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EXHIBIT 10.30
FORM OF FOREIGN SUBSIDIARIES GUARANTY
THIS AGREEMENT is made this 30th day of October, 1997,
BY: 1229501 ONTARIO INC., a corporation governed by the laws of
the Province of Ontario
(the "Guarantor")
IN FAVOUR OF: U.S. TRUST COMPANY OF TEXAS, N.A., a banking corporation
organized and existing under the laws of Texas, in its
capacity as collateral agent (in such capacity, the
"Collateral Agent") for the rateable benefit of the holders
(the "Noteholders") of the 12% Senior Secured Notes due 2004
(the "Notes") issued by Source Media, Inc., a Delaware
corporation (the "Company") under the Indenture dated as of
October 30, 1997, between the Company and U.S. Trust Company
of Texas, N.A., in its capacity as trustee (the "Indenture")
RECITALS:
A. The Company, NatWest Capital Markets Limited and Prudential Securities
Incorporated (together, the "Initial Purchasers") have entered into a
Purchase Agreement dated October 23, 1997 (the "Purchase Agreement"),
pursuant to which, among other things, the Initial Purchasers have
agreed to purchase the Notes from the Company; and
B. It is a condition precedent to the obligations of the Initial
Purchasers to purchase the Notes under the Purchase Agreement, that
the Guarantor shall have executed and delivered this Guarantee
Agreement to the Collateral Agent.
NOW THEREFORE in consideration of the sum of $1.00 and for other
good and valuable consideration (the receipt and sufficiency of which are hereby
acknowledged), the Guarantor agrees with the Collateral Agent as follows:
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ARTICLE 1.
INTERPRETATION
1.1. DEFINITIONS
Unless otherwise defined herein, terms which are defined in the
Indenture and used herein are so used as so defined, and the meanings assigned
to terms defined herein or in the Indenture shall be equally applicable to both
the singular and plural forms of such terms.
In this Agreement, unless there is something in the subject
matter or context inconsistent therewith:
"THIS AGREEMENT", "HERETO", "HEREIN", "HEREOF", "HEREBY", "HEREUNDER"
and any similar expressions refer to this agreement as it may be
amended or supplemented from time to time, and not to any particular
Article, section or other portion hereof;
"BUSINESS DAY" means any day, other than Saturday, Sunday or any
statutory holiday in the Province of Ontario;
"CANADIAN TAXES" means all Taxes imposed, levied, collected, withheld
or assessed by any governmental body within Canada or any political
subdivision thereof;
"COLLATERAL AGENT" means U.S. Trust Company of Texas, N.A. and any
successor in the capacity of collateral agent on behalf of the
Noteholders;
"EVENT OF DEFAULT" has the meaning attributed thereto in the
Indenture;
"GUARANTOR SECURITY DOCUMENTS" means, collectively, the pledge
agreement and the general security agreement dated the date hereof and
entered into by the Guarantor in favour of the Collateral Agent, as
amended, restated or replaced from time to time, and any other
security documents from time to time entered into by the Guarantor in
favour of the Collateral Agent to secure the obligations of the
Guarantor under this Agreement;
"NOTE PURCHASE DOCUMENTS" means collectively the Purchase Agreement,
the Notes, the Exchange Notes, the Registration Rights Agreement, the
Indenture, the Units, the Unit Agreement, the Warrants, the Warrant
Shares, the Warrant Agreement, the Warrant Registration Rights
Agreement, the Preferred Stock, the Exchange Preferred Stock and the
Preferred Stock Registration Rights Agreement;
"OBLIGATIONS" shall mean the unpaid principal amount of, or any
premium applicable to, and interest on the Notes (including, without
limitation, interest accruing after the maturity of the Notes and
interest accruing after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like proceeding,
relating to the Company or the Guarantor, whether or not a claim for
post-filing or post-petition
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interest is allowed in such proceeding) and all other obligations and
liabilities of the Company to the Noteholders or the Collateral Agent,
whether direct or indirect, absolute or contingent, due or to become
due, or now existing or hereafter incurred, which may arise under, out
of, or in connection with, the Notes or the Indenture (in each such
case as the same may be amended, supplemented or modified from time to
time) and any other document made, delivered or given in connection
therewith, whether on account of principal, premium, interest,
reimbursement obligations, fees, indemnities, costs, expenses
(including, without limitation, all fees and disbursements of counsel)
or otherwise;
"PERSON" means any individual, partnership, limited partnership, joint
venture, syndicate, sole proprietorship, company or corporation with
or without share capital, unincorporated association, trust, trustee,
executor, administrator or other legal personal representative,
regulatory body or agency, government or governmental agency,
authority or entity however designated or constituted;
"RATE OF EXCHANGE" means, in relation to the conversion of one
currency to another on a particular day, the rate of exchange quoted
by the Bank of Canada as the spot rate of exchange for the conversion
of the first currency to the other at approximately noon (Toronto
time) on such day;
"SECURITY" has the meaning attributed to the "Security Documents" and
the "Subsidiary Guarantees" in the Purchase Agreement;
"SUBSIDIARY" has the meaning attributed thereto in the Indenture; and
"TAXES" means all taxes of any kind or nature whatsoever including,
without limitation, income taxes, sales or value-added taxes, levies,
stamp taxes, royalties, duties, and all fees, deductions and
withholdings imposed, levied, collected, withheld or assessed, as of
the date hereof or at any time in the future, by any governmental body
of or within Canada or any other jurisdiction whatsoever having power
to tax, together with penalties, fines, additions to tax and interest
thereon.
Words importing the singular include the plural and vice versa
and words importing gender include all genders.
1.2. HEADINGS
The inclusion of headings in this Agreement is for convenience of
reference only and shall not affect the construction or interpretation hereof.
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1.3. INVALIDITY OF PROVISIONS
Each of the provisions contained in this Agreement is distinct
and severable and a declaration of invalidity or unenforceability of any such
provision or part thereof by a court of competent jurisdiction shall not affect
the validity or enforceability of any other provision hereof.
1.4. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the
parties pertaining to the subject matter hereof. There are no warranties,
representations or agreements between the parties in connection with such
subject matter except as specifically set forth or referred to in this
Agreement.
1.5. WAIVER, AMENDMENT
Except as expressly provided in this Agreement, no amendment or
waiver of this Agreement shall be binding unless executed in writing by the
party to be bound thereby. No waiver of any provision of this Agreement shall
constitute a waiver of any other provision nor shall any waiver of any provision
of this Agreement constitute a continuing waiver unless otherwise expressly
provided.
1.6. CURRENCY
All amounts in this Agreement are stated and shall be paid in
Canadian currency, provided that if the Obligations are outstanding in a
currency other than Canadian currency, the Collateral Agent, at its option, may
require that such amounts be paid in such other currency, to the extent that the
Obligations are outstanding in such other currency.
1.7. GOVERNING LAW
This Agreement shall be governed by and construed in accordance
with the laws of the Province of Ontario and the federal laws of Canada
applicable therein.
1.8. INTEREST ACT
For purposes of the Interest Act (Canada), where a rate of
interest is to be calculated hereunder on the basis of a year of 360 days, the
yearly rate of interest to which the 360 day rate is equivalent is such rate
multiplied by the number of days in the year for which such calculation is made
and divided by 360.
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ARTICLE 2.
GUARANTEE
2.1. GUARANTEE
Subject to section 2.2, the Guarantor unconditionally and
irrevocably guarantees the due payment and performance of all of the
Obligations. The guarantee herein shall be a continuing guarantee of the payment
and performance of all of the Obligations and shall apply to and secure any
ultimate balance thereof due or remaining unpaid to the Noteholders.
2.2. LIMITATION ON LIABILITY
Notwithstanding any other provision of this Agreement, the
maximum aggregate liability of the Guarantor under this Agreement and in respect
of payment obligations set forth in the Guarantor Security Documents shall be
limited to the sum of $8,000,000.
2.3. INDEMNITY
Subject to section 2.2, the Guarantor shall indemnify and save
the Collateral Agent and the Noteholders harmless from and against any losses
which may arise by virtue of any of the Obligations being or becoming for any
reason whatsoever in whole or in part:
(a) void, voidable, ultra ▇▇▇▇▇, illegal, invalid, ineffective or
otherwise unenforceable by the Collateral Agent or the
Noteholders in accordance with its terms, or
(b) released or discharged by operation of law (other than by payment
and performance in full of the Obligations),
(all of the foregoing collectively, an "Indemnifiable Circumstance"). For
greater certainty, these losses shall include without limitation the amount of
all Obligations which would have been payable by the Company but for the
existence of an Indemnifiable Circumstance.
2.4. REPLACEMENT GUARANTEE
The Guarantor shall deliver to the Collateral Agent within 120
days after each fiscal year end a solvency certificate substantially in the form
delivered to the Collateral Agent in connection with this Agreement (except that
the Guarantor shall not therein be required to make reference to, and shall not
be required to procure, any independent assessment of the value of any of its
assets), which solvency certificate shall state (i) the realizable value of the
Guarantor's assets, (ii) the Guarantor's liabilities and (iii) the Guarantor's
stated capital of all classes of shares. If such solvency certificate and the
calculations contained therein disclose that it would be possible for the
Guarantor at such time to provide a guarantee in a greater amount than that
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provided for in section 2.2, then the Guarantor shall promptly execute and
deliver to the Collateral Agent an amended guarantee which will be amended to
include such increased amount and shall be accompanied by an opinion of counsel
to the Guarantor in respect of such amended guarantee substantially in the form
of the portion of the opinion delivered to the Collateral Agent on the date
hereof which is applicable to this Agreement.
ARTICLE 3.
ENFORCEMENT
3.1. DEMAND
Subject to section 2.2, upon the occurrence of an Event of
Default, the Guarantor shall, on demand by the Collateral Agent, forthwith pay
to the Collateral Agent, or perform or cause the performance of, all Obligations
for which such demand was made, whether or not any demand for the payment or
performance of such Obligations has been made upon the Company or any other
Person or any other action has been taken to enforce the payment or performance
of such Obligations. In the event that the Collateral Agent makes demand upon
the Guarantor as provided in this section 3.1, the Guarantor shall be liable to
the Collateral Agent as principal debtor and not as surety only, and will not
plead or assert to the contrary in any proceedings taken by the Collateral Agent
in enforcing this Agreement.
3.2. RENUNCIATION
The Guarantor hereby renounces all benefits of discussion and
division, and neither the Collateral Agent nor any Noteholder shall not be bound
to take any recourse available to it against the Company or any other Person or
any Security, nor to value any Security before requiring or being entitled to
payment from or performance by the Guarantor.
3.3. PROTECTION OF THE COLLATERAL AGENT AND NOTEHOLDERS
The Collateral Agent and the Noteholders shall not be concerned
to see or enquire into the powers of the Company or its directors, officers,
employees or agents acting or purporting to act on its behalf. Monies obtained
from, or obligations otherwise created in favour of, the Collateral Agent and
the Noteholders in the professed exercise of such powers shall be deemed to form
part of the Obligations even though the obtaining of such monies or the creation
of such obligations was irregularly, fraudulently, defectively or informally
effected or in excess of the powers of the Company or its directors, officers,
employees or agents and notwithstanding that the Collateral Agent or a
Noteholder has specific notice of the powers of the Company or its directors,
officers, employees or agents.
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3.4. COLLATERAL AGENT'S STATEMENT
The statement in writing of the Collateral Agent as to the amount
of the Obligations shall be conclusive evidence thereof against the Guarantor,
in the absence of manifest error.
3.5. APPROPRIATION
Each of the Collateral Agent and the Noteholders shall be at
liberty, without in any way prejudicing or affecting its rights hereunder, to
appropriate any payment made to, or monies received by, it to any portion of the
Obligations whether then due or to become due, and from time to time to revoke
or alter any such appropriation, all as the Collateral Agent and the Noteholders
may from time to time in its sole discretion determine.
3.6. GROSS-UP
All payments made by the Guarantor to the Collateral Agent under
this Agreement shall be made in full, without set-off or counterclaim, and free
of and without deduction or withholding for or on account of any present or
future Canadian Taxes provided that, if the Guarantor shall be required by law
to deduct or withhold any Canadian Taxes from or in respect of any payment or
sum payable to the Collateral Agent, the payment or sum payable shall be
increased as may be necessary so that after making all required deductions or
withholdings the Collateral Agent receives an amount equal to the sum it would
have received if no deduction or withholding had been made, and the Guarantor
shall pay the full amount deducted or withheld to the relevant taxation or other
authority in accordance with applicable law.
3.7. INTEREST
All amounts payable by the Guarantor under this Agreement shall
bear interest payable by the Guarantor from the date of demand for payment both
before and after default and judgment at the same rate as the principal amount
of the Notes.
ARTICLE 4.
OBLIGATIONS OF GUARANTOR NOT RELEASED
4.1. NO RELEASE
The obligation and liability of the Guarantor hereunder shall be
absolute and unconditional and shall not be released, discharged or in any way
affected by:
(a) any release, renewal, extension, indulgence, discharge, loss or
alteration in or
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dealing with any Note Purchase Document whatsoever, whether
granted under the Purchase Agreement or otherwise, or
anything done, suffered or permitted by the Collateral Agent
or the Noteholders in relation to any Note Purchase
Document;
(b) time being given to the Company, the Guarantor or any other
Person by the Collateral Agent or the Noteholders, or any
increase, decrease or other alteration of the Obligations or
any part thereof including, without limitation, any
supplement or amendment of any Note Purchase Document or
other agreement;
(c) the merging of any Note Purchase Document or any of the
Obligations in, or any alteration thereof by virtue of, any
supplement, amendment or restatement to any Note Purchase
Document, the Security or other agreement or any failure to
register or any omission or defect in any registration in
respect of the Security;
(d) any compromise, arrangement or plan of reorganization
affecting the Company, the Guarantor or any other Person;
(e) any change in the Company's or the Guarantor's business or
any part thereof or in the name, capital structure,
constating documents, ownership, objects, by-laws or
resolutions of the Company or the Guarantor;
(f) any amalgamation, winding up, dissolution, continuation,
consolidation or reorganization of the Company or the
Guarantor, or the occurrence of any transaction whereby all
or any part of the undertaking, property and assets of the
Company, the Guarantor or any other Person becomes the
property of any other Person;
(g) the release of any other guarantor or of any Person liable
directly or as surety or otherwise for the Obligations;
(h) any omission or refraining from proving the claim or any
part of the claim of the Noteholders in any bankruptcy,
winding up, compromise or other proceedings relating to the
Company or any other Person;
(i) any other act or proceeding relating to the Obligations, any
Note Purchase Document, this Agreement or any other
guarantee or security collateral to any thereof or hereof or
the security created by any thereof, whereby the Guarantor
might otherwise be released or exonerated;
(j) any lack of validity or enforceability for any reason of, or
any defect in or omission from, any Note Purchase Document
or the liens created by any thereof;
(k) any amendment in the manner, time or place of payment or
calculation of any of the Obligations, or any other
amendment or waiver of or consent to departure from the
terms of any of the Obligations or any Note Purchase
Document;
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(l) any right or power of the Company, the Guarantor or any
other Person to assert any claim or defence as to the
invalidity or unenforceability of the Obligations or any
part thereof;
(m) the fact that the Company ceases for any reason whatsoever,
as a matter of law, to be liable to the Noteholders in
respect of the Obligations (otherwise than by reason of the
payment in full of all the Obligations to the Collateral
Agent) or the fact that a court determines that the
liability of the Company to the Noteholders in respect of
the Obligations has been satisfied or is deemed to have been
satisfied (except in circumstances where payment in full of
all of the Obligations has been received by the Collateral
Agent); or
(n) any other circumstance which might otherwise constitute a
defence available to, or discharge of, the Guarantor under
this Agreement or to or of the Company, in respect of the
Obligations or any Note Purchase Document.
4.2. RIGHTS OF COLLATERAL AGENT
Without limiting the generality of section 4.1, the Collateral
Agent shall be at liberty, without in any way prejudicing or affecting its
rights hereunder, from time to time to receive such further or other security
for the Obligations or any part thereof as the Collateral Agent may consider
advisable, to release, discharge, abandon or otherwise deal with or fail to deal
with, the Company or other Persons or any such security or any part thereof or
with any security or any part thereof now held or deal with and allow the
Company or other Persons to deal with the assets covered thereby, all as the
Collateral Agent and the Noteholders may consider advisable. The Collateral
Agent may, without exonerating the Guarantor, give up, modify or abstain from
perfecting or taking advantage of any security, accept or make any compositions
or arrangements, and realize any security when, and in such manner, and with or
without notice, as the Collateral Agent and the Noteholders may consider
advisable. The Collateral Agent may from time to time grant to the Company or to
any Persons liable to the Collateral Agent for the Obligations or any part
thereof time for payment or any other indulgence and may compromise with all or
any of such Persons as the Collateral Agent and the Noteholders may consider
advisable.
ARTICLE 5.
POSTPONEMENT OF DEBTS
AND GUARANTOR NOT TO COMPETE
5.1. POSTPONEMENT OF DEBTS
Upon the occurrence and during the continuation of an Event of
Default, all liabilities and indebtedness, present and future, absolute or
contingent, of the Company to the Guarantor are hereby postponed to the payment
and performance in full of the Obligations and all other amounts payable
hereunder and all monies received by the Guarantor in respect thereof shall be
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received in trust for the Noteholders and forthwith upon receipt shall be paid
over to the Collateral Agent, the whole without in any way lessening or limiting
the liability of the Guarantor under this Agreement except to the extent of
monies so paid. Such postponement is independent of the guarantee herein and
shall remain in full force and effect until the Collateral Agent has received
payment and performance in full of all Obligations and all other amounts payable
hereunder.
5.2. GUARANTOR NOT TO COMPETE
The Guarantor shall not:
(a) take any security from the Company or any other guarantor or
Person liable directly or as surety for all or any part of the
Obligations;
(b) claim, rank, prove or vote as a creditor in any insolvency,
bankruptcy arrangement or similar proceedings of or affecting the
Company;
(c) assert any right (including without limitation any right of
set-off, right of indemnity or reimbursement or right of
contribution, and any right arising under any security) against
the Company or any other Person liable directly or as surety for
all or any part of the Obligations; or
(d) have any right of subrogation to the Collateral Agent or the
Noteholders in respect of the Obligations;
until the Collateral Agent has received payment and performance in full of all
Obligations and all other amounts payable hereunder. Any money, security or
other property taken or received by the Guarantor in contravention of this
section 5.2 shall be held by the Guarantor in trust for the Noteholders and
shall be delivered or transferred to the Collateral Agent on demand.
ARTICLE 6.
GENERAL
6.1. NO WAIVER
No delay on the part of the Collateral Agent in the exercise of
any right, power or remedy hereunder or otherwise shall operate as a waiver
thereof, and no single or partial exercise by the Collateral Agent of any right,
power or remedy shall preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. No action of the Collateral Agent
permitted hereunder shall in any way impair or affect its rights, powers or
remedies under this Agreement.
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6.2. WAIVER AND ACKNOWLEDGEMENT BY GUARANTOR
The Guarantor hereby expressly waives notice of the existence or
creation of all or any of the Obligations and presentment, demand, notice of
dishonour, protest and all other notices whatsoever in respect of the
Obligations. The Guarantor hereby acknowledges communication to it of the terms
of the Purchase Agreement, the Note Purchase Documents and all instruments
referred therein and of all the provisions therein contained and consents to and
approves the same.
6.3. ASSIGNMENT
The Guarantor may not assign any of its obligations hereunder.
The Collateral Agent and the Noteholders may sell, assign or transfer all or any
of the Obligations in whole or in part in accordance with the Notes and the
Indenture, and in such event each and every immediate and successive assignee,
transferee or holder of all or any of the Obligations shall have, in respect of
the rights or obligations sold, assigned or transferred to it, the full benefit
of this Agreement and the Guarantor Security Documents to the same extent as if
it were an original party to the Obligations or the part thereof so sold,
assigned or transferred.
6.4. COMMUNICATION
Any notice or other communication required or permitted to be
given hereunder shall be in writing and shall be given by facsimile or other
means of electronic communication or by hand-delivery as hereinafter provided.
Any such notice or other communication, if sent by facsimile or other means of
electronic communication, shall be deemed to have been received on the Business
Day following the sending, or if delivered by hand shall be deemed to have been
received at the time it is delivered to the applicable address noted below
either to the individual designated below or to an individual at such address
having apparent authority to accept deliveries on behalf of the addressee and,
in the case of the Collateral Agent, in the same department noted below. Notice
of change of address shall also be governed by this section. Notices and other
communications shall be addressed as follows:
(a) if to the Collateral Agent:
U.S. Trust company of Texas, N.A.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇
U.S.A.
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(b) if to the Guarantor:
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
▇▇▇▇▇▇
Attention: President
6.5. PAYMENT OF COSTS AND EXPENSES
Subject to section 2.2, the Guarantor shall pay to the Collateral
Agent on demand all reasonable costs and expenses of the Collateral Agent, the
Noteholders and their agents and any receiver or receiver-manager appointed by
them or by a court in connection with this Agreement or the Guarantor Security
Documents, including, without limitation:
(a) any actual or proposed amendment or modification hereof or any
waiver hereunder and all instruments supplemental or ancillary
thereto;
(b) obtaining advice as to the Collateral Agent's and the
Noteholders' rights and responsibilities under this Agreement or
the Guarantor Security Documents;
(c) the protection or enforcement of any of the rights or remedies of
the Collateral Agent and the Noteholders under this Agreement or
the Guarantor Security Documents including, without limitation,
all costs and expenses of establishing the validity and
enforceability of, or of collection of amounts owing under this
Agreement or the Guarantor Security Documents;
(d) and further including, without limitation, all of the reasonable
fees, expenses and disbursements of Collateral Agent's and
Noteholders' counsel incurred in connection therewith.
6.6. CURRENCY CONVERSION AND INDEMNITY
If, in connection with any claim or proof made or filed against
the Guarantor, any action brought in connection with this Agreement or the
Guarantor Security Documents or any judgment or order obtained as a result
thereof, it becomes necessary to convert any amount due hereunder in one
currency (the "first Currency") into another currency (the "second Currency"),
then the conversion shall be made at the Rate of Exchange on the first Business
Day immediately preceding the day on which payment is to be made.
If the Rate of Exchange on the date of payment is different from
the Rate of Exchange on such first Business Day, the Guarantor shall, subject to
section 2.2, pay such additional amount (if any) in the second Currency as may
be necessary to ensure that the amount paid on such payment date is the
aggregate amount in the second Currency which, when converted at the Rate of
Exchange on the date of payment, is the amount due in the first
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Currency, together with all costs and expenses of conversion. Any additional
amount owing by the Guarantor to the Collateral Agent pursuant to the provisions
of this section shall be due as a separate debt and shall give rise to a
separate cause of action and shall not be affected by or merged into any
judgment obtained for any other amounts due under or in respect of this
Agreement.
6.7. SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon the Guarantor and its
successors and shall enure to the benefit of the Collateral Agent and the
Noteholders and their respective successors and assigns.
6.8. COPY RECEIVED
The Guarantor hereby acknowledges receipt of a copy of this
Agreement.
IN WITNESS WHEREOF the Guarantor has executed this Agreement as
of the date first above written.
1229501 ONTARIO INC.
By: c/s
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Name:
Title: