EXHIBIT 10.15
GUARANTY
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This Guaranty (the "Guaranty") is made as of December 15, 1997 by X.X.
Xxxxxxxxx & Sons Company, a Delaware corporation (the "Guarantor"), 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 herein shall have the respective meanings ascribed to them in that
certain Contribution Agreement dated as of the date hereof (the "Contribution
Agreement") among Stream, Modus Media International, Inc., a Delaware
corporation ("MMI") and Modus Media International Holdings, Inc., a Delaware
corporation ("MMI Holdings"); provided that matters related to Taxes shall have
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the respective meanings ascribed to them in the Tax Sharing Agreement dated as
of the date hereof (the "Tax Sharing Agreement") among Stream, MMI Holdings,
MMI, Corporate Software & Technology Holdings, Inc., a Delaware corporation
("CST Holdings"), and Corporate Software & Technology, Inc., a Delaware
corporation.
1. (a) In order to induce Stream to enter into the Contribution
Agreement and the Tax Sharing Agreement and to effect the Drop-down and in
consideration thereof, Guarantor hereby unconditionally and irrevocably
guarantees to Stream and its subsidiaries and to its successors and/or assigns
the payment as and when due of all the (i) Indemnifiable Losses required to be
paid by MMI Holdings or MMI pursuant to Section 5.2 of the Contribution
Agreement, (ii) Other Taxes for which MMI Holdings or MMI 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) Income Taxes for
which MMI Holdings or MMI has indemnified any member of the Stream Group
pursuant to the Tax Sharing Agreement (the "Guaranteed Income Tax Obligations");
provided that Guarantor shall have no obligation to guarantee payment of, or
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pay, any Guaranteed General Obligation to the extent such Guaranteed General
Obligation arises from or relates to (A) a claim asserted by a Claim Notice from
a Stream International Indemnitee pursuant to Section 5.4.5 of the Contribution
Agreement received by MMI Holdings or MMI after the third anniversary of the
date hereof, (B) a claim asserted by a Third Party Claim Notice from a Stream
International Indemnitee relating to a Third Party Claim pursuant to Section
5.4.1 of the Contribution Agreement received by MMI Holdings or MMI after the
third anniversary of the date hereof or (C) a claim asserted by a member of the
Stream Group pursuant to the Tax Sharing Agreement after the third anniversary
of the date hereof; provided, further, that notwithstanding anything in this
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Guaranty to the contrary, the maximum aggregate amount Guarantor shall be
required to pay under this Guaranty in respect of Guaranteed General Obligations
and under a similar guaranty dated as of the date hereof in favor of Stream with
respect to CST Holdings in respect of Guaranteed General Obligations (as defined
therein), shall be $100,000,000, net of any such amount reimbursed to the
Guarantor by Stream, CST Holdings, MMI Holdings or their Subsidiaries (the
"Maximum Liability").
(b) The Guaranteed General Obligations and the Guaranteed Income Tax
Obligations are hereinafter collectively referred to as the "Guaranteed
Obligations."
2. Notwithstanding anything in this Guaranty to the contrary, Guarantor
shall not be required to make payment of any particular Guaranteed Obligation
until the earlier of the following shall have occurred: (i) with respect to
such Guaranteed Obligation, the sixtieth (60th) day following the Due Date or
the date payment thereof was due by MMI Holdings or MMI pursuant to the Tax
Sharing Agreement, as the case may be, shall have elapsed and the Guaranteed
Obligation shall not have been previously paid in full, or (ii) an Event of
Bankruptcy (as defined below) shall have occurred with respect to MMI Holdings,
MMI or any permitted successor to MMI Holdings' or MMI's obligations pursuant to
the Contribution Agreement or the Tax Sharing Agreement, as the case may be;
provided, however, that any claim by Stream against the Guarantor with respect
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to any Guaranteed Obligation relating to Taxes shall be accompanied by a writing
from Stream, reasonably satisfactory to the Guarantor, setting forth the
determination of any Tax Benefits (as defined in the Tax Reimbursement
Agreement) with respect to each taxable year or period ended prior to the time
such claim is made (including, without limitation, relevant Tax Returns and
Stream's or any accountant's workpapers, supporting documents or other
information). Upon receipt of any writing described in the foregoing proviso
clause, Stream and the Guarantor shall determine (1) the amount, if any, owing
by the Guarantor under this Guaranty in respect of such claim and (2) assuming
such amount were paid by the Guarantor to Stream, the amount, if any, owing by
Stream to the Guarantor under Section 4 of the Tax Reimbursement Agreement.
Within 30 days of such determinations (but in no event earlier than ten days
prior to the date Stream is required to make payment of such claimed amount to a
taxing authority), the Guarantor shall pay to Stream the excess, if any, of the
amount determined under clause (1) over the amount determined under clause (2).
For purposes of the Tax Reimbursement Agreement, Guarantor shall be treated as
having paid to Stream an amount hereunder with respect to Taxes (in addition to
amounts actually paid to Stream with respect to Taxes hereunder), and Stream
shall be treated as having paid to Guarantor under Section 4(a) of the Tax
Reimbursement Agreement, the amount described in clause (2).
3. If Guarantor fails to promptly perform its obligations under this
Guaranty, Stream may from time to time, and without first requiring performance
by MMI Holdings or MMI, bring any action at law or in equity or both to compel
Guarantor to perform its 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
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Guarantor to perform its obligations, together with interest thereon at the
lesser of (a) 10% per annum or (b) the maximum rate permitted by applicable law.
4. Guarantor hereby waives: (a) any defense based upon any legal
disability or other defense of MMI Holdings or its Subsidiaries or any other
Person or by reason of the cessation or limitation of the liability of MMI
Holdings or its Subsidiaries from any cause (including improper or impermissible
assignment to or assumption by MMI 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
MMI Holdings or its Subsidiaries or any other Person which may have created any
Guaranteed Obligation or any defect in the formation of MMI 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
Guarantor, CST Holdings, MMI Holdings or their Subsidiaries; (d) any defense
based upon Stream's failure to disclose to Guarantor any information concerning
MMI Holdings' or MMI's financial condition or any other circumstance bearing on
MMI Holdings' or MMI'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 the liability of Guarantor hereunder or the
enforcement thereof; and (h) to the extent permitted by applicable law, all
principles or provisions of law which conflict with the terms of this Guaranty.
5. Guarantor warrants and acknowledges that (a) Stream would not have
entered into the 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 Guarantor as of the date hereof; (c) Guarantor has established adequate means
of obtaining from sources other than Stream, on a continuing basis, financial
and other information pertaining to MMI Holdings' and MMI's financial condition
and the status of MMI Holdings' and MMI's performance of obligations imposed by
the Contribution Agreement and the Tax Sharing Agreement, and Stream has made no
representation to Guarantor concerning any such matters; and (d) Guarantor has
reviewed a copy of the Contribution Agreement and the Tax Sharing Agreement and
is 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 Guarantor hereunder shall be in addition to and shall not limit
or in any way affect the obligations of Guarantor 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 MMI Holdings or
MMI under the
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Contribution Agreement and the Tax Sharing Agreement. Stream may bring a
separate action to enforce the provisions hereof against Guarantor without
taking action against MMI Holdings, MMI or any other party or joining MMI
Holdings, MMI or any other party as a party to such action.
7. As used in this Guaranty, "Event of Bankruptcy" means as to MMI
Holdings, MMI or any permitted successor to MMI Holdings' obligations under the
Contribution Agreement or the Tax Sharing 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
proceeding, Guarantor 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. Guarantor's performance of a portion, but not all, of the Guaranteed
Obligations shall in no way limit, affect, modify or abridge Guarantor's
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
Guarantor's covenant to perform a portion of the Guaranteed Obligations, such
judgment shall in no way be deemed to release Guarantor from its covenant to
perform any portion of the Guaranteed Obligations which are not the subject of
such suit.
10. This Guaranty shall be binding upon Guarantor, its representatives,
successors and assigns (including any acquirer of substantially all of
Guarantor's assets) and shall inure to the benefit of and shall be enforceable
by Stream and its successors and assigns. Notwithstanding the foregoing, this
Guaranty may not be assigned by Guarantor without the prior written consent of
Stream. Any permitted assignee and any successor of Guarantor (including any
acquirer of substantially all of Guarantor's assets) must agree in writing to be
bound by this Guaranty.
11. This Guaranty shall survive the merger, sale or liquidation of MMI
Holdings or MMI. This Guaranty shall not be impaired by any modification,
release
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or other alteration of any portion of the Guaranteed Obligations, nor by any
agreement with, or release of, MMI Holdings, MMI or any other Person; provided,
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however, that the Guarantor shall be released from its obligations hereunder to
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the extent that any such modification, release or other alteration releases
Stream and its Subsidiaries from Liability and; provided, further, that if
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Stream releases MMI Holdings and MMI from any Guaranteed Obligation, the
Guarantor shall be released from its obligations hereunder with respect to such
Guaranteed Obligation to the same extent (but only to the same extent) that
Stream has released MMI Holdings and MMI 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, Guarantor has executed this Guaranty as of the date
appearing on the first page of this Guaranty.
X.X. XXXXXXXXX & SONS COMPANY, a Delaware
corporation
By: /s/ C. A. Xxxxxxx
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Name: C. A. Xxxxxxx
Title: Executive V.P. and Chief
Financial Officer
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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