EXHIBIT 10.2
AFFILIATE AGREEMENT
This Affiliate Agreement (this "AGREEMENT") is made and entered into as of
May 28, 1996, between C-Cube Microsystems Inc., a Delaware corporation ("C-
CUBE"), DiviCom Inc., a Delaware corporation ("DIVICOM"), Sagem S.A., Sagem
International S.A. and Tregor Electronique S.A., each a company organized under
the laws of France, and Iena International S.A., a company organized under the
laws of Luxembourg (collectively, "STOCKHOLDER").
RECITALS
A. Concurrently with the execution of this Agreement, C-Cube and DiviCom
have entered into an Agreement and Plan of Reorganization (the "REORGANIZATION
AGREEMENT") which provides, among other things, for the merger (the "MERGER") of
DiviCom with and into C-Cube Acquisition Corp., a Delaware corporation and a
wholly-owned subsidiary of C-Cube ("MERGER SUB"). Pursuant to the Merger, all
outstanding capital stock of DiviCom will be canceled and extinguished and be
converted automatically into the right to receive shares of C-Cube Common Stock
pursuant to the Reorganization Agreement.
B. The Stockholder is the beneficial owner (as defined in Rule l3d-3
under the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT")) of
such number of shares of the outstanding capital stock of DiviCom as is
indicated on Exhibit A to Agreement (the "SHARES").
NOW THEREFORE, the parties agree as follows:
1. TAX TREATMENT: RULE 145. Stockholder understands and agrees that it
is intended that the Merger will be treated as a "reorganization" for federal
income tax purposes. Stockholder further understands and agrees that
Stockholder may be deemed to be an "affiliate" of DiviCom within the meaning of
Rule 145 ("RULE 145") promulgated by the Securities and Exchange Commission (the
"SEC") under the Securities Act of 1933, as amended (the "SECURITIES ACT"),
although nothing contained herein should be construed as an admission of such
fact.
2. RELIANCE UPON REPRESENTATIONS WARRANTIES AND COVENANTS. Stockholder
has been informed that the treatment of the Merger as a reorganization for
federal income tax purposes requires that former stockholders of DiviCom
maintain a meaningful continuing equity ownership interest in C-Cube after the
Merger. Stockholder understands that the representations, warranties and
covenants of Stockholder set forth herein will be relied upon by C-Cube, DiviCom
and their respective counsel.
3. REPRESENTATIONS WARRANTIES AND COVENANTS OF STOCKHOLDER. Stockholder
represents, warrants and covenants as follows:
(a) Stockholder has full power and authority to execute this
Agreement, to make the representations, warranties and covenants herein
contained and to perform Stockholder's obligations hereunder.
(b) Set forth below the signatures below is the number of Shares
owned by Stockholder, including all Shares as to which Stockholder has sole or
shared voting or investment
power and all rights, options and warrants to acquire DiviCom Capital Stock
owned or held by Stockholder.
(c) The shares of C-Cube Common Stock issued to Stockholder as
consideration in the Merger, and any C-Cube securities issued in exchange
therefor, are hereinafter referred to as "Restricted Securities". The
Stockholder agrees, in addition to the limitations set forth in Section 3(d),
that as to a portion of the Restricted Securities representing two-thirds of all
Restricted Securities acquired by Stockholder less the amount contained in the
Escrow Fund pursuant to the Reorganization Agreement in respect of Stockholder,
Stockholder will not, for a period of 270 days from the date of this Agreement,
sell, transfer, exchange, pledge (except in connection with a bona fide loan
transaction), make charitable contributions in respect of; or otherwise dispose
of such portion of the Restricted Securities (or any option, right or other
interest with respect thereto).
(d) Notwithstanding the foregoing, Stockholder will not sell,
transfer, exchange, pledge (except in connection with a bona fide loan
transaction) or make charitable contributions in respect of; or otherwise
dispose of any Restricted Securities (or any interest with respect thereto),
unless: (i) such transaction is permitted pursuant to Rule 145(c) and 145(d)
under the Securities Act; or (ii) counsel representing Stockholder, which
counsel is reasonably satisfactory to C-Cube, shall have advised C-Cube in a
written opinion letter reasonably satisfactory to C-Cube and C-Cube's legal
counsel, and upon which C-Cube and its legal counsel may rely, that no
registration under the Securities Act would be required in connection with such
transaction; or (iii) a registration statement under the Securities Act covering
the Restricted Securities (or interests with respect thereto) proposed to be
disposed of, describing the manner and terms of the proposed disposition, and
containing a current prospectus, shall have been filed with the SEC and made
effective under the Securities Act; or (iv) an authorized representative of the
SEC shall have rendered written advice to Stockholder (sought by Stockholder or
counsel to Stockholder, with a copy thereof and all other related communications
delivered to C-Cube) to the effect that the SEC would take no action, or that
the staff of the SEC would not recommend that the SEC take any action, with
respect to the proposed disposition if consummated.
(e) Stockholder has no present plan or intent to sell, transfer,
exchange, pledge (other than in a preexisting bona fide margin account) or
otherwise dispose of; including a distribution by a corporation to its
stockholders (but excluding transactions among family members for tax or estate
planning purposes or among corporate affiliates, and transfers occurring by
operation of law or pursuant to court order) any of the shares of C-Cube Common
Stock that Stockholder may acquire in connection with the Merger. If any of
Stockholder's representations in this subsection (e) cease to be true at any
time prior to the Effective Time of the Merger, Stockholder will deliver to each
of DiviCom and C-Cube, prior to the Effective Time of the Merger, a written
statement to that effect, signed by Stockholder.
4. RULES 144 AND 145. From and after the Effective Time of the Merger
and for so long as is necessary in order to permit Stockholder to sell the C-
Cube Common Stock held by Stockholder pursuant to Rule 145 and, to the extent
applicable, Rule 144 under the Securities Act, C-Cube will use its best efforts
to file on a timely basis all reports required to be filed by it pursuant to
Section 13 of the Securities Exchange Act of 1934, as amended, referred to in
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paragraph (c)(1) of Rule 144 under the Securities Act. In addition, C-Cube
acknowledges that the covenants herein are given by Stockholder in reliance upon
the Registration Rights Agreement being executed concurrently with the Merger
and are contingent upon C-Cube's compliance with such Registration Rights
Agreement.
5. LIMITED RESALES. Stockholder understands that, in addition to the
restrictions imposed under Section 4, the provisions of Rule 145 limit
Stockholder's public resales of Restricted Securities, in the manner set forth
in subsections (a), (b) and (c) below:
(a) Unless and until the restriction "Cut-off" provisions of Rule
l45(d)(2) or Rule l45(d)(3) set forth below become available, public resales of
Restricted Securities may only be made by Stockholder in compliance with the
requirements of Rule 145(d)(1). Rule 145(d)(1) permits such resales only: (i)
while C-Cube meets the public information requirements of Rule 144(c); (ii) in
broker's transactions or in transactions with a market maker; and (iii) where
the aggregate number of Restricted Securities sold at any time together with all
sales of restricted C-Cube Common Stock sold for Stockholder's account during
the preceding three (3) month period does not exceed the greater of (A) one
percent (1%) of the C-Cube Common Stock outstanding or (B) the average weekly
volume of trading in C-Cube Common Stock on all national securities exchanges,
or reported through the automated quotation system of a registered securities
association, during the four (4) calendar weeks preceding the date of receipt of
the order to execute the sale.
(b) Stockholder may make unrestricted sales of Restricted Securities
pursuant to Rule l45(d)(2) if: (i) Stockholder has beneficially owned (within
the meaning of Rule 144(d) under the Securities Act) the Restricted Securities
for at least two (2) years after the Effective Time of the Merger; (ii)
Stockholder is not an affiliate of C-Cube; and (iii) C-Cube meets the public
information requirements of Rule 144(c).
(c) Stockholder may make unrestricted resales of Restricted
Securities pursuant to Rule 145(d)(3) if Stockholder has beneficially owned
(within the meaning of Rule 144(d) under the Securities Act) the Restricted
Securities for at least three (3) years and is not, and has not been for at
least three (3) months, an affiliate of C-Cube.
(d) C-Cube acknowledges that the provisions of Section 5(c) will be
satisfied as to any sale by the undersigned of the Restricted Securities
pursuant to Rule 145(d), by a broker's letter and a letter from the undersigned
with respect to that sale stating that each of the above-described requirements
of Rule 145(d)(1) has been met or is inapplicable by virtue of Rule l45(d)(2) or
Rule l45(d)(3); PROVIDED, HOWEVER, that C-Cube has no reasonable basis to
believe that such sales were not made in compliance with such provisions of Rule
145(d).
(e) C-Cube acknowledges that none of the foregoing restrictions is
applicable during any period in which a registration statement in respect of the
C-Cube Common Stock acquired by Stockholder is in effect pursuant to the
Registration Rights Agreement, and acknowledges its obligations, as set forth
therein, to maintain an effective registration statement on behalf of
Stockholder under the circumstances and for the periods therein contemplated;
provided, however, that Seller shall not request registration as to the
Restricted Securities and for
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the period specified in Section 3(c) hereof.
6. LEGENDS. Stockholder also understands and agrees that stop transfer
instructions will be given to C-Cube's transfer agent with respect to
certificates evidencing the Restricted Securities and that there will be placed
on the certificate evidencing the Restricted Securities legends stating in
substance:
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED,
SOLD, PLEDGED, EXCHANGED, TRANSFERRED OR OTHERWISE DISPOSED OF
EXCEPT IN ACCORDANCE WITH THE REQUIREMENTS OF THE SECURITIES ACT
OF 1933, AS AMENDED, AND THE OTHER CONDITIONS SPECIFIED IN THAT
CERTAIN AFFILIATE AGREEMENT DATED AS OF _________, 1996, AMONG C-
CUBE MICROSYSTEMS INC., DIVICOM, INC. AND THE PERSON OR ENTITY
NAMED THEREIN. A COPY OF SUCH AFFILIATE AGREEMENT MAY BE
INSPECTED BY THE HOLDER OF THIS CERTIFICATE AT THE OFFICES OF C-
CUBE MICROSYSTEMS INC., OR C-CUBE MICROSYSTEMS INC. WILL FURNISH,
WITHOUT CHARGE, A COPY THEREOF TO THE HOLDER OF THIS CERTIFICATE
UPON WRITTEN REQUEST THEREFOR."
C-Cube agrees to remove promptly such stop transfer instructions and legend upon
full compliance with this Agreement by the undersigned, including, without
limitation, a sale or transfer of C-Cube Common Stock permitted under Section 3.
7. TERMINATION. This Agreement shall be terminated and shall be of no
further force and effect upon the termination of the Reorganization Agreement
pursuant to Article VIII of the Reorganization Agreement.
8. COUNTERPARTS. This Agreement shall be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
9. BINDING AGREEMENT. This Agreement will inure to the benefit of and be
binding upon and enforceable against the parties and their successors and
assigns, including administrators, executors, representatives, heirs, legatees
and devisees of Stockholder and pledgees holding Restricted Securities as
collateral.
10. WAIVER. No waiver by any party hereto of any condition or of any
breach of any provision of this Agreement shall be effective unless in writing
and signed by each party hereto.
11. GOVERNING LAW. This Agreement shall be governed by and construed,
interpreted and enforced in accordance with the internal laws of the State of
Delaware.
12. ATTORNEYS' FEES. In the event of any legal actions or proceeding to
enforce of
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interpret the provisions hereof, the prevailing party shall be entitled to
reasonable attorneys' fees, whether or not the proceeding results in a final
judgment.
13. EFFECT OF HEADINGS; DEFINITION OF TERMS. The Section headings herein
are for convenience only and shall not affect the construction or interpretation
of this Agreement. Capitalized terms that are not defined herein shall have the
meanings set forth in the Reorganization Agreement.
14. THIRD PARTY RELIANCE. Counsel to the parties shall be entitled to
rely upon this Agreement.
IN WITNESS WHEREOF, the parties have caused this Affiliate Agreement to be
duly executed on the day and year first above written.
C-CUBE MICROSYSTEMS INC.
By: ______________________________________
Name:
Title:
DIVICOM INC.
By: ______________________________________
Name:
Title:
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SAGEM S.A.
By: ______________________________________
Name:
Title:
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SAGEM INTERNATIONAL S.A.
By: ______________________________________
Name:
Title:
IENA INTERNATIONAL S.A.
By: ______________________________________
Name:
Title:
TREGOR ELECTRONIQUE S.A.
By: ______________________________________
Name:
Title:
Stockholder's Address for Notice:
SAGEM S.A.
27 rue Leblanc
75015 Ponnant
France
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Attention: Michel Toussan
Telephone No.: 011-33-1-40-70-64-56
Facsimile No.: 011-33-1-40-70-64-38
with a copy to:
Gibson, Dunn & Crutcher LLP
333 South Grand Avenue
Los Angeles, California 90071-3197
Attention: Jennifer Bellah, Esq.
Telephone No.: (213) 229-7000
Facsimile No.: (213) 229-7520
[Signature Page to Affiliate Agreement]
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