AVID TECHNOLOGY MERGES WITH PARALLAX AND ELASTIC REALITY.

TEWKSBURY, Mass.--(BUSINESS WIRE)-- March 29, 1995--Avid Technology, Inc. (NASDAQ: AVID) announced today that it has acquired through mergers The Parallax Software Group of London, England, a leading developer of paint and compositing technology, and Elastic Reality, Inc. of Madison, Wis., a leading developer of special effects software, including morphing and film restoration tools. Under the terms of the respective merger agreements, Avid has issued in aggregate approximately 1.5 million shares of Avid Common Stock, valued today at approximately $45 million.

Curt Rawley, Avid's chief executive officer, commented, "We view these organizations as very important companies in the area of digital image processing, and these mergers will help us further our goals of providing integrated product solutions. Their paint, compositing and morphing and effects capabilities complement Avid's existing family of digital editing solutions and the mergers will provide key products, technologies and additional software developers. Together, it is our intention to create the next generation of integrated products for digital media users, whether they're in online suites, broadcast newsrooms, corporations, the home, small office or educational markets."

"We share Avid's view that the software tools used today in creating and manipulating digital media must become more closely integrated," said Gareth Griffith, managing director of Parallax. "Our customers have been asking for tighter links with digital editing systems, just as Avid's customers have been asking for closer ties with image processing tools. We believe that we can provide a real benefit, both now and in the future, to these customers by merging with Avid. There is tremendous leverage in this combination because Parallax's well-established paint and compositing products are the perfect complement to Avid's editing products."

Perry Kivolowitz, Elastic Reality's president, observed, "We agree with Avid that the combination of our engineering talents represents a foundation for developing innovative and exciting new products for the film, video and broadcast markets. Joining with Avid also affords us an opportunity to leverage their sales and marketing organizations and to make Elastic Reality's leading-edge technology accessible to a broader range of customers."

In the twelve months ended December 31, 1994, Elastic Reality and Parallax generated combined revenues of approximately $12.0 million. Both mergers are effective March 29, 1995, and will be accounted for as poolings of interests. Elastic Reality and Parallax each were privately owned prior to the mergers.

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Avid Technology, Inc., headquartered in Tewksbury, Massachusetts, is an international developer and supplier of comprehensive solutions for capturing, creating, editing, and distributing digital media. Ranked #9 by Fortune magazine and #5 by Inc. magazine on their lists of America's 100 fastest-growing companies for 1994, Avid is a pioneering developer of nonlinear film, video and audio editing software and hardware and networking technologies for applications ranging from desktop video and post production to broadcast news. Avid's products are sold through direct sales offices and a network of distributors and resellers around the world.

Since 1990, Parallax Software has been devoted to extending the creative possibilities to digital effects artists and designers and providing a fully integrated suite of effects and animation tools on affordable general purpose workstations. More than 600 customers in 50 countries around the world use Parallax Software including the BBC, Industrial Light & Magic, The Mill, VTR, The Framestore, Sony Pictures Imageworks, Rhythm & Hues, ITN, Moving Picture Company, NHK, Fuji Television, NBC, MTV and Warner Bros. Parallax Software has played a major role in effects creation for over 70 movies including Oscar winners Death Becomes Her and Jurassic Park plus all three 1995 special effects Oscar nominees, Forrest Gump, The Mask and True Lies.

Elastic Reality, Inc., headquartered in Madison, Wisconsin, is an innovator in high-quality special effects and image processing applications for the Silicon Graphics, Macintosh, Power Macintosh and Microsoft Windows platforms. Its products include Elastic Reality(tm) morphing and special effects software; No Strings Attached artificial intelligence based image editing software and HIIP (Host Independent Imaging Protocol) technology for image portability across platforms and applications.

Avid Technology is a registered trademark of Avid Technology, Inc. All other trademarks contained herein are the property of their respective owners.

CONTACT: Avid Technology, Inc. Parallax Software Group Scott Higgins, 508/640-3563 Gareth Griffith, 44/71-287-3626 Kara Misenheimer, 508/640-3103 Lynwen Goldspink, 44/71-287-3626

or or Schwartz Communications, Inc. Elastic Reality, Inc. Pamela Hamilton, 617/431-0770 ext. 222 Perry Kivolowitz, 608/273-6585 Deirdre O'Connell, 617/431-0770 ext. 217