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Exhibit 99.2
PLEDGE AGREEMENT
PLEDGE AGREEMENT dated as of May 2, 2000 at 12:15 p.m., (the
"Agreement") between C-CUBE SEMICONDUCTOR INC, a Delaware corporation (the
"Pledgor") and C-CUBE MICROSYSTEMS INC., a Delaware Corporation ("C-Cube"), All
capitalized terms used herein, unless otherwise specifically defined in this
Agreement, shall have the meanings ascribed to them in the Note (as hereinafter
defined) and Guaranty (as hereinafter defined).
W I T N E S S E T H:
WHEREAS, C-Cube has agreed to make a loan to C-Cube Semiconductor II
Inc. (the "Borrower"), which will be evidenced by a Promissory Note dated May 2,
2000 at 12:15 p.m. in a principal amount of $ 150,000,000.00 (as amended from
time to time, the "Note");
WHEREAS, pursuant to a Parent Guaranty dated May 2, 2000 at 12:15 p.m.
(as amended from time to time, the "Guaranty") by the Pledgor in favor of
C-Cube, the Pledgor has agreed to guaranty the obligations of the Borrower under
the Note;
WHEREAS, the Pledgor is the record and beneficial owner of the shares
of capital stock or other equity interests listed in Schedule I hereto;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. DEFINITIONS. The following shall have (unless otherwise
provided elsewhere in this Agreement) the following respective meanings (such
meanings being equally applicable to both the singular and plural form of the
terms defined):
"Collateral Documents" means this Agreement, financing statements and
all other documents executed or delivered from time to time in connection
therewith or otherwise to secure the Pledgor's obligations under the Loan
Documents, in each case as amended from time to time.
"Lien" means any lien, mortgage, pledge, security interest, charge or
encumbrance of any kind (including any conditional sale or other title retention
agreement or any lease in the nature thereof) and any agreement to give or
refrain from giving any of the foregoing.
"Loan Documents" means, collectively, this Agreement, the Note, the
Guaranty, the Collateral Documents and any other agreement, instrument or other
writing executed or delivered by any Grantor in connection herewith, and all
amendments, exhibits and schedules to any of the foregoing.
"Person" means an individual, a corporation, a partnership, a limited
liability company, a trust, an unincorporated organization or any other entity
or organization, including a governmental authority.
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"Pledged Collateral" has the meaning assigned to such term in Section 2
hereof.
"Pledged Entity" means an issuer of Pledged Interests.
"Pledged Interests" means those shares of capital stock and other
equity interests listed on Schedule I hereto (as modified from time to time by
the delivery of one or more Pledge Amendments).
"Secured Obligations" has the meaning assigned to such term in Section
3 hereof.
SECTION 2. PLEDGE. The Pledgor hereby pledges to C-Cube and grants to
C-Cube a security interest in, all of the following (collectively, the "Pledged
Collateral"):
(a) the Pledged Interests and any certificates representing
the Pledged Interests, and all dividends, distributions, cash,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for
any or all of the Pledged Interests; and
(b) any additional shares of capital stock or other equity
interests of a Pledged Entity, or any other Subsidiary of the Pledgor,
from time to time acquired by the Pledgor in any manner (which shares
or equity interests shall be deemed to be part of the Pledged
Interests), and any certificates representing such additional shares or
equity interests, and all dividends, distributions, cash, instruments
and other property or proceeds from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all of
such Pledged Interests.
SECTION 3. SECURITY FOR OBLIGATIONS. This Agreement secures, and the
Pledged Collateral is security for, the prompt payment in full when due, whether
at stated maturity, by acceleration or otherwise, and performance of all
Obligations of the Pledgor of any kind under or in connection with the Note and
the Guaranty and all obligations of the Pledgor now or hereafter existing under
this Agreement including, without limitation, all fees, costs and expenses
whether in connection with collection actions hereunder or otherwise
(collectively, the "Secured Obligations").
SECTION 4. DELIVERY OF PLEDGED COLLATERAL. All certificates or other
instruments evidencing the Pledged Collateral shall be delivered to and held by
or on behalf of C-Cube, pursuant hereto and all such certificates or instruments
shall be accompanied by duly executed instruments of transfer or assignment in
blank, all in form and substance reasonably satisfactory to C-Cube.
SECTION 5. REPRESENTATIONS AND WARRANTIES. The Pledgor represents and
warrants to C-Cube:
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(a) Pledgor is, and at the time of delivery of the Pledged
Interests to C-Cube will be, the sole holder of record and the sole
beneficial owner of such Pledged Collateral pledged by Pledgor free and
clear of any Lien thereon or affecting the title thereto;
(b) All of the Pledged Interests have been duly authorized,
validly issued and are fully paid and non-assessable;
(c) Pledgor has all requisite, power, authority and legal
right to pledge, assign, transfer, deliver, deposit and set over the
Pledged Collateral pledged by Pledgor to C-Cube, as provided herein;
(d) None of the Pledged Interests has been created, issued or
transferred in violation of the securities registration, securities
disclosure or similar laws of any jurisdiction to which such issuance
or transfer may be subject;
(e) All of the Pledged Interests are presently owned by the
Pledgor, and with respect to certificated Pledged Interests, are
presently represented by the certificates listed on Schedule I hereto.
As of the date hereof, there are no existing options, warrants, calls
or commitments of any character whatsoever relating to the Pledged
Interests or with respect to any other capital stock of a Pledged
Entity;
(f) No consent, approval, authorization or other order or
other action by, and no notice to or filing with, any governmental
authority or any other Person is required (i) for the pledge by Pledgor
of the Pledged Collateral pursuant to this Agreement or for the
execution, delivery or performance of this Agreement by Pledgor, or
(ii) for the exercise by C-Cube of the voting or other rights provided
for in this Agreement or the remedies in respect of the Pledged
Collateral pursuant to this Agreement, except as may be required in
connection with such disposition by applicable laws;
(g) The pledge, assignment and delivery of the Pledged
Collateral pursuant to this Agreement creates a valid first priority
Lien on and a first priority perfected security interest in favor of
C-Cube in the Pledged Collateral and the proceeds thereof, securing the
payment of the Secured Obligations, subject to no other Lien or adverse
claim;
(h) This Agreement has been duly authorized, executed and
delivered by Pledgor and constitutes a legal, valid and binding
obligation of the Pledgor enforceable against Pledgor in accordance
with its terms, subject to the effects of applicable bankruptcy,
insolvency, moratorium, reorganization or similar laws affecting
creditors' rights generally and equitable principles of general
applicability;
(i) Except as specified on Schedule I hereto, the Pledged
Interests constitute 100% of the issued and outstanding shares of
capital stock or other equity interests of each Pledged Entity.
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The representations and warranties set forth in this Section 5 shall
survive the execution and delivery of this Agreement.
SECTION 6. COVENANTS. The Pledgor covenants and agrees that until the
full and complete satisfaction of the Secured Obligations (the "Termination
Date"):
(a) Pledgor will not sell, assign, transfer, pledge, or
otherwise encumber any of its rights in or to the Pledged Collateral,
or xxxxx x Xxxx in the Pledged Collateral except in favor of C-Cube;
(b) Pledgor will, at its expense, promptly execute,
acknowledge and deliver all such instruments and take all such actions
as C-Cube from time to time may reasonably request in order to ensure
to C-Cube the benefits of the Liens in and to the Pledged Collateral
intended to be created by this Agreement, including the filing of any
necessary Uniform Commercial Code financing statements, which may be
filed by C-Cube with or (to the extent permitted by law) without the
signature of Pledgor, and will cooperate with C-Cube, at Pledgor's
expense, in obtaining all necessary approvals and making all necessary
filings under federal, state, local or foreign law in connection with
such Liens or any sale or transfer of the Pledged Collateral;
(c) Pledgor has and will defend the title to the Pledged
Collateral and the Liens of C-Cube, the Pledged Collateral against the
claim of any Person and will maintain and preserve such Liens; and
(d) Pledgor will, upon obtaining ownership of any additional
capital stock of, or equity interest in, a Pledged Entity or capital
stock or other equity interest in any other Subsidiary, promptly (and
in any event within three (3) Business Days) deliver to C-Cube, duly
executed by Pledgor, in substantially the form of Schedule II hereto (a
"Pledge Amendment") in respect of any such additional capital stock or
equity interest, pursuant to which Pledgor shall pledge to C-Cube all
of such additional capital stock or ownership interest. Pledgor hereby
authorizes C-Cube to attach each Pledge Amendment to this Agreement and
agrees that all Pledged Interests listed on any Pledge Amendment
delivered to C-Cube shall for all purposes hereunder be considered
Pledged Collateral; provided, however, that it is understood and agreed
the security interest in the Pledged Collateral described in Section 2
hereof shall in no way be limited or impaired by the failure of the
Pledgor to execute and deliver any Pledge Amendment.
SECTION 7. Pledgor'S Rights. As long as no Event of Default shall have
occurred and be continuing:
(a) The Pledgor shall have the right, from time to time, to
vote and give consents with respect to the Pledged Collateral, or any
part thereof, for all purposes not inconsistent with the provisions of
this Agreement, the Note, or the Guaranty; provided, however, that no
vote shall be cast, and no consent shall be given or action taken,
which
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would have the effect of impairing the position or interest of C-Cube
in respect of the Pledged Collateral or which would authorize, effect
or consent to:
(i) the dissolution or liquidation, in whole or in
part, of a Pledged Entity;
(ii) the consolidation or merger of a Pledged Entity
with any other Person;
(iii) the sale, disposition or encumbrance of all or
substantially all of the assets of a Pledged Entity;
(iv) any change in the authorized number of shares,
ownership interests, the stated capital or the authorized
share capital of a Pledged Entity or the issuance of any
additional shares of its capital stock or any other ownership
or equity interest therein except to the extent the same are
pledged pursuant to Section 6 hereof; or
(v) the alteration of the voting rights with respect
to the capital stock or ownership interest of a Pledged
Entity; and
(b) (i) The Pledgor shall be entitled, from time to time, to
receive and retain for its own use all cash dividends, interest and
other distributions paid in respect of the Pledged Interests to the
extent not in violation of the Note other than any and all: (A)
dividends, interest and other distributions paid or payable other than
in cash in respect of any Pledged Collateral, and any cash or other
property received, receivable or otherwise distributed in exchange for,
any Pledged Collateral; and (B) dividends and other distributions paid
or payable in cash in respect of any Pledged Interests in connection
with a partial or total liquidation or dissolution or in connection
with a reduction of capital, capital surplus or paid-in capital of a
Pledged Entity paid, payable or otherwise distributed, in respect of
principal of, or in redemption of, or in exchange for, any Pledged
Collateral; provided, however, that until actually paid all rights to
such distributions shall remain subject to the Lien created by this
Agreement; and
(ii) all dividends and interest (other than such cash
dividends, interest and other distributions as are permitted to be
received and retained by the Pledgor in accordance with clause (i)
above) and all other distributions in respect of any of the Pledged
Interests or Pledged Indebtedness, whenever paid or made, shall be
delivered to C-Cube to hold as Pledged Collateral and shall, if
received by Pledgor, be received in trust for the benefit of C-Cube, be
segregated from the other property or funds of Pledgor, and be
forthwith delivered to C-Cube as Pledged Collateral in the same form as
so received (with any necessary indorsement).
SECTION 8. DEFAULTS AND REMEDIES; PROXY.
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(a) Upon the occurrence and during the continuation of an
Event of Default (as defined in the Guaranty), in addition to all of
the rights (and without limiting any such right) of a secured party
under applicable law, including, without limitation, under the
California Commercial Code, C-Cube (personally or through an agent) is
hereby authorized and empowered to transfer and register in its name or
in the name of its nominee the whole or any part of the Pledged
Collateral, to exchange certificates or instruments representing or
evidencing Pledged Collateral for certificates or instruments of
smaller or larger denominations, to exercise the voting and all other
rights as a holder with respect thereto, to collect and receive all
cash dividends, interest, principal and other distributions made
thereon, to sell in one or more sales after ten (10) days' notice of
the time and place of any public sale or of the time at which a private
sale is to take place (which notice the Pledgor agrees is commercially
reasonable) the whole or any part of the Pledged Collateral and to
otherwise act with respect to the Pledged Collateral as though C-Cube
was the outright owner thereof. Any sale shall be made at a public or
private sale at C-Cube's place of business, or at any place to be named
in the notice of sale, either for cash or upon credit or for future
delivery at such price as C-Cube may deem fair, and C-Cube may be the
purchaser of the whole or any part of the Pledged Collateral so sold
and hold the same thereafter in its own right free from any claim of
the Pledgor or any right of redemption. Each sale shall be made to the
highest bidder, but C-Cube reserves the right to reject any and all
bids at such sale which, in its discretion, it shall deem inadequate.
Demands of performance, except as otherwise herein specifically
provided for, notices of sale, advertisements and the presence of
property at sale are hereby waived and any sale hereunder may be
conducted by an auctioneer or any officer or agent of C-Cube. THE
PLEDGOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS C-CUBE AS THE PROXY
AND ATTORNEY-IN-FACT OF PLEDGOR WITH RESPECT TO THE PLEDGED COLLATERAL,
INCLUDING THE RIGHT TO VOTE THE PLEDGED INTERESTS, WITH FULL POWER OF
SUBSTITUTION TO DO SO. THE APPOINTMENT OF C-CUBE AS PROXY AND
ATTORNEY-IN-FACT IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE
UNTIL THE TERMINATION DATE. IN ADDITION TO THE RIGHT TO VOTE THE
PLEDGED INTERESTS, THE APPOINTMENT OF C-CUBE AS PROXY AND
ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS,
POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF THE PLEDGED
INTERESTS WOULD BE ENTITLED (INCLUDING GIVING OR WITHHOLDING WRITTEN
CONSENTS OF SHAREHOLDERS, MEMBERS OR PARTNERS, AS THE CASE MAY BE,
CALLING SPECIAL MEETINGS OF SHAREHOLDERS, MEMBERS OR PARTNERS, AS
APPLICABLE, AND VOTING AT SUCH MEETINGS). SUCH PROXY SHALL BE
EFFECTIVE, AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION
(INCLUDING ANY TRANSFER OF ANY PLEDGED INTERESTS ON THE RECORD BOOKS OF
THE ISSUER THEREOF) BY ANY PERSON (INCLUDING THE ISSUER OF THE PLEDGED
INTERESTS OR ANY OFFICER OR AGENT THEREOF), UPON THE OCCURRENCE AND
DURING THE CONTINUATION OF
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AN EVENT OF DEFAULT. NOTWITHSTANDING THE FOREGOING, C-CUBE SHALL NOT
HAVE ANY DUTY TO EXERCISE ANY SUCH RIGHT OR TO PRESERVE THE SAME AND
SHALL NOT BE LIABLE FOR ANY FAILURE TO DO SO OR FOR ANY DELAY IN DOING
SO.
(b) If, at the original time or times appointed for the sale
of the whole or any part of the Pledged Collateral, the highest bid, if
there be but one sale, shall be inadequate to discharge in full all the
Secured Obligations, or if the Pledged Collateral be offered for sale
in lots, if at any of such sales, the highest bid for the lot offered
for sale would indicate to C-Cube, in its discretion, that the proceeds
of the sales of the whole of the Pledged Collateral would be unlikely
to be sufficient to discharge all the Secured Obligations, C-Cube may,
on one or more occasions and in its discretion, postpone any of said
sales by public announcement at the time of sale or the time of
previous postponement of sale, and no other notice of such postponement
or postponements of sale need be given, any other notice being hereby
waived; provided, however, that any sale or sales made after such
postponement shall be after ten (10) days' notice to the Borrower or
the applicable Pledgor.
(c) If, at any time when C-Cube shall determine to exercise
its right to sell the whole or any part of the Pledged Collateral
hereunder, such Pledged Collateral or the part thereof to be sold shall
not, for any reason whatsoever, be effectively registered under the
Act, C-Cube may, in its discretion (subject only to applicable
requirements of law), sell such Pledged Collateral or part thereof by
private sale in such manner and under such circumstances as C-Cube may
deem necessary or advisable, but subject to the other requirements of
this Section 8, and shall not be required to effect such registration
or to cause the same to be effected. Without limiting the generality of
the foregoing, in any such event, C-Cube in its discretion (x) may, in
accordance with applicable securities laws, proceed to make such
private sale notwithstanding that a registration statement for the
purpose of registering such Pledged Collateral or part thereof could be
or shall have been filed under said Act (or similar statute), (y) may
approach and negotiate with a single possible purchaser to effect such
sale, and (z) may restrict such sale to a purchaser who is an
accredited investor under the Act and who will represent and agree that
such purchaser is purchasing for its own account, for investment and
not with a view to the distribution or sale of such Pledged Collateral
or any part thereof. In addition to a private sale as provided above in
this Section 8, if any of the Pledged Collateral shall not be freely
distributable to the public without registration under the Act (or
similar statute) at the time of any proposed sale pursuant to this
Section 8, then C-Cube shall not be required to effect such
registration or cause the same to be effected but, in its discretion
(subject only to applicable requirements of law), may require that any
sale hereunder (including a sale at auction) be conducted subject to
restrictions:
(i) as to the financial sophistication and ability of
any Person permitted to bid or purchase at any such sale;
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(ii) as to the content of legends to be placed upon
any certificates representing the Pledged Collateral sold in
such sale, including restrictions on future transfer thereof;
(iii) as to the representations required to be made
by each Person bidding or purchasing at such sale relating to
that Person's access to financial information about Pledgor
and such Person's intentions as to the holding of the Pledged
Collateral so sold for investment for its own account and not
with a view to the distribution thereof; and
(iv) as to such other matters as C-Cube may, in its
discretion, deem necessary or appropriate in order that such
sale (notwithstanding any failure so to register) may be
effected in compliance with the Bankruptcy Code and other laws
affecting the enforcement of creditors' rights and the Act and
all applicable state securities laws.
(d) The Pledgor recognizes that C-Cube may be unable to effect
a public sale of any or all the Pledged Collateral and may be compelled
to resort to one or more private sales thereof in accordance with
clause (c) above. The Pledgor also acknowledges that any such private
sale may result in prices and other terms less favorable to the seller
than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall not be deemed to
have been made in a commercially unreasonable manner solely by virtue
of such sale being private. C-Cube shall be under no obligation to
delay a sale of any of the Pledged Collateral for the period of time
necessary to permit the Pledged Entity to register such securities for
public sale under the Act, or under applicable state securities laws,
even if the applicable Pledgor and the Pledged Entity would agree to do
so.
(e) The Pledgor agrees to the maximum extent permitted by
applicable law that following the occurrence and during the continuance
of an Event of Default it will not at any time plead, claim or take the
benefit of any appraisal, valuation, stay, extension, moratorium or
redemption law now or hereafter in force in order to prevent or delay
the enforcement of this Agreement, or the absolute sale of the whole or
any part of the Pledged Collateral or the possession thereof by any
purchaser at any sale hereunder, and the Pledgor waives the benefit of
all such laws to the extent it lawfully may do so. The Pledgor agrees
that it will not interfere with any right, power and remedy of C-Cube
provided for in this Agreement or now or hereafter existing at law or
in equity or by statute or otherwise, or the exercise or beginning of
the exercise by C-Cube of any one or more of such rights, powers or
remedies. No failure or delay on the part of C-Cube to exercise any
such right, power or remedy and no notice or demand which may be given
to or made upon the applicable Pledgor by C-Cube with respect to any
such remedies shall operate as a waiver thereof, or limit or impair
C-Cube's right to take any action or to
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exercise any power or remedy hereunder, without notice or demand, or
prejudice its rights as against the Pledgor in any respect.
(f) The Pledgor further agrees that a breach of any of the
covenants contained in this Section 8 will cause irreparable injury to
C-Cube, that C-Cube shall have no adequate remedy at law in respect of
such breach and, as a consequence, agrees that each and every covenant
contained in this Section 8 shall be specifically enforceable against
the Pledgor, and the Pledgor hereby waives and agrees not to assert any
defenses against an action for specific performance of such covenants
except for a defense that the Secured Obligations are not then due and
payable in accordance with the agreements and instruments governing and
evidencing such obligations.
SECTION 9. WAIVER. No delay on C-Cube's part in exercising any power of
sale, Lien, option or other right hereunder, and no notice or demand which may
be given to or made upon the Pledgor by C-Cube with respect to any power of
sale, Lien, option or other right hereunder, shall constitute a waiver thereof,
or limit or impair C-Cube's right to take any action or to exercise any power of
sale, Lien, option, or any other right hereunder, without notice or demand, or
prejudice C-Cube's rights as against the Pledgor in any respect.
SECTION 10. ASSIGNMENT. C-Cube may assign, indorse or transfer any
instrument evidencing all or any part of the Secured Obligations as provided in,
and in accordance with, the Note and/or the Guaranty, and the holder of such
instrument shall be entitled to the benefits of this Agreement.
SECTION 11. TERMINATION. Immediately following the payment in full of
the Secured Obligations, C-Cube shall deliver to the Pledgor the Pledged
Collateral pledged by the Pledgor at the time subject to this Agreement and all
instruments of assignment executed in connection therewith, free and clear of
the Liens hereof and, except as otherwise provided herein, all of the Pledgor's
obligations hereunder shall at such time terminate.
SECTION 12. LIEN ABSOLUTE. All rights of C-Cube hereunder, and all
obligations of the Pledgor hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of the Note, the
Guaranty, or any other agreement or instrument governing or evidencing
any Secured Obligations;
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any part of the Secured Obligations, or
any other amendment or waiver of or any consent to any departure from
the Note, the Guaranty or any other agreement or instrument governing
or evidencing any Secured Obligations;
(c) any exchange, release or non-perfection of any other
Collateral, or any release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Secured Obligations;
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(d) the insolvency of the Pledgor; or
(e) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Pledgor other than payment
in full of the Secured Obligations.
SECTION 13. WAIVER OF DEFENSES. (a) The Pledgor acknowledges that the
obligations undertaken herein involve the granting of security for obligations
of Persons other than that of the Pledgor and, in full recognition of that fact,
consents and agrees that C-Cube may, at any time and from time to time, in
accordance with the terms of the Loan Documents, without notice or demand, and
without affecting the enforceability or continuing effectiveness hereof: (i)
supplement, modify, amend, extend, renew, accelerate or otherwise change the
time for payment or the terms of the Secured Obligations or any part thereof,
including any increase or decrease of the rate(s) of interest thereon; (ii)
supplement, modify, amend or waive, or enter into or give any agreement,
approval or consent with respect to, the Secured Obligations or any part
thereof, or any of the Loan Documents to which the Pledgor is not a party or any
additional security or guaranties, or any condition, covenant, default, remedy,
right, representation or term thereof or thereunder; (iii) accept new or
additional instruments, documents or agreements in exchange for or relative to
any of the Loan Documents or the Secured Obligations or any part thereof; (iv)
accept partial payments on the Secured Obligations; (v) receive and hold
additional security or guaranties for the Secured Obligations or any part
thereof; (vi) release, reconvey, terminate, waive, abandon, fail to perfect,
subordinate, exchange, substitute, transfer and/or enforce any security or
guaranties, and apply any security and direct the order or manner of sale
thereof as C-Cube in its sole and absolute discretion may determine; (vii)
release any Person from any personal liability with respect to the Secured
Obligations or any part thereof; (viii) settle, release on terms satisfactory to
C-Cube or by operation of applicable laws or otherwise liquidate or enforce any
Secured Obligations and any security or guaranty therefor in any manner, consent
to the transfer of any security and bid and purchase at any sale; and/or (ix)
consent to the merger, or consent to any change or any other restructuring or
termination of the corporate existence of the Borrower or any other Person, and
correspondingly restructure the Secured Obligations, and any such merger,
change, restructuring or termination shall not affect the liability of the
Pledgor or the continuing effectiveness hereof, or the enforceability hereof
with respect to all or any part of the Secured Obligations.
(b) Upon the occurrence and during the continuance of any
Event of Default, C-Cube may enforce this Agreement independently as to
the Pledgor and independently of any other remedy or security C-Cube at
any time may have or hold in connection with the Secured Obligations.
The Pledgor expressly waives any right to require C-Cube to marshal
assets in favor of the Borrower, or upon or against any security or
remedy, before proceeding to enforce this Agreement, in such order as
it shall determine in its sole and absolute discretion. C-Cube may file
a separate action or actions against the Borrower without respect to
whether action is brought or prosecuted with respect to any security or
against any other Person, or whether any other Person is joined in any
such action or actions. The Pledgor agrees that C-Cube and the
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Borrower and any Affiliates of the Borrower may deal with each other in
connection with the Secured Obligations or otherwise, or alter any
contracts or agreements now or hereafter existing between any of them,
in any manner whatsoever, all without in any way altering or affecting
the security of this Agreement. C-Cube's rights hereunder shall be
reinstated and revived, and the enforceability of this Agreement shall
continue, with respect to any amount at any time paid on account of the
Secured Obligations which thereafter shall be required to be restored
or returned by C-Cube upon the bankruptcy, insolvency or reorganization
of the Borrower or any other Person, or otherwise, all as though such
amount had not been paid. The rights of C-Cube created or granted
herein and the enforceability of this Agreement with respect to the
Pledgor at all times shall remain effective to guaranty the full amount
of all the Secured Obligations even though the Secured Obligations, or
any part thereof, or any security or guaranty therefor, may be or
hereafter may become invalid or otherwise unenforceable as against the
Borrower or any surety and whether or not the Borrower or other surety
shall have any personal liability with respect thereto. The Pledgor
expressly waives any and all defenses now or hereafter arising or
asserted by reason of (i) any disability or other defense of the
Borrower with respect to the Secured Obligations, (ii) the
unenforceability or invalidity of any security or guaranty for the
Secured Obligations or the lack of perfection or continuing perfection
or failure of priority of any security for the Secured Obligations,
(iii) the cessation for any cause whatsoever of the liability of the
Borrower (other than by reason of the full payment and performance of
all Secured Obligations), (iv) any failure of C-Cube to marshal assets
in favor of the Borrower or any other Person, (v) any act or omission
of C-Cube or others that directly or indirectly results in or aids the
discharge or release of the Borrower or other surety or the Secured
Obligations or any guaranty therefor by operation of law or otherwise,
(vi) any applicable law which provides that the obligation of a surety
or guarantor must neither be larger in amount nor in other respects
more burdensome than that of the principal or which reduces a surety's
or guarantor's obligation in proportion to the principal obligation,
(vii) any failure of C-Cube to file or enforce a claim in any
bankruptcy or other proceeding with respect to any Person, (viii) the
election by C-Cube, in any bankruptcy proceeding of any Person, of the
application or non-application of Section 1111(b)(2) of the United
States Bankruptcy Code, (ix) any extension of credit or the grant of
any Lien under Section 364 of the United States Bankruptcy Code, (x)
any use of cash collateral under Section 363 of the United States
Bankruptcy Code, (xi) any agreement or stipulation with respect to the
provision of adequate protection in any bankruptcy proceeding of any
Person, (xii) the avoidance of any Lien in favor of C-Cube for any
reason, (xiii) any bankruptcy, insolvency, reorganization, arrangement,
readjustment of debt, liquidation or dissolution proceeding commenced
by or against any Person, including any discharge of, or bar or stay
against collecting, all or any of the Secured Obligations (or any
interest thereon) in or as a result of any such proceeding, or (xiv)
any action taken by C-Cube that is authorized by this Section or any
other provision of any Loan Document. The Pledgor expressly waives all
setoffs and counterclaims and all presentment, demands for payment or
performance, notices of nonpayment or nonperformance, protests, notices
of protest, notices of dishonor and all other notices or demands of any
kind or nature whatsoever with respect to the Secured Obligations
(except notices expressly required by the Loan Documents), and all
notices of acceptance of this Agreement or of the existence, creation
or incurrence of new or additional Secured Obligations.
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SECTION 14. REINSTATEMENT. This Agreement shall remain in full force
and effect and continue to be effective should any petition be filed by or
against the Pledgor or any Pledged Entity for liquidation or reorganization,
should the Pledgor or any Pledged Entity become insolvent or make an assignment
for the benefit of creditors or should a receiver or trustee be appointed for
all or any significant part of the Pledgor's or a Pledged Entity's assets, and
shall continue to be effective or be reinstated, as the case may be, if at any
time payment and performance of the Secured Obligations, or any part thereof,
is, pursuant to applicable law, rescinded or reduced in amount, or must
otherwise be restored or returned by any obligee of the Secured Obligations,
whether as a "voidable preference", "fraudulent conveyance", or otherwise, all
as though such payment or performance had not been made. In the event that any
payment, or any part thereof, is rescinded, reduced, restored or returned, the
Secured Obligations shall be reinstated and deemed reduced only by such amount
paid and not so rescinded, reduced, restored or returned.
SECTION 15. MISCELLANEOUS.
(a) C-Cube may execute any of its duties hereunder by or
through agents or employees and shall be entitled to advice of counsel
concerning all matters pertaining to its duties hereunder.
(b) The Pledgor agrees to promptly reimburse C-Cube for actual
out-of-pocket expenses, including, without limitation, reasonable counsel fees,
incurred by C-Cube in connection with the enforcement of this Agreement.
(c) None of C-Cube or any of its respective officers,
directors, employees, agents or counsel shall be liable for any action lawfully
taken or omitted to be taken by it or them hereunder or in connection herewith,
except for its or their own gross negligence or willful misconduct.
(d) THIS AGREEMENT SHALL BE BINDING UPON THE PLEDGOR AND ITS
SUCCESSORS AND ASSIGNS (INCLUDING A DEBTOR-IN-POSSESSION ON BEHALF OF THE
PLEDGOR), AND SHALL INURE TO THE BENEFIT OF, AND BE ENFORCEABLE BY, C-CUBE AND
ITS SUCCESSORS AND ASSIGNS, AND NONE OF THE TERMS OR PROVISIONS OF THIS
AGREEMENT MAY BE WAIVED, ALTERED, MODIFIED OR AMENDED EXCEPT IN WRITING DULY
SIGNED FOR AND ON BEHALF OF C-CUBE AND PLEDGOR.
SECTION 16. SEVERABILITY. If for any reason any provision or provisions
hereof are determined to be invalid and contrary to any existing or future law,
such invalidity shall not impair the operation of or effect those portions of
this Agreement which are valid.
SECTION 17. NOTICES. Except as otherwise provided herein, whenever it
is provided herein that any notice, demand, request, consent, approval,
declaration or other communication shall or may be given to or served upon any
of the parties by any other party, or whenever any of
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the parties desires to give or serve upon any other a communication with respect
to this Agreement, each such notice, demand, request, consent, approval,
declaration or other communication shall be in writing and either shall be
delivered in accordance with the terms of the Guaranty.
SECTION 18. GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN
ANY OF THE LOAN DOCUMENTS, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER
SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT
STATE.
SECTION 19. WAIVER OF JURY TRIAL. EACH PARTY TO THIS AGREEMENT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTY HERETO OR ANY OF THEM WITH
RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR
TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
SECTION 20. SECTION TITLES. The Section titles contained in this
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.
SECTION 21. ADVICE OF COUNSEL. Each of the parties represents to each
other party hereto that it has discussed this Agreement and, specifically, the
provisions of Section 18 and Section 19, with its counsel.
SECTION 22. BENEFIT OF C-CUBE. All Liens granted or contemplated hereby
shall be for the benefit of C-Cube, and all proceeds or payments realized from
Collateral in accordance herewith shall be applied to the Obligations in
accordance with the terms of the Note.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first written above.
C-CUBE SEMICONDUCTOR INC., AS PLEDGOR
By: /s/ XXXXX XXXXXX
--------------------------------------
Name: Xxxxx Xxxxxx
Title: President and
Chief Executive Officer
C-CUBE MICROSYSTEMS INC.
By: /s/ XXXXXXXXX XXXXXXXXX
--------------------------------------
Name: Xxxxxxxxx Xxxxxxxxx
Title: President and
Chief Executive Officer
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SCHEDULE I
PLEDGED INTERESTS
NUMBER
OF SHARES AND %
CERTIFICATE OF EQUITY
PLEDGED ENTITY EQUITY INTEREST CLASS OF STOCK NUMBER(S) INTEREST
-------------- --------------- -------------- --------- -------------------
C-Cube Semiconductor II Inc. N/A Common XX-0, XX-0 1,000,000
over 99% equity interest
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SCHEDULE II
PLEDGE AMENDMENT
This Pledge Amendment, dated _____________ ___, _____ is delivered pursuant to
Section 6(d) of the Pledge Agreement referred to below. All defined terms herein
shall have the meanings ascribed thereto or incorporated by reference in the
Pledge Agreement. The undersigned hereby certifies that the representations and
warranties in Section 5 of the Pledge Agreement are and continue to be true and
correct as to the Pledged Collateral pledged prior to this Pledge Amendment and
as to Pledged Collateral pledged pursuant to this Pledge Amendment. The
undersigned further agrees that this Pledge Amendment may be attached to that
certain Pledge Agreement, dated as of May 2, 2000 at 12:15 p.m. (as the same may
be amended, supplemented or otherwise modified from time to time, the "Pledge
Agreement"), among the undersigned, as a Pledgor, and C-CUBE MICROSYSTEMS INC.
("C-Cube"), and that the Pledged Interests listed on Schedule A to this Pledge
Amendment shall be and become a part of the Pledged Collateral referred to in
said Pledge Agreement and shall secure all Secured Obligations referred to in
said Pledge Agreement. The undersigned acknowledges that any shares not included
in the Pledged Collateral at the discretion of C-Cube may not otherwise be
pledged by Pledgor to any other Person or otherwise used as security for any
obligations other than the Secured Obligations.
C-CUBE SEMICONDUCTOR INC.
By:
--------------------------------------
Name:
Title:
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SCHEDULE A
PLEDGED INTERESTS
NUMBER
CERTIFICATE OF SHARES AND % OF
PLEDGED ENTITY EQUITY INTEREST CLASS OF STOCK NUMBER(S) EQUITY INTEREST
-------------- --------------- -------------- --------- ---------------
