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Exhibit 99.3
PARENT GUARANTY
THIS PARENT GUARANTY, dated as of May 2, 2000 at 12:15 p.m. (this
"Guaranty"), is executed by C-Cube Semiconductor Inc., a Delaware corporation
("Parent"), in favor of C-Cube Microsystems Inc., a Delaware corporation
("Lender").
RECITALS
A. Pursuant to a Promissory Note, dated as of May 2, 2000 at 12:15
p.m. (the "Note"), executed in favor of Lender by C-Cube Semiconductor II Inc.,
a Delaware corporation, of which Parent is the majority stockholder
("Borrower"), Lender has agreed to extend credit to Borrower upon the terms and
subject to the conditions set forth therein.
B. Lender's obligation to extend the credit to Borrower under the Note
is subject, among other conditions, to receipt by Lender of this Guaranty, duly
executed by Parent.
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Parent hereby agrees with Lender as follows:
1. Definitions and Interpretation. When used in this Guaranty, the
following terms shall have the following respective meanings:
"Bankruptcy Code" shall mean Title 11 of the United States Code (11
U.S.C. Section 101 et seq.) or any replacement or supplemental federal
statutes dealing with the bankruptcy of debtors.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the business, assets, operations, prospects or financial or other
condition of Parent; or (b) the rights and remedies of Lender under
this Guaranty, the Note, the other Transaction Documents or any related
document, instrument or agreement.
"Obligations" shall mean and include all loans, advances, debts,
liabilities and obligations, howsoever arising, owed by Borrower to
Lender of every kind and description (whether or not evidenced by any
note or instrument and whether or not for the payment of money), direct
or indirect, absolute or contingent, due or to become due, now existing
or hereafter arising (or which would become due or arise but for the
operation of any provision or doctrine with respect to the Bankruptcy
Code and whether or not an allowed claim) pursuant to the terms of the
Note or any of the other Transaction Documents, including without
limitation all interest, fees, charges, expenses, attorneys' fees and
accountants' fees chargeable to Borrower or payable by Borrower
thereunder. "Obligations" shall also include all "Obligations" as
defined in the Note.
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Unless otherwise defined herein, all other capitalized terms used herein and
defined in the Note shall have the respective meanings given to those terms in
the Note. The rules of construction set forth in the Note shall, to the extent
not inconsistent with the terms of this Guaranty, apply to this Guaranty and are
hereby incorporated by reference. Parent acknowledges receipt of copies of the
Note and the other Transaction Documents.
2. Continuing Guaranty. Parent unconditionally guarantees and promises
to pay to Lender at Lender's office located at the address set forth in
Paragraph 8(a) hereof, on demand after the occurrence and during the continuance
of an Event of Default, in lawful money of the United States, any and all
Obligations, and to perform on demand after the occurrence and during the
continuance of an Event of Default any and all Obligations. Parent's undertaking
to guarantee shall not apply to any Obligations created after actual receipt by
Lender of written notice of Parent's revocation as to future transactions;
provided, however, that (i) it shall continue to be applicable to any
Obligations created thereafter which result because payments of Obligations as
to past transactions are rescinded or otherwise required to be surrendered by
Lender after receipt; and, (ii) it shall continue to be applicable to any
Obligations created thereafter which are created pursuant to any binding
commitments of Lender. The liability of Parent hereunder is independent of the
Obligations, and a separate action or actions may be brought and prosecuted
against Parent irrespective of whether action is brought against Borrower or any
other guarantor of the Obligations or whether Borrower or any other guarantor of
the Obligations is joined in any such action or actions. This Guaranty is a
guaranty of payment and not of collection.
3. Representations and Warranties. Parent represents and warrants to
Lender that (a) Parent is a corporation duly organized, validly, existing and in
good standing under the laws of its state of incorporation and is duly qualified
and in good standing in each jurisdiction where the nature of its business or
properties requires such qualification, except where the failure to qualify
could not reasonably be expected to have a Material Adverse Effect; (b) the
execution, delivery and performance by Parent of this Guaranty are within the
power of Parent and have been duly authorized by all necessary actions on the
part of Parent; (c) this Guaranty has been duly executed and delivered by Parent
and constitutes a legal, valid and binding obligation of Parent, enforceable
against it in accordance with its terms, except as limited by bankruptcy,
insolvency or other laws of general application relating to or affecting the
enforcement of creditors' rights generally; (d) the execution, delivery and
performance of this Guaranty do not (i) violate any laws, rules or regulations
applicable to Parent, (ii) contravene any material contractual obligation of
Parent, or (iii) result in the creation or imposition of any Lien upon any
property, asset or revenue of Parent; (e) no consent, approval, order or
authorization of, or registration, declaration or filing with, any governmental
authority or other person or entity (including, without limitation, the
shareholders of any Parent) is required in connection with the execution,
delivery and performance of this Guaranty, except such consents, approvals,
orders, authorizations, registrations, declarations and filings that are so
required and which have been obtained and are in full force and effect; (f)
Parent has paid all taxes and other charges imposed by any governmental
authority due and payable by Parent other than those which are being challenged
in good faith by appropriate proceedings and for which adequate reserves have
been established; (g) Parent is not in violation of any law, rule or regulation
or contractual obligation other than those the consequences of which could not
reasonably be expected to have a Material
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Adverse Effect; (h) Parent is neither an investment company (as defined in the
Investment Company Act of 1940) nor controlled by an investment company; (i) no
litigation, investigation or proceeding of any governmental authority is pending
or, to the knowledge of Parent, threatened against Parent which, if adversely
determined, could reasonably be expected to have a Material Adverse Effect; and
(j) the Pro-Forma Financial Statements of Parent for the fiscal year ended
December 31, 1999, were prepared in accordance with generally accepted
accounting principles and present fairly the financial condition of Parent as at
such date and the results of operations and changes in financial position for
such period.
4. Covenants. Parent hereby agrees (a) to deliver to Lender (i) notice
of any Event of Default or of any other event or condition which could
reasonably be expected to have a Material Adverse Effect, and (ii) such other
information regarding business, operations or financial or other condition of
Parent as Lender may reasonably request; (b) to the extent failure to do so
could have a Material Adverse Effect, to pay all taxes and other charges imposed
by any government authority upon Parent or its property as and when they become
due; (c) to the extent failure to do so could reasonably be expected to have a
Material Adverse Effect, to comply with all laws, rules and regulations and
contractual obligations; and (d) to maintain its corporate existence and all
rights, privileges and franchises necessary for the conduct of its business.
5. Authorized Actions. Parent authorizes Lender, in its discretion,
without notice to Parent, irrespective of any change in the financial condition
of Borrower, Parent or any other guarantor of the Obligations since the date
hereof, and without affecting or impairing in any way the liability of Parent
hereunder, from time to time to (a) create new Obligations, and, either before
or after receipt of notice of revocation, renew, compromise, extend, accelerate
or otherwise change the time for payment or performance of, or otherwise change
the terms of the Obligations or any part thereof, including increase or decrease
of the rate of interest thereon; (b) take and hold security for the payment or
performance of the Obligations and exchange, enforce, waive or release any such
security; (c) apply such security and direct the order or manner of sale
thereof; (d) purchase such security at public or private sale; (e) otherwise
exercise any right or remedy it may have against Borrower, Parent, any other
guarantor of the Obligations or any security, including, without limitation, the
right to foreclose upon any such security by judicial or nonjudicial sale; (f)
settle, compromise with, release or substitute any one or more makers, endorsers
or guarantors of the Obligations; and (g) assign the Obligations, this Guaranty,
or the other Transaction Documents in whole or in part.
6. Waivers. Parent waives (a) any right to require Lender to (i)
proceed against Borrower or any other guarantor of the Obligations, (ii) proceed
against or exhaust any security received from Borrower or any other guarantor of
the Obligations, or (iii) pursue any other remedy in Lender's power whatsoever;
(b) any defense arising by reason of the application by Borrower of the proceeds
of any borrowing; (c) any defense resulting from the absence, impairment or loss
of any right of reimbursement, subrogation, contribution or other right or
remedy of Parent against Borrower, any other guarantor of the Obligations or any
security, whether resulting from an election by Lender to foreclose upon
security by nonjudicial sale, or otherwise; (d) any setoff or counterclaim of
Borrower or any defense which results from any disability or other defense of
Borrower or the
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cessation or stay of enforcement from any cause whatsoever of the liability of
Borrower (including, without limitation, the lack of validity or enforceability
of any Transaction Document); (e) any right to exoneration of sureties which
would otherwise be applicable; (f) so long as any Obligations remain
outstanding, any right of subrogation or reimbursement and, if there are any
other guarantors of the Obligations, any right of contribution, and right to
enforce any remedy which Lender now has or may hereafter have against Borrower,
and any benefit of, and any right to participate in, any security now or
hereafter received by Lender; (g) all presentments, demands for performance,
notices of non-performance, notices delivered under the Note or any Transaction
Document, protests, notice of dishonor, and notices of acceptance of this
Guaranty and of the existence, creation or incurring of new or additional
Obligations and notices of any public or private foreclosure sale; (h) the
benefit of any statute of limitations to the extent permitted by law; (i) any
appraisement, valuation, stay, extension, moratorium redemption or similar law
or similar rights for marshalling; and (j) any right to be informed by Lender of
the financial condition of Borrower or any other guarantor of the Obligations or
any change therein or any other circumstances bearing upon the risk of
nonpayment or nonperformance of the Obligations. Parent has the ability and
assumes the responsibility for keeping informed of the financial condition of
Borrower and any other guarantors of the Obligations and of other circumstances
affecting such nonpayment and nonperformance risks.
7. Subordination of Debt to Parent. Parent hereby subordinates any
indebtedness of Borrower to Parent to the Obligations. Parent agrees that Lender
shall be entitled to receive payment of all Obligations before Parent receives
payment of any indebtedness of Borrower to Parent. Any payments on such
indebtedness of Borrower to Parent, if Lender so requests, shall be collected,
enforced and received by Parent as trustee for Lender and be paid over to Lender
on account of the Obligations, but without reducing or affecting in any manner
the liability of Parent under the other provisions of this Guaranty. Lender is
authorized and empowered (but without any obligation to so do), in its
discretion, (a) in the name of Parent, to collect and enforce, and to submit
claims in respect of, indebtedness of Borrower to Parent and to apply any
amounts received thereon to the Obligations, and (b) to require Parent (i) to
collect and enforce, and to submit claims in respect of, indebtedness of
Borrower to Parent, and (ii) to pay any amounts received on such indebtedness to
Lender for application to the Obligations.
8. Miscellaneous.
(a) Notices. Except as otherwise provided herein, all notices,
requests, demands, consents, instructions or other communications to or
upon Lender or Parent under this Guaranty shall be by telecopy or in
writing and telecopied, mailed, telexed or delivered to each party at
telecopier number or its address set forth below. All such notices and
communications: when sent by federal express or other overnight
service, shall be effective on the Business Day following the deposit
with such service; when mailed, first class postage prepaid and
addressed as aforesaid in the mails, shall be effective upon receipt;
when telexed, shall be effective upon receipt of answerback; when
delivered by hand, shall be effective upon delivery; and when
telecopied, shall be effective upon confirmation of receipt.
Lender: HARMONIC INC.
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549 Baltic Way
Sunnyvale, California 94089
Tel: 408-542-2500
Fax: 408-542-2516
Borrower: C-CUBE SEMICONDUCTOR II INC.
1778 McCarthy Blvd.
Milpitas, California
Tel: (408) 590-8000
Fax: _________________
(b) Nonwaiver. No failure or delay on Lender's part in
exercising any right hereunder shall operate as a waiver thereof or of
any other right nor shall any single or partial exercise of any such
right preclude any other further exercise thereof or of any other
right.
(c) Amendments and Waivers. This Guaranty may not be amended
or modified, nor may any of its terms be waived, except by written
instruments signed by Parent and Lender. Each waiver or consent under
any provision hereof shall be effective only in the specific instances
for the purpose for which given.
(d) Assignments. This Guaranty shall be binding upon and inure
to the benefit of Lender and Parent and their respective successors and
assigns; provided, however, that Parent and Lender may sell, assign and
delegate their respective rights and obligations hereunder only as
permitted by the Loan Agreement.
(e) Cumulative Rights, etc. The rights, powers and remedies of
Lender under this Guaranty shall be in addition to all rights, powers
and remedies given to Lender by virtue of any applicable law, rule or
regulation of any Governmental Authority, the Loan Agreement, any other
Operative Document or any other agreement, all of which rights, powers,
and remedies shall be cumulative and may be exercised successively or
concurrently without impairing Lender's rights hereunder.
(f) Partial Invalidity. If at any time any provision of this
Guaranty is or becomes illegal, invalid or unenforceable in any respect
under the law or any jurisdiction, neither the legality, validity or
enforceability of the remaining provisions of this Guaranty nor the
legality, validity or enforceability of such provision under the law of
any other jurisdiction shall in any way be affected or impaired
thereby.
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(g) Governing Law. This Guaranty shall be governed by and
construed in accordance with the laws of the State of California
without reference to conflicts of law rules.
(h) Jury Trial. EACH OF PARENT AND LENDER, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY AS TO ANY ISSUE RELATING HERETO IN ANY ACTION,
PROCEEDING, OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS
GUARANTY.
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IN WITNESS WHEREOF, Parent has caused this Guaranty to be executed as
of the day and year first above written.
C-CUBE SEMICONDUCTOR INC.
By: /s/ UMESH PADVAL
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Name: Umesh Padval
Title: President and Chief
Executive Officer
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