other
purposes of such void or unenforceable provision.
48
10.6 Other Remedies. Except as otherwise provided herein, any and all
remedies herein expressly conferred upon a party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby, or by law or equity upon
such party, and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy.
10.7 Governing Laws; Arbitration. This Agreement shall be governed by and
construed in accordance with the laws of the State of California, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof. Any claim or dispute arising out of or related to this Agreement,
or the interpretation, making, performance, breach or termination thereof, shall
be finally settled by binding arbitration in the County of Santa Xxxxx under the
AAA International Commercial Arbitration Rules and Supplemental Procedures for
Large Complex Disputes by a single arbitrator mutually agreeable to the Buyers
and the Sellers. In the event that within forty-five (45) days after the
submission of any dispute to arbitration, the Buyers and the Sellers cannot
mutually agree on a single arbitrator, the Buyers and the Sellers shall each
select one arbitrator and the AAA shall select a third arbitrator. The
arbitrator(s) shall have the authority to grant any equitable and legal remedies
that would be available in any judicial proceeding instituted to resolve a
dispute. Judgment on the award rendered by the arbitrators may be entered in any
court having jurisdiction thereof. The parties hereto hereby waive any and all
rights of appeal under the English Arbitration Act and any amendments thereto.
The arbitrator(s) may award to the prevailing party, if any, as determined by
the arbitrator(s), all of its costs and fees, including without limitation AAA
administrative fees, arbitrator fees, attorney's fees, expert fees, witness
fees, travel expenses and out-of-pocket expenses (including without limitation
such expenses as copying, telephone, facsimile, postage and courier fees). The
parties to the arbitration may apply to any court of competent jurisdiction for
a temporary restraining order, preliminary injunction or other interim or
conservatory relief, as necessary, without breach of this arbitration provision
and without any abridgement of the powers of the arbitrator(s). The parties
agree that, any provision of applicable law notwithstanding, they will not
request and the arbitrator(s) shall have no authority to award punitive or
exemplary damages against any party. The arbitration proceedings and all
pleadings and written evidence shall be in the English language. Any written
evidence originally in a language other than English shall be submitted in
English translation accompanied by the original or true copy thereof.
10.8 Rules of Construction. The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefor, waive the application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.
10.9 No Third Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the parties hereto and their
respective successors and permitted assigns.
10.10 Amendement. This Agreement may be amended by the parties hereto at
any time by execution of an instrument in writing signed on behalf of each of
the parties hereto.
10.11 Notary's Fees. The notary's fees accruing from this Agreement shall
be born half by Miro Computer Products and half by Pinnacle Systems GmbH.
49
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have executed this Asset Purchase
Agreement on the date first above written.
PINNACLE SYSTEMS, INC.
By: /s/ XXXXXX XXXXXXXX
Name: Xxxxxx Xxxxxxxx
Title: VP Finance, CFO
PINNACLE SYSTEMS GMBH
By: /s/ XXXXXX XXXXXXXX
Name: Xxxxxx Xxxxxxxx
Title: Geschuftsfuhrer
PINNACLE SYSTEMS C.V.
By: /s/ XXXXXX XXXXXXXX
Name: Xxxxxx Xxxxxxxx
Title: VP Finance, CFO, Pinnacle System Inc.
PINNACLE SYSTEMS LTD.
By: /s/ XXXXXX XXXXXXXX
Name: Xxxxxx Xxxxxxxx
Title: CFO
MIRO COMPUTER PRODUCTS AG
By: /s/ XXXXX, B
Name: Xxxxx, G.
Title: [Unreadable] CFO
50
MIRO COMPUTER PRODUCTS S.A.R.L.
By: /s/ XXXXX, G.
Name: Xxxxx, G.
Title: CFO
MIRO COMPUTER PRODUCTS B.V.
By: /s/ XXXXX, G.
Name: Xxxxx, G.
Title: CFO
51
EXHIBIT A-1A
DEED OF TRANSFER OF SHARES
IN THE SHARE CAPITAL OF
MIRO COMPUTER PRODUCTS B.V.
(final draft)
On the first day of September, nineteen hundred and ninety-seven appears before
me, Xxxxxxxx Xxxxxx Clumpkens, notaris (civil law notary), practicing in
Amsterdam:
Saskia Elisabeth van den Xxxx, candidate civil law notary, residing at 3581 BL
Utrecht, Maliesingel 44-bis, born in Leiden on the fourth day of February,
nineteen hundred and seventy-one, whose identity has been established upon
production of passport number K786869, expiring at the seventeenth day of June,
nineteen hundred and ninety-seven, not married, who for the purpose hereof is
acting as attorney authorized in writing of:
1. The company organised under the laws of Germany: miro Computer Products AG,
with corporate seat in Braunschweig, Germany and address at: 381112
Braunschweig, Germany, Carl-Miele-Strabe 4, hereinafter referred to as: the
"Transferor", and in that capacity is representing the Transferor;
2. the Limited Partnership organised under the laws of the Netherlands:
Pinnacle Systems C.V., with registered address at: 000 X. Xxxxxxxx Xxxxxx,
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000, Xxxxxx Xxxxxx of America, hereinafter
referred to as: the "Transferee", and in that capacity is representing the
Transferee; and
3. the private company with limited liability organised under the laws of the
Netherlands: miro Computer Products B.V., with corporate seat in Eindhoven
and address at: 6546 BB Nijmegen, Kerkenbos 10-15, Unit 1, number B.V.
496.759, hereinafter referred to as: the "Company", and in that capacity is
representing the Company.
The person appearing
DECLARES THAT,
WHEREAS:
(a) The Transferor is holder of six hundred (600) shares, numbered 1 up to
and including 600, each share having a par value of one hundred Dutch
guilders (NLG 100) in the share capital of the Company, hereinafter
referred to as: the "Shares";
(b) the Shares were acquired by the Transferor pursuant to the issue upon
the incorporation of the Company, effected by a notarial deed, executed
before X.X. Xxxxxx, notaris in 's-Gravenhage, on the eighteenth day of
October, nineteen hundred and ninety-four;
(c) the Shares are registered in the share register of the Company in the
name of the Transferor;
(d) on the twenty-ninth day of August, nineteen hundred and ninety-seven
the Transferor and the Transferee entered into an agreement of sale and
purchase of the Shares, which agreement is hereinafter referred to as:
the Agreement;
(e) under the provisions of the Agreement the Transferor must transfer the
Shares to the Transferee;
(f) the share transfer restrictions included in the of the Company need not
be applied to the present transfer of the Shares, since the Transferor
is the sole shareholder in the Company.
IT IS HEREBY AGREED AND CONFIRMED AS FOLLOWS:
1. In order to implement the Agreement the Transferor hereby transfers the
Shares to the Transferee, who accepts the transfer of the Shares.
The Shares are for the account of the Transferee as of the thirty-first day
of August, nineteen hundred and ninety-seven at twenty-four hours.
2. The purchase price and its method of payment is further specified in the
Agreement and sufficiently known to the Transferor and the Transferee.
3. The Transferor warrants the Transferee that he is fully entitled to the
Shares, the Shares are fully paid-up, they are encumbered neither with a
right of pledge nor with a right of usufruct and are not attached.
The Transferee accepts this warranty.
4. Unless otherwise provided for in this deed, and the Agreement, all that has
been agreed between the parties relating to the sale, purchase and transfer
of the Shares prior to the execution of this deed shall remain in full
force and effect, provided, however, that a condition subsequent, if any,
may no longer be invoked and a condition precedent, if any, is deemed to
have been fulfilled.
5. The Company acknowledges this transfer of the Shares.
6. All costs and expenses connected with this transfer of the Shares will be
for the account of the Transferee.
7. The Transferor and the Transferee waive the right to dissolve the Agreement
and the agreement contained in this deed under the provisions of section
6:265 Civil Code.
Sufficient proof of the existence of the powers of attorney has been given to
me, notaris.
The written powers of attorney to the person appearing are evidenced by three
private instruments, which are attached to this deed.
IN WITNESS WHEREOF the original of this deed, which shall be retained by me,
notaris, is executed in Amsterdam, on the date first given in the head of this
deed.
Having conveyed the substance of this deed to the person appearing he has
declared that he has taken cognizance of the contents of the deed and does not
require it to be read out to him in full.
Immediately after the reading of those parts of the deed which the law
prescribes to be read out, this deed is signed by the person appearing, who is
known to me, notaris, and by myself, notaris.
Exhibit A-1B
English Summary: French transfer document relating to the sale of all of the
capital stock of Miro Computer Products SARL, a corporation formed under the
laws of France, by its sole stockholder, Miro Computer Products AG, to Pinnacle
Systems C.V.
CESSION DE PARTS
Les soussignees:
- la societe MIRO COMPUTER PRODUCTS AG, societe de droit allemand au capital de
7.867.750 DM, ayant son siege social Xxxx-Xxxxx-Xxx. 0, 00000 XXXXXXXXXXXX,
ALLEMAGNE, immatriculee au Registre du commerce de Braunschweig sous le numero
HRB 3444,
representee par Monsieur Xxxxx XXXXX, en qualite de membre du directoire,
agissant egalement pour le compte de Monsieur Georg Rybing, un autre membre du
directoire, sur la base d'une procuration notariee en date du 18 aout 1997, dont
une copie est jointe a la presente,
ci-apres denommee "le Cedant", d'une part,
- la societe PINNACLE SYSTEMS C.V., societe de droit neerlandais au captal de
700.000 Fl ayant son siege social [unreadable], immatriculee au Registre du
commerce et des societes sous le numero 10148252,
representee par Monsieur Art Xxxxxxxx, en qualite de vice President/CFO of
Pinnacle Systems, Inc, partenaire general de C.V.
ci-apres denommee "le Cessionnaire", d'autre part,
Ont prealablement a l'acte de cession de parts sociales, objet des presentes,
expose ce qui suit:
Suivant acte sous seing prive il existe une societe a responsabilite limitee
denommee MIRO COMPUTER PRODUCTS SARL, au capital de 200.000 F, divise en 200
parts de 1.000 F chacune,entierement liberees, dont le siege est fixe 00/000 Xxx
Xxxxxx Xxxxxx, 00000 CHATILLON, et qui est immatriculee au Registre du commerce
et des societes de NANTERRRE sous le numero B 394 367 353.
Le Cedant possede 200 parts sociales de 1.000 X.
Xxxx expose, ;ils ont convenu et arrete ce qui suit:
CESSION
MIRO COMPUTER PRODUCTS AG cede et transporte sous les garanties ordinaires de
fait et de droit a PINNACLE SYSTEMS C.V. qui accepte 200 parts sociales de 1.000
F lui appartenant dans la Societe.
PINNACLE SYSTEMS C.V. devient proprietaire des parts cedees a compter de ce jour
et sera subrogee dans tous les droits et obligations attaches a ces parts.
Toutefois, le Cessionnaire partagera prorata temporis avec le Cedant les
dividendes susceptibles d'etre attribues auxdites parts au titre des resultats
de l'exercice en cours.
PRIX
La presente cession est consentie et acceptee moynnant le prix de $620.000 X que
PINNACLE SYSTEMS C.V. a paye a MIRO COMPUTER PRODUCTS AG, qui le reeconnait et
lui en donne quittance.
Dont quittance.
DECLARATION DU CEDANT
Le Cedant declare:
(1) - qui'il a la pleine capacite civile pour engager la societe dans le
cadre des presentes, que la societe MIRO COMPUTER PRODUCTS AG ne fait
l'objet d'aucune procedure collective et n'est pas en etat de cessation
des paiements,
(2) que les parts cedees sont libres de tout nantissement et ne font
l'objet d'aucune procedure susceptible de faire obstacle a leur
cession.
MODIFICATION DES STATUTS
Monsieur Xxxxxxxx representant la societe PINNACLE SYSTEMS C.V., associe unique
de la Societe, decide que, pour tenir compte de la nouvelle repartition des
parts, l'article IX des statuts serait desormais redige de la maniere suivante:
ARTICLE IX - PARTS
le capital social est fixe a la somme de FF 200.000 et divise en 200
parts de FF 1.000 chacune entierement souscrite et integralement
liberees, numerotees de 1 a 200 attribuees en totalite a la societe
PINNACLE SYSTEMS C.V.
-2-
DECLARATION POUR L'ENREGISTREMENT
Le Cedant declare que la societe MIRO COMPUTER PRODUCTS SARL est soumise a
l'impot sur les societes et que les parts sociales cedees ont ete creees en vue
de remunerer les apports en numeraire effectues a la Societe. II precise que la
Societe n'est pas une societe a preponderance immobiliere au sens de l'article
150 A bis du Code general des impots.
FORMALITES DE PUBLICITE - POUVOIRS
La presente cession sera signifiee a la Societe dans les conditions prevues par
l'article 1690 du Code civil. Toutefois cette signification pourra etre
remplacee par le depot d'un original du present acte au siege social contre
remise par la gerance d'une attestation de ce depot.
Tous pouvoirs sont conferes au porteur d'orginaux ou de copies des presentes en
vue de l'accomplissement de toutes formalites legales de depot et de publicite.
FRAIS
Les frais et droits des presentes et ceux qui en seront la consequence seront
supportes par le Cessionnaire, qui s'y oblige, a l'exception de ceux concernant
la modification des statuts qui seront supportes par la Societe.
Fait a ____________________
Le ________________________
En 6 orginaux
/S/ XXXXX XXXXX /S/ XXXXXX X. XXXXXXXX
MIRO COMPUTER PRODUCTS AG PINNACLE SYSTEMS C.V.
-3-
EXHIBIT A-2
ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT is entered into on August 29, 1997, by
and among Pinnacle Systems, Inc., a California corporation whose principal place
of business is in Mountain View, California, U.S.A. ("Pinnacle"), Pinnacle
Systems GmbH, a corporation organized under the laws of Germany and a subsidiary
of Pinnacle ("German Sub"), Pinnacle Systems C.V., a limited partnership formed
under the laws of the Netherlands ("Dutch Sub") and Pinnacle Systems, Ltd.
("U.K. Sub" and, together with Pinnacle, German Sub and Dutch Sub, the
"Buyers"), Miro Computer Products AG, a corporation organized under the laws of
Germany ("Miro"), Miro Computer Products Ltd., a corporation organized under the
laws of the United Kingdom and a subsidiary of Miro ("Miro U.K."), and Miro
Computer Products Inc., a California corporation and a subsidiary of Miro ("Miro
U.S." and together with Miro and Miro U.K., the "Sellers").
WITNESSETH:
WHEREAS, the Buyers and the Sellers are parties to an Asset Purchase
Agreement dated August 29, 1997 (the "Purchase Agreement") pursuant to which the
Sellers agreed to sell, and the Buyers agreed to purchase, all of the properties
and assets of the Sellers as described therein in Section 2.1 as the Acquired
Assets (such initially capitalized terms and, except as defined herein, all
other initially capitalized terms used herein shall have the same meanings
ascribed to them in the Purchase Agreement);
WHEREAS, pursuant to the Purchase Agreement, the Buyers agreed to assume
all liabilities and obligations of the Sellers as described as being Assumed
Liabilities in Section 2.2 of the Purchase Agreement.
WHEREAS, it is the intention of the Buyers and the Sellers to reflect the
transfer of the title over the Acquired Assets by the execution and delivery of
the following documents at the Effective Date (unless otherwise specified in the
Purchase Agreement): (i) this Assignment and Assumption Agreement between the
Sellers and the Buyers; (ii) the Xxxx of Sale and Conveyance by the Sellers to
the Buyers; (iii) the deeds relating to any of the Acquired Assets, properly
endorsed; (iv) assignments of the Sellers' permits, leases, Intellectual
Property and Contracts (including Intellectual Property transfer documents) and
any third party consents necessary, or requested by the Buyers, to such
assignments described in (iv); (v) the Transfer Documents; (vi) those certain
asset transfer documents required under laws of France and The Netherlands; and
(vii) such other instruments of sale, transfer, conveyance, and assignment as
the Buyers and their counsel may reasonably request;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Buyers and the Sellers hereby agree as follows:
1. Effective from and after the Effective Date, the Sellers hereby assign
according to the allocation set forth in Schedule 2.9(a)(1), Schedule 2.9(a)(2),
Schedule 2.9(a)(3) and Schedule 2.9(d) attached hereto, respectively, to
Pinnacle and each of German Sub, U.K. Sub and Dutch Sub, all right, title and
interest in, to and under all contracts, agreements, leases, licenses,
undertakings, commitments, and other property and assets constituting the
Acquired Assets described in Section 2.1 of the Purchase Agreement.
2. Effective from and after the Effective Date, the Buyers hereby assume
all liabilities and obligations of the Sellers described in Section 2.2 of the
Purchase Agreement, constituting the Assumed Liabilities.
3. In the event that any provision of this Assignment and Assumption
Agreement be construed to conflict with a provision of the Purchase Agreement,
the provision in the Purchase Agreement shall be deemed controlling.
4. This Assignment and Assumption Agreement shall bind and shall inure to
the benefit of the respective parties and their assigns, transferees and
successors.
5. This Assignment and Assumption Agreement shall be construed and enforced
in accordance with the laws of the State of California, U.S.A., regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
6. This Assignment and Assumption Agreement may be executed in
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
7. The parties confirm the continuing application of the provisions of
Section 2.10 of the Purchase Agreement and the Sellers agree that they will
execute and deliver to the Buyers such assignments of specific Acquired Assets
(such as individual debts owing to the Sellers) as the Buyers may request
notwithstanding that such assets are covered by any of the documents referred to
in the third recital above.
-2-
IN WITNESS WHEREOF, the undersigned have executed this instrument as of the
date first above written.
MIRO COMPUTER PRODUCTS AG
By: /s/ X. XXXXX
-----------------------
Name: X. Xxxxx
---------------------
Title: CFO
--------------------
MIRO COMPUTER PRODUCTS INC.
By: /s/ X. XXXXX
-----------------------
Name: X. Xxxxx
---------------------
Title: CFO
--------------------
MIRO COMPUTER PRODUCTS LTD.
By: /s/ X. XXXXX
-----------------------
Name: X. Xxxxx
---------------------
Title: CFO
--------------------
PINNACLE SYSTEMS, INC.
By: /s/ XXXXXX XXXXXXXX
-----------------------
Name: Xxxxxx Xxxxxxxx
---------------------
Title: VP Finance, CFO
--------------------
PINNACLE SYSTEMS GMBH
By: /s/ XXXXXX XXXXXXXX
-----------------------
Name: Xxxxxx Xxxxxxxx
---------------------
Title: Geschuftsfuhrer
--------------------
[ASSIGNMENT AND ASSUMPTION AGREEMENT]
-3-
PINNACLE SYSTEMS C.V.
By: /s/ XXXXXX XXXXXXXX
-----------------------
Name: Xxxxxx Xxxxxxxx
---------------------
Title: VP Finance,
CFO Pinnacle Systems
--------------------
PINNACLE SYSTEMS, LTD.
By: /s/ XXXXXX XXXXXXXX
-----------------------
Name: Xxxxxx Xxxxxxxx
---------------------
Title: Director
--------------------
[ASSIGNMENT AND ASSUMPTION AGREEMENT]
-4-
EXHIBIT A-3
XXXX OF SALE AND CONVEYANCE
XXXX OF SALE AND CONVEYANCE, made, executed and delivered on August 29,
1997, by and among Pinnacle Systems, Inc., a California corporation whose
principal place of business is in Santa Xxxxx County, California, U.S.A.
("Pinnacle"), Pinnacle Systems GmbH, a corporation organized under the laws of
Germany and a subsidiary of Pinnacle ("German Sub"), Pinnacle Systems C.V., a
limited partnership formed under the laws of the Netherlands ("Dutch Sub"), and
Pinnacle Systems Ltd., a corporation formed under the laws of the United Kingdom
and a subsidiary of Pinnacle ("U.K. Sub," and, together with Pinnacle, German
Sub and Dutch Sub, the "Buyers"), Miro Computer Products AG, a corporation
organized under the laws of Germany ("Miro"), Miro Computer Products Ltd., a
corporation organized under the laws of the United Kingdom and a subsidiary of
Miro ("Miro U.K."), and Miro Computer Products Inc., a California corporation
and a subsidiary of Miro ("Mrio U.S." and, together with Miro and Miro U.K., the
"Sellers").
WITNESSETH:
WHEREAS, the Sellers and the Buyers are parties to an Asset Purchase
Agreement dated as of August 29, 1997 (the "Purchase Agreement"), providing,
for, among other things, the transfer and sale to the Buyers of substantially
all of the assets, properties, rights and business of the Sellers for
consideration of the Purchase Price (such initially capitalized term and, except
as defined herein, all other initially capitalized terms used herein shall have
the same meanings ascribed to them in the Purchase Agreement), and on the terms
and conditions provided in the Purchase Agreement;
WHEREAS, the Buyers and the Sellers now desire to carry out the intent and
purpose of the Purchase Agreement by the Sellers' execution and delivery to the
Buyers of this instrument evidencing the sale, conveyance, assignment, transfer
and delivery to the Buyers of the Acquired Assets subject to the Assumed
Liabilities; provided, however, that there shall be excluded the Excluded
Liabilities;
WHEREAS, it is the Buyers' and Sellers' intentions to reflect the transfer
of the title over the Acquired Assets by the execution and delivery of the
following documents at the Effective Date (unless otherwise specified in the
Purchase Agreement): (i) this Xxxx of Sale and Conveyance by the Sellers to the
Buyers; (ii) the Assignment and Assumption Agreement between the Sellers and the
Buyers; (iii) the deeds relating to any of the Acquired Assets, properly
endorsed; (iv) assignments of the Sellers' permits, leases, Intellectual
Property and Contracts (including Intellectual Property transfer documents) and
any third party consents necessary, or requested by the Buyers, to such
assignments described in (iv); (v) the Transfer Documents; (vi) those certain
asset transfer documents required under the laws of France and The Netherlands;
and (vii) such other instruments of sale, transfer, conveyance, and assignment
as the Buyers and their counsel may reasonably request; and
NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Sellers do hereby, effective from and after the Effective
Date, sell, convey, transfer, assign and deliver unto
Buyers and their successors and assigns, forever, all right, title and interest
in, to and under the Acquired Assets, subject to the Assumed Liabilities.
TO HAVE AND TO HOLD the Acquired Assets unto Buyers, its successors and
assigns, FOREVER.
The Sellers hereby constitute and appoint Buyers and their successors and
assigns as their true and lawful attorneys in fact in connection with the
transactions contemplated by this instrument, with full power of substitution,
in the name and stead of the Sellers but on behalf of and for the benefit of
Buyers and their successors and assigns, to demand and receive any and all of
the assets, properties, rights and business hereby conveyed, assigned, and
transferred or intended so to be, and to give receipt and release for and in
respect of the same and any part thereof, and from time to time to institute and
prosecute, in the name of the Sellers or otherwise, for the benefit of Buyers or
their successors and assigns, proceedings at law, in equity, or otherwise, which
Buyers or their successors or assigns reasonably deem proper in order to collect
or reduce to possession or endorse any of the assets, properties, rights and
business, and to do all acts and things in relation to the assets which Buyers
or their successors or assigns reasonably deem desirable.
In the event that any provision of this Xxxx of Sale and Conveyance be
constructed to conflict with a provision in the Purchase Agreement, the
provision in the Purchase Agreement shall be deemed to be controlling.
This instrument shall be binding upon and shall inure to the benefit of the
respective successors and assigns of the Sellers and the Buyers.
This Xxxx of Sale and Conveyance may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
-2-
IN WITNESS WHEREOF, this Xxxx of Sale and Conveyance has been duly executed
and delivered by a duly authorized representative of the Sellers on the date
first above written.
MIRO COMPUTER PRODUCTS AG
By: /s/ X. XXXXX
------------------------
Name: X. Xxxxx
----------------------
Title: CFO
---------------------
MIRO COMPUTER PRODUCTS INC.
By: /s/ X. XXXXX
------------------------
Name: X. Xxxxx
----------------------
Title: CFO
---------------------
MIRO COMPUTER PRODUCTS LTD.
By: /s/ X. XXXXX
------------------------
Name: X. Xxxxx
----------------------
Title: CFO
-3- ---------------------
EXHIBIT A-4
COPYRIGHT ASSIGNMENT (U.S. Copyrights)
WHEREAS, Miro Computer Products AG, a corporation organized under the laws
of Germany and having its principal place of business at Xxxx-Xxxxx Xxx. 0,
X-00000 Xxxxxxxxxxxx, Xxxxxxx (hereinafter "Assignor"), and Pinnacle Systems,
Inc., a California corporation, having its principal place of business at 000 X.
Xxxxxxxx Xxxxxx, Xxxxxxxx Xxxx, Xxxxxxxxxx 00000 (hereinafter "Assignee") are
parties to that certain Asset Purchase Agreement effective as of August 31,
1997 (the "Agreement") pursuant to which Assignor sold, conveyed, transferred,
assigned and delivered to Assignee all of Assignor's right, title and interest
in and to certain intellectual property, including all patent, copyright,
trademark and other intellectual property rights therein together with the
business associated therewith.
NOW, THEREFORE, for good and valuable consideration the receipt of which is
hereby acknowledged, Assignor hereby transfers, conveys and assigns to Assignee
all right, title and interest whatsoever, throughout the world, in and under the
copyrights on the works identified on Schedule A hereto, to have and to hold the
same, unto Assignee, its successors and assigns, for the full duration of all
such rights, and any renewals and extensions thereof.
Assignor further transfers, conveys and assigns unto Assignee the entire
right, title and interest in and to any and all causes of action and rights of
recovery for past infringement of the copyrights herein assigned.
This Assignment is made pursuant to and is subject to all the terms of the
Agreement.
IN WITNESS WHEREOF, Miro Computer Products AG has each caused this
instrument to be signed in its name by its duly authorized officer to be
effective as of the 29 day of August, 1997.
MIRO COMPUTER PRODUCTS AG
By: /s/ X. XXXXX
------------------------
Name: X. Xxxxx
Title: CFO
-2-
SCHEDULE A
COPYRIGHTS
See pages 2-6 of Schedule 2.9(e)
-4-
EXHIBIT A-5
PATENT(S) ASSIGNMENT (U. S. Patents)
WHEREAS, Miro Computer Products AG, a corporation organized under the laws
of Germany and having its principal offices at Xxxx-Xxxxx Xxx. 0, X-00000
Xxxxxxxxxxxx, Xxxxxxx (hereinafter "Assignor") and Pinnacle Systems, Inc., a
California corporation with principal offices at 000 X. Xxxxxxxx Xxxxxx,
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000 (hereinafter "Assignee") are parties to that
certain Asset Purchase Agreement effective as of August 31, 1997, pursuant to
which Assignor sold, conveyed, transferred, assigned and delivered to Assignee
all of Assignor's right, title and interest in and to certain intellectual
property and all patent, copyright, trademark and other intellectual property
rights therein together with the business related thereto.
NOW THEREFORE, For good and valuable consideration, the receipt of which is
hereby acknowledged, Assignor does hereby sell, assign and transfer and agrees
to sell, assign and transfer unto Assignee or its designees, all of Assignor's
right, title and interest in and to Patents set forth on Schedule A hereto and
any reissues and continuations thereof and in all counterparts of such patents
and patent applications filed or issued in foreign countries, as to which
Assignor agrees to furnish and to execute on a country-by-country basis specific
Assignments as requested by Assignee or any such designee.
Assignor covenants that it is the sole owner and assignee and holder of
record title to the above-identified United States Patents (and foreign
counterparts thereto) and that it has full power to make the present assignment.
Assignor further sells, assigns, transfers and conveys unto Assignee the
entire right, title and interest in and to any and all causes of action and
rights or recovery for past infringement of the Patent herein assigned.
Assignor warrants unto the Assignee and further agrees that Assignor will,
without demanding any further consideration therefor, at the request and at the
expense of the Assignee, do all lawful and just acts including the execution and
acknowledgment of instruments, that may be or became necessary for sustaining,
obtaining continuations thereof, or reissuing said United States Patent and
foreign counterparts and for maintaining and perfecting the Assignee's right to
said Patent, particularly in cases of interference and litigation.
Assignor also hereby authorizes the Commissioner of Patents to issue any
and all Patents which may be granted upon any of the patent applications herein
referenced to Assignee, as the assignee to the entire interest therein.
IN WITNESS WHEREOF, this Assignment of Patent is executed at Munich,
Germany, this 29 day of August, 1997.
MIRO COMPUTER PRODUCTS AG
By: /s/ X. XXXXX
------------------------
Name: X. Xxxxx
Title: CFO
ATTEST:
By: /s/ XXXXXX XXXXXXXX
----------------------
Title: VP Finance, CFO
------------------
-2-
SCHEDULE A
NONE
-4-
EXHIBIT A-6
TRADEMARKS ASSIGNMENT (U. S. Trademarks)
WHEREAS, Miro Computer Products AG, a corporation organized under the laws
of Germany and having its principal place of business at Xxxx-Xxxxx Xxx. 0,
X-00000 Xxxxxxxxxxxx, Xxxxxxx (hereinafter "Assignor"), and Pinnacle Systems,
Inc., a California corporation having its principal place of business at 000 X.
Xxxxxxxx Xxxxxx, Xxxxxxxx Xxxx, Xxxxxxxxxx 00000 (hereinafter "Pinnacle"), are
the parties to that certain Asset Purchase Agreement effective as of August 31,
1997, pursuant to which Assignor sold, conveyed, transferred, assigned and
delivered to Pinnacle and the other Purchasers all of Assignor's right, title
and interest in and to certain intellectual property, including those trademarks
listed on Schedule A attached hereto and other intellectual property rights
therein together with the business associated therewith; and
WHEREAS, Assignor has adopted, used and is using the trademarks listed on
Schedule A attached hereto (the "Trademarks") in connection with the design,
development and marketing of certain intellectual property, and are the owners
of all right, title and interest in and to the Trademarks including any and all
common law rights therein, applications to register and registrations therefor
as also listed on Schedule A; and
WHEREAS, Pinnacle desires to acquire all right, title and interest in and
to the Trademarks, including any and all common law rights therein, applications
to register and registrations therefor.
NOW THEREFORE, for good and valuable consideration, paid in hand, the
receipt and sufficiency of which are hereby acknowledged, Assignor does hereby
assign, grant, transfer and otherwise convey to Pinnacle, all of Assignor's
right, title and interest in and to the Trademarks, including all of its common
law rights therein, applications to register and registrations therefor,
together with the goodwill of the business symbolized by the Trademarks.
Agreed and consented to this 29 day of August, 1997.
MIRO COMPUTER PRODUCTS AG
By: /s/ X. XXXXX
------------------------
Name: X. Xxxxx
Title: CFO
SCHEDULE A
REGISTERED TRADEMARKS
OTHER TRADEMARKS
See pages 2-6 of Schedule 2.9(e)
-3-
Exhibit B
English Summary:
Rent Agreement between Miro Computer Products AG ("Miro") and Pinnacle Systems
Gmbh ("Pinnacle"), pursuant to which Pinnacle will rent from Miro the facilities
in Braunschweig Germany for a monthly rent of 32,700 Deutschmarks. The agreement
has a one-year term and covers certain services related to the building such as
security and janitorial services.
Mietvertrag fur Gewerberaume Vertrags-Nr.: ...........
Austertgung fur Vermieter/Miete
Unter Mieter und Vermieter werden die Mietparteien auch dann verstanden, wenn
sie aus mehreren, ggf. auch juristischen Personen beste hen. Alle im Vertrag
gennannten Personen - bei Firmen die gesetzlichen Vertreter - haben den
Mietvertrag eigenhandig zu unterschreiben Nichtzutreffende Teile des
Mietvertrages sind durchzustreichen, freie Stellen sind auszufullen, anzukreuzen
oder durchzustreichen. Falls erforderlich, zusatzliche Anlageblatter beifugen
und ebenfalls unterschreiben.
Zwischen genaue Bezeichnung des Vermieters (Firma, Name, Anschrift, vertreten
durch):
miro Computer Products XX
Xxxx-Xxxxx-XxxxXx 0
00000 Xxxxxxxxxxxx
und, genaue Bezeichnung des/der Mieter-s (Firma, Name, Anschrift, vertreten
durch):
Pinnacle Systems GmbH
Xxxx-Xxxxx-XxxxXx 0
00000 Xxxxxxxxxxxx
wird folgender Mietvertrag geschlossen:
ss. 1. Mietsache, Mietzweck
1. Vermiete werden auf dem Grundstuck folgende Raume:
Buroflache
(genaue Anschrift und genaue Lagebezeichnung, ggf. Lageplan beifugen)
Zum Betriebe einer/eines:
Entwicklungs - und Verwaltungsbetriebes
(Art der Nutzung, z.B. Fabrik, Werkstatt, Lager, Buro, Ladengeschaft)
Zusatzlich vermietet werden:
|_| Freiflache:
|_| Garage:
Xxxxx 2 des Mietvertrages Vermieter: miro Computer Products AG
vom: Mieter: Pinnacle Systems GmbH
|X| Einstellplatz: 90 Stuck a 30, -- DM
Vermietete Flachen in m2: ca. 2.547 qm
Deckenbelastung maximal: kg/m2
2. Der Mieter ist berechtigt, die nachfolgend aufgefuhrten
Grundstuckstelle, Einrichtungen und technischen Anlagen, z.B. Aufzuge,
mitzubenutzen.
3. Dem Mieter werden fur die Mietzeit folgende Schlussel ubergeben:
|_| Bei Vertragsunterzeichnung:
|X| Bei Einzug:
Fehlende Schlussel hat der Mieter auf eigene Kosten zu beschafffen.
Samtliche Schlussel sind bei Beendigung des Mietverhaltnisses an den
Vermieter herauszugeben.
4. Der Vermieter gewahrt den Gebrauch der Mietsache in dem Zustand bei
Ubergabe. Die verschuldensunabhangige Haftung des Vermieters fur
anfangliche Sachmangle (ss. 538 BGB) wird dem Vermieter vom Mieter
erlassen.
5. |_| Der Vermieter verpflichtet sich, bis zum Einzug des Mieters, bis
spatestens zum
folgende Arbeiten in den Mietraumen vornehmen zu lassen
(erforderlichenfalls Anlage beifugen):
6. Der Vermieter gewahrt den Gebrauch der Mietraume in einem fur den
vorgesehenen gewerblichen Xxxxx grundsatzlich geeigneten Zustand. Der
Mieter hat jedoch behordliche Auflagen auf eigene Kosten zu erfullen;
die Raume durfen nur fur die nach den jeweiligen behordlichen
Bestimmungen zulassigen Zwecke benutzt werden.
7. Dieser Mietvertrag wird unter der Bedingung geschlossen, daB der erste
Mietzins vor Ubergabe der Mietsache vom Mieter an den Vermieter
geleistet xxxxxx ist.
2
Xxxxx 3 des Mietvertrages Vermieter: miro Computer Products AG
vom: Mieter: Pinnacle Systems GmbH
Bei Nichterfullung dieser Bedingung ist der Vermieter berechtigt, den
Mietvertrag aus wichtigem Xxxxx ohne Einhaltung einer Xxxxx mit
sofortiger Wirkung zu kundigen.
ss. 10 - Miete und Nebenkosten
1. |X| Die Netto-Kaltmiete (ausschlieBlich Betriebskosten, Heizung
und Warmwasser) betragt...........monatlich z.Z. DM 30.000,--
----------
|_| Die Brutto-Kaltmiete (einschlieBlich Betriebskosten,
ausschlieBlich Heizung und Warmwasser) betragt
............................monatlich z.Z. DM
----------
2.a. |_| Es sind keine zusatzlichen Betriebskosten zu zahlen, diese
sind im Mietzins enthalten.
b. |_| Neben der Miete ist ein BetriebskostenvorschuB gemaB ss. 13 zu
zahlen, ermittelt auf Xxxxx der letzten Berechnung des
Vermieters
vom...............................monatlich z.Z. DM
----------
c. |_| HeizkostenvorschuB gemaBss. 12....monatlich z.Z. DM
----------
d. |X| Nebenkosten.......................monatlich z.Z. DM 10.000,--
----------
e. |X| Parkplatzmiete....................monatlich z.Z. DM 2.700,--
----------
f. |_| ..................................monatlich z.Z. DM
----------
3. |X| zuzuglich Mehrwertsteuer..........monatlich z.Z. D 6.405,--
----------
4. monatlich insgesamt z.Z. DM 49.105,--
----------
5. Die Betreibskosten sind Kosten gemaB Anlage 3 zu ss. 27 der Zweiten
Berechnungsverordnung, siehe ss. 13 des Vertrages. Soweit
Betriebskosten sich erhohen, vermindern, neu entstehen oder wegfallen
ist dies in der anteiligen Umlageberechnung zu berucksichtigen.
Entsprechend ist der Vermieter berechtigt, die Vorauszahlungen auf die
Betriebskosten neu festzusetzen, falls die entstehenden Betriebskosten
durch die Vorauszahlung nicht mehr gedeckt werden. Der Mieter kann
seinerseits eine Herabsetzung der Vorauszahlungen verlangen, falls
diese such als zu xxxx erweisen.
3
Xxxxx 4 des Mietvertrages Vermieter: miro Computer Products AG
vom: Mieter: Pinnacle Systems GmbH
6. Auf Verlangen des Vermieters hat der Mieter der gewerblich oder
selbstandig beruflich genutzten Raume neben dem Mietzins Mehrwertsteuer
zum jeweils gultigen Steuersatz zu zahlen, wenn der Vermieter nach ss.
9 UStG fur die Mehrwertsteuerpflicht optiert hat. Die Bestimmungen des
Umsatzsteuergesetzes sind den Parteien bekannt. In diesem Fall ist der
Vermieter verpflichtet, dem Mieter die erforderlichen Vorsteuerbelege
zu erteilen.
7. Die Schonheitsreparaturen tragt |_| der Vermieter |X| der Mieter.
Der Verpflichtete hat die Schonheitsreparaturen regelmaBig und
fachgerecht vomehmen zu lassen.
8. Kleine Instandhaltungen tragt |_| der Vermieter |_| der Mieter.
Der Verpflichtete hat die Arbeiten fachgerecht vornehmen zu lassen.
ss.11 - Mietdauer, Option, Kundigung Das Mietverhaltnis beginnt am 01.09.1997
1. |_| Es lauft auf unbestimmte Xxxx und kann folgendermaBen gekundigt
werden:
|_| mit einer Xxxxx von.....................Monaten zum Ende eines
...........................Kalender - Viertel - Halb - Jahres)
|_| nach MaBgabe der gesetzlichen Fristen.
2. |X| Es lauft auf bestimmte Xxxx und endet am 31.08.1998
|_| ohne Verlangerungsmoglichkeit
|_| mit folgender Verlangerungsmoglichkeit: Das Mietverhaltnis
verlangert sich jeweils um 12 Monate wenn xxxxx der Parteien
spatestens 6 Monate vor Vertragsablauf der Verlangerung
widerspricht.
3. |_| Der Mieter hat ein ________ maliges Optionsrecht auf
Forsetzung des Mietverhaltnisses fur weitere ________ Jahre.
4
Xxxxx 5 des Mietvertrages Vermieter: miro Computer Products AG
vom: Mieter: Pinnacle Systems GmbH
Dieses Recht muB spatestens _______ Monate - Jahre*) vor
Vertragsablauf geltend gemacht werden.
4. Kundigung, Widerspruch sowie Ausubung des Optionsrechtes mussen
schriftlich erfolgen und dem anderen Vertragspartner spatestens am
letzten Werktage vor Beginn der Kundigungsfrist zugegangen sein.
ss. 17 - Xxxxxxx xxx Xxxxx xxx xxx Xxxxxxxxxxx
0. Die Miete und Nebenkosten sind monatlich im voraus, spatestens am 3.
Werktag des Monats, kostenfrei an den Vermieter oder an die von ihm zur
Entgegennahme ermachtigte Person oder Stelle zu zahlen.
|X| Die Miete und die Nebenkosten sind einzuzahlen auf das Konto
bei: der Xxxx XX BLZ 250 500 00 Kt.-Nr.: 1961713
Fur die Rechtzeitigkeit der Zahlung kommt es nicht auf die Absendung,
sondern auf die Ankunft des Geldes an.
|_| Miete und Nebenkosten werden im Lastschrift - Einzugsverfahren
von einem vom Mieter zu benennenden Konto abgebucht. Der
Mietere verpflichtet sich, dem Vermieter eine
Einzugsermachtigung zu erteilen, dies gilt auch bei
Kontoanderung.
2. Bei verpateter Zahlung ist der Vermieter berechtigt, Mahnkosten in Hohe
von DM je Mahnung unbeschadet von Verzugszinsen zu erheben.
ss. 18 - Vereinbarung einer Staffeimiete
1. |_| Die Miete bleibt unverandert bis zum ______________________
2. |_| Fur den nachfolgend bezeichneten Zeitraum wird eine
Staffelmiete verinbart. Bei Miebeg___ richtet sich die Miete
nach ss. 10. Die Miete erhoht sich.
-------------------------------------------------------------
ab fur auf DM ab fur auf DM
-------------------------------------------------------------
--------
* Nichtzutreffendes streichen.
5
Xxxxx 6 des Mietvertrages Vermieter: miro Computer Products AG
vom: Mieter: Pinnacle Systems GmbH
-------------------------------------------------------------
.............................................................
-------------------------------------------------------------
Eine daruber hinaus gehende Erhohung der Miete ist wahrend der
Laufzeit der Staffeimiete ausgeschlossen.
ss. 19 - Pfandrecht des Vermieters - Sicherhaltslelstung (Kaution)
1. Der Mieter erklart, daB die beim Einzug eingebrachten Sachen sein
freies Eigentum, nicht gepfandet und nicht verpfandet sind,
|_| mit Ausnahme folgender Gegenstande:
2. Der Mieter ist verpflichtet, den Vermieter unverzuglich von einer
etwaigen Pfandung eingebrachter Gegenstande unter Angabe des
Gerichtsvollziehers and des pfandenden Glaubigers zu benachrichtigen.
3. |_| Der Mieter leistat dem Vermieter Sicherheit fur die Erfullung
seiner Verpflichtungen und/oder zur Befriedigung von
Schadensersatzanspruchen in Hohe von _____ Monatsmieten, ohne
Betriebskostenvorschusse, namlich in Hohe von DM
Der Vermieter hat die Sicherheit, ab Erhalt mit dem fur Spareinlagen
mit dreimonatiger Kundigungsfirst ublichen Satz zu versinsen. ______
Zinsen erhohen die Sicherheit. Die Sicherheit is vor Ubergabe der
Mietraume zu xxxxxxx. -- Die Sicherheitsleistung kann jederzeit dutch
eine Bankburgschaft ersetzt werden.
4. Die sicherheit einschl. Zinsen ist bei Beendigung des Mietverhaltnisses
an den Mieter zuruckzuzahlen, wenn feststeht, daB gegen diesen keine
Anspruche mehr bestehen.
ss. 20 - WerbemaBnahmen/AuBenwerbung
|_| Der Mieter is zur Anbringung von Werbeschildern an folgenden
Flachen berechtigt:
Beim Vorhandensein oder bei Einrichtung von Sammelschildanlagen ist der
Mieter verpflichtet, diese zu benutzen und die anteiligen Kosten zu
ubernehmen. (siehe auch Hausordnung)
6
Xxxxx 7 des Mietvertrages Vermieter: miro Computer Products AG
vom: Mieter: Pinnacle Systems GmbH
ss. 21 - Konkurrenzschutz
|_| Konkurrenzschutz fur den Mieter is ausgeschlossen.
|_| Dem Mieter wird folgender
Konkurrenzschutz gewahrt:
ss. 22 - Weltere Verinbarungen
1. Bie der Ausubung seiner gewerblichen Tatigkeit hat der Mieter alle
einschlagigen Umweltschutz-Vorschriften zu beachten.
2. Die auf den Ruckseiten xxx Xxxxx 1, 2 und 3 enthaltenen Vereinbarungen,
insbesondere auch die Hausordnung, sowie die zusatzlich beigefugten
Anlagen Nr. _______ bis Nr. ______ sind wesentliche Bestandtaile dieses
Vertrages.
Braunschweig ________ den 24/8/97 Braunschweig __________ den 24/8/97
/S/ X. XXXXX /S/ XXXXXX X. XXXXXXXX
------------------------------------ -----------------------------------
------------------------------------ -----------------------------------
(Vermieter) (Mieter)
7
EXHIBIT C
REGISTRATION RIGHTS AGREEMENT
Between
PINNACLE SYSTEMS, INC.
and
MIRO COMPUTER PRODUCTS AG
Dated as of August 29, 1997
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made effective as
of August 31, 1997, between PINNACLE SYSTEMS, INC., a California corporation
(the "Company"), and MIRO COMPUTER PRODUCTS AG, a corporation organized under
the laws of Germany ("Miro").
RECITALS
A. Pursuant to the terms of the Asset Purchase Agreement dated as of August
29, 1997 (the "Purchase Agreement"), by and among the Company, Pinnacle Systems
GmbH, Pinnacle Systems C.V., Pinnacle Systems, Ltd. and Miro, Miro shall acquire
from the Company Two Hundred Three Thousand Five Hundred Sixty-Five (203,565)
fully paid and nonassessable shares of the Company's Common Stock, no par value
(the "Pinnacle Shares").
B. The Purchase Agreement provides for the execution and delivery of this
Agreement at the closing of the transactions contemplated thereby.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and conditions herein and in the Purchase Agreement, the parties
hereto hereby agree as follows:
SECTION 1
REGISTRATION RIGHTS
1.1 Shelf Registration.
(a) Initial Payment Shares. As promptly as practicable and in any event
within 14 days after the issuance of the shares of Pinnacle Common Stock in
connection with the Closing under the Purchase Agreement and pursuant to Section
2.5(a)(i) of the Purchase Agreement, the Company shall file a registration
statement on Form S-3 under the Securities Act covering such Pinnacle Shares.
(b) Earnout Payment Shares. As promptly as practicable and in any event
within 14 days after the issuance of shares of Pinnacle Common Stock in
connection with the Earnout Payment (as such term is defined in the Purchase
Agreement) and pursuant to Section 2.5(a)(ii) of the Purchase Agreement, the
Company shall file a registration statement on Form S-3 under the Securities Act
covering such Pinnacle shares.
(c) Obligations of the Company. In connection with any registration of
Registrable Securities pursuant to this Section 1.1, the Company shall:
(i) Use its commercially reasonable efforts to cause such
registration statement to become effective and to remain effective until the
earlier of (A) the second anniversary of the
date of issuance of the Pinnacle Shares, (B) the sale of all of such shares of
Registrable Securities so registered or (C) such time as all of the Registrable
Securities can be sold by Holders within a three-month period without compliance
with the registration requirements of the Securities Act pursuant to Rule 144
thereunder.
(ii) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus (the "Prospectus")
used in connection therewith as may be necessary to make and to keep such
registration statement effective and to comply with the provisions of the
Securities Act with respect to the sale or other disposition of all securities
proposed to be registered in such registration statement.
(iii) Furnish to the participating Holders or the underwriters
such number of copies of any Prospectus (including any preliminary Prospectus
and any amended or supplemented Prospectus), in conformity with the requirements
of the Securities Act, as the Holders may reasonably request in order to effect
the offering and sale of the shares of Registrable Securities to be offered and
sold, but only while the Company shall be required under the provisions hereof
to cause the registration statement to remain current.
(iv) Use its best efforts to register or qualify the shares of
Registrable Securities covered by such registration statement under the
securities or Blue Sky laws of such states as the participating Holders shall
reasonably request, maintain any such registration or qualification current
until the earlier of (A) the second anniversary of the date of this Agreement,
(B) the sale of all the shares of Registrable Securities so registered or (C)
such time as all of the Registrable Securities can be sold by Holders within a
three-month period without compliance with the registration requirements of the
Securities Act pursuant to Rule 144 thereunder; provided, however, that the
Company shall not be required to take any action that would subject it to the
general jurisdiction of the courts of any jurisdiction in which it is not so
subject or to qualify as a foreign corporation in any jurisdiction where the
Company is not so qualified.
(v) Take all such other action either necessary or desirable to
permit the shares of Registrable Securities held by Miro (or its permitted
assignees) to be registered and disposed of in accordance with the method of
disposition described herein.
(vi) Enter into and perform its obligations under an underwriting
agreement, in usual and customary form, with the managing underwriter of such
offering. Each participating Holder participating in such underwriting shall
also enter into and perform its obligations under any such agreement.
(vii) Cause all Registrable Securities registered pursuant to
this Section 1.1 to be listed on The Nasdaq National Market or such other
exchange as the Company's Common Stock is then listed or quoted.
2
(d) Notwithstanding anything else in this Section 1.1, if, at any time
during which a Prospectus is required to be delivered in connection with the
sale of Registrable Securities, the Board of Directors of Pinnacle determines in
good faith that a development has occurred or a condition exists as a result of
which the registration statement or the Prospectus contains or incorporates by
reference a material misstatement or omission, the correction of which would
require the premature disclosure of confidential information that would, in the
good faith determination of the Board of Directors, materially and adversely
affect Pinnacle, Pinnacle will immediately notify the Holders thereof by
telephone and in writing. Upon receipt of such notification, Holders will
immediately suspend all offers and sales of any Registrable Securities pursuant
to the registration statement for a period not to exceed 30 days. Pinnacle may
not exercise this delay right more than once in any twelve (12) month period.
1.2 Company Registration.
(a) If, at any time or from time to time within seven (7) years after
the effective date of the first registration statement for a public offering of
securities of the Company, the Company shall determine to register any of its
securities, whether for its own account in connection with an offering of its
securities to the general public for cash on a form which would permit the
registration of Registrable Securities, other than (i) a registration relating
solely to employee benefit plans on Form S-1 or S-8 or similar forms which may
be promulgated in the future, or (ii) a registration on Form S-4 or similar form
which may be promulgated in the future relating solely to a SEC Rule 145
transaction, the Company will promptly give to the Holders written notice
thereof and include in such registration (and any related qualification under
Blue Sky laws or other compliance), and in any underwriting involved therein,
all of the Registrable Securities specified in a written request or requests,
made within thirty (30) business days after mailing or personal delivery of such
written notice from the Company by any Holders, except as set forth in Section
7.4(b). Such written request may specify all or a part of the Holder's
Registrable Securities.
(b) If the registration of which the Company gives notice is for a
registered public offering involving an underwriting, the Company shall so
advise the Holders as a part of the written notice given pursuant to Section
1.2(a). In such event the right of any Holder to registration pursuant to this
Section 1.2 shall be conditioned upon such Holder's participating in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to distribute
their securities through such underwriting shall (together with the Company)
enter into an underwriting agreement in the form negotiated by the Company with
the underwriter or underwriters selected for such underwriting by the Company.
Notwithstanding any other provision of this Section 1.2, if the underwriter
determines that marketing factors require a limitation of the number of shares
to be underwritten, the underwriter may limit the number of Registrable
Securities to be included in such registration and underwriting to not less than
thirty percent (30%) of the securities sought to be included therein (based on
aggregate market values). The Company shall so advise all Holders whose
securities would otherwise be registered and underwritten pursuant hereto, and
the number of Registrable Securities that may be included in the registration
and underwriting shall be allocated among all Holders in proportion, as nearly
as practicable, to the
3
respective amounts of Registrable Securities entitled to inclusion in such
registration held by such Holders at the time of filing the registration
statement. If any Holder disapproves of the terms of any such underwriting, such
holder may elect to withdraw therefrom by written notice to the Company and the
underwriter.
(c) In the case of each registration effected by the Company pursuant
to Section 1.2, the Company will keep each Holder participating therein advised
in writing as to the initiation of each registration and as to the completion
thereof. At its expense the Company will:
(i) Keep such registration effective for a period of one hundred
twenty (120) days or until the Holders have completed the distribution described
in the registration statement relating thereto, whichever first occurs; and
(ii) Furnish such number of prospectuses and other documents
incident thereto as a Holder participating in such registration from time to
time may reasonably request.
1.3 Expenses.
(a) All expenses, other than discounts and commissions, incurred in
connection with any registration pursuant to Section 1.1 and Section 1.2 shall
be borne by the Company. The costs and expenses of any such registration shall
include, without limitation, the reasonable fees and expenses of the Company's
counsel and its accountants, the reasonable fees and expenses of one counsel for
the Holders and all other costs and expenses of the Company incident to the
preparation, printing and filing under the Securities Act of the registration
statement and all amendments and supplements thereto and the cost of furnishing
copies of each preliminary prospectus, each final prospectus and each amendment
or supplement thereto to underwriters, dealers and other purchasers of the
securities so registered, the costs and expenses incurred in connection with the
qualification of such securities so registered under the "blue sky" laws of
various jurisdictions, the fees and expenses of the Company's transfer agent and
all other costs and expenses of complying with the provisions of this Section 1
with respect to such registration (collectively, "Registration Expenses").
(b) Excluding the Registration Expenses, the participating Holders
shall pay all other expenses incurred on their behalf with respect to any
registration pursuant to Section 1.1 or 1.2, including any counsel for the
participating Holders (other than counsel as provided in Section 1.3(a)) and all
underwriting discounts and selling commissions with respect to the Registrable
Securities sold by them pursuant to such registration statement.
1.4 Indemnification.
(a) To the extent permitted by law, the Company will indemnify each
Holder (excluding Holders who are then directors or officers of the Company),
each of their respective officers and directors, and each person controlling
such person, with respect to which registration, qualification or compliance has
been effected pursuant to this Section 1, and each underwriter, if any,
4
and each person who controls any underwriter, against all claims, losses,
damages and liabilities (or actions in respect thereof) arising out of or based
on (i) any untrue statement (or alleged untrue statement) of a material fact
contained in any prospectus, offering circular or other document (including any
related registration statement, notification or the like) incident to any such
registration, qualification or compliance, or (ii) any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (iii) any violation
by the Company of any rule or regulation promulgated under the Securities Act or
any state securities laws or rule or regulation promulgated thereunder
applicable to the Company and relating to action or inaction required of the
Company in connection with any such registration, qualification or compliance,
and will reimburse each such person, each of its officers and directors, and
each person controlling such person, each such underwriter and each person who
controls any such underwriter, for any legal and any other expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability or action, provided that the Company will not be liable in any
such case to the extent that any such claim, loss, damage or liability arises
out of or is based on any untrue statement or omission based upon written
information furnished to the Company by an instrument duly executed by such
person or underwriter and stated to be specifically for use therein.
(b) To the extent permitted by law, each Holder will, if Registrable
Securities held by or issuable to such person are included in the securities as
to which such registration, qualification or compliance is being effected,
indemnify the Company, its legal counsel, each of its directors and officers who
sign such registration statement, each underwriter, if any, of the Company's
securities covered by such a registration statement, each person who controls
the Company within the meaning of the Securities Act and each other such Holder,
each of its officers and directors and each person controlling such Holder,
against all claims, losses, damages and liabilities (or actions in respect
thereof) arising out of or based on (i) any untrue statement (or alleged untrue
statement) of a material fact contained in any such registration statement,
prospectus, offering circular or other document, or (ii) any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
the Company, such Holders, such directors, officers, persons or underwriters for
any legal or any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action, in
each case to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document in
reliance upon and in conformity with written information furnished to the
Company by an instrument duly executed by such Holder and stated to be
specifically for use therein.
(c) Each party entitled to indemnification under this Section 1.4 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, if such
counsel is other than counsel named herein, shall be
5
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party's expense, and provided further that the failure of any Indemnified Party
to give notice as provided herein shall, if such failure is prejudicial to the
Indemnifying Party's ability to defend such action, relieve the Indemnifying
Party of its obligations under this Section 1, but not of any obligation arising
apart from this Section 1. No Indemnifying Party, in the defense of any such
claim or litigation, shall, except with the consent of each Indemnified Party,
consent to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party of a release from all liability in respect to such
claim or litigation. If any such Indemnified Party shall have reasonably
concluded that there may be one or more legal defenses available to such
Indemnified Party which are different from or additional to those available to
the Indemnifying Party, or that such claim or litigation involves or could have
an effect upon matters beyond the scope of the indemnity agreement provided in
this Section 1.5, the Indemnifying Party shall not have the right to assume the
defense of such action on behalf of such Indemnified Party and such Indemnifying
Party shall reimburse such Indemnified Party and any person controlling such
Indemnified Party for that portion of the fees and expenses of any counsel
retained by the Indemnified Party which are reasonably related to the matters
covered by the indemnity agreement provided in this Section 1.4.
1.5 Information by Holder. The Holders whose securities are included in any
registration effected pursuant to this Section 1 shall furnish in writing to the
Company such information regarding such persons and the distribution proposed by
such persons as the Company may request in writing and as shall be required in
connection with any registration, qualification or compliance referred to in
this Section 1. The Company's obligations under this Section 1 are conditioned
upon compliance by such persons with the provisions of this Section 1.5.
1.6 Sale without Registration. The holder of each certificate representing
securities of the Company required to bear the legend in substantially the form
set forth in Section 6.14 of the Purchase Agreement (or any similar legend) by
acceptance thereof agrees to comply in all respects with the provisions of this
Section 1.6. Prior to any proposed transfer of any Registrable Securities which
shall not be registered under the Securities Act, the holder thereof shall give
written notice to the Company of such holder's intention to effect such
transfer, accompanied by: (a) such information as is reasonably necessary in
order to establish that such transfer may be made without registration under the
Securities Act; and (b) except for transfers proposed to be made in accordance
with SEC Rule 144 (as in effect at the date hereof and as amended from time to
time thereafter) or to any constituent partner of any Miro, at the expense of
the Holder or transferee, an unqualified written opinion of legal counsel,
satisfactory in form and substance to the Company, to the effect that such
transfer may be made without registration under the Securities Act; provided
that nothing contained in this Section 1.6 shall relieve the Company from
complying with any request for registration, qualification or compliance made
pursuant to the other provisions of this Section 1.
1.7 Transfer of Registration Rights. The rights to cause the Company to
register securities granted by the Company under Sections 1.1 and 1.2 may be
assigned by any Miro to the transferee or assignee of not less than 20% of
Registrable Securities (as adjusted for stock splits and the like) and
6
provided that the Company is given written notice of any such transfer within
thirty (30) days of the date of said transfer, stating the name and address of
said transferee or assignee and identifying the securities with respect to which
such registration rights are being assigned and provided further that the
transferee or assignee of such rights is not deemed by the Board of Directors of
the Company, in its reasonable judgment, to be a competitor of the Company and
provided further that the transferee or assignee of such rights assumes in
writing in a form reasonably acceptable to the Company the obligations of Miro
under this Agreement.
1.8 Termination of Registration Rights. The registration rights granted
pursuant to this Section 1 shall terminate as to any Holder at such time as all
Registrable Securities beneficially owned by such Holder can be sold within a
given three-month period without compliance with the registration requirements
of the Securities Act pursuant to Rule 144 and a written opinion to that effect
of legal counsel for the Company delivered to such Holder which shall be
reasonably satisfactory in form and substance to legal counsel for such Holder.
Notwithstanding the foregoing, such registration rights shall terminate seven
(7) years after the effective date of the first registration statement for a
public offering of securities of the Company.
1.9 Sale of Registrable Securities. The sale of Registrable Securities of
any Holder shall be effected through the offices of Xxxxxxxxx & Xxxxx.
SECTION 2
MISCELLANEOUS
2.1 Certain Definitions. As used in this Agreement:
(a) The term "beneficially owned" refers to the meaning of such terms
as provided in Rule 13d-3 promulgated under the Exchange Act. References to
ownership of Voting Stock hereunder mean beneficial ownership.
(b) The term "Exchange Act" means the Securities Exchange Act of 1934,
as amended, or any similar federal statute and the rules and regulations of the
SEC thereunder, all as the same shall be in effect from time to time.
(c) The term "person" shall mean any person, individual, corporation,
partnership, trust or other nongovernmental entity or any governmental agency,
court, authority or other body (whether foreign, federal, state, local or
otherwise).
(d) The term "Holder" means Miro and any transferee of Registrable
Securities pursuant to Section 1.8 of this Agreement, provided that any such
person shall cease to be a Holder at such time as the registration rights to
which such person is entitled hereunder terminate pursuant to Section 1.10.
7
(e) The terms "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering by the SEC
of the effectiveness of such registration statement.
(f) The term "Registrable Securities" means (i) the Pinnacle Shares and
(ii) any Common Stock of the Company issued by the Company to Miro in respect of
the Pinnacle Shares upon any stock split, stock dividend, recapitalization, or
similar event; provided, that if, upon any stock dividend, recapitalization or
similar event, the Company issues securities which are not immediately
convertible into Common Stock, the term "Registrable Securities" shall also
include such securities.
(g) The term "Securities Act" means the Securities Act of 1933, as
amended, or any similar federal statute and the rules and regulations of the SEC
thereunder, all as the same shall be in effect at the time.
(h) The term "SEC" means the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
2.2 Governing Law. This Agreement shall be governed in all respects by the
laws of the State of California as applied to contracts entered into solely
between residents of, and to be performed entirely within, such state.
2.3 Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
assigns. This Agreement may not be assigned by a party without the prior written
consent of the other party. This Agreement is not intended and shall not be
construed to create any rights or remedies in any parties other than Miro and
the Company and no person shall assert any rights as third party beneficiary
hereunder.
2.4 Entire Agreement; Amendment. This Agreement contains the entire
understanding and agreement between the parties with regard to the subject
matter hereof and thereof and supersedes all prior agreements and understandings
among the parties relating to the subject matter hereof. Neither this Agreement
nor any term hereof may be amended, waived, discharged or terminated other than
by a written instrument signed by the party against whom enforcement of any such
amendment, waiver, discharge or termination is sought.
2.5 Notices and Dates. All notices or other communications required or
permitted under this Agreement shall be made in the manner provided in Section
10.1 of the Purchase Agreement. In the event that any date provided for in this
Agreement falls on a Saturday, Sunday or legal holiday, such date shall be
deemed extended to the next business day.
2.6 Language Interpretation. In the interpretation of this Agreement,
unless the context otherwise requires, (i) words importing the singular shall be
deemed to import the plural and vice versa, (ii) words denoting gender shall
include all genders, (iii) references to persons shall include
8
corporations or other entities and vice versa, and (iv) references to parties,
sections, schedules, paragraphs and exhibits shall mean the parties, sections,
schedules, paragraphs and exhibits of and to this Agreement, unless otherwise
indicated by the context.
2.7 Table of Contents; Titles; Headings. The Table of Contents, titles and
headings to Sections herein are inserted for convenience of reference only and
are not intended to be a part of or to affect the meaning or interpretation of
this Agreement.
2.8 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become a binding agreement when one or more counterparts have been signed
by each party and delivered to the other party.
2.9 Severability. If any provision of this Agreement or portion thereof is
held by a court of competent jurisdiction to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers as of the date aforesaid.
"COMPANY" PINNACLE SYSTEMS, INC.,
a California corporation
By: _______________________
Name: _____________________
Title: ____________________
"MIRO" MIRO COMPUTER PRODUCTS AG
a corporation organized
under the laws of Germany
By: _______________________
Name: _____________________
Title: ____________________
9
Exhibit D-1
(part 1)
[Letterhead of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx]
August 31, 1997
Miro Computer Products XX
Xxxx-Xxxxx Xxx. 0
X-00000 Xxxxxxxxxx
Xxxxxxx
Ladies and Gentlemen:
We have acted as counsel to Pinnacle Systems, Inc., a California
corporation ("Pinnacle"), Pinnacle Systems GmbH, a corporation organized under
the laws of Germany ("German Sub"), and Pinnacle Systems C.V., a corporation
organized under the laws of The Netherlands ("Dutch Sub") and Pinnacle Systems,
Ltd., a corporation organized under the laws of the United Kingdom and a
subsidiary of Pinnacle ("U.K. Sub") (Pinnacle, German Sub, Dutch Sub and U.K.
Sub are referred to herein collectively as the "Buyers"), in connection with the
acquisition (the "Acquisition") by the Buyers of assets and liabilities of Miro
Computer Products AG, a corporation organized under the laws of Germany ("Miro"
or the "Seller") and the acquisition of the capital stock of certain
wholly-owned subsidiaries of Miro (the "Acquired Subsidiaries"), pursuant to the
Asset Purchase Agreement dated August 29, 1997 among the Buyers and the Seller
(the "Purchase Agreement"). This opinion is furnished to you pursuant to Section
6.18 of the Purchase Agreement. Unless otherwise defined herein, the capitalized
terms used in this opinion have the meaning given to them in the Purchase
Agreement.
We have acted as counsel for the Buyers in connection with the negotiation
of the Purchase Agreement and the effectuation of the Acquisition. In addition,
we have examined copies of the Purchase Agreement and the Registration Rights
Agreement among the Buyers and the Seller, each dated as of August 29, 1997. As
such counsel, we have made such legal and factual examinations and inquiries as
we have deemed advisable or necessary for the purposes of rendering this
opinion. In addition, we have examined originals or copies of documents,
corporate records and other writings which we consider relevant for the purposes
of this opinion. In such examination, we have assumed the genuineness of all
signatures on original documents, the conformity to original documents of all
copies submitted to us and the due execution and delivery of all documents by
any party other than the Buyers where due execution and delivery are a
prerequisite to the effectiveness thereof.
As used in this opinion, the expression "to our knowledge" or "known to us"
with reference to matters of fact means that, after an examination of documents
made available to us by the Buyers, and
Miro Computer Products AG
August 31, 1997
Page 2
after inquiries of officers of the Buyers, but without any further independent
investigation, we find no reason to believe that the opinions expressed herein
are factually incorrect. Further, the expression "to our knowledge" with
reference to matters of fact refers to the current actual knowledge of the
attorneys of this firm who have worked on matters for the Buyers solely in
connection with the Purchase Agreement and the transactions contemplated
thereby. Except to the extent expressly set forth herein or as we otherwise
believe necessary to our opinion, we have not undertaken any independent
investigation to determine the existence or absence of any fact, and no
inference as to our knowledge of the existence or absence of any fact should be
drawn from our representation of the Buyers or the rendering of the opinion set
forth below.
For purposes of this opinion, we are assuming that you have all requisite
power and authority, and have taken any and all necessary company and
shareholder action, to execute and deliver the Purchase Agreement and we assume
that the representations and warranties made by you in the Purchase Agreement
pursuant thereto are true and correct. We are also assuming that you have
purchased the shares of Pinnacle Common Stock for value, in good faith and
without notice of any adverse claims within the meaning of California Uniform
Commercial Code.
The opinions hereinafter expressed are subject to the following
qualifications and assumptions:
A. We express no opinion as to the effect of rules of law governing
specific performance, injunctive relief or other equitable remedies (regardless
of whether such remedy is considered in a proceeding at law or in equity);
B. We express no opinion as to the effect of applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
rights of creditors generally;
C. We express no opinion as to the enforceability of any of the agreements
attached as exhibits to the Purchase Agreement other than the Registration
Rights Agreement;
D. We express no opinion as to compliance with the anti-fraud provisions of
applicable securities laws;
E. We express no opinion as to the enforceability of the indemnification
provisions of Article VIII of the Registration Rights Agreement to the extent
the provisions thereof may be subject to limitations of public policy and the
effect of applicable statutes and judicial decisions;
F. In rendering our opinion as to agreements or instruments in paragraph 5
below, we have relied solely upon (i) inquiries of officers of Pinnacle, (ii) a
list of material agreements or instruments filed as exhibits to Pinnacle's
report on Form 10-K filed with the SEC (iii) a certificate of an officer of
Pinnacle certifying that the agreements or instruments on such list constitute
all material agreements and
Miro Computer Products AG
August 31, 1997
Page 3
instruments to which Pinnacle is a party or by which it is bound or to which any
of its properties or assets are subject and (iv) our examination of the items on
the list referred to above. We have no reason to believe that the list referred
to above is inaccurate or incomplete.
G. In rendering our opinion in paragraph 2, we are assuming the number of
shares of Pinnacle Common Stock that will be issuable in connection with the
Earnout Payment will not exceed 400,000.
H. We are members of the Bar of the State of California and we are not
expressing any opinion as to any matter relating to laws of any jurisdiction
other than the laws of the United States of America and the laws of the State of
California. In the event that the Purchase Agreement and the transactions
thereunder are governed by the laws of a jurisdiction other than the State of
California, we assume that the laws of such jurisdiction are identical with the
laws of the State of California.
Based upon and subject to the foregoing, and except as set forth in the
Purchase Agreement, we are of the opinion that:
1. Pinnacle is a corporation duly organized, validly existing and in good
standing under the laws of the State of California.
2. The shares of Pinnacle Common Stock issuable in connection with the
Initial Payment are duly and validly issued, fully paid and nonassessable. The
shares of Pinnacle Common Stock issuable in connection with the Earnout Payment
have been reserved and, assuming such shares of Pinnacle Common Stock are issued
to the Seller in accordance with the terms of the Purchase Agreement, will be
duly and validly issued, fully paid and nonassessable.
3. All corporate action on the part of Pinnacle, its directors and
shareholders necessary for the authorization, execution and delivery of the
Purchase Agreement and the Registration Rights Agreement by Pinnacle, the
authorization, sale, issuance and delivery of the shares of Pinnacle Common
Stock issuable in connection with the Initial Payment and the performance of
Pinnacle's obligations under the Purchase Agreement and the Registration Rights
Agreement has been taken. The Purchase Agreement and the Registration Rights
Agreement have been duly and validly executed and delivered by Pinnacle and
constitute valid and binding obligations of Pinnacle, enforceable against
Pinnacle in accordance with their respective terms.
4. To our knowledge, there is no action, suit, proceeding, claim or
investigation pending or threatened against any Buyer which challenges or seeks
to prevent, enjoin, alter or delay any of the transactions contemplated by the
Purchase Agreement or the Ancillary Agreements.
Miro Computer Products AG
August 31, 1997
Page 4
5. The execution, delivery, and performance of and compliance with the
terms of the Purchase Agreement and the Registration Rights Agreement and the
issuance of the shares of Pinnacle Common Stock issuable in connection with the
Initial Payment do not violate any provision of the Amended and Restated
Articles of Incorporation or Bylaws, or, to our knowledge, any provision of any
applicable federal or state law, rule or regulation or any requirement of the
Nasdaq National Market. The execution, delivery and performance of and
compliance with the Purchase Agreement and the Registration Rights Agreement,
and the issuance of the shares of Pinnacle Common Stock pursuant to the
Agreement do not violate, or constitute a default under, any material contract,
agreement, instrument, judgment, or decree binding upon Pinnacle.
6. The offer and sale of the shares of Pinnacle Common Stock to you
pursuant to the terms of the Purchase Agreement are exempt from the registration
requirements of Section 5 of the Securities Act of 1933.
This opinion is solely for your benefit and is not to be made available to
or relied on by any other person without our express prior written consent. We
assume no obligation to inform you of any facts, circumstances, events or
changes in the law that may hereafter be brought to our attention that may
alter, affect or modify the opinions expressed herein.
Very truly yours,
XXXXXX XXXXXXX XXXXXXXX & XXXXXX
Professional Corporation
Exhibit D-1
(part 2)
[Letterhead of Oppenhoff and Xxxxxx]
August 29, 1997
miro Computer Products XX
Xxxx-Xxxxx Xxxx x 0
00000 Xxxxxxxxxxxx
Attn.: Xx. Xxxxx Xxxxx
Dear Xx. Xxxxx:
Reference is made to the Asset Purchase Agreement by and among Pinnacle
Systems, Inc., a California corporation whose principal place of business is in
Mountain View, California, U.S.A. ("Buyer"), Pinnacle Systems GmbH, a
corporation organized under the laws of Germany and a subsidiary of Buyer
("German Sub"), Pinnacle Systems C.V., a limited partnership formed under the
laws of the Netherlands ("Dutch Sub"), and Pinnacle Systems Ltd., a corporation
formed under the laws of the United Kingdom and a subsidiary of Pinnacle ("U.K.
Sub"), as well as miro Computer Products AG ("miro"), a corporation organized
under the laws of Germany miro Computer Products, Inc., a California corporation
and a subsidiary of miro ("miro U.S.") and miro Computer Products Ltd., a
corporation organized under the laws of the United Kingdom and a subsidiary of
miro ("miro UK") dated August 29, 1997 ("the Agreement"). The Agreement provides
for the acquistion by German Sub of certain assets of miro attributable to
miro's Digital Video Group (the "Acquisition"). This opinion is rendered to you
pursuant to Section 6.18 of the Agreement, and all capitalized terms used herein
shall have the meanings ascribed to such terms in the Agreement unless otherwise
defined herein.
We have acted as German counsel for the Buyer in connection with the
negotiations of the Agreement and the consummation of the transactions
contemplated thereby. As such counsel, we have made such legal and factual
examinations and inquiries as we have deemed advisable or necessary for the
purposes of rendering this opinion. In addition, we have examined originals or
copies of documents, corporate records and other writings which we considered
relevant for the purposes of this opinion.
As used in this opinion, the expression "to our knowledge" or "known to us"
with reference to matters of fact means that, after an examination of documents
made available to us by the Buyer and German Sub and after inquiries of the
Buyer and German Sub, but without any further independent factual investigation,
we find no reason to believe that the opinions expressed herein are factually
incorrect. Further, the expression "to our knowledge" with reference to matters
of fact refers to the current actual knowledge of the attorneys of the firm who
have worked on matters for the Buyer or German Sub. Except to the extent
expressly set forth herein or as we otherwise believed to be necessary
to our opinion, we have not undertaken any independent investigation to
determine the existence or absence of any fact, and no inference as to our
knowledge of the existence or absence of any fact should be drawn from our
representation of the Buyer or the German Sub in connection with the Acquisition
or the rendering of the opinion set forth below.
For purposes of this opinion, we are assuming that you have all requisite
power and authority, and have taken any and all necessary corporate action, to
execute and deliver the Agreement, and we assume that the representations and
warranties made by you in the Agreement and pursuant thereto are true and
correct.
The opinions hereinafter expressed are subject to the following
qualifications:
a. We express no opinion as to the effect of rules of law governing
specific performance, injunctive relief or other equitable remedies (regardless
of whether any such remedy is considered in a proceeding at law or in equity);
b. We express no opinion as to the rules and the application of the German
public order or of German mandatory law.
c. We express no opinion as to the effect of applicable bankruptcy,
insolvency, reorganization, oratorium and other similar laws affecting the
rights of creditors generally;
d. We express no opinion as to compliance with the antifraud provisions of
state and federal laws, rules and regulations;
e. We express no opinion as to the effect of any statute, rule, regulation
or other law enacted, or any court or regulatory decision rendered or published,
after the date of this opinion, or the conduct of the parties or any other
person following the date hereof and assume no obligation to advise you or any
other person of any change, whether factual or legal, or whether or not
material, that may arise or be brought to our attention after the date hereof;
and
f. We are members of the Bar of the Federal Republic of Germany and we are
not expressing any opinions to any matter relating to laws of any jurisdiction
other than laws of the Federal Republic of Germany. For this reason, too, we do
not express any opinion on the application and/or effect of the reference to
GAAP in the Agreement.
With your permission and without verification by us, we have assumed the
following for the purpose of rendering the opinions set forth herein:
A. That all signatures on the documents and instruments we have received
for review are genuine, all natural persons who are signatories have the legal
capacity to execute and deliver said documents, all documents and instrument
submitted to us as originals are authentic and complete, all documents and
instruments submitted as copies conform to the originals and are complete and
accurate, none of the aforesaid documents and instruments have been subsequently
modified or terminated and none of the rights or obligations under said
documents have been waived or released.
B. That there are no agreements or understandings between or among the
Buyer or German Sub or third parties which would expand, modify, interpret or
otherwise affect the terms of the Agreement or any of the Related Agreements or
the respective rights or obligations of the parties thereunder and that the
Agreement or any of the Related Agreements correctly and completely set forth
the intent of all parties thereto.
C. That Pinnacle Systems GmbH was registered with the commercial register
with the Amtsgericht Braunschweig on August 27, 1997 under docket no. HRB 4457
with the charter as adopted in notarial deed no. 495/1997 by notary Xx. Xxxxx
Xxxx of August 20, 1997, and that its stated capital was fully paid-in and not
repaid.
Based upon and subject to the foregoing, we are of the opinion that:
1. Organization. The German Sub is a limited liability company duly
organized and validly existing under the laws of Germany. German Sub has the
corporate power to own its properties and to carry on its business in Germany as
now conducted.
2. Capital Structure. The stated capital of the German Sub amounts to DM
50,000 and is represented by 1 (one) Geschaftsanteil (share). To our knowledge,
all issued and outstanding Company Capital has been duly authorized and validly
issued, and is not issued in violation of or subject to any preemptive right, or
other rights to subscribe for or purchase shares. To our knowledge, other than
Company Capital owned by the Buyer, there are not other outstanding interests,
existing or contingent or direct or indirect, in Company Capital. To our
knowledge, the German Sub is a wholly owned subsidiary of Buyer. To our
knowledge, there are no Company Rights of any character, written or oral, to
which the German Sub or the shareholder of the German Sub is a party or by which
any of them is bound obligating the German Sub or its shareholder to issue,
deliver, sell, repurchase or redeem, or cause to be issued, delivered, sold,
repurchased or redeemed, any Company Capital or obligating the German Sub or its
shareholder to grant, extend, accelerate the vesting of, change the price of,
otherwise amend or enter into any such German Sub Rights.
3. Authority. The German Sub has all requisite power and authority to enter
into any Related Agreements to which it is a party and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of any
Related Agreements to which it is a party and the consummation of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate action on the part of the German Sub and no further action
is required on its part to authorize any Related Agreements to which it is a
party and the transactions contemplated hereby and thereby.
4. No Conflict. To our knowledge, the execution and delivery of the
Agreement and any Related Agreements to which it is a party by the German Sub do
not, and, the consummation of the transactions contemplated hereby and thereby
wil not, conflict with, or result in any violation of, or default under (with or
without notice or lapse of time, or both), or give rise to a Conflict under any
provision of the Charter of the German Sub.
5. Consents. No consent, waiver, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity, is required
by or with respect to the German Sub
in connection with the execution and delivery of the Agreement and any Related
Agreements to which the German Sub is a party or the consummation of the
transactions contemplated hereby and thereby, except for such consents, waivers,
approvals, orders, authorizations, registrations, declarations and filings as
may be requried under applicable securities laws.
6. Agreement.
(a) Each of the Agreement and the Related Agreements has been duly and
validly executedand delivered by, or on behalf of, each of the German Sub and,
assuming due authorization, execution and delivery by the other parties thereto,
constitutes a valid and binding obligation of the German Sub, enforcable against
it in accordance with its terms.
(b) To our knowledge, neither the execution and delivery of each of the
Agreement and the Related Agreements nor the performance by each of their
respective obligations thereunder, violate any German statute or law applicable
to German Sub that would preclude German Sub from entering into the Agreement
and any Related Agreement, or consummating the transactions contemplated
thereby.
This opinion is solely for your benefit and is not to be made available to
or relied upon by any other person without our express prior written consent.
Very truly yours,
Oppenhoff & Xxxxxx
by ______________
EXHIBIT D-2
[Letterhead of Venture Law Group]
August 31, 1997
Pinnacle Systems, Inc.
Pinnacle Systems, GmbH
Pinnacle Systems, C.V.
Pinnacle Systems, Ltd.
000 X. Xxxxxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
We have acted as counsel for Miro Computer Products, Inc. ("Miro US"), a
California corporation and a subsidiary of Miro Computer Products, AG, a
corporation organized under the laws of Germany ("Miro"), in connection with the
acquisition (the "Acquisition") of assets and liabilities of Miro by Pinnacle
Systems, Inc., a California corporation ("Pinnacle"), Pinnacle Systems, GmbH, a
corporation organized under the laws of Germany and a subsidiary of Pinnacle
("German Sub"), Pinnacle Systems, C.V., a limited partnership organized under
the laws of The Netherlands and a subsidiary of Pinnacle ("Dutch Sub"), and
Pinnacle Systems, Ltd., a corporation formed under the laws of the United
Kingdom and a subsidiary of Pinnacle ("U.K. Sub") (Pinnacle, German Sub and
Dutch Sub are referred to herein collectively as the "Buyers and each as a
"Buyer"), pursuant to the Asset Purchase Agreement dated August 29, 1997 (the
"Asset Purchase Agreement") among the Buyers and Miro, Miro US and Miro Computer
Products, Ltd., a corporation organized under the laws of the United Kingdom and
a subsidiary of Miro. This opinion is provided to you pursuant to Section 6.20
of the Asset Purchase Agreement. Unless defined herein, capitalized terms have
the meaning given them in the Asset Purchase Agreement.
In rendering this opinion, we have made such legal and factual examinations
and inquiries as we have deemed advisable or necessary for the purpose of
rendering this opinion. In addition, we have examined originals or copies of
documents, corporate records and other writings which we consider relevant for
the purposes of this opinion. In such examination we have assumed the
genuineness of all signatures on original documents, the conformity to original
documents of all copies submitted to us and the due execution and delivery of
all documents where due execution and delivery are a prerequisite to the
effectiveness thereof. In making our examination of documents executed by
entities or persons other than Miro US, we have assumed that each other entity
or person had the power to enter into and perform all its obligations thereunder
and we also have assumed the due authorization by each such other entity or
person
of all requisite actions and the due execution and delivery of such documents by
each such other entity or person.
Whenever our opinion herein with respect to the existence or absence of
facts is indicated to be based on our knowledge or belief, it is intended to
signify that in the course of our representation of Miro US in connection with
the transactions referred to in the first paragraph hereof, no information has
come to the attention of Xxxxx Xxxxxxx, Xxxxx Xxxxxxxxx, Xxxxx X. Xxxxx, Xxxx
Windfeld-Xxxxxx, Xxxxx Xxxxxx or Heayoon Woo that would give them actual
knowledge of the existence or absence of such facts. We have not undertaken any
independent investigation to determine the existence or absence of such facts,
and no inference as to our knowledge of the existence or absence of such facts
should be drawn from the fact of our representation of Miro US.
The opinions hereinafter expressed are subject to the following further
qualifications:
(i) Our opinions are qualified by the effect of bankruptcy, insolvency,
reorganization, arrangement, moratorium or other similar laws relating to or
affecting the rights of creditors generally, including, without limitation, laws
relating to fraudulent transfers or conveyances, preferences and equitable
subordination;
(ii) Our opinions are qualified by the limitations imposed by general
principles of equity upon the availability of equitable remedies or the
enforcement of provisions of the Acquisition Agreements and the effect of
judicial decisions which have held that certain provisions are unenforceable
when their enforcement would violate the implied covenant of good faith and fair
dealing, or would be commercially unreasonable, or where their breach is not
material;
(iii) Our opinions are qualified by the enforceability of provisions of
the Acquisition Agreements providing that rights or remedies are not exclusive,
that every right or remedy is cumulative, or that the election of a particular
remedy or remedies does not preclude recourse to one or more other remedies;
(iv) Our opinions are qualified by the effect of judicial decisions
which may permit the introduction of extrinsic evidence to modify the terms or
the interpretation of the Acquisition Agreements (as defined below);
(v) We express no opinion as to compliance with applicable antifraud
provisions of federal or state securities laws, rules and regulations; and
(vi) We express no opinion as to the indemnification provisions
contained in Section 8 of the Asset Purchase Agreement insofar as the
enforceability thereof may be limited by principles of public policy.
(vii) Our opinion is based upon current statutes, rules, regulations,
cases and official interpretive opinions, and it covers certain items that are
not directly or definitively addressed by such authorities.
Based upon and subject to the foregoing, except as set forth in the
Asset Purchase Agreement, on any of the schedules or exhibits delivered pursuant
to the Asset Purchase Agreement, we are of the opinion that:
1. Miro US is a corporation duly organized, validly existing and in good
standing under the laws of the State of California and has all requisite
corporate power and authority to carry on its business as it is now being
conducted.
2. Miro US has the corporate power and authority to enter into the Asset
Purchase Agreement and the Related Agreements to which it is a party
(collectively, the "Acquisition Agreements") and to carry out its obligations
thereunder. The execution and delivery of the Acquisition Agreements and the
consummation of the transactions contemplated therein have been duly authorized
by the Board of Directors of Miro US and approved by the sole shareholder of
Miro US, and no other corporate proceedings are necessary to authorize the
execution, delivery and performance of the Acquisition Agreements by Miro US.
3. The Acquisition Agreements to which Miro US is a party have been duly
executed and delivered by Miro US and, assuming due execution and delivery
thereof by the other parties thereto, constitute the legal, valid and binding
obligation of Miro, US, enforceable against Miro US in accordance with its
terms.
4. The execution and delivery of the Acquisition Agreements by Miro US and
the performance by Miro US of its obligations as set forth therein do not: (a)
conflict with, violate or breach any provision of Miro US's Articles of
Incorporation or Bylaws, each as amended to date, or (b) violate or contravene:
(I) any order, writ, judgment, injunction, decree or determination of award
known to us which has been entered against Miro US or (ii) any United States
statute, rule or regulation of any United States governmental body applicable to
Miro US.
5. To our knowledge, there is no action, suit, proceeding, claim or
investigation pending or threatened against Miro US which challenges or seeks to
prevent, enjoin, alter or materially delay any of the transactions contemplated
in the Acquisition Agreements.
We express no opinion as to matters governed by any laws other than the
laws of the State of California and the federal law of the United States of
America. In the event that the Asset Purchase Agreement and the transactions
thereunder are governed by the laws of a jurisdiction other than the State of
California, we assume that the laws of such jurisdiction are identical with the
laws of the State of California.
This opinion is furnished to you pursuant to Section 6.20 of the Asset
Purchase Agreement and is solely for your benefit and may not be relied on by,
nor may copies be delivered to, any other person without our prior written
consent. We assume no obligation to inform you of any facts, circumstances,
events or changes in the law that may hereafter be brought to our attention that
may alter, affect or modify the opinions expressed herein.
Sincerely,
VENTURE LAW GROUP,
A Professional Corporation
[Letterhead of Doser Amereller Xxxxx]
Pinnacle Systems, Inc.
Pinnacle Systems GmbH
Pinnacle Systems C.V.
Pinnacle Systems Ltd.
000 X. Xxxxxxxx Xxxxxx
XXX-Xxxxxxxx Xxxx, XX 00000
August 29, 1997
US-bdc
Ladies and Gentlemen:
We have acted as counsel to Miro Computer Products XX, Xxxx-Xxxxx-Xxx. 0,
X-00000 Xxxxxxxxxxxx, a corporation organized under the laws of Germany
("Miro"), in connection with the acquisition (the "Acquisition") of assets and
liabilities of Miro by Pinnacle Systems, Inc., a California corporation
("Pinnacle"), Pinnacle Systems GmbH, a corporation organized under the laws of
Germany and a subsidiary of Pinnacle ("German Sub"), Pinnacle Systems C.V., a
limited partnership organized under the laws of The Netherlands and a subsidiary
of Parent ("Dutch Sub") and Pinnacle Systems Ltd., a corporation formed under
the laws of the United Kingdom and a subsidiary of Pinnacle ("UK Sub")
(Pinnacle, German Sub and Dutch Sub are referred to herein collectively as the
"Buyers" and each as a "Buyer"), pursuant to the Asset Purchase Agreement dated
as of August 29, 1997 (the "Purchase Agreement") among the Buyers and Miro. This
opinion is furnished to you pursuant to Section 6.20 of the Purchase Agreement.
Unless otherwise defined herein, the capitalized terms used in this opinion have
the meaning given to them in the Purchase Agreement.
We have acted as counsel for Miro in connection with the negotiation of the
Purchase Agreement and the effectuation of the Acquisition. As such counsel, we
have made such legal and factual examinations and inquiries as we have deemed
advisable or necessary for the purposes of rendering this opinion. In addition,
we have examined draft copies of the Purchase Agreement, the Registration Rights
Agreement and the original of the Rent Agreement between the Buyers and Miro,
each dated as of August 29, 1997, the other Related Agreements, corporate
records, certificates of public officials and of officers and other
representatives of Miro and other writings which we consider relevant for the
purposes of this opinion. In such examination, we have assumed the genuineness
of all signatures on original documents, the conformity to original documents of
all copies submitted to us and the due execution and delivery of all documents
by any party other than Miro where due execution and delivery are a prerequisite
to the effectiveness thereof.
As used in this opinion, the expression "to our knowledge" or "known to us"
with reference to matters of fact mean that, after an examination of documents
made available to us by Miro, and after inquiries of the CFO of Miro, Xx. Xxxxx
Xxxxx, but without any further independent factual investigation, we find no
reason to believe that the opinions expressed herein are factually incorrect.
Further, the expression "to our knowledge" with reference to matters of fact
refers to the current actual knowledge of the attorneys of this firm who have
worked on matters for Miro solely in connection with the Purchase Agreement and
the transactions contemplated thereby. Except to the extent expressly set forth
herein or as we otherwise believe to be necessary to our opinion, we have not
undertaken any independent investigation to determine the existence or absence
of any fact, and no inference as to our knowledge of the existence or absence of
any fact should be drawn from our representation of Miro or the rendering of the
opinion set forth below.
For purposes of this opinion, we are assuming that the Buyers have all
requisite power and authority and have taken any and all necessary corporate
action, to execute and deliver the Purchase Agreement, and we assume that the
representations and warranties made by the Buyers in the Purchase Agreement and
pursuant thereto are true and correct.
For the purposes of giving our opinion in paragraph 2, we have examined our
agent's report following their search on August 27, 1997 of the public records
of UK Sub on file and available for inspection by the public at the Companies
Registry in Cardiff ("the Company Search Report"). We have assumed that UK Sub
has not passed a voluntary winding-up resolution, no petition has been presented
or order made by a court for the winding-up, dissolution or administration of UK
Sub and no receiver, trustee, administrator, administrative receiver or other
similar officer has been appointed in relation to UK Sub or any of its assets or
revenues. For the purposes of paragraph 2, we have made such examination of the
laws of England as currently applied by the English courts as in our judgment is
necessary for the purposes of this opinion.
The opinions hereinafter expressed are subject to the following
qualifications:
A. We express no opinion as to the effect or availability of rules of
law governing specific performance, injunctive relief or other
equitable remedies (regardless of whether any such remedy is
considered in a proceeding at law or in equity);
B. We express no opinion as to the effect of applicable bankruptcy,
insolvency, reorganization, moratorium and other similar laws
affecting the rights of creditors generally;
C. We express no opinion as to compliance with the anti-fraud
provisions of laws, rules and regulations concerning the issuance
of securities; and
D. We do not, however, purport to be qualified to pass upon, and
express no opinion herein as to, the laws of any jurisdiction other
than those of Germany and England. We do not express any opinion on
European Community law as it affects any jurisdiction other than
England and Wales.
-2-
Based upon and subject to the foregoing, and except as set forth in the
Purchase Agreement or the Schedules, we are of the opinion that:
1. Miro is a corporation duly organized, validly existing and in good
standing under the laws of Germany, and is duly qualified as a
foreign corporation to do business and is in good standing in each
jurisdiction in which the failure to so qualify would have a
Material Adverse Effect on Miro. Miro has all requisite corporate
power and authority to own and operate its properties, to lease the
properties it currently operates under lease and to carry on its
business as now being conducted.
2. UK Sub is a company duly incorporated under the laws of England as
a private limited liability company.
3. Miro has all requisite power and authority to enter into the
Purchase Agreement, the Rent and Sales Agreement, the Registration
Rights Agreements and any other Related Agreements to which it is a
party, and to consummate the transactions contemplated thereby. The
execution and delivery of the Purchase Agreement, the Rent and
Services Agreement, the Registration Rights Agreements and any
other Related Agreements to which it is a party and the
consummation of the transactions contemplated hereby and thereby
have been duly authorized by all necessary corporate and
shareholder action on the part of Miro, and no further action is
required on the part of Miro to authorize the Purchase Agreement,
any other Related Agreements to which it is a party and, except for
the requisite approval of the shareholder, the transactions
contemplated hereby and thereby. Without limiting the generality of
the foregoing, (i) the Board of Directors ("Aufsichtsrat") of Miro
has duly authorized the execution, delivery and performance of the
Purchase Agreement by Miro, (ii) Miro has consulted with its
workers' committee in accordance with applicable German law
regarding the proposed sale of assets to Buyers and changes in
Miro's employment conditions and (iii) Miro has received the
appropriate shareholder approvals under applicable law. The
Purchase Agreement, the Rent and Services Agreement, the
Registration Rights Agreements and any other Related Agreements to
which Miro is a party have been duly executed and delivered by, or
on behalf of, Miro and, assuming the due authorization, execution
and delivery by the other parties hereto and thereto, constitute
valid and binding obligations of Miro enforceable in accordance
with their respective terms.
4. The execution and delivery of the Purchase Agreement, the Rent and
Services Agreement, the Registration Rights Agreements and any
Related Agreements to which it is a party by Miro do not, and, the
consummation of the transactions contemplated thereby (including
the assignments and assumptions referred to in Article II of the
Purchase Agreement) will not Conflict with, or result in any
Conflict with any provision of the charter documents or Bylaws (or
like document) of Miro.
-3-
5. The Purchase Agreement and the Acquisition have been duly approved
and adopted by the vote of 90% of the shareholders of Miro.
6. To our knowledge, there is no action, suit or proceeding of any
nature pending or threatened against Miro, its properties or any of
its officers, ("Vorstandsmitglieder") or directors
("Aufsichtsratsmitglieder"), nor is there any Basis therefor. To
our knowledge, there is no investigation pending or threatened
against Miro, its properties or any of its officers, or directors
(nor is there any Basis therefor) by or before any Governmental
Entity.
7. To our knowledge, Miro is in compliance with and has not breached,
violated or defaulted under, or received notice that it has
breached, violated or defaulted under, any of the terms or
conditions of any Contract.
This opinion is solely for your benefit and is not to be made available to
or relied upon by any other person without our express prior written consent.
Very truly yours,
Xx. Xxx X. Xxxxxxxxxx
-4-
Exhibit E
List of Key Employees
Xxxxxxxxx Xxxxxxxxx
Rausche Xxxxx
Xxxxxxxxxx Xxxxxxxx
Xxxxxx Owe
Xxxxx Xxxxx
Xxxxxxx Xxxxx-Xxxxxx
Xxxxxxxx Xxxxxx
Xxxxxxx Xxxx
Xxxxx Xxxxxxxx
Xxxxxxx Xxxxx
Xxxxx Xxxxxx
Xxxx Xxxx
Bussat Xxxxx
Xxxxxxx Xxxxxx
Xxxxxxxx Xxx
Xxxxxxxx Xxxxx
Xxxxx Jan
EXHIBIT F
FORM OF NON-COMPETITION AGREEMENT
THIS NON-COMPETITION AGREEMENT (the "Agreement") is made as of the
Effective Date (as defined below) by and among Pinnacle Systems, Inc., a
California corporation ("Pinnacle") and the undersigned employee ("Employee") of
Miro Computer Products AG, a corporation organized under the laws of Germany
("Miro").
WHEREAS, Pinnacle and Miro have entered into an Acquisition Agreement dated
as of August 29, 1997 (the "Acquisition Agreement") which provides that Pinnacle
will purchase certain assets and assume certain liabilities of Miro relating to
the Digital Video Group of Miro (the "Digital Video Group") and Employee will be
hired by Pinnacle or a wholly-owned subsidiary of Pinnacle. The closing date of
the Acquisition shall be the "Effective Date" of this Agreement.
WHEREAS, as a condition to the Acquisition, and to preserve the value of
the business being acquired by Pinnacle after the Acquisition, the Acquisition
Agreement contemplates, among other things, that the Employee enter into this
Agreement and that this Agreement become effective on the Effective Date.
NOW THEREFORE, in consideration of the mutual promises made herein,
Pinnacle and the Employee (collectively referred to as the "Parties") hereby
agree as follows:
1. Covenant Not to Compete or Solicit.
(a) Beginning on the date of termination of Employee's employment or
consulting relationship with Pinnacle or a subsidiary of Pinnacle and ending on
the first anniversary of such termination date (the "Non-Competition Period"),
Employee shall not directly or indirectly (other than on behalf of Pinnacle),
without the prior written consent of Pinnacle, engage anywhere (whether as an
employee, agent, consultant, advisor, independent contractor, proprietor,
partner, officer, director or otherwise), or have any ownership interest in
(except for ownership of five percent (5%) or less of any entity whose
securities have been registered under the Securities Act of 1933, as amended, or
Section 12 of the Securities Exchange Act of 1934), or participate in the
financing, operation, management or control of, any firm, partnership,
corporation, entity or business (other than Pinnacle) that engages or
participates in a "Competing Business Purpose." The term Competing Business
Purpose shall mean any entity or business that engages or participates in a
business that markets or sells products that incorporate CODEC technology or
otherwise constitute a non-linear editing solution.
(b) During the applicable Non-Competition Period, Employee shall not,
directly or indirectly, without the prior written consent of Pinnacle, solicit,
encourage or hire any employee of Pinnacle or any subsidiary or affiliate of
Pinnacle to terminate his or her employment with Pinnacle or any subsidiary or
affiliate of Pinnacle.
(c) Employee acknowledges that (i) the goodwill associated with the
existing business, customers and assets of the Digital Video Group prior to the
Acquisition is an integral component of the
value of the Digital Video Group to Pinnacle and (ii) Employee's agreement as
set forth herein is necessary to preserve the value of Digital Video Group for
Pinnacle following the Acquisition. Employee also acknowledges that the
limitations of time, geography and scope of activity agreed to in this Agreement
are reasonable because, among other things, (i) Pinnacle is engaged in a highly
competitive industry, (ii) Employee has unique access to, and will continue to
have access to, the trade secrets and know-how of the Digital Video Group,
including without limitation the plans and strategy (and, in particular, the
competitive strategy) of the Digital Video Group, and (iii) in the event
Employee's employment with Pinnacle ended, the Employee would be able to obtain
suitable and satisfactory employment without violation of this Agreement.
(d) The obligations of Employee hereunder (i) shall remain in effect if
such Employee voluntarily resigns employment with Pinnacle or a subsidiary or
affiliate of Pinnacle or the employment of Employee with Pinnacle or a
subsidiary or affiliate of Pinnacle is terminated for Cause; and (ii) shall
terminate if Pinnacle terminates (other than for Cause) or Constructively
Terminates (as defined below) such Employee's employment with Pinnacle or a
subsidiary or an affiliate of Pinnacle. The term "Constructively Terminate"
shall mean, without the Employee's written consent, (i) a material reduction in
the Employee's responsibilities with Pinnacle or a subsidiary or affiliate of
Pinnacle and (ii) any reduction is made in the annual salary of the Employee as
in effect on the Effective Date. The term "Cause" shall mean (i) the Employee
has engaged in illegal conduct substantially detrimental to the business of
Pinnacle, or is convicted of a felony, (ii) the Employee refuses to act in any
material respect in accordance with any reasonable order or direction of an
authorized executive officer or the Board of Directors of Pinnacle, provided
that the employee has been given written notice of such refusal or failure and
has failed to comply with such order or direction within 10 days after the date
of such notice, (iii) the Employee knowingly has engaged in any activity in
competition with Pinnacle or a subsidiary or affiliate of Pinnacle (excluding a
less than 5% passive investment in any public company) or (iv) the Employee has
engaged in any fraud, embezzlement, material misappropriation or similar conduct
against Pinnacle or a subsidiary or affiliate of Pinnacle.
2. Arbitration.
(a) The parties agree that any dispute or controversy arising out of,
relating to, or in connection with this Agreement, or the interpretation,
validity, construction, performance, breach, or termination thereof, shall be
settled by binding arbitration to be held in Santa Xxxxx County, California in
accordance with the American Arbitration Association Commercial Arbitration
Rules, and Supplemental Procedures for Large Complex Disputes (together the
"Rules"). The decision of the arbitrator shall be final, conclusive and binding
on the parties to the arbitration. Judgment may be entered on the arbitrator's
decision in any court having jurisdiction.
(b) At the request of either party, the arbitrator will enter an
appropriate protective order to maintain the confidentiality of information
produced or exchanged in the course of the arbitration proceedings.
(c) The arbitrator(s) shall apply California law to the merits of any
dispute or claim, without reference to rules of conflicts of law.
-2-
(d) The parties agree that it would be impossible or inadequate to
measure and calculate the other party's damages from any breach of the covenants
set forth in this Agreement. Accordingly, each party agrees that if it breaches
any provision of this Agreement, the other party will have available, in
addition to any other right or remedy otherwise available, the right to
injunctive relief restraining such breach or threatened breach and to specific
performance of any such provision of this Agreement.
(e) Either party may apply to any court of competent jurisdiction for a
temporary restraining order, preliminary injunction or other interim or
conservatory relief, as necessary, without breach of this arbitration agreement
and without any abridgment of the powers of the arbitrator(s).
(f) EMPLOYEE HAS READ AND UNDERSTANDS THIS SECTION 2, WHICH DISCUSSES
ARBITRATION. THE EMPLOYEE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EMPLOYEE
AGREES, EXCEPT AS SET FORTH IN SECTION 2(d) AND 2(e) ABOVE, TO SUBMIT ANY CLAIMS
ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE
INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION
THEREOF TO BINDING ARBITRATION, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A
WAIVER OF EMPLOYEE'S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL
DISPUTES ARISING OUT OF, RELATING TO OR IN CONNECTION WITH THIS AGREEMENT.
3. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by the laws of the
State of California without reference to rules of conflicts of law.
(b) Severability. If any portion of this Agreement is held by an
arbitrator or a court of competent jurisdiction to conflict with any federal,
state or local law, or to be otherwise invalid or unenforceable, such portion of
this Agreement shall be of no force or effect and this Agreement shall otherwise
remain in full force and effect and be construed as if such portion had not been
included in this Agreement.
(c) No Assignment. Because the nature of the Agreement is specific to
the actions of the Employee, the Employee may not assign this Agreement. This
Agreement shall inure to the benefit of Pinnacle and its successors and assigns.
(d) Notice. All notices or communication required or permitted under
this Agreement shall be made in writing and delivered personally to the other
party or sent by certified or registered mail, return receipt requested and
postage prepaid or express courier with confirmation of delivery to the
following addresses (or such other address for a party as shall have been
specified by like notice):
(i) if to Pinnacle or the Company, to:
Pinnacle Systems, Inc.
-3-
000 X. Xxxxxxxx Xxx.
Xxxxxxxx Xxxx, XX 00000
Telephone No. (000) 000-0000
(ii) if to Employee, to:
___________________
___________________
[home address]
Telephone No.
(e) Entire Agreement. This Agreement contains the entire agreement and
understanding of the parties and supersedes all prior discussions, agreements
and understandings relating to the subject matter hereof. This Agreement may not
be changed or modified, except by an agreement in writing executed by Pinnacle
and Employee.
(f) Waiver of Breach. The waiver of a breach of any term or provision
of this Agreement, which must be in writing, shall not operate as or be
construed to be a waiver of any other previous or subsequent breach of this
Agreement.
(g) Headings. All captions and section headings used in this Agreement
are for convenience only and do not form a part of this Agreement.
(h) Counterparts. This Agreement may be executed in counterparts, and
each counterpart shall have the same force and effect as an original and shall
constitute an effective, binding agreement on the part of each of the
undersigned.
(i) Term. The term of this Agreement is three (3) years from the
Effective Date or such shorter period as may be applicable under Section 1(a) of
this Agreement.
-4-
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
Effective Date.
PINNACLE SYSTEMS, INC. EMPLOYEE
By: _______________________ ______________________________
Name: Name:
Title:
Address: _____________________
_____________________
[NON-COMPETITION AGREEMENT]
-5-
EXHIBIT G-1
PINNACLE SYSTEMS, INC.
CERTIFICATE
Pinnacle Systems, Inc., a California corporation ("Pinnacle"), hereby
certifies, in accordance with Section 6.16 of the Asset Purchase Agreement
effective as of August 31, 1997 (the "Agreement") by and among Pinnacle,
Pinnacle Systems GmbH, a corporation organized under the laws of Germany and a
subsidiary of Pinnacle ("German Sub"), Pinnacle Systems C.V., a limited
partnership formed under the laws of the Netherlands ("Dutch Sub"), and Pinnacle
Systems Ltd., a corporation formed under the laws of the United Kingdom and a
subsidiary of Pinnacle ("U.K. Sub," and, together with Pinnacle, German Sub and
Dutch Sub, the "Buyers"), and Miro Computer Products AG, a corporation organized
under the laws of Germany ("Miro"), Miro Computer Products Inc., a California
corporation and a subsidiary of Miro, and Miro Computer Products Ltd. a
corporation organized under the laws of the United Kingdom and a subsidiary of
Miro that:
(i) The representations and warranties of each of the Buyers set forth in
the Agreement are true and correct in all material respects on and as of the
date hereof; and
(ii) Each of the Buyers has performed and complied with all covenants and
obligations to be performed by it under the Agreement in all material respects
prior to or as of the date hereof.
IN WITNESS WHEREOF, as of this 29 day of August, 1997, the undersigned
has executed this certificate on behalf of Pinnacle.
PINNACLE SYSTEMS, INC.
By: /s/ XXXXXX X. XXXXXXXX
---------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chief Financial Officer
EXHIBIT G-2
MIRO COMPUTER PRODUCTS AG
CERTIFICATE
Miro Computer Products AG, a corporatioin organized under the laws of
Germany ("Miro") hereby certifies, in accordance with Section 6.19 of the Asset
Purchase Agreement effective as of August 31, 1997 (the "Agreement") by and
among Pinnacle Systems, Inc., a California corporation ("Pinnacle"), Pinnacle
Systems GmbH, a corporation organized under the laws of Germany and a subsidiary
of Pinnacle, Pinnacle Systems C.V., a limited partnership formed under the laws
of the Netherlands, and Pinnacle Systems Ltd., a corporation formed under the
laws of the United Kingdom and a subsidiary of Pinnacle, Miro, Miro Computer
Products Inc., a California corporation and a subsidiary of Miro ("Miro U.S."),
and Miro Computer Products Ltd. a corporation organized under the laws of the
United Kingdom and a subsidiary of Miro ("Miro U.K." and, together with Miro
U.S. and Miro, the "Sellers") that:
(i) The representations and warranties of each of the Sellers set forth in
the Agreement are true and correct in all material respects on and as of the
date hereof; and
(ii) Each of the Sellers has performed and complied with all covenants and
obligations to be performed by it under the Agreement in all material respects
prior to or as of the date hereof.
IN WITNESS WHEREOF, as of this 29 day of August, 1997, the undersigned
has executed this certificate on behalf of Miro.
MIRO COMPUTER PRODUCTS AG
By: /s/ X. XXXXX
-----------------------
Name: X. Xxxxx
Title: CFO
