EXHIBIT 10.21
MODUS MEDIA INTERNATIONAL, INC.
Guaranty
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This Guaranty (the "Guaranty") is made jointly and severally as of December
15, 1997 by Modus Media International Holdings, Inc., a Delaware corporation
("MMI Holdings") and Modus Media International, Inc., a Delaware corporation
("MMI") (MMI Holdings and MMI shall each be referred to herein as a "Guarantor"
and collectively as the "Guarantors"), in favor of Stream International Inc., a
Delaware corporation (f/k/a Stream International Holdings Inc.) ("Stream").
Capitalized terms used herein but not otherwise defined shall have the
respective meanings ascribed to them in that certain Contribution Agreement
dated as of the date hereof (the "Contribution Agreement") among Stream
International Services Corp., a Delaware corporation, Corporate Software &
Technology, Inc., a Delaware corporation ("CST") and Corporate Software &
Technology Holdings, Inc., a Delaware corporation ("CST Holdings").
1. In order to induce Stream to enter into the Contribution Agreement,
the Contribution Agreement dated as of the date hereof among Stream, MMI and MMI
Holdings (the "MMI Contribution Agreement") and the Tax Sharing Agreement and to
effect the Drop-down and the Distribution, and in consideration thereof,
Guarantors hereby unconditionally and irrevocably and jointly and severally
guarantee to Stream and the Stream International Indemnities (i) the payment as
and when due of all the Indemnifiable Losses required to be paid by CST Holdings
or its Subsidiaries pursuant to Section 5.2 of the Contribution Agreement, (ii)
the payment as and when due of all Other Taxes (as defined in the Tax Sharing
Agreement) for which CST Holdings or CST has indemnified any member of the
Stream Group (as defined in the Tax Sharing Agreement) or otherwise agreed to
pay to Stream pursuant to the Tax Sharing Agreement (the obligations described
in clauses (i) and (ii) are hereinafter collectively referred to as the
"Guaranteed General Obligations"), and (iii) the payment as and when due of all
Income Taxes (as defined in the Tax Sharing Agreement) for which CST Holdings or
CST has indemnified any member of the Stream Group (as defined in the Tax
Sharing Agreement) pursuant to the Tax Sharing Agreement (the "Guaranteed Tax
Obligations", and collectively with the Guaranteed General Obligations, the
"Guaranteed Obligations").
2. Notwithstanding anything in this Guaranty to the contrary, Guarantors
shall not be required to make payment of any particular Guaranteed Obligation
until the earlier of the following shall have occurred: (i) the sixtieth (60th)
day following the Due Date or the date payment thereof was due by CST Holdings
or CST pursuant to the Tax Sharing Agreement, as the case may be, shall have
elapsed and the Guaranteed Obligation shall not have been paid in full, or (ii)
an Event of Bankruptcy (as defined below) shall have occurred with respect to
CST Holdings, CST or any permitted successor to CST Holdings' obligations
pursuant to the Contribution Agreement or the Tax Sharing Agreement, as the case
may be. In
addition, notwithstanding anything in this Guaranty to the contrary, Guarantors
shall not be required to make any payment of any particular Guaranteed
Obligation to the extent written notice of such claim is first delivered to
Guarantors following the closing of (a) the sale of all or substantially all of
the assets of a Guarantor, (b) a merger or consolidation which results in the
voting securities of a Guarantor outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving or acquiring entity) less than 50% of
the combined voting power of the voting securities of such Guarantor or such
surviving or acquiring entity or its parent outstanding immediately after such
merger or consolidation (but in no event including any transaction required to
effect the Distribution); or (c) the initial public offering of equity
securities of a Guarantor under the Securities Act of 1933, as amended.
3. If Guarantors fail to promptly perform their obligations under this
Guaranty, Stream may from time to time, and without first requiring performance
by CST Holdings, CST or any other Person, bring any action at law or in equity
or both to compel Guarantors to perform their obligations hereunder and to
collect in any such action compensation for all loss, cost, damage, injury and
expense sustained or incurred by Stream or its subsidiaries as a direct or
indirect consequence of the failure of Guarantors to perform their obligations,
together with interest thereon at the lesser of (a) 10% per annum or (b) the
maximum rate permitted by applicable law.
4. Guarantors hereby waive: (a) any defense based upon any legal
disability or other defense of CST Holdings or its Subsidiaries or any other
Person or by reason of the cessation or limitation of the liability of CST
Holdings or its Subsidiaries from any cause (including improper or impermissible
assignment to or assumption by CST Holdings or its Subsidiaries of any
Guaranteed Obligations) other than full payment of all sums payable in respect
of the Guaranteed Obligations; (b) any defense based upon any lack of authority
of the officers, directors or agents acting or purporting to act on behalf of
CST Holdings or its Subsidiaries or any other Person which may have created any
Guaranteed Obligation or any defect in the formation of CST Holdings or its
Subsidiaries or any other Person which may have created any Guaranteed
Obligation; (c) any defense based upon Stream's election of any remedy against a
Guarantor, CST Holdings, CST or any other Person or any or all of them; (d) any
defense based upon Stream's failure to disclose to a Guarantor any information
concerning CST Holdings' or CST's financial condition or any other circumstance
bearing on CST Holdings' or CST's ability to pay all sums payable in respect of
the Guaranteed Obligations; (e) any defense based upon any statute or rule of
law which provides that the obligation of a surety must be neither larger in
amount nor in any other respect more burdensome than that of a principal; (f)
presentment, demand, protest and notice of any kind; (g) the benefit of any
statute of limitations affecting liability of Guarantors hereunder or the
enforcement thereof; and
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(h) to the extent permitted by applicable law, all principles or provisions of
law which conflict with the terms of this Guaranty.
5. Guarantors warrant and acknowledge that (a) Stream would not enter
into the Contribution Agreement, the MMI Contribution Agreement and the Tax
Sharing Agreement but for this Guaranty; (b) there are no conditions precedent
to the effectiveness of this Guaranty, and this Guaranty shall be in full force
and effect and binding on Guarantors as of the date hereof; (c) Guarantors have
established adequate means of obtaining from sources other than Stream, on a
continuing basis, financial and other information pertaining to CST Holdings'
and CST's financial condition and the status of CST Holdings' and CST's
performance of obligations imposed by the Contribution Agreement and the Tax
Sharing Agreement, and Stream has made no representation to Guarantors
concerning any such matters; and (d) Guarantors have reviewed a copy of the
Contribution Agreement and the Tax Sharing Agreement and are fully informed of
the remedies Stream may pursue in the event of a default thereunder.
6. This is a guaranty of payment and not of collection and the
obligations of Guarantors hereunder shall be in addition to and shall not limit
or in any way affect the obligations of Guarantors under any other existing or
future guaranties unless said other guaranties are expressly modified or revoked
in writing. This Guaranty is independent of the obligations of CST Holdings and
its Subsidiaries under the Contribution Agreement and the Tax Sharing Agreement.
Stream may bring a separate action to enforce the provisions hereof against
Guarantor without taking action against CST Holdings or its Subsidiaries or any
other party or joining CST Holdings or its Subsidiaries or any other party as a
party to such action.
7. As used in this Guaranty, "Event of Bankruptcy" means as to CST
Holdings, CST or any permitted successor to CST Holdings' obligations under the
Contribution Agreement, (1) the filing of a voluntary petition in bankruptcy or
for reorganization or for the adoption of an arrangement under the Federal
Bankruptcy Code (as now or in the future amended) or an admission seeking the
relief therein provided; (2) the making of a general assignment for the benefit
of its creditors; (3) the consent to the appointment of a receiver for all or a
substantial part of its property; (4) in case of the filing of an involuntary
petition in bankruptcy, the failure to effect a full dismissal of such petition
prior to the earlier of the entry of any order granting relief sought in the
involuntary petition or sixty (60) days after the date of filing of the
petition; (5) the entry of a court order appointing a receiver or trustee for
all or a substantial part of its property without its consent; or (6) the
assumption of custody or sequestration by a court of competition jurisdiction of
all or substantially all of its property.
8. If any attorney is engaged by Stream to enforce or defend any
provisions of the Guaranty, with or without the filing of any legal action or
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proceeding, Guarantors shall pay to Stream, immediately upon demand, the amount
of all reasonable attorneys' fees and out-of-pocket costs incurred by Stream in
connection herewith.
9. Guarantors' performance of a portion, but not all, of the Guaranteed
Obligations shall in no way limit, affect, modify or abridge Guarantors'
liability for that portion of the Guaranteed Obligations which are not
performed. Without in any way limiting the generality of the foregoing, in the
event that Stream is awarded a judgment in any suit brought to enforce a
Guarantor's covenant to perform a portion of the Guaranteed Obligations, such
judgment shall in no way be deemed to release the Guarantors from their covenant
to perform any portion of the Guaranteed Obligations which are not the subject
of such suit.
10. This Guaranty shall be binding upon Guarantors, their representatives,
successors and assigns (including any acquirer of substantially all of either
Guarantor's assets) and shall inure to the benefit of and shall be enforceable
by Stream and its successors and assigns. Neither Guarantor may assign or
delegate its obligations hereunder except to a Person that acquires all or
substantially all of the assets or business of such Guarantor (whether by
merger, consolidation, sale of assets, sale of stock or otherwise). Each
Guarantor agrees that it will not transfer all or substantially all of its
assets unless the transferee agrees in writing to be bound by this Guaranty.
11. This Guaranty shall not be impaired by any modification, release or
other alteration of any portion of the Guaranteed Obligations, nor by any
agreement with, or release of, CST Holdings, CST or any other Person; provided,
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however, that the Guarantors shall be released from their obligations hereunder
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to the extent that any such modification, release or other alteration releases
Stream and its Subsidiaries from Liability and; provided, further, that the
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Guarantors shall be released from their obligations hereunder with respect to
any Guaranteed Obligation to the same extent that Stream releases CST Holdings
from such Guaranteed Obligation.
12. If any provision of this Guaranty shall be determined by a court of
competent jurisdiction to be invalid, illegal or unenforceable, that portion
shall be deemed severed from this Guaranty and the remaining parts shall remain
in full force as though the invalid, illegal or unenforceable portion had never
been part of this Guaranty.
13. This Guaranty shall be governed by, and construed in accordance with,
the laws of the Commonwealth of Massachusetts.
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IN WITNESS WHEREOF, Guarantors have executed this Guaranty as of the date
appearing on the first page of this Guaranty.
MODUS MEDIA INTERNATIONAL HOLDINGS, INC.,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
Chief Executive Officer and President
MODUS MEDIA INTERNATIONAL, INC.,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
Chief Executive Officer and President
ACCEPTED AND AGREED:
STREAM INTERNATIONAL INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: President
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