{"id":43500,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/preferred-stock-purchase-agreement-apple-computer-inc-and.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"preferred-stock-purchase-agreement-apple-computer-inc-and","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/preferred-stock-purchase-agreement-apple-computer-inc-and.html","title":{"rendered":"Preferred Stock Purchase Agreement &#8211; Apple Computer Inc. and Microsoft Corp."},"content":{"rendered":"<pre>\n                          PREFERRED STOCK PURCHASE AGREEMENT\n\n                              DATED AS OF AUGUST 5, 1997\n\n                                       BETWEEN\n\n                                 APPLE COMPUTER, INC.\n\n                                         AND\n\n                                MICROSOFT CORPORATION\n\n\n\n                                  TABLE OF CONTENTS\n\n                                                                         PAGE\n                                                                         ----\nSECTION 1 - Agreement to Purchase and Sell Preferred Stock . . . . . . . . . 1\n\n    1.1  Agreement to Purchase and Sell Preferred Stock. . . . . . . . . . . 1\n    1.2  Per Share Purchase and Conversion Prices. . . . . . . . . . . . . . 1\n\nSECTION 2 - Closing Date; Delivery . . . . . . . . . . . . . . . . . . . . . 1\n\n    2.1  Closing Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2\n    2.2  Delivery. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2\n\nSECTION 3 - Representations and Warranties of the Company. . . . . . . . . . 2\n\n    3.1  Organization. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2\n    3.2  Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . 3\n    3.3  No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3\n    3.4  SEC Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . 3\n    3.5  Absence of Certain Changes or Events. . . . . . . . . . . . . . . . 4\n    3.6  Governmental Consent, etc.. . . . . . . . . . . . . . . . . . . . . 4\n    3.7  Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4\n\nSECTION 4 - Representations and Warranties of the Purchaser. . . . . . . . . 5\n\n    4.1  Organization. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5\n    4.2  Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5\n    4.3  Investment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5\n    4.4  Disclosure of Information . . . . . . . . . . . . . . . . . . . . . 5\n    4.5  Investment Experience . . . . . . . . . . . . . . . . . . . . . . . 5\n    4.6  Accredited Investor Status. . . . . . . . . . . . . . . . . . . . . 6\n    4.7  Restricted Securities . . . . . . . . . . . . . . . . . . . . . . . 6\n\nSECTION 5 - Conditions to Obligation of the Purchaser. . . . . . . . . . . . 6\n\n    5.1  Representations and Warranties. . . . . . . . . . . . . . . . . . . 6\n    5.2  Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6\n    5.3  No Order Pending. . . . . . . . . . . . . . . . . . . . . . . . . . 6\n    5.4  No Law Prohibiting or Restricting Sale of the Shares. . . . . . . . 6\n    5.5  Registration Rights Agreement . . . . . . . . . . . . . . . . . . . 7\n    5.6  Patent Cross License Agreement and Technology Agreement . . . . . . 7\n\n                                      i\n\n\n\nSECTION 6 - Conditions to Obligation of the Company. . . . . . . . . . . . . 7\n\n    6.1  Representations and Warranties. . . . . . . . . . . . . . . . . . . 7\n    6.2  Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7\n    6.3  No Order Pending. . . . . . . . . . . . . . . . . . . . . . . . . . 7\n    6.4  No Law Prohibiting or Restricting the Sale of the Shares. . . . . . 7\n    6.5  The Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . 7\n    6.6  Patent Cross License Agreement and Technology Agreement . . . . . . 8\n\nSECTION 7 - Covenants of the Company . . . . . . . . . . . . . . . . . . . . 8\n\n    7.1  Registration Rights . . . . . . . . . . . . . . . . . . . . . . . . 8\n\nSECTION 8 - Covenants of the Purchaser . . . . . . . . . . . . . . . . . . . 8\n\n    8.1  Right of First Refusal. . . . . . . . . . . . . . . . . . . . . . . 8\n    8.2  Voting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10\n    8.3  Voting Trust, etc.. . . . . . . . . . . . . . . . . . . . . . . . .10\n    8.4  Solicitation of Proxies . . . . . . . . . . . . . . . . . . . . . .10\n    8.5  Acts in Concert with Others . . . . . . . . . . . . . . . . . . . .10\n    8.6  Restrictions on Transfer of Shares. . . . . . . . . . . . . . . . .10\n    8.7  Acquisition of Stock. . . . . . . . . . . . . . . . . . . . . . . .11\n\nSECTION 9 - Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . .11\n\n    9.1  Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . .11\n    9.2  Best Efforts. . . . . . . . . . . . . . . . . . . . . . . . . . . .12\n    9.3  Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . .12\n    9.4  Survival; Termination of Covenants. . . . . . . . . . . . . . . . .12\n    9.5  Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . .13\n    9.6  Entire Agreement; Amendment . . . . . . . . . . . . . . . . . . . .13\n    9.7  Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13\n    9.8  Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14\n    9.9  Fees, Costs and Expenses. . . . . . . . . . . . . . . . . . . . . .14\n    9.10 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . .14\n    9.11 Initial Public Announcement . . . . . . . . . . . . . . . . . . . .15\n\n                                        ii\n\n\n\n                          PREFERRED STOCK PURCHASE AGREEMENT\n\n     This PREFERRED STOCK PURCHASE AGREEMENT (this 'Agreement') is made as of\nthis 5th day of August, 1997 between Apple Computer, Inc., a California\ncorporation (the 'Company'), and Microsoft Corporation, a Washington corporation\n(the 'Purchaser').\n\n                                       RECITALS\n\n     WHEREAS, concurrently with this Agreement the Company and the Purchaser are\nentering into a Patent Cross License Agreement in the form attached hereto as\nExhibit A;\n\n     WHEREAS, concurrently with this Agreement the Company and the Purchaser are\nentering into a Technology Agreement in the form attached hereto as Exhibit B;\nand\n\n     WHEREAS, in connection with the Patent Cross License Agreement and the\nTechnology Agreement, the Company desires to sell to the Purchaser, and the\nPurchaser desires to purchase from the Company, shares of the Company's Series A\nNon-Voting Convertible Preferred Stock, no par value (the 'Preferred Stock')\nconvertible into the Company's Common Stock, no par value (the 'Common Stock'),\non the terms and conditions set forth in this Agreement;\n\n     NOW, THEREFORE, in consideration of the foregoing recitals, the mutual\npromises hereinafter set forth, and other good and valuable consideration, the\nreceipt and sufficiency of which are hereby acknowledged, the parties hereto\nagree as follows:\n\n                                      SECTION 1\n\n                    AGREEMENT TO PURCHASE AND SELL PREFERRED STOCK\n\n     1.1  AGREEMENT TO PURCHASE AND SELL PREFERRED STOCK.  Upon the terms and \nsubject to the conditions of this Agreement, the Company hereby agrees to \nsell to the Purchaser at the Closing (as defined below), and the Purchaser \nagrees to purchase from the Company at the Closing, $150,000,000 aggregate \npurchase price of Preferred Stock, no par value, of the Company having the \nterms and conditions set forth in the Certificate of Determination of \nPreferences of Series A Non-Voting Convertible Preferred Stock of Apple \nComputer, Inc. (the 'Certificate') substantially in the form attached hereto \nas Exhibit C (the 'Shares') at a price per share  (the 'Per Share Purchase \nPrice') set forth in Section 1.2 below.\n\n     1.2  PER SHARE PURCHASE AND CONVERSION PRICES.  The Per Share Purchase\nPrice shall be $1,000.  The initial 'Conversion Price' (as defined in the\nCertificate) shall be $16.50 per share. \n\n                                      SECTION 2\n\n                                CLOSING DATE; DELIVERY\n\n\n\n     2.1  CLOSING DATE.  The Closing of the purchase and sale of the Shares\nhereunder (the 'Closing') shall be held at the offices of Wilson Sonsini\nGoodrich &amp; Rosati, Professional Corporation, 650 Page Mill Road, Palo Alto,\nCalifornia, at 10:00 a.m. (Pacific time), August 11, 1997, or at such other time\nand place as the Company and the Purchaser mutually agree (the date of the\nClosing being hereinafter referred to as the 'Closing Date').\n\n     2.2  DELIVERY.  At the Closing, the Company will deliver to the Purchaser a\ncertificate or certificates representing the Shares against payment of the\naggregate purchase price of $150,000,000 by wire transfer of immediately\navailable funds to an account designated by the Company.  The certificate or\ncertificates representing the Shares and the shares of Common Stock issuable\nupon conversion of the Shares shall be subject to a legend restricting transfer\nunder the Securities Act of 1933, as amended (the 'Securities Act'), and\nreferring to restrictions on transfer herein, such legend to be substantially as\nfollows:\n\n     'The shares represented by this certificate have been acquired for\ninvestment and have not been registered under the Securities Act of 1933, as\namended.  Such shares may not be sold or transferred in the absence of such\nregistration or an opinion of counsel reasonably satisfactory to the Company as\nto the availability of an exemption from registration.\n\n     The shares represented by this certificate are subject to restrictions on\ntransfer, including any sale, pledge or other hypothecation, set forth in an\nagreement dated as of August 5, 1997 between the Company and Microsoft\nCorporation, a copy of which agreement may be obtained at no cost by written\nrequest made by the holder of record of this certificate to the secretary of the\nCompany at the Company's principal executive offices.'\n\n     The Company agrees (i) to remove the legend set forth in the second\npreceding paragraph upon receipt of an opinion of counsel in form and substance\nreasonably satisfactory to the Company that the Shares or the shares of Common\nStock issuable upon conversion of the Shares are eligible for transfer without\nregistration under the Securities Act and (ii) to remove the legend set forth in\nthe immediately preceding paragraph at such time as the Shares (or the shares of\nCommon Stock issuable upon conversion of the Shares) may be transferred in\ncompliance with Section 8 or upon the termination of the covenants of Section 8\nas provided for in Section 9.4.\n\n                                      SECTION 3\n\n                    REPRESENTATIONS AND WARRANTIES OF THE COMPANY\n\n     The Company hereby represents and warrants to the Purchaser as follows:\n\n     3.1  ORGANIZATION.  The Company is a corporation duly organized and validly\nexisting under the laws of the State of California and is in good standing under\nsuch laws.  The Company has the requisite corporate power to own and operate its\nproperties and assets, and to carry on its \n\n                                          2\n\n\n\nbusiness as presently conducted and as proposed to be conducted.  The Company \nis qualified to do business as a foreign corporation in each jurisdiction in \nwhich the ownership of its property or the nature of its business requires \nsuch qualification, except where the failure to be so qualified would not \nhave a materially adverse effect on the Company and its subsidiaries, taken \nas a whole.\n\n     3.2  AUTHORIZATION.  All corporate action on the part of the Company\nnecessary for the authorization, execution, delivery and performance of this\nAgreement, the Registration Rights Agreement (attached as Exhibit D hereto), the\nPatent Cross License Agreement and the Technology Agreement by the Company, the\nauthorization, sale, issuance and delivery of the Shares hereunder, and the\nperformance of the Company's obligations hereunder and under said Agreements has\nbeen taken.  This Agreement, the Registration Rights Agreement, the Patent Cross\nLicense Agreement and the Technology Agreement constitute legal, valid and\nbinding obligations of the Company enforceable in accordance with their\nrespective terms, subject to laws of general application relating to bankruptcy,\ninsolvency and the relief of debtors and rules of law governing specific\nperformance, injunctive relief or other equitable remedies, and to limitations\nof public policy as they may apply to Section 4 of the Registration Rights\nAgreement.  Upon their issuance and delivery pursuant to this Agreement, the\nShares will be validly issued, fully paid and nonassessable.  The issuance and\nsale of the Shares will not give rise to any preemptive rights or rights of\nfirst refusal on behalf of any person in existence on the date hereof.\n\n     3.3  NO CONFLICT.  The execution and delivery of this Agreement, the\nRegistration Rights Agreement, the Patent Cross License Agreement and the\nTechnology Agreement do not, and the consummation of the transactions\ncontemplated hereby and thereby will not, conflict with, or result in any\nviolation of, or default (with or without notice or lapse of time, or both), or\ngive rise to a right of termination, cancellation or acceleration of any\nobligation or to a loss of a material benefit under, any provision of the\nArticles of Incorporation or By-laws of the Company or any mortgage, indenture,\nlease or other agreement or instrument, permit, concession, franchise, license,\njudgment, order, decree, statute, law, ordinance, rule or regulation applicable\nto the Company, its properties or assets, the effect of which could have a\nmaterial adverse effect on the Company and its subsidiaries, taken as a whole,\nor materially impair or restrict the Company's power to perform its obligations\nas contemplated under said Agreements.\n\n     3.4  SEC DOCUMENTS.  The Company has filed all required reports, schedules,\nforms, statements and other documents with the Securities and Exchange\nCommission (the 'SEC') since December 31, 1995 (the 'SEC Documents').  As of\ntheir respective dates, the SEC Documents complied in all material respects with\nrequirements of the Securities Act or the Securities Exchange Act of 1934, as\namended (the 'Exchange Act'), as the case may be and the rules and regulations\nof the SEC promulgated thereunder applicable to such SEC Documents, and none of\nthe SEC Documents contained any untrue statement of a material fact or omitted\nto state a material fact required to be stated therein or necessary in order to\nmake the statements therein, in light of the circumstances under which they were\nmade, not misleading.  Except to the extent that information contained in any\nSEC Document has been revised or superseded by a later filed SEC Document, none\nof the SEC Documents contains any untrue statement of a material fact or omits\nto state any \n\n                                          3\n\n\n\nmaterial fact required to be stated therein or necessary in order to make the \nstatements therein, in light of the circumstances under which they were made, \nnot misleading.  The financial statements of the Company included in the SEC \nDocuments comply as to form in all material respects with applicable \naccounting requirements and the published rules and regulations of the SEC \nwith respect thereto, have been prepared in accordance with U.S. generally \naccepted accounting principles ('GAAP') (except, in the case of unaudited \nstatements as permitted by Form 10Q of the SEC) applied on a consistent basis \nduring the periods involved (except as may be indicted in the notes thereto) \nand fairly present the consolidated financial position of the Company and its \nconsolidated subsidiaries as of the dates thereof and the consolidated \nresults of their operation and cashflows (or changes in financial position \nprior to the approval of Financial Accounting Standards Boards Statement of \nFinancial Accounting Standards No. 95) for the periodthen ending in \naccordance with GAAP (subject, in the case of the unaudited statements, to \nnormal year end audit adjustments). Except as set forth in the filed SEC \nDocuments, neither the Company nor any of its subsidiaries has any \nliabilities or obligations of any nature (whether accrued, absolute, \ncontingent or otherwise) required by GAAP to be set forth on a consolidated \nbalance sheet of the Company and its consolidated subsidiaries or in the \nnotes thereto and which could reasonably be expected to have a material \nadverse effect on the Company and its subsidiaries taken as a whole.\n\n     3.5  ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in the SEC\nDocuments since the date of the most recent audited financial statements\nincluded in the SEC Documents, there has not been (i) any declaration, setting\naside or payment of any dividend or distribution (whether in cash, stock or\nproperty) with respect to any of the Company's capital stock, (ii) any split,\ncombination or reclassification of any of its capital stock or any issuance or\nthe authorization of any issuance of any other securities in respect of, in lieu\nof or in substitution for shares of its capital stock, (iii) any damage,\ndestruction or loss of property, whether or not covered by insurance, that has\nor could reasonably be expected to have a material adverse effect on the Company\nand its subsidiaries taken as a whole, or (iv) any change in accounting methods,\nprinciples or practices by the Company materially affecting its assets,\nliabilities, or business, except insofar as may have been required by a change\nin GAAP.\n\n     3.6  GOVERNMENTAL CONSENT, ETC.  No consent, approval or authorization of\nor designation, declaration or filing with any governmental authority on the\npart of the Company is required in connection with the valid execution and\ndelivery of this Agreement, or the offer, sale or issuance of the Shares, or the\nconsummation of any other transaction contemplated hereby, except such filings\nas may be required to be made with the SEC and the National Association of\nSecurities Dealers, Inc.\n\n     3.7  LITIGATION.  Except as is disclosed in the SEC Documents, there is no\nsuit, action or proceeding pending or affecting the Company or any of its\nsubsidiaries that, individually or in the aggregate, could (i) have a material\nadverse effect on the Company and its subsidiaries taken as a whole, (ii) impair\nthe ability of the Company to perform its obligations under this Agreement, the\nRegistration Rights Agreement, the Patent Cross License and the Technology\nAgreement, or (iii) prevent the consummation of any of the transactions\ncontemplated by said Agreements, nor is there any judgment, decree, injunction,\nrule or order of any governmental entity or arbitrator \n\n                                          4\n\n\n\n\noutstanding against the Company or any of its subsidiaries having, or which, \ncould reasonably be expected to have, any such effect.\n\n                                      SECTION 4\n\n                   REPRESENTATIONS AND WARRANTIES OF THE PURCHASER\n\n     The Purchaser hereby represents and warrants to the Company as follows:\n\n     4.1  ORGANIZATION.  The Purchaser is a corporation duly organized and\nvalidly existing and in good standing under the laws of the State of Washington,\nwith all requisite corporate power and authority to own, lease and operate its\nproperties and to conduct its business as now being conducted.\n\n     4.2  AUTHORITY. All corporate action on the part for the Purchaser\nnecessary of the authorization, execution, delivery and performance of this\nAgreement, the Registration Rights Agreement, the Patent Cross License Agreement\nand the Technology Agreement by the Purchaser has been taken.  This Agreement,\nthe Registration Rights Agreement, the Patent Cross License Agreement and the\nTechnology Agreement have been duly executed and delivered by the Purchaser and\nconstitute legal, valid and binding obligations of the Purchaser, enforceable in\naccordance with their respective terms, subject to laws of general application\nrelating to bankruptcy, insolvency and the relief of debtors and rules of law\ngoverning specific performance, injunctive relief or other equitable remedies,\nand to limitations of public policy as they may apply to Section 4 of the\nRegistration Rights Agreement.  The execution and delivery of said Agreements do\nnot, and the consummation of the transactions contemplated hereby and thereby\nwill not, conflict with or result in any violation of any obligation under any\nprovision of the Articles of Incorporation or By-laws of the Purchaser or any\njudgment, order, decree, statute, law, ordinance, rule or regulation applicable\nto the Purchaser.\n\n     4.3  INVESTMENT.  The Purchaser is acquiring the Shares for investment for\nits own account, not as a nominee or agent, and not with a view to, or for\nresale in connection with, any distribution thereof.  The Purchaser understands\nthat the Shares have not been registered under the Securities Act by reason of a\nspecific exemption from the registration provisions of the Securities Act which\ndepends upon, among other things, the bona fide nature of the investment intent\nand the accuracy of the Purchaser's representations and warranties contained\nherein.\n\n     4.4  DISCLOSURE OF INFORMATION.  The Purchaser has had full access to all\ninformation it considers necessary or appropriate to make an informed investment\ndecision with respect to the Shares to be purchased by the Purchaser under this\nAgreement.  The Purchaser further has had an opportunity to ask questions and\nreceive answers from the Company regarding the terms and conditions of the\noffering of the Shares and to obtain additional information necessary to verify\nany information furnished to the Purchaser or to which the Purchaser had access.\n\n     4.5  INVESTMENT EXPERIENCE.  The Purchaser understands that the purchase of\nthe Shares involves substantial risk.  The Purchaser has experience as an\ninvestor in securities of companies and \n\n                                          5\n\n\n\nacknowledges that it is able to fend for itself, can bear the economic risk \nof its investment in the Shares and has such knowledge and experience in \nfinancial or business matters that it is capable of evaluating the merits and \nrisks of this investment in the Shares and protecting its own interests in \nconnection with this investment.\n\n     4.6  ACCREDITED INVESTOR STATUS.  The Purchaser is an 'accredited investor'\nwithin the meaning of Regulation D promulgated under the Securities Act.\n\n     4.7  RESTRICTED SECURITIES.  The Purchaser understands that the Shares to\nbe purchased by the Purchaser hereunder are characterized as 'restricted\nsecurities' under the Securities Act inasmuch as they are being acquired from\nthe Company in a transaction not involving a public offering and that under the\nSecurities Act and applicable regulations thereunder such securities may be\nresold without registration under the Securities Act only in certain limited\ncircumstances.  The Purchaser is familiar with Rule 144 of the SEC, as presently\nin effect, and understands the resale limitations imposed thereby and by the\nSecurities Act.  The Purchaser understands that the Company is under no\nobligation to register any of the Shares sold hereunder except as provided in\nthe Registration Rights Agreement.\n\n                                      SECTION 5\n\n                      CONDITIONS TO OBLIGATION OF THE PURCHASER\n\n     The Purchaser's obligation to purchase the Shares at the Closing is, at the\noption of the Purchaser, which may waive any such conditions, subject to the\nfulfillment on or prior to the Closing Date of the following conditions:\n\n     5.1  REPRESENTATIONS AND WARRANTIES.  Each of the representations and \nwarranties of the Company contained in Section 3 will be true and correct on \nand as of the date hereof and on and as of the Closing Date with the same \neffect as though such representations and warranties had been made as of the \nClosing Date. The Purchaser shall have received a certificate signed by an \nofficer of the Company to such effect on the Closing Date.\n\n     5.2  COVENANTS.  All covenants, agreements and conditions contained in this\nAgreement to be performed by the Company on or prior to the Closing Date shall\nhave been performed or complied with in all material respects. The Purchaser\nshall have received a certificate signed by an officer of the Company to such\neffect on the Closing Date.\n\n     5.3  NO ORDER PENDING.  There shall not then be in effect any order\nenjoining or restraining the transactions contemplated by this Agreement.\n\n     5.4  NO LAW PROHIBITING OR RESTRICTING SALE OF THE SHARES.  There shall not\nbe in effect any law, rule or regulation prohibiting or restricting the sale of\nthe Shares, or requiring any consent or approval of any Person which shall not\nhave been obtained to issue the Shares with full benefits \n\n                                          6\n\n\n\n\nafforded the Preferred Stock or the Common Stock into which the Preferred \nStock is convertible (except as otherwise provided in this Agreement).\n\n     5.5  REGISTRATION RIGHTS AGREEMENT.  The Company shall have executed and\ndelivered the Registration Rights Agreement substantially in the form attached\nhereto as Exhibit D.\n\n     5.6  PATENT CROSS LICENSE AGREEMENT AND TECHNOLOGY AGREEMENT.  The Company\nshall have executed and delivered the Patent Cross License Agreement and\nTechnology Agreement substantially in the forms attached hereto as Exhibit A and\nExhibit B, respectively.\n\n                                      SECTION 6\n\n                       CONDITIONS TO OBLIGATION OF THE COMPANY\n\n     The Company's obligation to sell and issue the Shares at the Closing is, at\nthe option of the Company, which may waive any such conditions, subject to the\nfulfillment on or prior to the Closing Date of the following conditions:\n\n     6.1  REPRESENTATIONS AND WARRANTIES.  The representations and warranties of\nthe Purchaser contained in Section 4 will be true and correct on and as of the\ndate hereof and on and as of the Closing Date with the same effect as though\nsuch representations and warranties had been made as of the Closing Date.  The\nCompany shall have received a certificate signed on behalf of the Purchaser by\nan officer of the Purchaser to such effect on the Closing Date.\n\n     6.2  COVENANTS.  All covenants, agreements and conditions contained in this\nAgreement to be performed by the Purchaser on or prior to the Closing Date shall\nhave been performed or complied with in all material respects.  The Company\nshall have received a certificate signed on behalf of the Purchaser by an\nofficer of the Purchaser to such effect on the Closing Date.\n\n     6.3  NO ORDER PENDING.  There shall not then be in effect any order\nenjoining or restraining the transactions contemplated by this Agreement.\n\n     6.4  NO LAW PROHIBITING OR RESTRICTING THE SALE OF THE SHARES.  There shall\nnot be in effect any law, rule or regulation prohibiting or restricting the sale\nof the Shares, or requiring any consent or approval of any person which shall\nnot have been obtained to issue the Shares with full benefits afforded the\nPreferred Stock or the Common Stock into which the Preferred Stock is\nconvertible (except as otherwise provided in this Agreement).\n\n     6.5  THE PURCHASER.  The Purchaser shall have executed and delivered the\nRegistration Rights Agreement substantially in the form attached hereto as\nExhibit D.\n\n                                          7\n\n\n\n     6.6  PATENT CROSS LICENSE AGREEMENT AND TECHNOLOGY AGREEMENT.  The\nPurchaser shall have executed and delivered the Patent Cross License Agreement\nand Technology Agreement substantially in the forms attached hereto as Exhibit A\nand Exhibit B, respectively.\n\n                                      SECTION 7\n\n                               COVENANTS OF THE COMPANY\n\n     7.1  REGISTRATION RIGHTS.  The Company will comply with the provisions\nregarding registration rights contained in the Registration Rights Agreement\nattached hereto as Exhibit D.\n\n                                      SECTION 8\n\n                              COVENANTS OF THE PURCHASER\n\n     8.1  RIGHT OF FIRST REFUSAL.  Prior to making any sale or transfer of the\nShares (other than a sale or transfer registered under the Securities Act or\npursuant to Rule 144, or a sale or transfer of that number of Shares\nrepresenting less than three percent (3%) of the Company's outstanding Common\nStock to any person or group), the Purchaser shall give the Company the\nopportunity to purchase such Shares in the following manner:\n\n          (i)  The Purchaser shall give notice (the 'Transfer Notice') to the\nCompany in writing of such intention specifying the approximate number of the\nproposed purchasers or transferees, the amount of Shares proposed to be sold or\ntransferred, the proposed price per share therefor (the 'Transfer Price') and\nthe other material terms upon which such disposition is proposed to be made.\n\n          (ii) The Company shall have the right, exercisable by written notice\ngiven by the Company to the Purchaser within five (5) business days after\nreceipt of such Transfer Notice, to purchase all but not part of the Shares\nspecified in such Transfer Notice for cash per share equal to the Transfer\nPrice, provided, within five (5) business days after written notice of exercise\nby the Company, the Company shall provide the Purchaser with evidence\nsatisfactory to the Purchaser (by written commitment letter subject only to\ncustomary representations, diligence and documentation, letter of credit or\notherwise) of its ability to finance such repurchase.\n\n          (iii)  If the Company exercises its right of first refusal\nhereunder, the closing of the purchase of the Shares with respect to which such\nright has been exercised shall take place within ten (10) business days after\nthe Company gives notice of such exercise.  Upon exercise of its right of first\nrefusal, the Company and the Purchaser shall be legally obligated to consummate\nthe purchase contemplated thereby and shall use their best efforts to secure any\napprovals required in connection therewith.\n\n          (iv) If the Company does not exercise its right of first refusal\nhereunder within the time specified for such exercise, the Purchaser shall be\nfree, during the period of 90 calendar days \n\n                                          8\n\n\n\n\nfollowing the expiration of such time for exercise, to sell the Shares \nspecified in such Transfer Notice on terms no less favorable to the Purchaser \nthan the terms specified in such Transfer Notice.\n\n          (v)  Notwithstanding the foregoing, prior to making any sale or\nexchange of Shares in response to a tender or exchange offer, the Purchaser\nshall give the Company the opportunity to purchase such Shares in the following\nmanner:\n\n               (a)  The Purchaser shall give notice (the 'Tender Notice') to the\nCompany in writing of such intention no later than 10 calendar days prior to the\nlatest time by which Shares must be tendered in order to be accepted pursuant to\nsuch offer or to qualify for any proration applicable to such offer (the 'Tender\nDate'), specifying the amount of Shares proposed to be tendered.  For purposes\nhereof, a tender offer to purchase Shares shall be deemed to be an offer at the\nprice specified therein, without regard to any provisions thereof with respect\nto proration or conditions to the offeror's obligation to purchase (assuming\nsuch conditions are not impossible of performance when the offer is made,\nwithout giving effect to the Company's right of first refusal).\n\n               (b)  If the Tender Notice is given, the Company shall have the\nright, exercisable by giving notice to the Purchaser at least two business days\nprior to the Tender Date, to purchase all but not part of the Shares specified\nin the Tender Notice for cash.  If the Company exercises such right by giving\nsuch notice, the closing of the purchase of such Shares shall take place not\nlater than one business day prior to the Tender Date; provided, however, that if\nthe purchase price specified in the tender offer includes any property other\nthan cash, the value of any property included in the purchase price shall be\njointly determined by a nationally recognized investment banking firm selected\nby each party or, in the event such firms are unable to agree, a third\nnationally recognized investment banking firm to be selected by such two firms. \nFor this purpose:\n\n                    (x)  The parties shall use their best efforts to cause any\ndetermination of the value of any securities included in the purchase price to\nbe made within three business days after the date of delivery of the Tender\nNotice.  If the firms selected by the Purchaser and the Company are unable to\nagree upon the value of any such securities within such three-day period, the\nfirms shall promptly select a third firm whose determination shall be made\npromptly and shall be conclusive.\n\n                    (y)  The parties shall use their best efforts to cause any\ndetermination of the value of property other than securities to be made within\nfour business days after the date of delivery of the Tender Notice.  If the\nfirms selected by the Purchaser and the Company are unable to agree upon a value\nwithin six business days after the date of delivery of the Tender Notice, the\nfirms shall promptly select a third firm whose determination shall be made\npromptly and shall be conclusive.\n\n               The purchase price to be paid by the Company pursuant to this\nSection 8.1(v) shall be (A) if such tender offer is consummated, the purchase\nprice that the Purchaser would have received if it had tendered the Shares\npurchased by the Company and all such Shares had been \n\n                                          9\n\n\n\npurchased in such tender offer, including any increases in the price paid by \nthe tender offeror after exercise by the Company of its right of first \nrefusal hereunder, or (B) if such tender offer is not consummated, the \nhighest price offered pursuant thereto, in each case with property, if any, \nto be valued as aforesaid.  Each party shall bear the cost of its own \ninvestment banking firm and the parties shall share the cost of any third \nfirm selected hereunder.\n\n               (c)  If the Company does not exercise such right by giving such\nnotice, then the Purchaser shall be free to accept the tender offer with respect\nto which the Tender Notice was given.\n\n     8.2  VOTING.  Unless the Company otherwise consents in writing, the\nPurchaser shall take such action as may be required so that all Shares are voted\non all matters to be voted on by holders of Voting Stock (to the extent the\nShares are entitled to a vote) in the same proportion as the votes cast by the\nother holders of Voting Stock with respect to such matters; provided, that the\nShares and any other voting securities of the Company owned by the Purchaser may\nbe voted as the Purchaser determines in its sole discretion on any Significant\nEvent (as defined in Section 9.1 below) presented to the holders of Voting Stock\nfor a vote.  In the event that the Shares are entitled to vote on a matter\nsubmitted to the shareholders of the Company, the Purchaser, as the holder of\nShares, shall be present, in person or by proxy, at all meetings of shareholders\nof the Company so that the Shares may be counted for the purposes of determining\nthe presence of a quorum at such meetings.\n\n     8.3  VOTING TRUST, ETC.  The Purchaser shall not deposit any Shares in a\nvoting trust or, except as otherwise provided herein, subject any Shares to any\narrangement or agreement with respect to the voting of such Shares.\n\n     8.4  SOLICITATION OF PROXIES.  Without the Company's prior written consent,\nthe Purchaser shall not solicit proxies with respect to any Shares of the\nCompany owned by the Purchaser, nor shall it become a 'participant' in any\n'Election Contest' (as such terms are used in Rule 14a-11 of Regulation 14A\nunder the Exchange Act) relating to the election of directors of the Company. \nThe Purchaser shall exercise its influence on the management, the Board of\nDirectors and policies of the Company in a manner consistent with its\nshareholding and any business agreements between the Purchaser and the Company.\n\n     8.5  ACTS IN CONCERT WITH OTHERS.  Except as contemplated herein with\nregard to permissible sales of the Purchaser's Shares, the Purchaser shall not\njoin a partnership, limited partnership, syndicate or other group, or otherwise\nact in concert with any Person, for the purpose of acquiring, holding or\ndisposing of Shares of the Company owned by the Purchaser.\n\n     8.6  RESTRICTIONS ON TRANSFER OF SHARES.  For a period of three years from\nthe date of this Agreement, the Purchaser shall not, directly or indirectly,\nsell, transfer, pledge or hypothecate any Shares (or shares of Common Stock\nreceived upon the conversion of the Shares) owned by it except (i) to the\nCompany or any person or group approved in writing by the Company, or (ii) to a\ncorporation of which the Purchaser owns not less than 50% of the voting power\nentitled to be cast in \n\n                                          10\n\n\n\nthe election of directors (a 'Controlled Corporation'), so long as such \nControlled Corporation agrees to hold such Shares subject to all the \nprovisions of this Agreement, including this Section 8.6, and agrees to \ntransfer such Shares to the Purchaser or another Controlled Corporation of \nthe Purchaser if it ceases to be a Controlled Corporation of the Purchaser. \nNotwithstanding the foregoing or anything else to the contrary in this \nAgreement, the Purchaser may enter into bona fide transactions through a \nnationally recognized investment banking firm which constitute a hedge \nagainst changes in the market price of the Common Stock, provided, however, \nno public disclosure is made with respect to such hedge transactions, except \nin an initial Schedule 13D, the text of which is reasonably satisfactory to \nthe Company, or if in the opinion of counsel to Purchaser such disclosure is \nrequired as a matter of law. \n\n     8.7  ACQUISITION OF STOCK.  The Purchaser shall advise management of the\nCompany as to the Purchaser's general plans to acquire shares of Common Stock,\nor rights thereto, reasonably in advance of any such acquisitions.  All of the\nPurchaser's purchases of Common Stock shall be in compliance with applicable\nlaws and regulations and the provisions of this Agreement.\n\n                                      SECTION 9\n\n                                    MISCELLANEOUS\n\n     9.1  CERTAIN DEFINITIONS.  As used in this Agreement:\n \n          (a)  The term 'Voting Stock' means the Common Stock and any other\nsecurities issued by the Company having the ordinary power to vote in the\nelection of directors of the Company (other than securities having such power\nonly upon the happening of a contingency).\n\n          (b)  The terms 'Beneficial Owner,' 'beneficial Ownership' and 'group'\nshall have the meaning comprehended by Section 13(d)(3) of the Exchange Act and\nthe rules and regulations promulgated thereunder.\n\n          (c)  The term 'Person' shall mean any person, individual, corporation,\npartnership, trust or other non-governmental entity or any governmental agency,\ncourt, authority or other body (whether foreign, federal, state, local or\notherwise).\n\n          (d)  The term 'Change of Control' shall mean (i) an acquisition of \nVoting Stock by a Person or group in a purchase or transaction or series of\nrelated purchases or transactions if immediately thereafter such Person or group\nhas Beneficial Ownership of more than fifty percent (50%) of the combined voting\npower of the Company's then outstanding Voting Stock; (ii) the execution of an\nagreement providing for a tender offer, merger, consolidation or reorganization,\nor series of such related transactions involving the Company, unless the\nstockholders of the Company, immediately after such transaction or transactions\nare the Beneficial Owners of at least fifty percent (50%) of the Voting Stock;\n(iii) a change or changes in the membership of the Company's Board of \n\n                                          11\n\n\n\nDirectors which represent a change of a majority or more of such membership \nduring any twelve month period (unless such change or changes in membership \nare caused by the actions of the then existing Board of Directors and do not \noccur within twelve months of the commencement, threat or proposal of an \nElection Contest, tender offer or other transaction which would constitute a \nChange of Control under (i) or (ii) of this Section 9.1(d)); or (iv) a sale \nof all or substantially all of the Company's assets.\n\n          (e)  The term 'Insolvency Proceeding' shall mean (i) an assignment\nfor the benefit of creditors, (ii) the filing by or against Company of a\npetition to have Company adjudged insolvent, bankrupt or seeking a\nreorganization or liquidation under any law relating to bankruptcy, insolvency\nor receivership, (iii) an appointment of a receiver or trustee for all or\nsubstantially all of the assets of the Company, (iv) a public admission in\nwriting of the Company's inability to pay its debts as they come due, or (v) the\nadoption of a plan of liquidation or dissolution by the Board of Directors of\nthe Company.\n\n          (f)  The term 'Significant Event' means (i) any proposed amendment to\nthe Articles of Incorporation or By-laws of the Company (other than a proposal\nto increase the number of authorized shares of Common Stock or Preferred Stock;\nprovided such increase(s) is (are) not contrary to clause (v) of this Section\n9.1 (f)), (ii) a disposition of the Company (by way of merger, disposition of\nassets or otherwise), (iii) a recapitalization of the Company, (iv) a\nliquidation of the Company, or (v) any vote pursuant to any provision of law or\nthe Company's Articles of Incorporation or By-laws requiring or permitting\nshareholders to approve any business combination proposed by or with another\nPerson or its affiliates which have acquired a certain percentage of the\nCompany's shares or to grant voting rights to such Person or to waive or adopt\nprovisions requiring such a vote.\n\n     9.2  BEST EFFORTS.  Each of the Company and the Purchaser shall use its\nbest efforts to take all actions required under any law, rule or regulation\nadopted subsequent to the date hereto to ensure that the conditions to the\nClosing set forth herein are satisfied on or before the Closing Date.\n\n     9.3  GOVERNING LAW.  This Agreement shall be governed in all respects by\nthe internal laws of the State of California as applied to contracts entered\ninto solely between residents of, and to be performed entirely within, such\nstate, and without reference to principles of conflicts of laws or choice of\nlaws.\n\n     9.4  SURVIVAL; TERMINATION OF COVENANTS.  The representations and\nwarranties in Sections 3 and 4 of this Agreement shall not survive the Closing\nexcept for the representations and warranties in Sections 4.3 and 4.7 hereof\nwhich shall continue to survive.  The covenants of the Company and the Purchaser\nunder Section 7 and Section 8 hereof shall terminate on the fifth anniversary of\nthis Agreement, provided the Purchaser's covenants in Section 8 shall terminate\nin the event of a Change of Control or Insolvency Proceeding.\n\n                                          12\n\n\n\n     9.5  SUCCESSORS AND ASSIGNS.  This Agreement shall be binding upon and\nshall inure to the benefit of the parties hereto and their respective successors\nand assigns.\n\n     9.6  ENTIRE AGREEMENT; AMENDMENT.  This Agreement, the Certificate and the\nRegistration Rights Agreement  constitute the full and entire understanding and\nagreement between the parties with regard to the subject matter hereof and\nthereof and supersede all prior agreements and understandings among the parties\nrelating to the subject matter hereof.  Neither this Agreement nor any term\nhereof may be amended, waived, discharged or terminated other than by a written\ninstrument signed by the party against whom enforcement of any such amendment,\nwaiver, discharge or termination is sought.  The enforceability and validity of\nthis Agreement, the Patent Cross License Agreement and the Technology Agreement\nare each to be determined separately and any finding that any one or more of\nsuch agreements is invalid or nonenforceable shall have no effect on the\nvalidity or enforceability of this Agreement.\n\n     9.7  NOTICES. All notices, requests, demands or other communications which\nare required or may be given pursuant to the terms of this Agreement shall be in\nwriting and shall be deemed to have been duly given:  (i) on the date of\ndelivery if delivered by hand, (ii) upon the third day after such notice is\n(a) deposited in the United States mail, if mailed by registered or certified\nmail, postage prepaid, return receipt requested, or (b) sent by a nationally\nrecognized overnight express courier, or (iii) by facsimile upon written\nconfirmation (other than the automatic confirmation that is received from the\nrecipient's facsimile machine) of receipt by the recipient of such notice:  \n\n          (a)  if to the Company, to it at:\n\n               One Infinite Loop\n               Cupertino, CA  95014\n               Attention:  Chief Financial Officer\n\n          with a copy addressed as set forth above but to the attention of the\n          General Counsel; with a copy to:\n          \n               Larry W. Sonsini\n               Wilson Sonsini Goodrich &amp; Rosati\n               Professional Corporation\n               650 Page Mill Road\n               Palo Alto, CA  94306\n\n                                          13\n\n\n\n\n          (b)  if to the Purchaser, to it at:\n\n               Microsoft Corporation\n               One Microsoft Way\n               Building 8\n               North Office 2211\n               Redmond, WA  98052\n               Attention:  Chief Financial Officer\n\n          with a copy addressed as set forth above but to the attention of\n          Senior Vice President, Law and Corporate Affairs, with a copy to:\n          \n               Richard B. Dodd \n               Preston Gates &amp; Ellis LLP\n               5000 Columbia Center\n               701 Fifth Avenue\n               Seattle, WA 98104-7078\n\n     9.8  BROKERS.\n\n          (a)  The Company has not engaged, consented to or authorized any\nbroker, finder or intermediary to act on its behalf, directly or indirectly, as\na broker, finder or intermediary in connection with the transactions\ncontemplated by this Agreement.  The Company hereby agrees to indemnify and hold\nharmless the Purchaser from and against all fees, commissions or other payments\nowing to any party acting on behalf of the Company hereunder.\n\n          (b)  The Purchaser has not engaged, consented to or authorized any\nbroker, finder or intermediary to act on its behalf, directly or indirectly, as\na broker, finder or intermediary in connection with the transactions\ncontemplated by this Agreement.  The Purchaser hereby agrees to indemnify and\nhold harmless the Company from and against all fees, commissions or other\npayments owing to any party acting on behalf of the Purchaser hereunder.\n\n     9.9  FEES, COSTS AND EXPENSES.  All fees, costs and expenses (including\nattorneys' fees and expenses) incurred by either party hereto in connection with\nthe preparation, negotiation and execution of this Agreement, the Registration\nRights Agreement, the Patent Cross License Agreement and the Technology\nAgreement and the consummation of the transactions contemplated hereby and\nthereby, shall be the sole and exclusive responsibility of such party.\n\n     9.10 SEVERABILITY.  If any term, provision, covenant or restriction of this\nAgreement is held by a court of competent jurisdiction to be invalid, void or\nunenforceable, the remainder of the terms, provisions, covenants and restriction\nof this Agreement shall remain in full force and effect and shall in no way be\naffected, impaired or invalidated.  \n\n                                          14\n\n\n\n     9.11 INITIAL PUBLIC ANNOUNCEMENT.  The Company and the Purchaser shall\nagree on the form and content of the initial public announcement which shall be\nmade concerning this Agreement, the Patent Cross License Agreement and the\nTechnology Agreement and the transactions contemplated hereby and thereby, and\nneither the Company nor the Purchaser shall make such public announcement\nwithout the consent of the other, except as required by law.\n\n\n                                          15\n\n\n\n     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be\nexecuted by their respective authorized officers as of the date set forth above.\n\n\n                              APPLE COMPUTER, INC.\n\n                              By:  \/s\/ John B. Douglas, III\n                                ---------------------------------------------\n\n                              Name:    John B. Douglas, III\n                                   ------------------------------------------\n\n                              Title:   Senior Vice President\n                                    -----------------------------------------\n\n\n                              MICROSOFT CORPORATION\n\n                              By:  \/s\/ Greg Maffei\n                                ---------------------------------------------\n\n                              Title:   Chief Financial Officer\n                                    -----------------------------------------\n\n                                          16\n\n\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[6722,8221],"corporate_contracts_industries":[9508,9513],"corporate_contracts_types":[9622,9627],"class_list":["post-43500","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-apple-computer-inc","corporate_contracts_companies-microsoft-corp","corporate_contracts_industries-technology__hardware","corporate_contracts_industries-technology__software","corporate_contracts_types-planning","corporate_contracts_types-planning__purchase"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43500","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43500"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43500"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43500"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43500"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}