Document:

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                                                                     EXHIBIT 4.1

                                           [LETTERHEAD OF LINKLATERS & ALLIANCE]

--------------------------------------------------------------------------------

                                13 September 2001

                               [LOGO OF PINNACLE]

                                Pinnacle Systems
                                 Fast Multimedia

                      Asset Purchase and Transfer Agreement

                       Professional Video Editing Business

                                                  LINKLATERS OPPENHOFF & RADLER
                                                  Mainzer Landstrasse 16,
                                                  D-60325 Frankfurt am Main
                                                  Postfach 17 01 11,
                                                  D-60075 Frankfurt am Main

                                                  Telephone: (49-69) 7 10 03-0
                                                  Facsimile: (49-69) 7 10 03-333

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                      Asset Purchase and Transfer Agreement

between

(1)  Fast Multimedia Holding Inc., 101 Federal Street, Suite 1900, Boston, MA
     02110, U.S.A.,

                                     - hereinafter referred to as "FAST Inc." -,

(2)  Fast Multimedia AG, Rudesheimerstr. 11-13, D-80686 Munchen, Germany,

                                  - hereinafter referred to as "FAST Germany" -,
                 and together with FAST Inc. jointly referred to as "Sellers" -,

and, for the purposes of the covenants pursuant to Section 12 only,

(3)  Mrs. Steffi Koerner,

(4)  Mr. Matthias Zahn,

on the one side

and

(5)  PS Miro Holdings Inc. & Co. KG, c/o KPMG Deutsche Treuhand, Elektrastr. 6,
     81925 Munchen,

                                   - hereinafter referred to as "Pinnacle KG" -,

(6)  Pinnacle Systems GmbH, Frankfurter Strasse 3c, 38112 Braunschweig,
     Germany,

                                 - hereinafter referred to as "Pinnacle Germany"
          and together with Pinnacle Inc. jointly referred to as "Purchasers" -,

and, for the purposes of acting as guarantor for the Purchasers' obligations to
pay the consideration pursuant to Section 7 and the Purchasers' Representations
and Warranties pursuant to Sections 10 and 11 and with respect to its express
obligations according to Sections 8 and 13,

(7)  Pinnacle Systems, Inc., 280 N. Bernardo Avenue, Mountain View, CA 94043,

                                   - hereinafter referred to as "Pinnacle Inc.".

on the other side

Any reference in this Agreement to "Parties" shall only refer to parties named
under (1), (2), (5) and (6) above.

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<TABLE>
<CAPTION>

<S>    <C>
1      Definitions .....................................................    1

2      Purchase and Sale of Assets .....................................    5

3      Transfer of Assets ..............................................    7

4      Transfer of Agreements ..........................................    8

5      Obligations and Liabilities .....................................   10

6      Employees of the Business .......................................   11

7      Purchase Price ..................................................   12

8      Registration Rights .............................................   13

9      Representations and Warranties of the Sellers ...................   14

10     Representations and Warranties of the Purchasers,
       Guarantee of Pinnacle, Inc. .....................................   20

11     Performance and Liability .......................................   22

12     Covenants .......................................................   23

13     Compliance with the Securities Laws .............................   24

14     Closing Date Deliveries .........................................   25

15     Arrangements concerning the Relationship of the Parties
       until and after the Closing Date ................................   26

16     Miscellaneous ...................................................   27
</TABLE>

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                                    PREAMBLE

(A)  The Sellers are engaged in the business of developing, manufacturing and
     selling computer software and hardware for professional video editing as
     well as the rendering of services related thereto (the "Business"). FAST
     Germany is a wholly-owned subsidiary of FAST Inc.

(B)  The Purchasers design, manufacture, market and support a wide range of
     high-quality digital solutions that enable businesses and consumers to
     create, store, distribute and view video programs.

(C)  The Sellers are interested in selling and the Purchasers are interested in
     acquiring the Business and all of the assets, contracts and personnel
     related thereto, except as specifically excluded from the purchase
     hereafter, and certain liabilities specifically listed herein, on the terms
     and conditions set forth in this Agreement (the "Acquisition").

1    Definitions

     "Acquired Assets" shall mean the Tangible Assets, Intangible Assets, the
     Assigned Agreements and the Employment Contracts.

     "Affiliate" shall mean a person that directly, or indirectly through one or
     more intermediaries, controls or is controlled by, or is under common
     control with, another Person; for these purposes control shall mean the
     possession, directly or indirectly, of the power to direct or cause the
     direction of the management of a Person, whether by ownership of voting
     rights, by contract or otherwise.

     "Adjustment Amount" shall mean a number of shares determined by subtracting
     a sum B (the "Sum B") from a sum A (the "Sum A") where

     (A)  Sum A shall mean the sum of 1,200,000 plus the Second Stock Issuance
          Amount plus the Third Stock Issuance Amount and where

     (B)  Sum B shall mean the sum determined by dividing:

     (1)  the product obtained by multiplying (i) (euro) 14,500,000 minus any
          amount for penalties, liabilities, reimbursement or indemnification
          due to the Purchasers by the Sellers arising under this Agreement
          prior to 15 February 2002 times (ii) the Weighted Average Exchange
          Rate by

     (2)  the Floor Price.

     In the event that Sum A is equal to or less than Sum B, the Adjustment
     Amount shall be zero.

     "Adjusted Second Stock Issuance Amount" shall mean the Second Stock
     Issuance Amount minus the Adjustment Amount.

     "Average Exchange Rate" for a specified period of time means the average of
     the exchange rates of the European Central Bank for exchanging Euro to U.S.
     dollars, as reported at the end of each Trading Day during such period
     (represented as a ratio of U.S. dollars to Euro).

                                       -1-

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     "Average Share Price" for a specified period of time shall mean the average
     of the last sale prices of a single share of common stock of Pinnacle,
     Inc., as reported by the Nasdaq National Market for each Trading Day during
     such period.

     "Cash Equivalents" shall mean all liquid securities and other instruments
     readily marketable.

     "Closing Date" shall mean October 1, 2001, the date on which the sale and
     transfer of the Business will become effective.

     "Employee" shall mean any current employee of any of the Sellers involved
     in the Business.

     "Employment Agreement" means each agreement, contract or understanding
     between the Sellers or any Affiliate of the Sellers and any Employee
     relating, directly or indirectly, to such Employee's terms and condition of
     employment.

     "First Issuance Euro Amount" shall mean a number of Euro determined by
     dividing (A) the product of (1) 1,200,000 times (2) the Average Share Price
     for the 20 Trading Day period commencing September 30, 2001 by (B) the
     Average Exchange Rate over the 30 Trading Day period commencing September
     30, 2001.

     "Floor Price" shall mean the Average Share Price for the 20 Trading Day
     period ending on 12 September 2001.

     "Generally Accepted Financial Reporting Principles" shall have the meaning
     set forth in Section 9.8 of this Agreement.

     "Initial Payment Amount" shall mean the amount of (euro) 1,500,000 (One
     Million Five Hundred Thousand Euro).

     "Indemnification" shall mean the indemnification and holding harmless of an
     indemnified Party by the indemnifying Party from and against Losses. The
     Indemnification shall be reduced in each case by the Losses insofar (i) the
     indemnified party fails to inform the indemnifying Party of the assertion
     of any claims, suits, actions, proceedings, judgements or any demands of
     third parties ("Claim") which are likely to have an impact on the
     Indemnification, (ii) the indemnified Party has not taken all reasonable
     and necessary action in the defense of such Claim taking into account the
     future commercial interests of the indemnified Party, (iii) the indemnified
     Party has not granted the indemnifying Party the opportunity to provide
     comments and to participate on the defense of any Claim, and (iv) the
     indemnified party has made admission to the claimant or settlements without
     the prior written approval of the indemnifying Party, such approval not to
     be unreasonably withheld.

     "Inventory Deficiency" shall have the meaning as defined in Section 2.1.

     "Inventory Surplus" shall have the meaning as defined in Section 2.1.

     "Key Employees" shall mean the Employees listed in Exhibit 15.2a

     "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.

                                       -2-

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     "Lien" shall mean any mortgage, pledge, lien, security interest, charge,
     claim, equity, encumbrance, restriction on transfer, options or other
     rights of third parties, 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, except for customary reservations of
     title by suppliers pending payment, statutory liens (including but not
     limited to landlord liens) or such other Liens as are customary in the
     business field of the Business.

     "Losses" shall mean any and all costs, claims, judgements, assessments,
     deficiencies, penalties and interest, damages, losses, liabilities and
     expenses (including reasonable attorneys' fees and disbursements), together
     with any such reasonable costs or expenses to investigate the same or
     enforce the provisions arising out hereof.

     "Material Adverse Effect" shall mean (i) 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 or
     to the ability of a Party to consummate the transactions contemplated by
     this Agreement and (ii), additionally, with respect to any Seller shall
     mean any circumstance, change in, or effect on such Seller and (iii) that
     in each case is materially adverse to the Business taken as a whole.

     "Most Recent Accounts" shall mean the audited consolidated accounts of each
     of the Sellers dated December 31, 2000 and the unaudited consolidated
     accounts of each of the Sellers as of and for the six months ended 30 June
     2001, as set forth on Exhibit 9.8 hereto.

     "Ordinary Course of Business" shall mean the ordinary course of business
     consistent with past custom and practice (including with respect to
     quantity and frequency).

     "Person" shall mean an individual, a partnership, a corporation, an
     association, a joint stock company, a trust, a joint venture, an
     unincorporated organisation, or a governmental entity (or any department,
     agency or political subdivision thereof).

     "Products" shall mean all current products and services of the Business,
     any subsequent versions of such Products currently being developed by the
     Sellers or any of their Subsidiaries in the Business, any products
     currently being developed by the Sellers or any of their Subsidiaries which
     are designed to supersede, replace or function as a component of such
     Products, and any upgrades, enhancements, improvements and modifications to
     the foregoing, in each case as currently being developed by the Sellers.

     "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 but not limited to the
     Registration Rights Agreement.

     "Remaining Payment Amount" shall mean the sum of (euro) 14,500,0000
     (Fourteen Million Five Hundred Thousand Euro) minus the First Issuance Euro
     Amount and minus any amount for penalties, liabilities, reimbursement or
     indemnification due to the Purchasers by the Sellers arising under this
     Agreement prior to 15 February 2002.

     "R&D Employees" shall mean the persons as listed in Exhibit 15.2b.

     "Second Payment Amount" shall mean the amount of (euro) 1,000,000 (One
     Million Euro) minus any Inventory Deficiency plus any Inventory Surplus.

     "Second Stock Issuance Amount" shall mean the number of shares of common
     stock of Pinnacle, Inc, rounded to the nearest whole share (and as
     appropriately adjusted to reflect

                                       -3-

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     any stock splits, stock dividends or the like occurring after the date of
     this Agreement and prior to the issuance of such shares), determined by
     dividing:

     (A)  the product obtained by multiplying (1) the Remaining Payment Amount
          minus (euro) 4,750,000 (Four Million Seven Hundred Fifty Thousand
          Euro) times (2) the Average Exchange Rate over the 30 Trading Days
          ending on the second Trading Day prior to 1 February 2002, by

     (B)  the Average Share Price for the 20 Trading Day period ending on the
          second Trading Day prior to 1 February 2002.

     "Sellers Knowledge" shall mean what would, at the Signing Date, be in the
     actual knowledge of Mr. Matthias Zahn, Mr. Reiner Bielmeier, Mr. Alain
     Polgar and Mr. Jorg Adelstein had they acted as a prudent business men.

     "Signing Date" shall mean the date that this Agreement has been notarized.

     "Subsidiary" or "Subsidiaries" shall mean any corporation or corporations
     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" shall mean (i) any and all German, United
     States federal, state and local and other non-United States 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 or 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.

     "Third Stock Issuance Amount" shall mean the number of shares of common
     stock of Pinnacle, Inc, rounded to the nearest whole share (and as
     appropriately adjusted to reflect any stock splits, stock dividends or the
     like occurring after the date of this Agreement and prior to the issuance
     of such shares), determined by dividing:

     (A)  the product obtained by multiplying (1) (euro) 4,750,000 (Four Million
          Seven Hundred Fifty Thousand Euro) times (2) the Average Exchange Rate
          over the 30 Trading Days ending on the second Trading Day prior to 1
          February 2002, by

     (B)  the Average Share Price for the 20 Trading Day period ending on the
          second Trading Day prior to 1 February 2002.

     "Trading Day" shall mean (A) with respect to exchange rates, a day on which
     exchange rates of the European Central Bank for exchanging Euro to U.S.
     dollars are reported and (B) with respect to stock prices, shall mean a day
     on which sale prices for such stock are reported by the Nasdaq National
     Market.

                                       -4-

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     "Transferred Employee" shall mean any Employee being employed in the
     Business in Germany at 30 September 2001, 24:00h, and transferred to the
     Purchaser pursuant to Section 6 of this Agreement.

     "Weighted Average Exchange Rate" shall mean the exchange rate determined by
     taking the simple average of the Average Exchange Rate over the 30 Trading
     Day period commencing September 30, 2001 and the Average Exchange Rate over
     the 30 Trading Days ending on the second Trading Day prior to 1 February
     2002.

2    Purchase and Sale of Assets

     2.1  Purchase and Sale of Tangible Assets. On the terms and subject to the
          conditions set forth in this Agreement, the Sellers hereby sell to
          Pinnacle Germany, and Pinnacle Germany hereby purchases from the
          Sellers, effective as of the Closing Date, all right, title and
          interest in and to all of the tangible assets used or existing in the
          Business on 30 September 2001, 24:00h, free and clear of all Liens,
          except as specifically excluded from the sale and purchase pursuant to
          Section 2.2 of this Agreement (the "Tangible Assets"). The Tangible
          Assets include, but are not limited to, the following assets in the
          Business, wherever located:

          (a)  all movable fixed assets in existence on 30 September 2001,
               24:00h, including all machinery and equipment, tools, fixtures,
               fittings, EDV-hardware, office equipment, small value items, and
               all tangible embodiments or records related to any Intangible
               Assets, including documentation, source code listings and all
               files related to intellectual property applications or
               registrations, including, but not limited to, the assets set
               forth on the Updated Exhibit 2.1a (as defined below)
               (the "Movable Fixed Assets"); and

          (b)  all inventory in existence on the 30 September 2001, 24:00h,
               including, but not limited to, the inventory set forth on the
               Updated Exhibit 2.1b (as defined below) (the "Inventory").

          The Exhibits 2.1a (the "Original Exhibit 2.1a") and 2.1b (the
          "Original Exhibit 2.1b") attached to this Agreement reflect the status
          as of June 30, 2001 and August 31, 2001 respectively. The Parties
          agree to mutually update Exhibit 2.1a (the "Updated Exhibit 2.1a") and
          2.1b (the "Updated Exhibit 2.1b") as per 30 September 2001, 24:00h, to
          reflect all Tangible Assets and Inventory in existence on 30 September
          2001, 24:00h. If the aggregate value of the Inventory as set forth in
          the Updated Exhibit 2.1b is less than 90% of the aggregate value of
          the Inventory as set forth in the Original Exhibit 2.1b, Sellers will
          reimburse Purchasers any amount by which the aggregate value of the
          Inventory is less than 90% of the aggregate value of the Inventory set
          forth on the Original Exhibit 2.1b (the "Inventory Deficiency") and in
          the event that the aggregate value of the Inventory as set forth in
          the Updated Exhibit 2.1b exceeds 110% of the aggregate value of the
          Inventory as set forth in the Original Exhibit 2.1b the Purchasers
          shall in addition to the Purchase Price pay to the Sellers any amount
          by which the aggregate value of the Inventory exceeds 110% of the
          aggregate value of the Inventory set forth on the Original Exhibit
          2.1b (the "Inventory Surplus"). For the purposes of valuing the
          Inventory pursuant to this Section 2.1, the Parties hereby agree that
          the Inventory will be mutually valued by the Parties in accordance
          with accounting principles used

                                       -5-

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          in arriving at the Original Exhibit 2.1b and, insofar as the Original
          Exhibit 2.1b does not provide any guidance, in accordance with
          Generally Accepted Financial Reporting Principles. Any disputes
          between the Sellers and the Purchasers as to the valuation which
          cannot be settled directly between them shall be settled, upon request
          of either Party, by an independent auditor acting as expert
          arbitrator. If the Parties cannot mutually agree on such expert
          arbitrator within one (1) week after either Party has requested its
          appointment, the expert arbitrator shall be appointed by the Institute
          of Chartered Accountants in Dusseldorf. To the extent permissible by
          law ((S)319 German Civil Code) the findings of such expert arbitrator
          shall be finally binding on the Parties.

     2.2  Excluded Tangible Assets

          The following tangible assets, properties and rights of the Sellers
          shall be specifically excluded from the Tangible Assets to be sold and
          purchased hereunder, to the extent in existence on the 30 September
          2001, 24:00h, (the "Excluded Tangible Assets"):

          (a)  All cash held by the Sellers, in hand, in the Sellers' bank
               account(s) and all cash credited to any of Sellers' bank accounts
               and all Cash Equivalents held by or on behalf of the Sellers.

          (b)  Sellers' accounts receivable arising from customer contracts for
               products and services delivered or rendered prior to the Closing
               Date.

          (c)  All moveable fixed assets located in the Sellers' offices in
               France, the United Kingdom and the United States, including but
               not limited to EDV hardware, office equipment and small value
               items as well as the shareholdings in the Subsidiaries in France
               and the United Kingdom and, for the avoidance of doubt, the
               shareholdings of FAST Inc. in FAST Germany.

     2.3  Purchase and Sale of Intangible Assets. On the terms and subject to
          the conditions set forth in this Agreement, the Sellers hereby sell to
          Pinnacle KG, and Pinnacle KG hereby purchases from the Sellers, all
          right, title and interest in and to all of the intangible assets used
          or existing in the Business on 30 September 2001, 24:00h, (the
          "Intangible Assets"), including but not limited to, the intangible
          assets set forth on Exhibit 2.3a hereto, free and clear of all Liens,
          except for those intangible assets expressly set forth on Exhibit
          2.3b. The Intangible Assets include, but are not limited to, the
          following assets, if any as used by the Sellers in the Business:

          (a)  all intellectual property rights, copyrights, patents, petty
               patents, design patents, trademarks (and goodwill appurtenant
               thereto) and respective applications;

          (b)  transferable public and private concessions, permissions,
               authorizations and licenses;

          (c)  software;

          (d)  proprietary information or trade secrets of the Business,
               including without limitation available lists of suppliers,
               dealers, customers, price lists, catalogues, sales literature,
               inventions, business and trade secrets, know-

                                       -6-

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               how, engineering, manufacturing, test and quality control data
               relating to past, present and planned products.

          Exhibit 2.3a reflects the status of the Intangible Assets as of August
          31, 2001. The Parties agree to mutually update Exhibit 2.3a as of the
          30 September 2001, 24:00h, to reflect all Intangible Assets in
          existence as of 30 September 2001, 24:00h.

     2.4  FAST Brand. For the avoidance of doubt, the Intangible Assets shall
          not include the rights and title to the name and logo type "FAST", to
          the extent such rights and titles are held by Sellers, in the form as
          set out in Exhibit 2.4 hereto (the "FAST Brand"). The Sellers hereby
          grant to Pinnacle Inc. and its Affiliates for use in the Business, a
          royalty-free, non-exclusive license, transferable only upon prior
          consent of the Sellers which shall not unreasonably be withheld, in
          respect of the FAST Brand for a period of twelve (12) months as of the
          Closing Date. Sellers shall not during such period of time grant to
          any third party any further licenses to use the FAST Brand.

     2.5  It is understood by the Parties, that the intangible assets related to
          the U.S., in particular customer relationships, the trademark "Blue"
          and support agreements are sold by FAST Inc. to Pinnacle KG. All other
          Intangible Assets are solely sold to Pinnacle KG by FAST Germany.

3    Transfer of Assets

     On the terms and subject to the conditions set forth herein, effective upon
     the Closing, the Sellers hereby transfer to the Purchasers the Tangible
     Assets and the Intangible Assets as follows.

     3.1  Transfer of Tangible Assets. Effective as of the Closing Date, the
          Sellers hereby transfer to Pinnacle Germany, the Tangible Assets, and
          Pinnacle Germany hereby accepts the transfer of the Tangible Assets.

     3.2  Delivery of Tangible Assets. On the Closing Date the Sellers shall
          grant possession to Pinnacle Germany by way of delivery at the
          relevant Sellers' premises or such other locations at which Sellers'
          hold the Tangible Assets ("ex works"). For the avoidance of doubt the
          Sellers shall not be required to deliver the Tangible Assets to the
          offices of Pinnacle Germany, such delivery, if any, being the
          responsibility of Pinnacle Germany. To the extent that any Tangible
          Assets are in direct possession of a third party, the Sellers hereby
          assign to Pinnacle Germany, effective as of the Closing Date, all of
          their rights and claims against such third party for the delivery of
          such Tangible Assets (Abtretung des Herausgabeanspruchs), and Pinnacle
          Germany hereby accepts such assignment. At the request of Pinnacle
          Germany, the Sellers shall notify the third party of the assignment.
          To the extent that on the Closing Date Pinnacle does not gain
          possession of individual Tangible Assets because their delivery is not
          possible or expedient for factual reasons, the granting of possession
          shall be substituted by the agreement that these tangible assets
          shall, on the costs and at the risk of the Purchasers, be held by the
          Sellers for the benefit of the Purchasers as from the Closing Date
          (Besitzkonstitut).

     3.3  Assignment of Intangible Assets. Effective as of the Closing Date, the
          Sellers hereby assign to Pinnacle KG the Intangible Assets and
          Pinnacle KG hereby accepts assignment of the Intangible Assets. The
          Parties undertake to give any declarations and sign any further
          documents reasonably necessary in order to effect

                                       -7-

<PAGE>

          the transfer to and the registration for the benefit of Pinnacle KG.
          To the extent that a transfer of Intangible Assets is not legally
          possible, the Sellers shall grant to Pinnacle KG an exclusive,
          irrevocable, transferable royalty-free and perpetual right to use the
          respective Intangible Assets. Any registration fees owed to trademark
          and patent offices and comparable agencies shall be borne by Pinnacle
          KG and each Party shall bear its own costs connected therewith.

4    Transfer of Agreements

     4.1  Transfer. Effective as of the Closing Date, the Sellers hereby sell to
          Pinnacle Germany, and Pinnacle Germany hereby purchases, all
          agreements, contracts, commitments and instruments of the Sellers
          pertaining to the Business, existing as of 30 September 2001, 24:00h,
          as set forth on Exhibit 4.1 and all pending customer orders received
          in the Ordinary Course of Business, except as specifically excluded
          pursuant to Section 4.2 of this Agreement (the "Transferred
          Agreements"). Pinnacle Germany, effective as of the Closing Date,
          shall assume from the Sellers all rights and obligations under the
          Transferred Contracts by way of assumption of contract with the effect
          of discharging the Sellers (Vertragsubernahme mit befreiender Wirkung)
          with respect to all rights and obligations arising on and after the
          Closing Date. The Transferred Agreements include all existing
          agreements and all pending contract offers made by or to either of the
          Sellers related to the Business at 30 September 2001, 24:00h. The
          Transferred Agreements include, but are not limited to, the following
          agreements, contracts, commitments and instruments, in each case if
          pertaining to the Business or the Acquired Assets:

          (a)  all agreements of the Sellers with suppliers or customers;

          (b)  all agreements of the Sellers with distributors, agents and
               advisers;

          (c)  all license and co-operation agreements of the Sellers;

          (d)  all lease, leasing and rental agreements of the Sellers and all
               agreements with public utilities;

          (e)  all insurance agreements however, the Parties hereby agree that
               Sellers shall, if legally possible, and in co-operation with the
               Purchasers terminate such insurance agreements on or before
               September 30, 2001 effective as of December 31, 2001; the Parties
               are further in agreement that insurance of the Business and the
               Acquired Assets for all periods on and after the Closing Date
               shall be in the sole responsibility of the Purchasers; and

          (f)  all other agreements pertaining to the Business.

          Exhibit 4.1 is a list of the Transferred Agreements dated as of August
          31, 2001. The Parties agree to mutually update Exhibit 4.1 as of 30
          September 2001, 24:00h, to reflect all pertinent changes as to the
          Transferred Agreements as of 30 September 2001, 24:00h.

     4.2  Excluded Agreements. The following agreements of the Sellers shall be
          specifically excluded from the Transferred Agreements:

          (a)  all employment contracts with any current or former employee of
               the Sellers who is not transferred to the Purchasers pursuant to
               Section 6, or any of the Sellers' directors (Organe);

                                       -8-

<PAGE>

          (b)  all contracts covering or relating solely to assets and/or
               obligations and liabilities which have been specifically excluded
               from the sale and purchase;

          (c)  office lease agreements in France, UK and USA and all other
               agreements relating to Sellers offices in France, UK and USA,
               including but not limited to all service agreements,
               telecommunications agreements and office equipment lease
               agreements; and

          (d)  all other agreements listed in Exhibit 4.2 hereto, including the
               agreement of the Sellers with its supplier, BMK, Augsburg
               ("BMK"), it being understood that Pinnacle Germany undertakes to
               purchase from FAST Germany on a separate basis, at cost prices of
               FAST Germany (Einstandskosten), such current products or raw
               materials in marketable quality and quantity of BMK relating to
               the Acquired Assets, at request of FAST Germany up to an
               aggregate amount of DEM 500,000 plus Value Added Tax, in respect
               of which FAST Germany is bound vis-a-vis BMK by existing purchase
               obligations. FAST Germany and Pinnacle Germany shall mutually and
               in good faith agree upon the details of the purchase, including
               time and further terms and conditions of delivery.

     4.3  Third Party Consents. The Parties shall use their best efforts to
          obtain the consents of the other parties to the Transferred Agreements
          to the transfer and to cause to be executed and delivered to the
          Purchasers all documents of transfer necessary to effect the transfer
          of such Transferred Agreements. In the event that, for any reason, one
          or more third parties refuse to consent to the assignment of such
          Transferred Agreement to any of the Purchasers, the rights and
          obligations under the applicable Transferred Agreement shall be
          transferred in the internal relationship between the Sellers and
          Pinnacle Germany, with the consequence that Pinnacle Germany, to the
          extent that this is legally permissible, shall act as Sellers' agent
          in performing the contract and accepting performance of the contract
          by the other contractual party in the name of the respective Seller
          but internally on the risk and for the account of Pinnacle Germany.
          The Sellers shall, on request of Pinnacle Germany (the "Purchasers'
          Instructions"), make any declaration to the extent legally
          permissible, including the termination of such Transferred Agreement,
          that is requested by Pinnacle Germany, provided however that the
          Purchasers shall provide Indemnification to the Sellers for all Losses
          based upon or resulting from the Transferred Agreements and the
          Purchasers' Instructions for all periods from and after the Closing
          Date.

     4.4  Breach/Non-Performance of Transferred Agreements Prior to Closing. If,
          following the transfer of the Business, the other party to the
          Transferred Agreements terminates any of the Transferred Agreements
          with the Sellers for cogent reason and/or asserts a claim for breach
          of contract, in each case only if based upon or resulting from the
          non-performance or the default of the Sellers under the Transferred
          Agreements prior to the Closing Date, the Sellers shall provide
          Indemnification to the Purchasers from and against any and all Losses.

     4.5  Allocation of Benefits and Responsibility Under Transferred Agreements
          Prior to and After the Closing Date. Any rights, including trade
          receivables, and any obligations and liabilities, including trade
          payables under the Transferred Agreements, irrespective of whether the
          transfer takes effect in the relation to the

                                       -9-

<PAGE>

          other contractual party or only in the internal relation between the
          Sellers and Pinnacle Germany, shall be attributable to the Sellers to
          the extent such right (a "Seller Allocable Right") or such obligation
          or liability (a "Seller Allocable Obligation") relates to the period
          of time prior to Closing Date and shall be attributable to Pinnacle
          Germany to the extent such right (a "Purchaser Allocable Right") or
          such obligation or liability (a "Purchaser Allocable Obligation")
          relates to the period of time on and after the Closing Date. The
          Sellers shall provide Pinnacle Germany with Indemnification for Losses
          incurred by Pinnacle Germany and arising out of, based upon or
          resulting from the Seller Allocable Obligations. Pinnacle Germany
          shall provide the Sellers with Indemnification for Losses incurred by
          the Sellers and arising out of, based upon or resulting from the
          Purchaser Allocable Obligations. Both the Sellers and Pinnacle Germany
          will forward amounts received from the other contractual party
          accordingly if such amounts are attributable to the relevant other
          Party.

     4.6  Warranty Services. The Purchasers shall without undue delay inform
          Sellers as to any warranty claims made against the Purchasers relating
          to Products sold before the Closing Date ("Defective Products"), and,
          on request of Sellers, render all services reasonably necessary and
          expectable to fulfill such warranty claims of Sellers' customers
          relating to Defective Products, provided however that the Sellers
          shall pay to the Purchasers an amount equal to the Purchasers' costs
          for any such services plus a mark-up of 10%.

5    Obligations and Liabilities

     5.1  Purchasers' Assumed Liabilities. The Purchasers shall assume the
          following liabilities or obligations of the Business:

          (a)  Obligations and liabilities arising from the Transferred
               Agreements, to the extent such obligations and liabilities relate
               to the period on and after the Closing Date as further specified
               in Section 4.5, for the avoidance of doubt including, but not
               limited to payment obligations incurred by the Sellers before the
               Closing Date relating to services to be rendered, or products to
               be delivered, by suppliers to the Purchasers on and after the
               Closing Date; and

          (b)  Obligations and liabilities under the Employment Contracts (as
               defined in Section 6.1 of this Agreement) that are being
               transferred by virtue of law or pursuant to Section 6 of this
               Agreement, to the extent that such obligations and liabilities
               relate to the period on and after the Closing Date.

     5.2  Liabilities Not Assumed. The Purchasers shall not assume any
          Liabilities or obligations (i) of the Sellers or (ii) attached or
          related to the Acquired Assets for all periods prior to the Closing
          Date, other than those specifically enumerated in this Agreement,
          including without limitation any Liability or obligation with respect
          to Taxes concerning the period prior to the Closing Date.

     5.3  Sellers' Indemnification for Purchasers' Assumed Liabilities. The
          Sellers shall provide the Purchasers with Indemnification for Losses
          incurred by the Purchasers arising from or related to all obligations
          and liabilities of (i) the Sellers, or (ii) relating to the Acquired
          Assets for all periods prior to the Closing Date, that the Purchasers
          have not assumed pursuant to this Agreement.

                                      -10-

<PAGE>

6    Employees of the Business

     6.1  (S)613a BGB. The Parties are aware that Pinnacle Germany, by operation
          of law, pursuant to (S)613a German Civil Code, will, as of the Closing
          Date, assume all rights and obligations arising from all employment
          contracts (the "Employment Contracts") of the employees employed in
          the Business in Germany who do not exercise their statutory right to
          object to the transfer (the "Transferred Employees"). Without limiting
          the possibility of Pinnacle Germany to agree upon new terms and
          conditions of the employment with the Transferred Employees in
          separate agreements with the Transferred Employees after the Closing
          Date, Pinnacle Germany hereby also undertakes vis-a-vis the Sellers to
          assume the Transferred Employees and the Sellers' obligations under
          the Employment Contracts; the provisions of Sec. 4.5 shall apply
          mutatis mutandis. A list of all Employment Contracts setting forth the
          position, commencement of the employment, salary, other remuneration,
          age and, as the case may be, to the extent known by the Sellers at the
          date hereof, special dismissal protection (disability, etc.) of all
          Employees of the Business as of August 31, 2001 is attached as Exhibit
          6.1. In case any Employee objects to his employment relationship being
          transferred to Purchaser, such Employee and all liabilities and
          obligations in connection with his employment and a termination of his
          employment shall remain with the Sellers.

     6.2  Information of Employees. As soon as practicable following the
          execution of this Agreement, the Parties shall inform and consult with
          the Employees in Germany regarding the transfer of the Business by the
          Sellers to the Purchasers and the assumption by Pinnacle Germany of
          the Employment Contracts.

     6.3  Overtime and Vacation Claims. The aggregate amount of claims for
          overtime accrued and vacation as of August 31, 2001 have been
          calculated as set forth in Exhibit 6.3. The Parties agree to mutually
          update Exhibit 6.3 as of 30 September 2001, 24:00h, to reflect the
          aggregate amount of claims for overtime accrued and vacation as of 30
          September 2001, 24:00h. With the exception of claims for overtime
          accrued and vacation not taken before the Closing Date the Sellers
          shall remain liable and provide Purchasers with Indemnification for
          Losses arising from or related to Transferred Employees relating to
          periods before the Closing Date, in particular but not limited to
          claims for a prorated portion for the beginning of the year until the
          Closing Date of any year-end bonus and similar payments for the year
          2001 to be paid to Transferred Employees, provided however that such
          year-end bonus and similar payments for the year 2001, to the extent
          to be finally determined or otherwise to be resolved on by Purchasers
          on a discretionary basis, have been mutually agreed upon in writing by
          the Sellers. Purchasers shall bear the remaining prorated portion of
          any year-end bonus and similar payments for the year 2001 to be paid
          to Transferred Employees.

     6.4  Reimbursement of Severance Payments.

          (a)  Should the Purchasers decide to restructure the Business and,
               therefore, discontinue the employment of employees, the Sellers
               shall indemnify the Purchasers against reasonable severance
               payments to up to 21 employees whose employment is discontinued,
               provided that (i) either notice of termination or written notice
               offering a severance payment is served on the employee before
               December 1, 2001 and (ii) the severance payment is made prior to
               January 15, 2002. If less than 71 employees transfer to the
               Purchasers, the

                                      -11-

<PAGE>

               number of employees to whom the indemnity applies shall be
               reduced accordingly. The indemnity shall not cover any other
               costs in connection with the restructuring (e.g. lawyer fees,
               litigation fees).

          (b)  If the indemnification is not paid within 30 days after a
               justified claim under this Section 6.4 is made, the Sellers shall
               owe a penalty (Vertragsstrafe) in the amount of 50% of the
               indemnity in addition to the indemnification.

     6.5  Special Bonus. The Sellers intend to enter in agreements with certain
          Employees, pursuant to which such Employees will receive from the
          Sellers special bonus payments. Any obligations in respect of such
          bonus payments shall to the extent legally possible not be transferred
          to the Purchasers. In the event that pursuant to (S)613a German
          Civil Code such transfer applies by operation of law, the Sellers
          shall provide Indemnification with regard to Losses incurred by the
          Purchasers as to the transfer of such bonus obligations. For the
          avoidance of doubt, the Sellers shall neither in relation to the
          Purchasers nor to the Employees be obliged to grant any such special
          bonus.

7    Purchase Price

     7.1  Purchase Price. The aggregate consideration (hereinafter referred to
          as "Purchase Price") to be paid by the Purchasers to the Sellers for
          the sale and transfer of the Business shall be an amount of
          (euro) 17,000,000 (Seventeen Million Euro), adjusted by any Inventory
          Deficiency or any Inventory Surplus, as the case may be, payable as
          hereinafter provided.

     7.2  Method of Payment of Purchase Price. The Purchase Price shall be due
          and payable by the Purchasers to the Sellers as follows:

          (a)  An aggregate initial payment of the Initial Payment Amount in
               cash (the "Initial Payment") within 1 business day after the
               Signing Date to be paid by Pinnacle Germany. Sellers shall grant
               to the Purchasers sufficient collateral for the Initial Payment
               by assigning for security purposes all accounts receivable, title
               to Fixed Assets and Inventory up to the amount of the outstanding
               Initial Payment to Purchasers in a separate document as attached
               hereto as Exhibit 7.2.

          (b)  An aggregate second payment of the Second Payment Amount in cash
               (the "Second Payment") on October 5, 2001 to be paid by Pinnacle
               Germany provided that Sellers and Purchasers have agreed on an
               Inventory Deficiency or Inventory Surplus, as the case may be; it
               being understood that if the Parties fail to reach agreement on
               the amount of a Inventory Deficiency or a Inventory Surplus, as
               the case may be, the Second Payment Amount shall be paid to the
               Sellers, to the extent not disputed.

          (c)  The issuance by Pinnacle, Inc. on behalf of Pinnacle KG of
               1,200,000 (One Million Two Hundred Thousand) shares of Pinnacle,
               Inc. common stock on October 1, 2001 (the "First Stock
               Issuance"), payable in accordance with Section 7.3 of this
               Agreement.

          (d)  The issuance by Pinnacle, Inc. on behalf of Pinnacle KG of a
               number of shares of Pinnacle, Inc. common stock equal to the sum
               of the Adjusted Second Stock Issuance Amount (the "Second Stock
               Issuance") and the

                                      -12-

<PAGE>

               Third Stock Issuance Amount (the "Third Stock Issuance") on 15
               February 2002, payable in accordance with Section 7.3 of this
               Agreement. The shares of Pinnacle, Inc. common stock issuable
               pursuant to the First Stock Issuance, the Second Stock Issuance
               and the Third Stock Issuance are sometimes referred to herein as
               the "Pinnacle Shares".

     7.3  Payment Procedure. The Initial Payment and the Second Payment shall be
          paid by the Purchasers by money transfer into the account No. 27 22
          860 of FAST Multimedia AG with HypoVereinsbank (Bank Reference Number
          700 202 70), and shall be payable in Euro. The First Stock Issuance
          and the Second Stock Issuance shall be made in the name of FAST
          Multimedia AG and delivered to its deposit account to be notified to
          the Purchasers in writing at least 5 business days prior to the date
          on which the respective payment becomes payable. The Third Stock
          Issuance shall be made in the name of FAST Multimedia Inc. and
          delivered to its deposit account to be notified to the Purchasers in
          writing at least 5 business days prior to the date on which the
          payment becomes payable.

     7.4  Value Added Tax. The Parties understand that the sale and purchase of
          the Tangible Assets by Pinnacle Germany is subject to Value Added Tax
          at the rate of 16% on that portion of the Purchase Price that is
          allocated to the Tangible Assets, however the parties understood that
          the sale and purchase of the Intangible Assets by Pinnacle KG is not
          subject to any Value Added Tax. Pinnacle Germany will pay the Value
          Added Tax on the Purchase Price allocated to the Tangible Assets and
          any further Value Added Tax, if any. Any Value Added Tax shall be due
          and payable as soon as Pinnacle Germany has received from FAST Germany
          an respective invoice which conforms to the provisions of sec. 14
          German Value Added Tax Act.

     7.5  Purchase Price Allocation. The Purchase Price shall be paid as set
          forth in Section 7.2. In respect of the Acquired Assets received, the
          Purchase Price shall be allocated as follows:

          (a)  Pinnacle Germany shall bear in consideration for the sale and
               transfer of the Inventory, the Movable Fixed Assets and the
               Transferred Agreements an amount equal to the value of the
               Inventory as per 30 September 2001, 24:00h, plus the value of
               the Moveable Fixed Assets as per 30 September 2001, 24:00h, less
               the aggregate amount of claims for overtime accrued and vacation
               calculated according to Section 6.3 as per 30 September 2001,
               24:00h, if any;

          (b)  Pinnacle KG shall bear in consideration for the sale and transfer
               of the Intangible Assets any remaining amount.

8    Registration Rights.

     Pinnacle, Inc. undertakes to register for resale on Form S-3 under the
     Securities Act of 1933, as amended, (the "Securities Act") the Pinnacle
     Shares in accordance with the Registration Rights Agreement attached as
     Exhibit 8 hereto.

                                      -13-

<PAGE>

9    Representations and Warranties of the Sellers

     In concluding this Agreement, the Purchasers rely on the correctness of the
     representations and warranties made by the Sellers hereinafter. The Seller
     represent expressly and warrant as a guaranteed quality of the Business and
     the Acquired Assets (with the legal consequences as conclusively set forth
     in Section 11) that the following representations and warranties are
     correct, unless expressly otherwise provided hereunder on the Signing Date
     and the Closing Date, subject to such exceptions as are specifically set
     forth in the disclosure exhibits (referencing the appropriate section and
     paragraph numbers, if appropriate) supplied by the Sellers to the Buyers
     (the "Schedules") as of the Signing Date or, to the extent representations
     and warranties are given to the Sellers' Knowledge as of the Closing Date.

     9.1  Organization and Authority. The Sellers are companies duly
          incorporated, validly existing and in good standing under the laws of
          their respective jurisdiction and have the corporate power to own
          their respective properties and to carry on their respective
          businesses as now being conducted. 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.

     9.2  Execution and Delivery. 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.

     9.3  Compliance with Corporate Requirements. 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 (i) any provision of the charter documents or Bylaws (or their
          equivalent) of any such Seller, or (iii) any judgment, order, decree,
          statute, law, ordinance, rule or regulation applicable to any such
          Seller or its properties or assets.

     9.4  Required Consents. Each of the Sellers has obtained or will obtain
          prior to the Closing Date, all necessary corporate consents and taken
          all necessary corporate action, if any, required on the Sellers side
          for the consummation of the transactions contemplated by this
          Agreement, including the approval of FAST Germany's shareholders'
          meeting pursuant to (S)179a German Stock Corporation Code. Except as
          set forth in Exhibit 9.4, 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, for the avoidance of doubt other than the consents of the
          other Parties to the Transferred Agreements pursuant to Section 5, is
          required by or with respect to any of the Sellers in connection with
          the execution and delivery of

                                      -14-

<PAGE>

          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.

     9.5  Correct Information. The information contained in the Exhibits of this
          Agreement, unless such Exhibits relate to circumstances of the
          Purchasers, for which the Sellers accept no responsibility, is
          complete and correct.

     9.6  Title to Assets. On the Closing Date the Sellers have good and valid
          title to, or a valid and subsisting leasehold or license interest in
          the Acquired Assets free and clear of all Liens. On the Closing Date
          the Sellers have full right and capacity to sell and transfer good and
          valid title to the Acquired Assets except for those tangible assets
          which are still subject to customary reservations of title by
          suppliers pending payment. Except for such customary reservations of
          title the Purchasers will receive on the Closing Date good and valid
          title, to the Acquired Assets free and clear of all Liens. The use of
          the Tangible Assets and of the Intangible Assets by the Sellers and
          the sale and transfer of the Tangible Assets and of the Intangible
          Assets from the Sellers to the Purchasers to the Sellers' Knowledge
          does not infringe any third party rights.

     9.7  Sufficiency of Acquired Assets. By the acquisition of the Business
          pursuant to this Agreement, the Purchasers are put into the position
          to continue the Business of the Sellers in the current form except to
          the extent that (i) any other party to any Transferred Agreement may
          refuse to agree to the transfer of such Transferred Agreement, (ii)
          any Employee may refuse to his transfer to the Purchasers pursuant to
          Section 6 and (S)613a German Civil Code, (iii) the Acquired Assets
          do not comprise the shares in the Subsidiaries of the Sellers active
          in the Business in France and the UK nor any of their Employees or
          assets, other than intangible assets, (iv) any changes of the Business
          may take place until the Closing Date due to grounds of a change of
          general economics or in the business fields in which the Sellers and
          the Business are active or (v) any other changes of the Business
          beyond Sellers' control may apply, including but not limited to a
          potential adverse impact resulting from the disclosure of the
          transactions contemplated by this Agreement on the business relations
          with third parties, including customers and suppliers of the Business,
          namely the business relationship with Matrox Inc., Canada. The
          Acquired Assets comprise all of the material assets of the Sellers
          used by them in the operation of the Business in the ordinary course
          as currently conducted.

     9.8  Financial Statements. The Sellers have submitted to the Purchasers the
          Most Recent Accounts, statements of operations and statements of cash
          flows of the Business as of and for the year ended 31 December 2000
          and as of and for the six months ended June 30, 2001 (together the
          "Financial Statements"), which are attached as Exhibit 9.8. June 30,
          2001 is referred to herein as the "Most Recent Balance Sheet Date."
          The Financial Statements have been prepared in accordance with
          accounting, valuation and depreciation principles generally accepted
          in the respective Seller's jurisdiction ("Generally Accepted Financial
          Reporting Principles") all applied consistent with historical
          practice, except for changes in the accounting, valuation and
          depreciation principles, in particular regarding the inventory and
          reserves related to the inventory, as applied to the interim balance
          sheet as per June 30, 2001. The Financial Statements are, with the
          aforementioned exceptions, complete and correct and present fairly the
          financial condition, operating results and cash flows of the Business
          as of the dates and for the periods indicated

                                      -15-

<PAGE>

          therein. The Parties are in agreement that, for the purposes of the
          representation and warranties contained in this Section 9.8 only such
          balance sheet items shall be represented and warranted to the
          Purchasers that relate to the Business and the Acquired Assets as
          being transferred to the Purchasers by this Agreement.

     9.9  Liabilities. No Seller is a guarantor or otherwise liable for any
          Liability of any other person or entity for any matter which relates
          to or affects or will affect the Business or Acquired Assets. To the
          Sellers' Knowledge, there is no Liability, and, to the Sellers'
          Knowledge no threatened action, suit, proceeding, hearing,
          investigation, charge, complaint, claim or demand, which could give
          rise to any Liability that would reasonably be expected to have a
          Material Adverse Effect.

     9.10 Ordinary Course of Business. Since the Most Recent Balance Sheet Date
          until the date hereof, the Business has been conducted within the
          Ordinary Course of Business. Since that time no extraordinary business
          event or legal arrangement has occurred or been entered into and there
          has also not been any event which by itself or together with other
          events has a Material Adverse Effect on the Acquired Assets or the
          Business.

     9.11 Restrictions on Business Activities. Except as specifically
          contemplated by this Agreement or its Exhibits, there is no agreement
          (non-compete or otherwise) or commitment or any judgment, injunction,
          order, decree or other action by any Government Entity binding upon
          the Business or the Acquired Assets which has or reasonably could be
          expected to have the effect of prohibiting or impairing any business
          practice of the Sellers with respect to the Business, any acquisition
          or disposition of property (tangible or intangible) by such Seller
          relating to the Business or the conduct of the Business by such
          Seller. Except as specifically contemplated by this Agreement, none of
          the Sellers has entered into any agreement under which the Business 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.

     9.12 Condition of Assets. All Movable Fixed Assets have been well
          maintained and are in good and serviceable condition, normal wear and
          tear excepted. All Inventories on the Closing Date will by quantity
          and quality be usable or saleable in the ordinary course of business.
          All of the Inventory reflected on the Financial Statements and the
          Sellers' books and records on the date hereof were purchased, acquired
          or produced in the ordinary and regular course of business.

     9.13 Agreements. The pending customer orders transferred to the Purchasers
          according to Section 4.1 have been received by the Purchasers in the
          Ordinary Course of Business and do not provide for any terms or
          conditions, in particular to the calculation and payment conditions
          which deviate from the practice of the Sellers in the past. The
          conditions are fair and reasonable. To Sellers' Knowledge there is no
          reason to believe that such pending customer orders would lead to any
          losses outside of the Business, provided that such pending customer
          orders will be handled by the Purchasers diligently and in accordance
          with the practice as applied in the past.

     9.14 Government Approvals. The Sellers have obtained all material
          approvals, permits, licenses, grants or other authorizations of any
          Government Entity ("Permits") required for the operation of the
          Business and for Sellers to hold the Acquired

                                      -16-

<PAGE>

          Assets. All such Permits and any other Permits held by any Seller in
          connection with the operation of the Business or the holding of any of
          the Acquired Assets are listed in Exhibit 9.14 and are in full force
          and effect and no revocation, limitation or amendment of any of such
          Permits is pending or to the Sellers' Knowledge has been threatened.
          The Business is in all material aspects carried out in compliance with
          the listed Permits.

     9.15 Litigation. There is at the date hereof, no action, suit or proceeding
          of any nature by or before any Government Entity pending or, to the
          Sellers' Knowledge, threatened against any of the Sellers, involving
          the Business or the Acquired Assets, or any of its officers or
          directors to the extent affecting the Business or the Acquired Assets,
          nor, to the Sellers' Knowledge, is there any reasonable basis therefor
          which could give rise to any Liability relating to the Acquired Assets
          or prevent or materially delay the transactions contemplated by this
          Agreement. There is no investigation pending or, to the Sellers'
          Knowledge, threatened against any of the Sellers properties or any of
          its officers or directors by or before any Governmental Entity which
          could prevent or materially delay the transactions contemplated by
          this Agreement. 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, or to conduct the
          Business, in the present manner or style thereof.

     9.16 Transferred Agreements. The Transferred Agreements are to the Sellers'
          Knowledge valid and enforceable against the Parties thereto and
          neither the respective Seller nor, to the Sellers' Knowledge, any
          respective other party thereto has materially breached, or is in
          default under, any Transferred Agreements.

     9.17 Compliance with Regulations. To Sellers' Knowledge, the Business is in
          all material respects in compliance with all material applicable laws
          (including rules, regulations, codes, plans, injunctions, orders,
          decrees, rulings and charges thereunder), including without limitation
          occupational health and safety regulations.

     9.18 Intangible Assets. The Intangible Assets constitute all the know-how
          and intellectual property necessary or otherwise used by Sellers for
          the conduct of the Business as it is conducted on the Closing Date.
          The use or other exploitation of the Intangible Assets in the manner
          used by Seller in connection with the Business, to the Sellers'
          Knowledge, does not and will not violate any rights of any third
          parties. The fees, if any, necessary for upholding the Intangible
          Assets have been duly paid. The Intangible Assets, to the Sellers'
          Knowledge, are not subject to invalidity, cancellation or total or
          partial nullification, and to Sellers' Knowledge, no facts exist that
          would reasonably be thought to constitute a basis for the foregoing.
          The Sellers are the sole and exclusive owners of the Intangible Assets
          unless otherwise indicated in Exhibit 9.18 hereto, and have, unless
          otherwise indicated in the Exhibit 9.18, the right to transfer the
          Intangible Assets as contemplated by this Agreement free from any
          Lien. To the Seller's knowledge, none of the Intangible Assets is
          infringed by third parties.

     9.19 Business Knowledge. The Sellers own all manufacturing, processing and
          marketing know-how for the Sellers' entire previous and present
          Products, and hold, to the extent that such manufacturing, processing
          and marketing know-how has been reduced to writing, all documents
          pertaining thereto (which documents will be delivered as described in
          Section 2 of this Agreement).

                                      -17-

<PAGE>

     9.20 Protection of Confidential Information. The Sellers have imposed to
          the Employees such obligations as to the treatment of confidential
          information and trade secrets as set forth in the relevant Employment
          Contracts. Sellers have not licensed software, or provided any
          significant parts of software, included in the Intangible Assets to
          any third party in source code format.

     9.21 Interested Party Transactions. Except as listed in Exhibit 9.21, no
          Managing Director, Supervisory Board member, Director or majority
          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 an interest), has,
          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 Assigned Agreement;
          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 9.21.

     9.22 Employee Matters.

          (a)  There are no obligations, agreements or commitments in relation
               to the Transferred Employees other than those (i) reflected in
               the Employment Contracts referred to in 6.1, or (ii) agreed upon
               among the Sellers and the Transferred Employees between the date
               hereof and the Closing Date with the prior written consent of the
               Purchasers, or (iii) generally imposed by mandatory law, and
               there are no other obligations, agreements or commitments with
               regard to any Employees that will transfer to the Purchasers as a
               result of the transactions contemplated by this Agreement. The
               information regarding the Transferred Employees contained in
               Exhibit 6.1 is true and correct.

          (b)  The Sellers (i) are in compliance in all material respects with
               all applicable foreign, federal, state and local laws, rules and
               regulations respecting employment, employment practices, terms
               and conditions of employment and wages and hours, in each case,
               with respect to Employees, (ii) have withheld and reported all
               amounts required by law or by contract to be withheld and
               reported with respect to wages, salaries and other payments to
               Employees, (iii) are not liable for any arrears of wages or any
               taxes or any penalty for failure to comply with any of the
               foregoing, and (iv) are not liable for any payment to any trust
               or other fund governed by or maintained by or on behalf of any
               governmental entity, with respect to unemployment compensation
               benefits, social security or other benefits or obligations for
               Employees (other than routine payments to be made in the Ordinary
               Course of Business and consistent with past practice). There are
               no pending or, to the Sellers' Knowledge, threatened or
               reasonably anticipated claims or actions against the Sellers
               under any worker's compensation policy, long-term disability
               policy, or similar policy.

          (c)  At the Signing Date, no work stoppage or labor strike against any
               member of the Sellers is pending, or to the Sellers Knowledge
               threatened or reasonably anticipated. There are no actions,
               suits, claims, labor disputes or grievances pending, or, to the
               Sellers' Knowledge, threatened or reasonably anticipated

                                      -18-

<PAGE>

               relating to any labor, safety or discrimination matters involving
               any Employee, including, without limitation, charges of unfair
               labor practices or discrimination complaints, which, if adversely
               determined, would, individually or in the aggregate, result in
               any material Liability to the Purchasers. Neither Sellers nor any
               of Subsidiaries have engaged in any unfair labor practices. The
               Sellers are not bound by any collective bargaining agreement
               (Betriebsvereinbarungen), other than those set out in Exhibit
               9.22, or union contract with respect to Employees and no
               collective bargaining agreement is being negotiated by the
               Sellers, in each case relating to the Transferred Employees that
               would result in any material Liability of the Purchasers on or
               after the Closing Date.

          (d)  To the Sellers' Knowledge, no Employee is obligated under any
               contract or subject to any judgment, decree or order of any court
               or administrative agency that would interfere with such
               Employee's efforts to promote the interests of the Business or
               that would interfere with the Business. To the Sellers'
               Knowledge, neither the execution nor delivery of this Agreement,
               nor the carrying on of the Business as presently conducted or
               proposed to be conducted nor any activity of the Employees in
               connection with the carrying on of the Business as presently
               conducted or currently proposed to be conducted, will conflict
               with or result in a breach of the terms, conditions or provisions
               of, or constitute a default under, any contract or Employment
               Agreement under which any Employees are now bound.

     9.23 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. There are no warranty and
          indemnity claims in excess of $25,000 made against the Sellers in
          existence at the Signing Date relating to the Products and to Sellers'
          Knowledge there are no such indemnity claims threatened, except for
          indemnity claims with respect to infringement of intellectual property
          rights. The Sellers agree to indemnify the Purchasers from any Losses
          arising from any infringement of any intellectual property right,
          copyright, patent, petty patent, design patent or trademark of any
          third party caused by the Sellers prior to the Closing Date to the
          extent claims have been served in writing within one (1) year after
          the Closing Date, except for any indemnities related to the MPEG-LA
          Consortium and/or the DV Consortium.

     9.24 Taxes. The Sellers, to the extent such Taxes could affect Purchasers
          ownership in the Acquired Assets or the operations of the Business,
          have duly filed by the due date all tax returns and other reports
          required under the applicable laws to be filed with tax and other
          authorities, paid all due taxes, tax prepayments, social security
          charges and other public dues, retained all taxes, social security
          charges and other charges to be retained and paid them by the due date
          to the respective recipient and paid all related delay charges and
          penalties, if any.

     9.25 Insurance. The Sellers carry adequate insurance against all risks that
          a conscientious businessman usually covers. The insurance contracts
          are in full force and effect and all premiums due until the Closing
          Date have been paid and Sellers are otherwise in material compliance
          with the terms of such policies and bonds (or other policies and bonds
          providing substantially similar insurance coverage). Since

                                      -19-

<PAGE>

          the Most Recent Balance Sheet Date, no material insurable events of
          damage or damages have arisen at the Seller which were not covered by
          insurance. 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. To the
          Sellers' Knowledge no termination of, or material premium increase
          with respect to, any of such policies has been threatened.

     9.26 No Illegal Payments, Etc. To the Sellers' Knowledge, 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.

     9.27 Material Adverse Effect. To Sellers' Knowledge, there are no
          particular circumstances that could in the future materially adversely
          affect the Business. To Sellers' Knowledge there are no facts or
          circumstances which could result in any restriction, impediment or
          cessation of the manufacture and/or marketing of any material product
          presently manufactured and/or marketed by the Seller in the Business,
          except for changes in the business relationship with Matrox Inc.,
          Canada, which may occur as a result of the transactions contemplated
          by this Agreement or its disclosure or such facts and circumstances
          that are not particularly relating to the Business relations, but may
          affect the economic situation or the business field in which the
          Business is active in general.

10   Representations and Warranties of the Purchasers, Guarantee of Pinnacle,
     Inc.

     In concluding this Agreement, the Sellers rely on the correctness of the
     representations and warranties made by the Purchasers and Pinnacle Inc.
     hereinafter. The Purchasers and Pinnacle, Inc. represent expressly and
     warrant as a guaranteed quality (with the legal consequences as
     conclusively set forth in Section 11 that the following representations and
     warranties are correct, unless otherwise provided hereunder on the date
     hereof and the Closing Date and all dates after the Closing Date until full
     payment of any outstanding amounts under the Purchase Price pursuant to
     Section 7:

     10.1 Organization and Authority. The Purchasers and Pinnacle Inc. are
          companies duly incorporated, validly existing and in good standing
          under the laws of their respective jurisdiction and have the corporate
          power to own their respective properties and to carry on their
          respective businesses as now being conducted. Each of the Purchasers
          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.

                                      -20-

<PAGE>

     10.2 Execution and Delivery. This Agreement and any Related Agreements to
          which any Purchaser or Pinnacle Inc. is a party have been duly
          executed and delivered by such Purchaser and, assuming the due
          authorization, execution and delivery by the other Parties hereto and
          thereto, constitute the valid and binding obligation of such Purchaser
          or Pinnacle Inc. 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.

     10.3 Compliance with Corporate Requirements. The execution and delivery of
          this Agreement and any Related Agreements to which it is a party by
          any of the Purchasers or Pinnacle Inc. 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 (i) any provision of the
          charter documents or Bylaws (or their equivalent) of any such Seller,
          or (ii) any judgment, order, decree, statute, law, ordinance, rule or
          regulation applicable to any such Purchaser or its properties or
          assets.

     10.4 Required Consents. Each of the Purchasers and Pinnacle Inc. has
          obtained all necessary corporate consents and taken all necessary
          corporate action, if any, required on the Sellers side for the
          consummation of the transactions contemplated by this Agreement.
          Except as set forth in Section 14 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, is required by or with respect to any of the Purchasers
          in connection with the execution and delivery of this Agreement and
          any Related Agreements to which any of the Purchasers or Pinnacle Inc.
          is a party or the consummation of the transactions contemplated hereby
          and thereby.

     10.5 Correct Information. The information contained in the Exhibits of this
          Agreement, relating to circumstances of the Purchasers and Pinnacle
          Inc., is complete and correct.

     10.6 Pinnacle Shares. The Pinnacle Shares are duly authorized and have been
          reserved for issuance in accordance with this Agreement. When issued
          in accordance with this Agreement, the Pinnacle Shares will be duly
          issued and outstanding, fully paid and nonassessable.

     10.7 Required Filings. Pinnacle Inc, is a public reporting issuer under the
          Securities Exchange Act of 1934, as amended (the "1934 Act"), and has
          made all required filings thereunder by the required filing date and
          in accordance with the rules and regulations of the Securities and
          Exchange Commission ("SEC"). None of such filings, including the
          financial statements contained therein, or the filings made by
          Pinnacle Inc. under the Securities Act of 1933, as amended, contained
          a material misstatement or omitted to state a material fact. The Form
          S-3 to be filed by Pinnacle Inc. in accordance with this Agreement and
          the Registration Rights Agreement attached hereto will not contain a
          material misstatement or omit to state any material fact.

                                      -21-

<PAGE>

     10.8 Absence of Material Adverse Effect. Since 30 June 2001, there has not
          been any circumstance, change in or effect upon Pinnacle Inc. which
          has or could reasonably be expected to have a Material Adverse Effect.
          Pinnacle Inc. has no present plans or intention to make any
          pre-announcement with respect to its financial results for the present
          fiscal quarter or any announcement to the effect that it expects its
          financial results for future fiscal quarters to be less than consensus
          street estimates.

     Pinnacle, Inc. hereby further undertakes to act as an absolute guarantor
     (selbstschuldnerischer Burge) for the obligations and liabilities of
     Pinnacle Germany and Pinnacle KG under Sections 7, 10 and 11 of this
     Agreement.

11   Performance and Liability

     11.1 Breach of Warranties. In case of violation of any of the
          representations or warranties by a Party (the "Warranting Party")
          which have an adverse effect on, and cause damages to, (i) the
          Business or the Acquired Assets in the case of Sellers'
          representations and warranties, or (ii) the Sellers in the case of
          Purchasers representations and warranties, the Warranting Party shall
          be jointly and severally liable to put the other Parties (the "Damaged
          Party") in the position they would be in had the representation or
          warranty not been violated. In case the Warranting Party is unable to
          cure the defect or violation, the Damaged Party shall be compensated
          by an amount in cash which corresponds to the damage within the sense
          of Section 249 Sentence 2 German Civil Code.

     11.2 Other Claims and Remedies. The Parties shall not have any other claims
          or remedies than the claims and remedies defined in Section 11.1 in
          case of a breach of any representation and warranty, and no further
          statements, representations and warranties or guarantees are made, or
          deemed to be made, by either Party, other than those expressly and
          conclusively set forth in Sections 9 and 10; provided, that this
          Section 11 shall not limit Purchasers' remedies for indemnification
          provided for in Sections 4.5 and 5 of this Agreement, or claims and
          remedies of either Party as may apply under mandatory law for willful
          or fraudulent breaches of representations or warranties by the other
          Party and, for the avoidance of doubt, the right of any party to this
          Agreement to rescind this Agreement pursuant to (S)326 German Civil
          Code in the event of a default of another party with its obligations
          under this Agreement. Any other claims or rights of the Purchasers in
          respect of the Business and the Acquired Assets, circumstances
          (financial, legal or otherwise), results and or its operations,
          whether by statute or contract or any other legal basis, shall to the
          extent legally possible, i.e. except for claims based upon willful
          misconduct (Vorsatz oder Arglist), be excluded and waived. Without
          limiting the foregoing exclusion and waiver, the Purchasers shall, in
          particular, not have the right to rescind this Agreement (Recht auf
          Wandelung/Rucktritt), to reduce the purchase price (Recht auf
          Minderung), to claim damages for incorrect assurances (Schadensersatz
          wegen unrichtiger Zusicherung), to avoid the Agreement or to request
          damages because of lack of essentiality (Fehlen einer wesentlichen
          oder zugesicherten oder garantierten Eigenschaft) or in the event of
          culpa in contrahendo, or to rescind or amend this Agreement for
          frustration of contract (Wegfall der Geschaftsgrundlage) or for any
          other reason whatsoever.

     11.3 Limitation of Claims. The period of limitation for all claims of the
          Purchasers pursuant to Section 11.1 and 15.1 of this Agreement shall
          run until, and any claims

                                      -22-

<PAGE>

          shall be time barred (verjahrt), two (2) years from the Closing Date.
          This period of limitation shall not apply to other remedies available
          to the Purchasers or the Sellers, including without limitation
          remedies for breaches of covenants and for indemnification provided by
          this Agreement. All such claims as well as any other claims of either
          Party under or in relation to this Agreement, whether by law, contract
          or otherwise, shall be time barred (verjahren) three (3) years after
          the relevant Party becomes aware of the relevant claim.

     11.4 Due Diligence. No Party shall be liable to the other Party for any
          claims, if the other Party or its advisors had knowledge of such
          breach within the sense of Section 460 German Civil Code. The Sellers
          and the Purchasers have jointly evaluated the Inventory as reflected
          in the accounts as of August 31, 2001.

     11.5 De minimis threshold. Purchasers shall have claims based upon a breach
          of any representation or warranty as set out in Section 9 only if the
          individual claim exceeds an amount of (euro) 25,000 or the aggregate
          of all claims exceeds an amount of (euro) 100,000 at which point
          Purchasers shall be entitled to be compensated for all claims of
          breaches of representations and warranties contained in Section 9 of
          this Agreement.

     11.6 Cap on Claims. All claims of the Purchasers under or in connection
          with Section 9, except for any willful or fraudulent (Vorsatz oder
          Arglist) breaches of the representations and warranties contained in
          Section 9 of this Agreement, shall be limited to an aggregate amount
          of (euro) 3,500,000.

12   Covenants

     12.1 Confidentiality. For a period commencing on the Signing Date and
          ending five (5) years later, the Sellers (and their successors and
          assigns), Mr. Matthias Zahn and Mrs. Steffi Korner, for the avoidance
          of doubt individually and not jointly and severally, shall keep
          confidential all matters related to the Business, in particular all
          business and trade secrets, and not disclose such matters and secrets,
          directly or indirectly, to any third party nor to cause such
          disclosure by third parties nor to abet or justify such disclosure nor
          to use such matters or secrets for themselves.

     12.2 Non-Solicitation. For a period commencing on the Closing Date and
          ending thirty (30) months later, the Sellers, Mr. Matthias Zahn and
          Mrs. Steffi Korner, for the avoidance of doubt individually and not
          jointly and severally, shall not (nor shall it permit any of its
          Subsidiaries or Affiliates) directly or indirectly, without the prior
          written consent of the Purchasers, cause or influence any Transferred
          Employees to work in any way whatsoever for any of the Sellers
          (whether as an employee, agent, consultant, advisor, independent
          contractor, proprietor, partner, officer, director or otherwise), for
          an enterprise in which any one of them holds an interest or for a
          competitor, or to terminate an existing relationship with the
          Purchasers (or its consolidated Subsidiaries).

     12.3 Non-Competition.

          (a)  For a period commencing on the Closing Date and ending two (2)
               years later, the Sellers (acting jointly - gesamtschuldnerisch -
               with respect to one other) and Mr. Matthias Zahn (acting
               individually - "einzelschuldnerisch") and Mrs. Steffi Korner
               (acting individually - "einzelschuldnerisch") shall not (nor
               shall they permit any of their Subsidiaries or Affiliates)
               directly or indirectly, without the

                                      -23-

<PAGE>

               prior written consent of the Purchasers (i) manufacture,
               distribute or render any products or services which are of the
               same kind as, or competitive with, products or services
               manufactured, distributed or rendered by the Business in any part
               of the world where the Business was conducted (a "Competing
               Business"); (ii) assist third parties in any way whatsoever,
               directly or indirectly, in the manufacture, distribution or
               rendering of such products or services of a Competing Business;
               (iii) hold in any way whatsoever, directly or indirectly, an
               interest in a company or other entity that constitutes a
               Competing Business other than an interest of less than 5% in a
               publicly quoted company; or (iv) participate in the financing,
               operation, management or control of a Competing Business. For the
               Avoidance of doubt, the activities of Mr. Matthias Zahn, Mrs.
               Steffi Koerner, and TV-Server AG in the field of technologies and
               services for interactive television shall not be restricted by
               the foregoing non-competition obligation.

          (b)  In the event that the provisions of this Section 12.3 are deemed
               to exceed the time, geographic or scope limitations permitted by
               applicable law, then such provisions shall be amended to the
               maximum time, geographic or scope limitations, as the case may
               be, permitted by applicable law.

          (c)  For the purposes of this Section 12, the Sellers, Mr. Matthias
               Zahn and Mrs. Steffi Korner, acknowledge 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 the Purchasers and is reflected in the Purchase Price
               for the Acquisition to be received by the Sellers and (ii) the
               Transferred Agreements are necessary to preserve the value of the
               Business, including the goodwill and customer relationships, for
               the Purchasers following the Acquisition. The Sellers also
               acknowledge that the limitations of time, geographic scope and
               scope of activity agreed to in this Agreement are reasonable
               because, among other things, (x) the Sellers and their
               subsidiaries and the Purchasers are engaged in a highly
               competitive industry (y) management of the Sellers and their
               subsidiaries have unique access to, and will continue to have
               access to, the trade secrets and know-how of the Sellers and
               their Subsidiaries, including without limitation, the plans and
               strategy (and in particular, the competitive strategy) of the
               Sellers and its Subsidiaries and (z) the Sellers are receiving
               significant consideration in connection with the Acquisition.

13   Compliance with the Securities Laws

     13.1 Securities Act Exemption. Each of the Sellers has been advised that
          the Pinnacle Shares issued to the Sellers pursuant to this Agreement
          will be issued as securities to the Sellers in a private placement
          exempt from the registration requirements of Section 5 of the
          Securities Act, as set forth in Section 4(2) thereof, and may not be
          offered or sold except pursuant to an exemption or pursuant to an
          effective registration statement under the Securities Act.

     13.2 Legends. Pinnacle, Inc. will give stop transfer instructions to its
          transfer agent with respect to Pinnacle Shares received by the Sellers
          pursuant to this Agreement and

                                      -24-

<PAGE>

          there will be placed on each certificate representing such Pinnacle
          Shares, 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 STATEMENT THEREOF, OR EXEMPTION
               THEREUNDER, UNDER SUCH ACT OR IN 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, Inc. agrees
          to so instruct its transfer agent at such time as a registration
          statement on Form S-3 covering such Pinnacle 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 Subsection 12.3 hereof shall
          have occurred.

     13.3 Representations Regarding Securities Laws Matters. The Sellers agree
          not to sell, transfer or otherwise dispose of any Pinnacle Shares
          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, Inc. with the Securities and Exchange Commission (the "SEC")
          which is then in effect; or (y) upon delivery to Pinnacle, Inc. of a
          written opinion of counsel, reasonably acceptable to Pinnacle, Inc. 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
          disposition (sought by the Sellers or counsel thereto, with a copy
          thereof and of all other related communications delivered to Pinnacle,
          Inc.) 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. The Sellers acknowledge and understand that Pinnacle,
          Inc. is relying on the written representations made by the Sellers in
          the Investment Representation Statements in the form attached hereto
          as Exhibit 13.3 executed by each of the Sellers.

14   Closing Date Deliveries

     14.1 Sellers' Deliveries

          On the Closing Date, the Sellers shall deliver, or cause to be
          delivered, to the Purchasers, the following:

          (a)  such instruments of sale, transfer, conveyance and assignment as
               the Purchasers and their counsel may reasonably request to give
               effect to the transfer of the Acquired Assets as contemplated by
               this Agreement;

          (b)  approvals, consents, waivers and authorizations as set forth in
               Exhibit 9.4;

          (c)  all other documents, certificates, instruments or writings
               required to be delivered by the Sellers on the Closing Date in
               order to consummate the transactions contemplated by this
               Agreement;

                                      -25-

<PAGE>

     14.2 Purchasers' Deliveries

          On the Closing Date, the Purchasers and Pinnacle, Inc. shall deliver,
          or cause to be delivered, to the Sellers, (without in any way
          affecting the effectiveness of this Agreement upon signing) the
          following:

          (a)  internal approval by the Board of Directors of each of Pinnacle,
               Inc., Pinnacle KG and Pinnacle Germany;

          (b)  all other documents, certificates, instruments or writings
               required to be delivered by the Purchasers on the Closing Date in
               order to consummate the transactions contemplated by this
               Agreement;

          (c)  reassignment of any receivables assigned to Purchasers pursuant
               to the Global Assignment Agreement as reflected in Section 7.2a.

15   Arrangements concerning the Relationship of the Parties until and after the
     Closing Date

     15.1 Conduct of the Business until Closing Date. Between the date hereof
          and the Closing Date, except as otherwise agreed to in advance and in
          writing by Purchasers, Sellers covenant and agree with Purchasers as
          follows:

          (a)  Sellers shall operate the Business diligently and in good faith
               and only in the ordinary course, in the manner as heretofore
               conducted and consistent with Sellers' past management and
               business practices.

          (b)  Sellers shall use reasonable efforts to (i) maintain, preserve,
               renew and keep in full force and effect the existence, rights and
               franchises of the Business; (ii) maintain the Acquired Assets in
               good working order; (iii) not allow the disposal or lapse of any
               Intangible Assets; (iv) preserve for Purchasers Sellers' present
               relationships with its suppliers, distributors, vendors,
               manufacturers, customers, communities and others having business
               relations with Sellers' in the Business; and (v) not allow any
               event or occurrence within Sellers' control which might,
               individually or in the aggregate, have a Material Adverse Effect
               on Seller.

          (c)  Sellers shall not terminate, amend or otherwise modify any
               Transferred Agreement.

          (d)  Sellers shall not create any indebtedness that would constitute
               an liability or obligation to be assumed by the Purchasers.

          (e)  Sellers will not act or omit to act, or consent to any act or
               omission to act by another party, which will cause a breach or
               violation of, or default under, any Transferred Agreements or
               other commitments or other obligations adversely affecting the
               Acquired Assets or the Business.

     15.2 Termination of Agreement. The Purchasers may terminate this Agreement
          by giving written notice to the Sellers at any time prior to and at
          the date of consummation of this agreement at the Closing Date if
          there has been any event which by itself or together with other events
          has a Material Adverse Effect on the Business. For the purposes of
          this Section 15.2 only, if (i) at least two of the Key Employees
          listed in Exhibit 15.2a or (ii) at least 6 of the R&D Employees listed
          in Exhibit 15.2b object to be transferred to Purchasers or do not
          agree to be

                                      -26-

<PAGE>

          transferred to Pinnacle Germany according to (S)613a BGB prior to
          Closing Date or Jorg Adelstein does not agree to continue to work for
          the Business, this shall be deemed to have a Material Adverse Effect
          on the Business. The Sellers may terminate this Agreement by giving
          written notice to the Purchasers (i) at any time prior to the date on
          which the Purchase Price has been paid in full, in the event of
          insolvency proceedings of the Purchasers or Pinnacle, Inc., or in the
          event of a default pursuant to (S)326 German Civil Code, or, (ii) at
          any time prior to the Closing Date, if any other event which by itself
          or together with other events has a Material Adverse Effect on
          Pinnacle, Inc. has occurred.

     15.3 Sellers' Further Deliveries. Any time, and from time to time after the
          Closing Date, at the reasonable request of the Purchasers 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 the Purchasers may reasonably determine is
          necessary to transfer, convey and assign to Purchasers and to confirm
          Purchasers' title to or interest in the Acquired Assets, to put
          Purchasers in actual possession and in operating control thereof, to
          assist Purchasers in exercising all rights in respect thereto and to
          ensure the transition of the Business from the Sellers to the
          Purchasers in an orderly and smooth fashion.

     15.4 Purchasers' Further Deliveries. Any time, and from time to time after
          the Closing Date, at the reasonable request of the Sellers and without
          further consideration, the Purchasers will execute and deliver such
          other instruments of assumption and confirmation and take such action
          as Sellers may reasonably determine is necessary to ensure the
          transition of the Business from the Sellers to the Purchasers in an
          orderly and smooth fashion.

     15.5 Publicity. No announcement of any kind to the media or any other
          indefinite group of persons shall be made before the Closing Date in
          respect of the subject matter of this Agreement except as specifically
          agreed between the Sellers and the Purchasers or if such announcement
          is required by law or administrative or judicial order.

     15.6 Notice of Acquisition. Upon the request of the Purchasers, the Sellers
          will join the Purchasers in sending out on or after the Closing Date a
          notice in a mutually approved form to all suppliers, agents,
          distributors, clients and customers advising them of the transfer of
          the Business.

     15.7 Employee Matters. Until the Closing Date, Sellers shall not (without
          the prior written consent of Purchasers) modify or terminate any
          Employment Agreement or enter into any new employment agreement.

16   Miscellaneous

     16.1 Notice. All notices and other communications required or permitted
          hereunder shall be in writing, shall be effective when given, and
          shall in any event be deemed to be given upon receipt, or, if earlier,
          (a) five (5) days after deposit with the U.S. Postal Service or other
          applicable postal service, if delivered by first class mail, postage
          prepaid, (b) upon delivery, if delivered by hand, (c) one (1) business
          day after the business day of facsimile transmission, if delivered by
          facsimile transmission with receipt of transmission confirmation and
          with a copy by first class mail, postage prepaid, and shall be
          addressed to the intended recipient as set forth below:

                                      -27-

<PAGE>

              If to Pinnacle, Inc.:

              Pinnacle Systems, Inc.
              280 North Bernardo Avenue
              Mountain View, CA  94043
              U.S.A.
              Attention: Chief Financial Officer
              Telephone: (650) 560-1600
              Facsimile: (650) 526-1601

              With a copy to:

              Wilson Sonsini Goodrich & Rosati
              Professional Corporation
              650 Page Mill Road
              Palo Alto, CA 94304-1050
              U.S.A.
              Attention: Chris F. Fennell, Esq.
              Telephone: (650) 493-9300
              Facsimile: (650) 845-5000

              And a copy to:

              Linklaters Oppenhoff & Radler
              Mainzer Landstrasse 16,
              D-60325 Frankfurt am Main
              Postfach 17 01 11
              D-60075 Frankfurt am Main
              Attention: Ulli Janssen
              Telephone: (49-69) 7-10-03-0
              Facsimile: (49-69) 7-10-03-333

              If to Pinnacle Germany:

              Pinnacle Systems GmbH
              Frankfurter Strasse 3c, 38112
              Braunschweig, Germany

              With a copy to:

              Wilson Sonsini Goodrich & Rosati
              Professional Corporation
              650 Page Mill Road
              Palo Alto, CA 94304-1050
              U.S.A.
              Attention: Chris F. Fennell, Esq.
              Telephone: (650) 493-9300
              Facsimile: (650) 845-5000

                                      -28-

<PAGE>
              And a copy to:

              Linklaters Oppenhoff & Radler
              Mainzer Landstrasse 16,
              D-60325 Frankfurt am Main
              Postfach 17 01 11
              D-60075 Frankfurt am Main
              Attention: Ulli Janssen
              Telephone: (49-69) 7-10-03-0
              Facsimile: (49-69) 7-10-03-333

              If to Fast, Inc.:

              Fast Multimedia Holding Inc.
              101 Federal Street, Suite 1900
              Boston, MA 02110
              U.S.A.

              With a copy to:
              SJ Berwin Knopf Tulloch Steininger
              Maria-Theresia-Str. 5
              81675 Munchen
              Attention: Thomas Pauls and Dr. Christoph Brenner
              Telephone: (0049-89-89081-0)
              Facsimile: (0049-89-89081-100)

              If to FAST Germany:

              Fast Multimedia AG
              Rudesheimerstr. 11-13, D-80686
              Munchen, Germany

              With a copy to:

              SJ Berwin Knopf Tulloch Steininger
              Maria-Theresia-Str. 5
              81675 Munchen
              Attention: Thomas Pauls and Dr. Christoph Brenner
              Telephone: (0049-89-89081-0)
              Facsimile: (0049-89-89081-100)

     16.2 Notary Fees. The Notary fees connected with the notarial recording of
          this Agreement shall be borne by the Purchasers. Apart therefrom, each
          Party shall bear its own costs and the costs of its advisers and
          auditors.

     16.3 Amendment. Changes and amendments to this Agreement as well as
          declarations to be made hereunder shall be valid only if made in
          writing unless a notarial deed is legally required. This shall also
          apply to any change of this provision.

                                      -29-

<PAGE>

     16.4 Severability. If a provision of this Agreement should be or become
          invalid or not contain a necessary regulation, the validity of the
          other provisions of this Agreement shall not be affected thereby. The
          invalid provisions shall be deemed to be replaced and the gap be
          filled by a legally valid arrangement which corresponds as closely as
          possible to the intentions of the Parties or what would have been the
          intentions of the Parties according to the aim and purpose of this
          Agreement if they had recognised the gap.

     16.5 Headings and Exhibits. The Exhibits to this Agreement shall form an
          integral part of this Agreement. The headings in this Agreement shall
          only serve the purpose of easier orientation and are of no consequence
          for the contents and interpretation of this Agreement. Statements in
          one provision of, or Exhibit to, this Agreement shall be deemed to
          have been made also for the purposes of all other provisions of, and
          Exhibits to, this Agreement.

     16.6 Further Assurances. The Parties agree (a) to furnish upon request to
          each other such further information, (b) to execute and deliver to
          each other such other documents, and (c) to do such other acts and
          things, all as the other Party may reasonably request for the purpose
          of carrying out the intent of this Agreement and the documents
          referred to in this Agreement.

     16.7 Governing Law. This Agreement shall be governed by German law.

     16.8 Jurisdiction. The Courts of Frankfurt am Main shall have exclusive
          jurisdiction for all disputes arising out of or in connection with
          this Agreement, including disputes about its validity.

     16.9 Entire Agreement. This Agreement, the schedules and exhibits hereto,
          and the documents and instruments and other agreements among the
          Parties hereto referenced herein 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.

    16.10 Assignment. No Party may, directly or indirectly, in whole or in
          part, neither by operation of law or otherwise, assign or transfer
          this Agreement or delegate any of its obligations under this Agreement
          without the other party's prior written consent. Any attempted
          assignment, transfer or delegation without such prior written consent
          will be void. Notwithstanding the foregoing, a Party, or its permitted
          successive assignees or transferees, may assign or transfer this
          Agreement or delegate any rights or obligations hereunder without
          consent: (1) to any entity controlled by, or under common control
          with, such Party, or its permitted successive assignees or
          transferees; or (2) in connection with a merger, reorganization,
          transfer, sale of assets or product lines, or change of control or
          ownership of such Party or its permitted successive assignees or
          transferees subject however to the assignor or transferor acting as
          guarantor for all obligations of the assignee or transferee vis-a-vis
          the other contractual parties. Without limiting the foregoing, this
          Agreement will be binding upon and inure to the benefit of the Parties
          and their permitted successors and assigns.

    16.11 No Third Party Beneficiaries. This Agreement shall not confer any
          rights or remedies upon any person or entity other than the Parties
          hereto and their respective successors and permitted assigns.

                                      -30-

<PAGE>

    16.12 Extension; Waiver. Purchasers on the one hand and Sellers on the
          other hand may, to the extent legally allowed, (i) extend the time for
          the performance of any of the obligations of the other Parties hereto,
          (ii) waive any inaccuracies in the representations and warranties made
          to such Parties contained herein or in any document delivered pursuant
          hereto, and (iii) waive compliance with any of the agreements or
          conditions for the benefit of such Parties contained herein. Any
          agreement on the part of a Party hereto to any such extension or
          waiver shall be valid only if set forth in an instrument in writing
          signed on behalf of such Party.

    16.13 The Notary shall send certified copies of this deed to the Persons
          listed in section 16.1 above.

    16.14 This agreement shall be executed in the English language only.

    16.15 Nach Uberzeugung des beurkundenden Notars und nach Bestatigung aller
          unterzeichneten Urkundsbeteiligten sind diese der englischen Sprache
          hinreichend kundig.

    16.16 All Exhibits are well known to all parties.

          The Exhibits 7.2 is attached to this agreement for the purpose of
          prove and evidence.

          Reference is made to the Exhibits 8, 13.3 - they form an integral part
          of this Agreement ((S)9 Abs. 1 Satz 2 BeurkG).

          Reference is also made to the Exhibits 2.1a, 2.1b, 2.3a, 2.3b,
          2.4, 4.1, 4.2, 6.1, 6.3, 9.4, 9.8, 9.14, 9.18, 9.21, 9.22, 15.2a and
          15.2b - they also form an integral part of this Agreement ((S)14 Abs.
          1 BeurkG) and are signed on each page by the parties. The parties
          waive in reading this documents.

[Remainder of this page intentionally left blank]

                                      -31-

<PAGE>

PURCHASERS

                               PS MIRO HOLDINGS INC. & CO. KG,
                               a partnership under the laws of Germany

                               By: PS MIRO HOLDINGS INC.
                               As General Partner of PS Miro
                               Holdings Inc. & Co. KG

                               By:   /s/ Arthur D. Chadwick
                                   ---------------------------------------------

                               Name: Arthur D. Chadwick
                                     -------------------------------------------

                               Title: Vice President, Finance and Administration
                                      ------------------------------------------
                                      and Chief Financial Officer
                                      ------------------------------------------

                               PINNACLE SYSTEMS GMBH, a German corporation

                               By: /s/ Arthur D. Chadwick
                                  ----------------------------------------------

                               Name: Arthur D. Chadwick
                                     -------------------------------------------

                               Title: General Manager
                                      ------------------------------------------

For the purposes of acting as guarantor for the Purchasers' obligations to pay
the consideration pursuant to Section 7 and the Purchasers' Representations and
Warranties pursuant to Sections 10 and 11 and with respect to its express
obligations according to Sections 8 and 13:

                               PINNACLE SYSTEMS, INC.,
                               a California corporation

                               By:   /s/ Arthur D. Chadwick
                                   ---------------------------------------------

                               Name: Arthur D. Chadwick
                                     -------------------------------------------

                               Title: Vice President, Finance and Administration
                                      ------------------------------------------
                                      and Chief Financial Officer
                                      ------------------------------------------

                                      -32-

<PAGE>

"SELLERS"                      FAST MULTIMEDIA HOLDINGS, INC.,
                               a Delaware corporation

                               By:   /s/ Matthias Zahn
                                   ---------------------------------------------

                               Name: Matthias Zahn
                                     -------------------------------------------

                               Title: Chief Executive Officer
                                      ------------------------------------------

                               FAST MULTIMEDIA AG, a German corporation

                               By: /s/ Reiner Bielmeier
                                  ----------------------------------------------

                               Name: Reiner Bielmeier
                                     -------------------------------------------

                               Title: Chief Executive Officer
                                      ------------------------------------------

For the purposes of Section 12 only:

                               MATTHIAS ZAHN
                               In his personal capacity

                               /s/ Matthias Zahn
                               -------------------------------------------------

                               STEFFI KOERNER
                               In her personal capacity

                               By Power of Attorney to Matthias Zahn

                               /s/ Matthias Zahn
                               -------------------------------------------------

                                      -33-<PAGE>

                                                                     EXHIBIT 4.2

                          REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made effective as of
                                          ---------
October 2, 2001, between PINNACLE SYSTEMS, INC., a California corporation
("Pinnacle") and FAST MULTIMEDIA HOLDINGS INC., a Delaware corporation ("Fast
  --------                                                               ----
Inc.") and FAST MULTIMEDIA AG, a German corporation ("Fast Germany" and together
----                                                  ------------
with Fast Inc., the "Sellers") pursuant to the Asset Purchase Agreement dated as
of September 13, 2001 among Pinnacle, PS Miro KG ("Pinnacle KG"), Pinnacle
                                                   -----------
Systems GmbH ("Pinnacle GmbH") and the Sellers, (the "Acquisition Agreement").
               -------------                          ---------------------

                                    RECITALS
                                    --------

A. Pursuant to the terms of the Acquisition Agreement, Pinnacle KG and Pinnacle
GmbH shall cause Pinnacle issue to the Sellers shares of common stock of
Pinnacle, no par value (the "Pinnacle Shares"), in connection with the
                             ---------------
acquisition by Pinnacle KG and Pinnacle GmbH of certain assets of Sellers.

B. Section 8 of the Acquisition Agreement provides for the execution and
delivery of this Agreement concurrent with the closing of the asset purchases
under the Agreement.

NOW, THEREFORE, in consideration of the representations, warranties, covenants
and conditions herein and in the Acquisition Agreement, the parties hereto
hereby agree as follows:

                                   SECTION 1
                                  DEFINITIONS

   1.1   Certain Definitions.  As used in this Agreement:
         -------------------

         (a) 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.

         (b) The term "Form S-3" shall mean such form under the Securities Act
as in effect on the date hereof or any registration form under the Securities
Act subsequently adopted by the SEC which similarly permits inclusion or
incorporation of substantial information by reference to other documents filed
by the Company with the commission.

         (c) The term "person" shall mean any person, individual, corporation,
partnership, trust or other non-governmental entity or any governmental agency,
court, authority or other body (whether foreign, federal, state, local or
otherwise).

         (d) The term "Holder" means (i) a Seller holding Registrable Securities
or (ii) a transferee of Registrable Securities from a Holder to which transferee
registration rights granted under this Agreement are assigned pursuant to
Section 2.8 of this Agreement.

<PAGE>

         (e) The term "First Issuance Shares" means the Pinnacle Shares issued
to Fast Germany pursuant to Section 7.2(c) of the Acquisition Agreement.

         (f) The term "Second Issuance Shares" means the Pinnacle Shares issued
to Fast Germany pursuant to Section 7.2(d) of the Acquisition Agreement.

         (g) The term "Third Issuance Shares" means the Pinnacle Shares issued
to Fast Inc. pursuant to Section 7.2(d) of the Acquisition Agreement.

         (h) 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.

         (i) The term "Registrable Securities" means the First Issuance Shares,
the Second Issuance Shares and the Third Issuance Shares and shall include all
Pinnacle Shares received by any Holder in respect thereof pursuant to a stock
split, stock dividend or other recapitalization of Pinnacle or pursuant to any
merger, consolidation or reorganization involving Pinnacle; provided, however,
                                                            --------  -------
Registrable Securities shall not include Pinnacle Shares that have been
registered under the Securities Act and disposed of pursuant to the registration
statement used to effect such registration or that can be sold (together with
all other Pinnacle Shares held by the holder thereof and issued pursuant to the
Acquisition Agreement) in any consecutive ninety (90) day period without
registration in accordance with Rule 144 of the Securities Act.

         (j) The term "Registration Statement" shall mean any registration
statement (including the Preliminary Prospectus, the Prospectus, any amendments
(including any post-effective amendments) thereof, any supplements and all
exhibits thereto and any documents incorporated therein by reference pursuant to
the rules and regulations of the SEC), filed by Pinnacle with the SEC under the
Securities Act in connection with the provisions of Section 2 of this Agreement.

         (k) 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.

         (l) The term "SEC" means the United States Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.

   1.2   Acquisition Agreement. Capitalized terms not otherwise defined herein
         ---------------------
have the meanings given to them in the Acquisition Agreement.

                                     - 2 -

<PAGE>

                                   SECTION 2
                              REGISTRATION RIGHTS

   2.1   Shelf Registration.
         ------------------

         (i) Initial Registration. Pinnacle shall use its commercially
             --------------------
reasonable best efforts to file within fifteen (15) days of the issuance of the
First Issuance Shares (subject to the delay provisions of Section 2.4) a
Registration Statement on Form S-3 registering the resale of the First Issuance
Shares on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act (or any similar rule that may be adopted by the SEC) in ordinary
course brokerage or dealer transactions. The offering made pursuant to such
registration shall not be underwritten, and the Registration Statement shall not
include any securities other than the Registrable Securities. As soon as
practicable after filing, Pinnacle shall use its commercially reasonable best
efforts to cause such Registration Statement to be declared effective, at its
expense, by the SEC and to keep such Registration Statement effective until the
sooner to occur of (A) the date on which all First Issuance Shares included
within such Registration Statement have been sold or (B) the first anniversary
of the date of the issuance of the First Issuance Shares.

         (ii) Subsequent Registration. Pinnacle shall use its commercially
              -----------------------
reasonable best efforts to file within three (3) days of the issuance of the
Second Issuance Sharesand Third Issuance Shares (subject to the delay provisions
of Section 2.4) a Registration Statement on Form S-3 registering the resale of
the Second Issuance Shares and the Third Issuance Shares on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act (or any similar
rule that may be adopted by the SEC) in ordinary course brokerage or dealer
transactions. The offering made pursuant to such registration shall not be
underwritten, and the Registration Statement shall not include any securities
other than the Registrable Securities. Pinnacle shall use its commercially
reasonable best efforts to cause such Registration Statement to be declared
effective by the SEC on February 15, 2002 or as soon as practicable thereafter
and to keep such Registration Statement effective until the sooner to occur of
(A) the date on which all Second Issuance Shares and Third Issuance Shares
included within such Registration Statement have been sold or (B) the first
anniversary of the date of issuance of the Second Issuance Shares.

   2.2   Information by Holder(s). The Holder(s) whose securities are included
         ------------------------
in any registration effected pursuant to this Section 2 shall furnish in writing
to Pinnacle such information regarding such persons and the distribution
proposed by such persons as Pinnacle may request in writing and as shall be
required in connection with any registration, qualification or compliance
referred to in this Section 2. Pinnacle's obligations under this Section 2 are
conditioned upon compliance by such persons with the provisions of this Section
2.2.

   2.3   Obligations of Pinnacle.  In connection with any registration of
         -----------------------
Registrable  Securities pursuant to this Section 2,  Pinnacle shall:

         (a) 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.

                                     - 3 -

<PAGE>

         (b) Furnish to the participating Holders such number of copies of any
Prospectus (including any preliminary Prospectus and any amended or supplemented
Prospectus) 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 Pinnacle shall be required under the provisions hereof to
cause a Registration Statement to remain current. In addition, during such
period, Pinnacle shall provide the Holders, without charge, with one copy of any
Registration Statement and any post-effective amendments thereto (including
financial statements and schedules and the exhibits thereto).

         (c) 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.

         (d) Take all such other action either reasonably necessary or desirable
to permit the shares of Registrable Securities held by the Holders to be
registered and disposed of in accordance with the method of disposition
described herein.

         (e) Cause all Registrable Securities registered pursuant to this
Section 2 to be listed on The Nasdaq National Market or on any other exchange on
which Pinnacle's Common Stock is then listed or quoted.

         (f) Provide for or designate a transfer agent and registrar (which may
be the same entity) for the Registrable Securities covered by the Registration
Statement from and after the effective date of such Registration Statement.

         (g) Pinnacle will keep the Holders informed of Pinnacle's best estimate
of the earliest date on which such Registration Statement or any post-effective
amendment thereto will become effective and will notify each Holder, (i) when
such Registration Statement or any post-effective amendment to such Registration
Statement is filed or becomes effective, (ii) of any request by the SEC for an
amendment or any supplement to such Registration Statement or any related
Prospectus, or any other information request by any other governmental agency
directly relating to the offering, and promptly deliver to each Holder
participating in the offering copies of all correspondence between the SEC or
any such governmental agency or self-regulatory body and all written memoranda
relating to discussions with the SEC or its staff with respect to the
Registration Statement or proposed sale of shares, to the extent not covered by
attorney-client privilege or constituting attorney work product, (iii) of the
issuance by the SEC of any stop order suspending the effectiveness of such
Registration Statement or of any order preventing or suspending the use of any
related Prospectus or the initiation or threat of any proceeding for that
purpose, (iv) of the suspension of the qualification of any shares of Common
Stock included in such Registration Statement for sale in any jurisdiction or
the initiation or threat of a proceeding for that purpose, and (v) of any
determination by Pinnacle that an event has occurred (the nature and pendency of
which need not be disclosed during a "black-out period" pursuant to Section 2.4
of this Agreement) which makes untrue any statement of a material fact made in
such Registration Statement or any related Prospectus or which requires the
making of a change in such Registration Statement or any related Prospectus in
order that the same will not contain any

                                     - 4 -

<PAGE>

untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.

         (h) In the event of the issuance of any stop order suspending the
effectiveness of such Registration Statement or of any order suspending or
preventing the use of any related Prospectus or suspending the qualification of
any shares of Common Stock included in such Registration Statement for sale in
any jurisdiction, Pinnacle will obtain its withdrawal at the earliest possible
time.

   2.4   Suspension of Prospectus.
         ------------------------

         (a) Notwithstanding anything else in this Section 2, 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 reasonably
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 45 days with respect to
each of the Registration Statements Pinnacle is obligated to file pursuant to
the terms of this Agreement. Pinnacle may not exercise this delay right more
than twice in any 12-month period with respect to each of the Registration
Statements Pinnacle is obligated to file pursuant to the terms of this
Agreement. In the event of the delivery of the notice described above by
Pinnacle, Pinnacle shall use its best efforts to amend such Registration
Statement and/or amend or supplement the related prospectus if necessary and to
take all other actions necessary to allow the proposed sale to take place as
promptly as possible, subject, however, to the right of Pinnacle set forth above
in this Section 2.4(a) to delay further sales of Registrable Securities until
the conditions or circumstances referred to in the notice have ceased to exist
or have been disclosed.

         (b) In the event that conditions described in Section 2.4(a) arise
prior to the filing or effectiveness of a Registration Statement required
pursuant to this Agreement and such conditions would have entitled Pinnacle to
suspend offers and sales under such Registration Statement had the conditions
arisen after filing and effectiveness of such Registration Statement, Pinnacle
may, upon giving of the notice required by Section 2.4(a), delay the filing of
or cause a delay in the declaration of effectiveness of such Registration
Statement. Any such delay caused by Pinnacle under this Section 2.4(b) shall be
treated as a suspension of sales under such Registration Statement for purposes
of applying the limitations on Pinnacle's exercise of the delay right provided
in Section 2.4(a).

                                     - 5 -

<PAGE>

   2.5   Expenses.
         --------

         (a) All costs and expenses, other than discounts and commissions,
incurred in connection with any registration pursuant to Section 2 shall be
borne by Pinnacle. The costs and expenses of any such registration shall
include, without limitation, the reasonable fees and expenses of Pinnacle's
counsel and its accountants, and all other costs and expenses of Pinnacle
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 brokers, 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, NASDAQ fees, the fees and expenses of Pinnacle's transfer
agent and all other costs and expenses of complying with the provisions of this
Section 2 with respect to such registration (collectively, "Registration
Expenses").

         (b) Excluding the Registration Expenses, the participating Holders
shall pay all other fees and expenses incurred on their behalf with respect to
any registration pursuant to this Section 2, including any counsel for the
Holders and all selling commissions with respect to the Registrable Securities
sold by them pursuant to such Registration Statement.

   2.6   Indemnification. In the event of any offering registered pursuant to
         ---------------
this Agreement:

         (a) Pinnacle will indemnify each Holder (excluding Holders who are then
directors or officers of Pinnacle), each of their respective officers,
directors, employees and agents, and each person controlling such person, with
respect to which registration, qualification or compliance has been effected
pursuant to this Section 2, against all claims, losses, damages, liabilities and
expenses (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 preliminary or final prospectus, offering circular or other document
(including any related Registration Statement, notification or the like) or any
amendment or supplement thereto 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 Pinnacle of any rule or
regulation promulgated under the Securities Act or any state securities laws or
rule or regulation promulgated thereunder applicable to Pinnacle and relating to
action or inaction required of Pinnacle 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, for
any legal and any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability, expense or
action, provided that Pinnacle will not be liable in any such case to the extent
that any such claim, loss, damage, liability or expense arises out of or is
based on any untrue statement or omission based upon and made in conformity with
written information furnished to Pinnacle by an instrument duly executed by such
person and stated to be specifically for use in the Registration Statement.

         (b) 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 Pinnacle, each of its
directors, officers, employees and agents, each person

                                     - 6 -

<PAGE>

who controls Pinnacle 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, liabilities and expenses (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, preliminary or final prospectus, offering circular or
other document, or any amendment or supplement thereto, 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
Pinnacle, such Holders, such directors, officers, or persons for any legal or
any other expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability, expense 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, preliminary or final prospectus, offering circular or
other document in reliance upon and in conformity with written information
furnished to Pinnacle by an instrument duly executed by such Holder and stated
to be specifically for use in the Registration Statement; provided, however,
that the obligations of such Holders hereunder shall be limited to an amount
equal to the gross proceeds before expenses and commissions to each such Holder
of Registrable Securities sold as contemplated herein.

         (c) Each party entitled to indemnification under this Section 2.6 (the
"Indemnified Party") shall give written notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has written notice 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, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
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 not relieve the Indemnifying Party of
its obligations under this Agreement, except to the extent, but only to the
extent, that the Indemnifying Party's ability to defend against such claim or
litigation is materially impaired as a result of such failure to give notice. 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 any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to the 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 2.6, 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 2.6.

         (d) If the indemnification provided for in this Section 7 from the
Indemnifying Party is unavailable to an Indemnified Party hereunder in respect
of any losses, claims, damages,

                                     - 7 -

<PAGE>

liabilities or expenses referred to therein as a result of a judicial
determination that such indemnification may not be enforced in such case
notwithstanding this Agreement, the Indemnifying Party, in lieu of indemnifying
such Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the relative fault of
the Indemnifying Party and Indemnified Party in connection with the actions
which resulted in such losses, claims, damages, liabilities or expense, as well
as any other relevant equitable considerations. The relative fault of such
Indemnifying Party and Indemnified Party shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information supplied by,
such Indemnifying Party or Indemnified Party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action; provided, however, that no person guilty of fraudulent misrepresentation
        --------  -------
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation and no Holder will be required to contribute any amount in
excess of the public offering price (less underwriting discounts and selling
commissions) of all such Registrable Stock offered by it pursuant to such
Registration Statement.

         (e) The obligations of Pinnacle and each Holder under this Section 2.6
shall survive the completion of any offering of Registrable Securities in a
Registration Statement under this Agreement and otherwise.

   2.7   Sale without Registration. The Holder of a certificate representing
         -------------------------
Registrable Securities required to bear the legend in substantially the form set
forth in Section 12 of the Acquisition Agreement (or any similar legend) by
acceptance thereof agrees to comply in all respects with the provisions of this
Section 2.7. 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 Pinnacle 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 of the Shareholders, at
the expense of the Holder or transferee, an unqualified written opinion of legal
counsel, satisfactory in form and substance to Pinnacle, to the effect that such
transfer may be made without registration under the Securities Act; provided
that nothing contained in this Section 2.7 shall relieve Pinnacle from complying
with any request for registration, qualification or compliance made pursuant to
the other provisions of this Section 2.

   2.8   Transfer of Registration Rights. The rights to cause Pinnacle to
         -------------------------------
register securities granted by Pinnacle under this Agreement may be assigned by
the Shareholders only if: (i) Pinnacle is, prior to such transfer, furnished
with written notice of the name and address of such transferee and the
Registrable Securities with respect to which such registration rights are being
assigned and a copy of a duly executed written instrument in form reasonably
satisfactory to Pinnacle by which such transferee assumes all of the obligations
and liabilities of its transferor

                                     - 8 -

<PAGE>

hereunder and agrees itself to be bound hereby and (ii) such assignment includes
all of the Registrable Securities then held by the transferor; provided,
                                                               --------
however, that such the requirement that all of a transferor's Registrable
-------
Securities must be transferred in order to effect a transfer of registration
rights hereunder shall not apply to (x) transfers by an entity Holder in a
liquidity distribution to its equity holders or (y) transfers by a Holder to
spouses and ancestors, lineal descendants, and siblings of such Holders or
spouses who acquire Registrable Securities by right, will, or intestate
succession, if all such transferees or assignees under (x) or (y) agree in
writing to appoint a single representative as their attorney-in-fact for the
purpose of receiving any notices and exercising their rights under this
Agreement.

   2.9   Rule 144. Pinnacle covenants that it shall file any reports required to
         --------
be filed by it under the Exchange Act, and that it shall take such further
action as any Holder may reasonably request, all to the extent required from
time to time to enable such Holder to sell the Registrable Securities without
registration under the Securities Act within the limitations of the exemptions
provided by (a) Rule 144 under the Securities Act, as such rule may be amended
from time to time, or (b) any similar rule or regulation adopted by the SEC.
Pinnacle shall, upon the request of any Holder of Registrable Securities,
deliver to such Holder a written statement as to whether it has complied with
such requirements.

   2.10  Termination of Registration Rights. The registration rights set forth
         ----------------------------------
in this Agreement shall terminate with respect to Pinnacle Shares issued
pursuant to the Acquisition Agreement (and the right to transfer such Pinnacle
Shares pursuant to the Registration Statement under which such Pinnacle Shares
were registered shall terminate) immediately upon the earlier to occur of (a)
the date on which such shares cease to be Registrable Securities and (b) the one
year anniversary of the issuance of such shares pursuant to the Acquisition
Agreement; provided that no such termination shall affect any liability of
           --------
Pinnacle for any prior breach of the registration rights of the Holders set
forth herein.

                                   SECTION 3
                                 MISCELLANEOUS

   3.1   Governing Law.  This Agreement shall be governed in all respects by the
         -------------
laws of the State of California.

   3.2   [Reserved].
         ----------

   3.3   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.

   3.4   Amendment of Registration Rights.  This Agreement may be amended or
         --------------------------------
modified only by a writing signed by Pinnacle and holders of a majority of the
Registrable Securities from time to time outstanding.

                                     - 9 -

<PAGE>

   3.5   Notices and Dates. All notices or other communications required or
         -----------------
permitted under this Agreement shall be made in the manner provided in Section
15.1 of the Acquisition 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.

   3.6   Severability. If any provision of this Agreement or portion thereof is
         ------------
held by a court of competent jurisdiction to be invalid, illegal, 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.

                  [Remainder of Page Intentionally Left Blank]

                                     - 10 -

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers as of the date aforesaid.

"PINNACLE"                     PINNACLE SYSTEMS, INC.,
                               a California corporation

                               By: /s/ Arthur D. Chadwick
                                  ----------------------------------------------
                                  Arthur D. Chadwick, Vice President,
                                  Finance and Chief Financial Officer

"SELLERS"                      FAST MULTIMEDIA HOLDINGS, INC.

                               By: /s/ Matthias Zahn
                                  ----------------------------------------------

                               Name:   Matthias Zahn
                                    --------------------------------------------

                               Title:  Chief Executive Officer
                                     -------------------------------------------

                               FAST MULTIMEDIA AG

                               By: /s/ Reiner Bielmeier
                                  ----------------------------------------------

                               Name:   Reiner Bielmeier
                                    --------------------------------------------

                               Title:  Chief Executive Officer
                                     -------------------------------------------

                                     - 11 -

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