Exhibit 10.1
THIS GUARANTEE AND REIMBURSEMENT
AGREEMENT IS SUBJECT TO THE SUBORDINATION AND INTERCREDITOR
AGREEMENT, DATED AS OF MARCH 2, 2009, AMONG THE LOAN PARTIES, THE
AGENT, THE TERM B AGENT AND ARES UNDER WHICH THIS GUARANTEE AND
REIMBURSEMENT AGREEMENT AND THE STREAM ENTITIES’ OBLIGATIONS
HEREUNDER ARE SUBORDINATED IN THE MANNER SET FORTH THEREIN TO THE
PRIOR PAYMENT IN FULL OF CERTAIN OBLIGATIONS TO THE HOLDERS OF
SENIOR INDEBTEDNESS AS DEFINED THEREIN.
GUARANTEE AND REIMBURSEMENT
AGREEMENT
This GUARANTEE AND REIMBURSEMENT
AGREEMENT (this “ Agreement ”) is made and
entered into as of the 2nd day of March, 2009, by and among STREAM
GLOBAL SERVICES, INC., a Delaware corporation (the “
Company ”), STREAM HOLDINGS CORPORATION, a Delaware
corporation (“ SHC ”), STREAM FLORIDA INC., a
Delaware corporation (“ Stream Florida ”),
STREAM INTERNATIONAL INC., a Delaware corporation (“
SII ”), STREAM NEW YORK INC., a Delaware corporation
(“ Stream New York ” and, together with the
Company, SHC, Stream Florida, SII and any other entity that becomes
a party to this Agreement pursuant to Section 9(b), the
“ Stream Entities ”), and ARES CORPORATE
OPPORTUNITIES FUND II, L.P., a Delaware limited partnership
(“ Ares ”). Capitalized terms used, but not
otherwise defined herein, shall have the meanings ascribed to them
in the Credit Agreement (defined below) mutatis mutandis
.
WHEREAS, the Loan Parties have
entered into that certain Fifth Amended and Restated Revolving
Credit, Term Loan and Security Agreement, by and among PNC Bank,
National Association (as Lender and as Agent, “ PNC
”), Steel City Capital Funding, LLC (as Term B Lender and as
Term B Agent), PNC Capital Markets LLC (as Lead Arranger) and the
other Lenders party thereto, dated January 8, 2009 (as in
effect on the date hereof after giving effect to (i) Amendment
No. 1 and Waiver to the Credit Agreement, dated as of
March 2, 2009 (“ Amendment No. 1 and Waiver
”), by and among the Loan Parties, the Lenders, the Agent,
the Swingline Lender, the Term B Agent, the Lead Arranger and the
Documentation Agent and (ii) the Waiver to the Credit
Agreement, dated as of March 2, 2009 (the “
Waiver ”), by and among the Loan Parties, the Agent,
the Lenders, the Swingline Lender, the Term B Agent, the Lead
Arranger and the Documentation Agent, the “ Credit
Agreement ”);
WHEREAS, Ares is the owner of
150,000 shares of Series A Convertible Preferred Stock, $0.001 par
value per share, of the Company;
WHEREAS, the Stream Entities have
requested that Ares, directly or through one or more of its
affiliates, provide certain standby letters of credit, guarantees
or other form of credit support to support obligations of the
Stream Entities in connection with certain letters of credit issued
for the account of one or more of the Stream Entities (the “
Letters of Credit ”), subject to the terms and
conditions set forth herein; and
WHEREAS, each of the Stream Entities
and Ares desire to set forth herein the terms and conditions
pursuant to which Ares (and/or one or more of its affiliates) would
provide such credit support if Ares elects to do so and delivers
the written notice contemplated by Section 1(b)
below.
NOW, THEREFORE, in consideration of
the mutual promises and covenants contained herein and for other
good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereby agree as
follows:
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AGREEMENT
1. Credit Support
.
a. Letter of Credit
Guarantees . On the terms and subject to the conditions set
forth herein, including the prior written consent of Ares in
accordance with Section 1(b) below, upon the written request
of one of the Stream Entities, Ares may, or may cause one or more
of its affiliates, as determined by Ares (each such affiliate being
referred to as an “ Ares Affiliate ” and each
Ares Affiliate and Ares being referred to, collectively, as the
“ Ares Guarantors ”) to, provide, or cause a
financial institution or other entity to provide, a standby letter
of credit (each of the foregoing, an “ Ares Letter of
Credit ”) directly to the beneficiary or guarantee or
otherwise backstop (each of the foregoing, including any Ares
Letter of Credit, an “ LC Guarantee ”)
obligations of the Stream Entities under one or more Letters of
Credit issued for the benefit of one or more of the Stream
Entities; provided , that (i) each LC Guarantee will
only be provided if it effects an increase in the borrowing
availability of the Stream Entities under the Credit Agreement
beyond the amount which would otherwise be available to them
without such LC Guarantee; (ii) each LC Guarantee shall be
issued in the exact undrawn face amount of the applicable Letter(s)
of Credit it supports or replaces; (iii) the obligations
(whether fixed or contingent) of the Ares Guarantors under the LC
Guarantees shall not exceed $10,000,000.00 in the aggregate under
any circumstance whatsoever; and (iv) the LC Guarantees shall
be in such form as is acceptable to (x) each of the applicable
Stream Entity, Ares, the Agent, the Term B Agent and the Required
Lenders, with respect to any Letter(s) of Credit issued under the
Credit Agreement, and (y) the applicable Stream Entity, Ares
and the issuer of the Ares Letter of Credit, with respect to any
letter(s) of credit issued other than under the Credit
Agreement.
b. Prior Written Consent to LC
Guarantees . Notwithstanding anything herein to the contrary,
the execution and delivery of this Agreement or otherwise,
(i) each LC Guarantee shall only be delivered and become
effective upon the prior written consent of Ares with respect
thereto, and (ii) Ares shall not have, or be deemed to have,
any obligation whatsoever (either directly or through any of its
affiliates) to enter into or provide, any LC Guarantee unless and
until it elects in writing to do so. The date that such written
consent is given (if ever) for the first time an LC Guarantee is
issued and delivered hereunder is referred to herein as the “
Effective Date .”
c. Term of LC Guarantees .
Each LC Guarantee shall continue in full force and effect for a
term of twelve (12) months from its issuance or such other
period as shall be agreed to by Ares and the Company in writing.
Under no circumstance whatsoever shall any Ares Guarantor have any
liability or obligation to any of the Stream Entities or any other
Person in the event that the issuer of any Ares Letter of Credit
(i) does not (notwithstanding any automatic or optional
renewal provisions therein) renew such Ares Letter of Credit for
any reason whatsoever or (ii) incorrectly honors, disaffirms
or fails to honor, in any manner, presentment of any Ares Letter of
Credit. If any Ares Letter of Credit or other form of LC Guarantee
extends to a date later than twelve (12) months from the
Effective Date, the Stream Entities shall, on or prior to such
twelve (12) month anniversary, (A) in the case of an Ares
Letter of Credit, cause each such Ares Letter of Credit to be
terminated and returned to the applicable Ares Guarantor and
(B) in the case of any other form of LC Guarantee, cause such
LC Guarantee to terminate and, in the case of clauses (A) and
(B) of this sentence, the Ares Guarantors to be irrevocably,
unconditionally and forthwith released from any and all liabilities
and obligations thereunder or in connection therewith.
d. Reimbursement Obligation of
the Stream Entities . Each of the Stream Entities agrees,
jointly and severally, to reimburse the Ares Guarantors for any and
all amounts drawn or paid under the LC Guarantees, or otherwise
payable by the Ares Guarantors in connection with such LC
Guarantees (collectively, the “ Reimbursement
Obligations ”).
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e. Unconditional Obligation of
Payment . Each of the Stream Entities’ obligations to
make any payments hereunder shall be absolute, unconditional and
irrevocable, irrespective of any circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense to
payment (except for the indefeasible payment in full of all amounts
payable hereunder in strict compliance with the terms hereof) and
shall not be subject to reduction by way of setoff, counterclaim or
otherwise. Without limiting the generality of the foregoing, it is
agreed that the occurrence of any one or more of the following
shall not alter or impair the liability and GR Obligations (as
defined below) of the Stream Entities hereunder, which shall remain
absolute, irrevocable and unconditional under any and all
circumstances: (i) any lack of validity or enforceability of
any Ares Letter of Credit or Letter of Credit, the Credit Agreement
or this Agreement, or any term or provision herein or therein;
(ii) any draft or other document presented under an Ares
Letter of Credit or Letter of Credit being proved to be forged,
fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect;
(iii) payment by the issuer thereof under an Ares Letter of
Credit or Letter of Credit against presentation of a draft or other
document that fails to comply with the terms of such Ares Letter of
Credit or Letter of Credit; (iv) any other event or
circumstance whatsoever, whether or not similar to any of the
foregoing, that might, but for the provisions of this
Section 1(e), constitute a legal or equitable discharge of or
defense to payment of, or provide a right of setoff against, the GR
Obligations; (v) any material adverse change in the condition
(financial or otherwise), results of operations, assets,
liabilities (contingent or otherwise), agreements, properties,
solvency, business, management, prospects or value of any Loan
Party or any of their respective Subsidiaries; or (vi) any
other fact, circumstance or event whatsoever. Each Stream Entity
hereby waives notice of non-payment of the GR Obligations, demand,
presentment, protest and notice thereof with respect to any and all
instruments, notice of acceptance hereof, notice of loans or
advances made, credit extended, Collateral received or delivered,
or any other action taken in reliance hereon, and all other demands
and notices of any description, except such as are expressly
provided for herein. Each Stream Entity hereby absolutely,
unconditionally and irrevocably waives (A) promptness,
diligence, notice of acceptance, notice of presentment or payment
and any other notice hereunder, (B) demand of payment,
protest, notice of dishonor or nonpayment, notice of the present
and future amount of the GR Obligations and any other notice with
respect to the GR Obligations, (C) any requirement that Ares
or any other Ares Guarantor obtain, protect, secure, perfect or
insure any security interest or Lien or any property subject
thereto or exhaust any right or take any action against any other
Stream Entity, or any Person or any Collateral, (D) any other
action, event or precondition to the enforcement hereof or the
performance by each such Stream Entity of the GR Obligations,
(E) all suretyship defenses and (F) any defense arising
by any lack of capacity or authority or any other defense of any
Stream Entity or any notice, demand or defense by reason of
cessation from any cause of the GR Obligations other than payment
and performance in full of the GR Obligations by the Stream
Entities and any defense that any other guarantee or security was
or was to be obtained by any Ares Guarantor; provided , that
the foregoing provisions of this sentence shall apply only to a
Stream Entity to the extent that it is secondarily liable for any
GR Obligation of another Stream Entity.
f. Payments Free and Clear .
All payments required to be made by the Stream Entities hereunder
shall be made to the Ares Guarantors free and clear of, and without
any deduction for, any and all present and future taxes and other
amounts. If any Stream Entity making payment hereunder is required
by any legal requirements or Governmental Body to deduct any taxes
or other amounts from or in respect of any sum payable hereunder,
(i) the sum payable hereunder shall be increased as much as
shall be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under
this Section 1(f)) the Ares Guarantors receive an amount equal
to the sum they would have received had no such deduction(s) been
made (the “ Gross-Up Payment ”), (ii) such
Stream Entity shall make such deduction(s) and (iii) such
Stream Entity shall pay the full amount deducted to the relevant
taxing authority or other Governmental Body in accordance with
applicable legal requirements. The rights of the Ares Guarantors
under this Section 1(f) shall be subject to compliance by any
Ares Guarantor that is not organized under the laws of the United
States of America or a state thereof with the provisions set forth
on Annex 1(f) hereto.
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g. Reinstatement . The
obligations of the Stream Entities to make payments hereunder shall
be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of any of the Stream Entities
hereunder is rescinded or must otherwise be restored by any Ares
Guarantor, whether as a result of any proceedings in bankruptcy,
reorganization or otherwise.
h. General Limitation on
Obligations . In any proceeding involving any state corporate,
limited partnership or limited liability company law, or any
applicable state, federal or foreign bankruptcy, insolvency,
reorganization or other legal requirement affecting the rights of
creditors generally, if the GR Obligations of any Stream Entity
hereunder would otherwise be held or determined (in whole or in
part) to be void, voidable, invalid or unenforceable, or
subordinated to the claims of any other creditor, on account of the
amount of its liability hereunder, then, notwithstanding any other
provision to the contrary, the amount of such liability shall,
without any further action by such Stream Entity or any other
Person, be automatically limited and reduced to the highest amount
that is valid and enforceable, not void or voidable and not
subordinated to the claims of any other creditor as determined in
such proceeding.
i. Notice of Draws, Payments
. Ares will provide to the Company written notice of any draw or
payment under any LC Guarantee; provided , that the failure
to provide such notice shall not affect in any respect the GR
Obligations of the Stream Entities hereunder.
j. Payments; Payment of
Interest . All payments to be made by the Stream Entities
hereunder shall, except as otherwise expressly provided herein, be
paid in full within five (5) business days following written
demand therefor from an Ares Guarantor in immediately available
funds in U.S. Dollars, at an interest rate per annum equal to five
percent (5.0%), which interest shall constitute a GR Obligation. If
such payments are not so timely made, interest shall be payable
thereon from the due date at a rate per annum equal to seven
percent (7.0%) and such interest shall also constitute a GR
Obligation. All interest hereunder shall (i) be computed on
the basis of a year of three hundred sixty five (365) days,
(ii) be due and payable in accordance with the terms hereof
before and after judgment, and before and after the commencement of
any bankruptcy, insolvency, reorganization or other proceeding and
(iii) not exceed the highest rate permissible under Applicable
Law. In the event interest and other charges as computed hereunder
would otherwise exceed the highest rate permitted under Applicable
Law, such excess amount shall be first applied to any unpaid GR
Obligations hereunder owed by any Stream Entity, and if the then
remaining excess amount is greater than the previously unpaid GR
Obligations hereunder, the Ares Guarantors shall promptly refund
such excess amount to the Stream Entities and the provisions hereof
shall be deemed amended to provide for such permissible
rate.
2. Consideration
.
a. LC Guarantee Fee . Upon
the delivery and effectiveness in accordance with Section 1(b)
above of an LC Guarantee, the Company agrees to issue to Ares (on
behalf of itself and, if applicable, the other Ares Guarantors) a
number of shares (the “ Shares ”) of Series B
Convertible Preferred Stock, $0.001 par value per share, of the
Company (the “ Series B Preferred Stock ”) equal
to (i) one thousand (1,000) shares multiplied by
(ii) (a) the aggregate maximum amount which may be drawn
or paid under such LC Guarantee with respect to the Letter(s) of
Credit supported by such LC Guarantee divided by
(b) $10,000,000.00, with any fractional shares being rounded
up to the nearest whole share (the “ LC Fee ”);
provided , that, subject to Section 2(d), in no event
shall the aggregate number of Shares issued under this
Section 2(a) exceed 1,000. The Company shall deliver to Ares
(on behalf of itself and, if applicable, the other Ares Guarantors)
a certificate(s) for the Shares, registered in the name of Ares
and/or, if applicable, one or more of its designees, within five
(5) business days of the delivery and effectiveness of the LC
Guarantee as provided in the first sentence of this
Section 2(a).
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b. Tax Treatment of LC Fee .
The parties agree that the fair market value of each Share as of
the date of this Agreement for all federal, state, local and
foreign tax purposes is $1,000.00 and no party shall take any
contrary position unless and until there is a “final
determination” to the contrary within the meaning of
Section 1313(a) of the Code. Each of the Stream Entities
further agrees that the LC Fee shall not be subject to any tax
withholding or, if subject to any withholding, Ares (and the other
Ares Guarantors) shall be entitled to such additional fees so that
after making all required deductions each of Ares and the other
Ares Guarantors receives an amount equal to the fees it would have
received had no such withholding been made.
c. Reservation and Listing of
Common Stock . The Company shall maintain a reserve from its
duly authorized but unissued shares of common stock, $0.001 par
value per share (the “ Common Stock ”), in such
amount as may be required to fulfill its obligations in full to
issue shares of Common Stock upon conversion of the Shares (the
“ Conversion Shares ”). The Company shall
(i) prepare and timely file with the Trading Market (as
defined in the Certificate (as defined below)) an additional shares
listing application covering all of the Conversion Shares,
(ii) use commercially reasonable efforts to cause such
Conversion Shares to be approved for listing on the Trading Market
as soon as practicable thereafter, (iii) provide to Ares and
its counsel evidence of such listing and (iv) use commercially
reasonable efforts to maintain the listing of such Conversion
Shares on such Trading Market.
d. Adjustments in Share Numbers
and Prices . In the event of any stock split, subdivision,
dividend or distribution payable in Common Stock (or other
securities or rights convertible into, or entitling the holder
thereof to receive, directly or indirectly, Common Stock),
combination or other similar recapitalization or event occurring
after the date hereof, each reference in this Agreement to a number
of shares or a price per share shall be automatically amended to
appropriately account for such event.
e. Tax Treatment of the
Shares . So long as the Shares are held by an Ares Guarantor,
the Company shall not treat the Shares as “preferred
stock” for purposes of Section 305 of the Code, unless
and until there is a “final determination” to the
contrary within the meaning of Section 1313(a) of the
Code.
3. Security Interest and
Collateral .
a. Grant of Security Interest
. To secure the prompt payment and performance of all covenants,
agreements, obligations and liabilities of any kind or nature,
present or future, direct or indirect, absolute or contingent, of
the Stream Entities from time to time arising under or in respect
of this Agreement, including (i) the Reimbursement Obligations
and the Stream Liabilities, (ii) the obligation to pay the LC
Fee or any other amounts payable in connection with the issuance or
provision of any LC Guarantee, including the obligation to provide
cash collateral, (iii) all other monetary obligations,
including costs, expenses and indemnities, (iv) compliance
with the obligation to issue the Shares and Conversion Shares under
this Agreement, and (v) any obligations and liabilities
(including interest) incurred under or in respect of this Agreement
during the pendency of any bankruptcy, insolvency, reorganization
or other proceeding relating to any Stream Entity, regardless of
whether allowed or allowable in such proceeding (collectively, the
“ GR Obligations ”), each of the Stream Entities
(other than the Company) hereby grants to Ares (on behalf of itself
and for the ratable benefit of the other Ares Guarantors) a
continuing security interest in all of its right, title and
interest in, to and under the Collateral (which term, for purposes
of this Agreement, shall include (i) the LC Account (as
defined below) and (ii) subject to Section 1(e) of
Annex 3(b) hereto, only Collateral of a Stream Entity other
than the Company),
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whether now owned or existing or hereafter
acquired or arising and wheresoever located; provided , that
in no event shall more than 65% of the Capital Stock of each of the
First Tier Foreign Subsidiaries be deemed to be pledged hereunder.
Notwithstanding anything to the contrary herein, no Stream Entity
shall be required to take (or cause to be taken) any action to
pledge any Capital Stock of any First Tier Foreign Subsidiary under
any local law pledge or take any similar or related action under
any applicable local law to perfect the pledge of any interest in
the Capital Stock of such First Tier Foreign Subsidiary. Such
security interest in the Collateral shall be maintained at all
times as a valid, enforceable and, subject to the prior sentence,
perfected security interest in favor of Ares (on behalf of itself
and for the ratable benefit of the Ares Guarantors), subject only
to Permitted Encumbrances.
b. Further Assurances .
Subject to the second to last sentence of Section 3(a) above
and the Subordination Agreement (as defined below), each Stream
Entity agrees to take all action that may be necessary or
desirable, or that may be reasonably requested by the Ares
Guarantors, so as at all times to maintain the attachment,
validity, perfection, enforceability and priority of, and the
ability of the Ares Guarantors to protect, exercise and enforce,
their respective security interests in any and all of the
Collateral including (i) executing, delivering and filing
financing statements, continuation statements and amendments
relating thereto under the Uniform Commercial Code (the “
UCC ”), (ii) complying with any provision of any
Applicable Laws if compliance with such provision is a condition to
or otherwise affects attachment, validity, perfection,
enforceability or priority of, or the ability of the Ares
Guarantors to protect, exercise or enforce, their respective
security interests in such Collateral, and (iii) taking all
actions required by the UCC or by other Applicable Law, all of the
foregoing at the Stream Entities’ reasonable cost and
expense. The agreements, covenants and warranties set forth on
Annex 3(b) hereto are incorporated herein by
reference.
c. Subordination Agreement .
This Agreement and the rights granted to the Ares Guarantors
hereunder are subject in their entirety to the provisions of that
certain Subordination and Intercreditor Agreement, dated as of
March 2, 2009 (as amended and in effect from time to time, the
“ Subordination Agreement ”), by and among Ares,
the Agent, the Term B Agent, the Stream Entities and the other Loan
Parties party thereto. If any of the terms of the Subordination
Agreement conflict with any of the terms of this Agreement, the
conflicting terms of the Subordination Agreement shall control.
Until such time as the Obligations have been paid in full in cash
(other than contingent reimbursement and indemnification
obligations in respect of which no claim for payment has been
asserted) and the commitments to advance funds under the Credit
Agreement shall have been terminated, notwithstanding anything to
the contrary herein, the failure of any Stream Entity to comply
with its payment obligations in this Agreement solely due to the
terms of the Subordination Agreement shall not constitute a default
or trigger an Event of Default under this Agreement. For so long as
Section 3.9 of the Subordination Agreement is in full force
and effect and the Agent has not directly or indirectly disaffirmed
or sought to disaffirm its obligations thereunder, any obligation
of a Stream Entity in this Agreement that requires delivery of
possession of Pledged Collateral (as defined in the Subordination
Agreement) to, or the possession of Pledged Collateral by, any Ares
Guarantor shall be deemed to be complied with and is satisfied if
such delivery is made to, or such possession is by, the
Agent.
d. Legal Status . Each Stream
Entity’s (other than the Company’s) (i) exact
legal name is that indicated on Schedule I hereto;
(ii) organizational type and jurisdiction of organization is
as set forth on Schedule I hereto; (iii) organizational
identification number (or a statement that it has none) is as set
forth on Schedule I hereto; (iv) tax identification
number is as set forth on Schedule I hereto; and
(v) chief executive office as well as its mailing address (if
different than its chief executive office) is as set forth on
Schedule I hereto. Each Stream Entity (other than the
Company) agrees as follows: (A) without providing at least 30
days’ prior written notice to Ares, such Stream Entity will
not change its name, tax identification number or organizational
identification number if it has one, (B) if such Stream Entity
does not have an organizational identification number and later
obtains one, it shall forthwith
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notify Ares of such organizational
identification number and (C) without providing at least 30
days’ prior written notice to Ares, such Stream Entity will
not merge with or consolidate with another Person (either as the
surviving or disappearing Person), change its type of organization,
jurisdiction of organization or other legal structure or its chief
executive office or mailing address.
e. Occurrence of an Event of
Default . If any Stream Entity fails to make any payment when
due hereunder (including payment of a Reimbursement Obligation or
other GR Obligation) or any LC Event of Default (as defined below)
occurs (each, an “ Event of Default ”), and if
such Event of Default shall be continuing, the Ares Guarantors may,
without notice to or demand upon any Stream Entity, declare this
Agreement to be in default and, subject to the Subordination
Agreement, the Ares Guarantors shall thereafter have in any
jurisdiction in which enforcement thereof is sought, in addition to
all other rights and remedies available at law, in equity or
otherwise, the rights and remedies of a secured party under the
Uniform Commercial Code of the State of New York or of any
jurisdiction in which Collateral is located, including the right to
take possession of the Collateral, and for that purpose the Ares
Guarantors may, enter upon any premises on which the Collateral may
be situated and remove the same therefrom. Subject to the
Subordination Agreement, the Ares Guarantors may in their
discretion require the Stream Entities to assemble all or any part
of the Collateral at such location or locations within the
jurisdiction(s) of the principal office of the applicable Stream
Entity as the Ares Guarantors may designate. Subject to the
Subordination Agreement, unless the Collateral is perishable or
threatens to decline speedily in value or is of a type customarily
sold on a recognized market, the Ares Guarantors shall give to the
Company at least ten (10) days’ prior written notice of
the time and place of any public sale of Collateral or of the time
after which any private sale or any other intended disposition is
to be made. In connection with the exercise of such rights and
remedies under or in connection with this Agreement, each Stream
Entity hereby waives presentment, demand, protest or any notice (to
the maximum extent permitted by Applicable Law) of any kind
whatsoever. In addition, each Stream Entity waives any and all
rights that it may have to a judicial hearing in advance of the
enforcement of any of the Ares Guarantors’ rights hereunder,
including their respective rights following an Event of Default, to
take immediate possession of the Collateral and to exercise their
respective rights and remedies with respect thereto.
f. Authorization to File
Financing Statements . Each Stream Entity (other than the
Company) hereby irrevocably authorizes each of the Ares Guarantors
at any time and from time to time to file in any UCC jurisdiction
any financing statements, continuation statements and amendments
thereto in such form and substance as the Ares Guarantors shall
deem appropriate. By its signature hereto, each Stream Entity
(other than the Company) hereby authorizes each Ares Guarantor, at
any time and from time to time, to file, without the signature of
such Stream Entity in accordance with Section 9-509 of the
UCC, financing statements, continuation statements and amendments
thereto, including financing statements that describe the
Collateral as “all assets (whether now owned or existing or
hereafter acquired or arising)” of the applicable Stream
Entity (provided that any such generic description shall not extend
or expand the grant contained in Section 3(a) above) and which
contain any other information required by the UCC for the
sufficiency or filing office acceptance of any financing
statements, continuation statements or amendments thereto, all in
form and substance satisfactory to such Ares Guarantor. All
charges, expenses and fees that Ares or any other Ares Guarantor
may reasonably incur in doing any of the foregoing, and any local
taxes relating thereto, shall be paid by the Stream Entities
immediately upon demand and shall constitute a Reimbursement
Obligation.
g. LC Events of Default .
Subject to the Subordination Agreement, upon (i) the
occurrence of an Event of Default under Section 10.7 of the
Credit Agreement, (ii) the acceleration of the Obligations, or
the termination of the Credit Agreement or the obligation of the
Lenders to make Advances, by the Required Lenders pursuant to
Section 11.1(ii) of the Credit Agreement or (iii) the
termination of the obligation of the Lenders to make Advances
pursuant to Section 11.1(iii) of the Credit
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Agreement (each, an “ LC Event of
Default ”), effective immediately, and without any demand
or other notice of any kind whatsoever, at Ares’ option, the
Stream Entities shall be obligated, jointly and severally, to
deposit, in a restricted blocked “deposit account” (the
“ LC Account ”) maintained with a
“bank” (each, as defined in the UCC) as to which Ares
(or its nominee) is the “bank’s customer” (as
defined in the UCC) in which Ares (for the benefit of itself and
the other Ares Guarantors) has a valid, enforceable security
interest perfected by “control” (as defined in the
UCC), including, at Ares’ option, pursuant to a deposit
account control agreement in form and substance acceptable to Ares,
an amount in cash equal to the aggregate amount available to be
drawn or paid under all Ares Letters of Credit and other forms of
LC Guarantees outstanding at such time (whether or not any
beneficiary shall have presented, or shall be entitled at such time
to present, the drafts or other documents required to draw or
require payment under such Ares Letter of Credit or other form of
LC Guarantee), plus the aggregate amount of all other GR
Obligations outstanding at such time, including any accrued and
unpaid interest plus any fees payable with respect to such
Ares Letters of Credit or other forms of LC Guarantees for the full
remaining term thereof (collectively, the “ Stream
Liabilities ”); provided , that upon the
occurrence of an LC Event of Default referenced in clauses
(i) or (iii) above, the result which would otherwise
occur only upon the exercise of Ares’ option as provided in
this Section 3(g) shall occur automatically, without the
exercise of such option. Any amounts cash-collateralized by the
Stream Entities pursuant to the foregoing sentence plus any
accrued interest with respect to such amounts (in each case, to the
extent not applied by the Ares Guarantors in accordance with this
Agreement) shall be refunded within ten (10) business days
after all LC Events of Default have been cured or waived by Ares or
the requisite Lenders under the Credit Agreement. If on any date of
determination, an Ares Letter of Credit has expired by its terms
but any amount may still be drawn thereunder by reason of the
operation of Rule 3.14 of the International Standby Practices 1998
(or ‘ISP 98’) published by the Institute of
International Banking Law & Practice, Inc. (or such later
version thereof as is applicable to such Ares Letter of Credit) (or
any other equivalent applicable rule with respect to force majeure
events), such Ares Letter of Credit shall be deemed to be
“outstanding” in the amount so remaining available to
be drawn.
4. Conditions Precedent to the
Obligations of Ares Guarantors . Notwithstanding anything
herein to the contrary, the issuance and delivery of each LC
Guarantee is subject to the satisfaction at or before the issuance
and delivery thereof of each of the following conditions by the
Stream Entities, the waiver of which shall not be effective against
any Ares Guarantor if it does not consent in writing
thereto:
a. each of the Stream Entities shall
have performed and complied with all agreements, obligations and
conditions contained in this Agreement that are required to be
performed or complied with by it on or before such date and each of
the representations and warranties of the Stream Entities contained
herein shall be true and correct in all material respects (without
giving effect to any qualifications as to materiality therein) as
of the date when made and as of the date of issuance and delivery
of such LC Guarantee as though made on and as of such date (except
for those representations and warranties that are expressly limited
to a certain date);
b. since the date of this Agreement,
there has been no event, occurrence, change, development, condition
or state of facts that, individually or in the aggregate, has had
or could reasonably be expected to have a material adverse effect
on the (i) the condition (financial or otherwise), results of
operations, assets, liabilities or business of the Stream Entities
on a consolidated basis, (ii) the ability of the Stream
Entities on a consolidated basis to pay the GR Obligations owed
hereunder by such Stream Entities in accordance with the terms
hereof, (iii) Ares’ Liens on the Collateral or the
priority of any such Lien (it being understood that the existence
of Permitted Encumbrances in and of itself shall not be deemed to
have a Material Adverse Effect) or (iv) the practical
realization of the benefits of Ares’ and each other Ares
Guarantor’s rights and remedies under this Agreement (each, a
“ Material Adverse Effect ”);
8
c. each of the Stream Entities shall
have complied with any and all notice and filing requirements
(including any filings or qualifications under applicable
securities laws and causing the Conversion Shares to be approved
for listing on the Trading Market) and obtained any and all
consents, permits and waivers necessary or appropriate in
Ares’ determination for consummation by the parties of the
transactions contemplated by this Agreement;
d. no statute, rule, regulation,
executive order, decree, ruling or injunction shall have been
enacted, entered, promulgated or endorsed by any court or
Governmental Body of competent jurisdiction that prohibits the
consummation of any of the transactions contemplated
hereby;
e. the Ares Guarantors shall have
received opinions in form and substance satisfactory to it and its
counsel of Wilmer Cutler Pickering Hale and Dorr LLP, counsel to
the Stream Entities, to the effect set forth in Exhibit A
attached hereto;
f. the Company shall have duly
adopted, executed and filed with the Secretary of State of the
State of Delaware the Certificate of Designations for the Series B
Preferred Stock in the form attached hereto as Exhibit B
(the “ Certificate ”) and the same shall have
become effective on or before such date and shall not have been
amended or modified, and a copy of the Certificate, certified by
the Secretary of State of the State of Delaware, shall have been
delivered to Ares and its counsel;
g. the Stream Entities shall have
paid in full all reasonable fees, expenses and disbursements
incurred on or prior to such date by the Ares Guarantors, including
all reasonable fees and disbursements of counsel to the Ares
Guarantors;
h. the Registration Rights
Agreement, dated as of August 7, 2008 (the “
Registration Rights Agreement ”), by and among the
Company, Ares and the other stockholders party thereto shall have
been amended in the form attached hereto as Exhibit C
;
i. Ares, the Agent, the Term B
Agent, the Stream Entities and the other Loan Parties party thereto
shall have executed and delivered the Subordination Agreement;
and
j. the Stream Entities shall have
received Amendment No. 1 and Waiver and the Waiver in the
forms attached hereto as Exhibits D-1 and D-2
.
5. Representations and
Warranties of the Stream Entities . Each of the Stream
Entities, jointly and severally, hereby makes all the
representations, warranties and covenants set forth on Annex
5 hereto and, jointly and severally, makes the following
additional representations, warranties and covenants:
a. the Certificate, when filed with
the Secretary of State of the State of Delaware, will be in
accordance with all requirements under the General Corporation Law
of the State of Delaware necessary for it to be effective under
Delaware law;
b. the Shares have been duly
authorized by all necessary action of the Company and, when issued,
sold and delivered in accordance with the terms of this Agreement,
will be duly and validly issued, fully paid and nonassessable, will
have the rights and preferences set forth in the Certificate, will
be free of any Liens and will not be subject to preemptive rights
or similar rights of stockholders;
c. the Conversion Shares have been
duly authorized by all necessary action of the Company and reserved
for issuance and, when issued in accordance with the provisions of
the Series B
9
Preferred Stock, will be duly and validly
issued, fully paid and nonassessable, will have the rights set
forth in the Company’s certificate of incorporation, as
amended to the date such shares of Common Stock are issued, will be
free of any Liens and will not be subject to preemptive rights or
similar rights of stockholders;
d. the Company has reserved from its
duly authorized capital stock a number of shares of Common Stock
for issuance upon the conversion of the Shares not less than the
total number of Conversion Shares; and the issuance of the Shares
and Conversion Shares as contemplated hereunder will not subject
any Ares Guarantor to any liability or obligation of any kind in
respect of or relating to the operation of the business of the Loan
Parties and their respective Subsidiaries; and
e. no consent, permission, waiver,
approval, order, exemption, license or authorization of, or
registration, application, notification, request, qualification,
designation, declaration or filing with, any (i) Governmental
Body or (ii) any other Person, is required by any of the
Stream Entities in connection with the execution or delivery of
this Agreement, the authorization, issuance, sale and delivery of
the Shares or the Conversion Shares or the consummation or
performance of the other transactions contemplated by this
Agreement, except for (A) the required filing of the
Certificate contemplated by Section 4(f), (B) the
approval from the Trading Market for the listing of the Conversion
Shares for trading thereon and (C) the filing of a Form D
with the U.S. Securities and Exchange Commission (the “
Commission ”) and compliance with the securities and
blue sky laws in the states in which the Shares and the Conversion
Shares are offered and sold, if any.
6. Representations and
Warranties of Ares . Ares represents and warrants to the
Stream Entities that on the date hereof that it is an entity duly
organized, validly existing and in good standing under the laws of
the State of Delaware with the requisite partnership power and
authority to enter into and to consummate the transactions
contemplated by this Agreement and otherwise to carry out its
obligations hereunder. The execution, delivery and performance by
Ares of this Agreement has been duly authorized by all necessary
partnership action on the part of Ares. This Agreement has been
duly executed by Ares and, when delivered by Ares, will constitute
the valid and legally binding obligation of Ares, enforceable
against it in accordance with its terms, except as limited by
(a) applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting
enforcement of creditors’ rights generally and (b) laws
relating to the availability of specific performance, injunctive
relief or other equitable remedies.
7. Termination and
Effect . This Agreement may be terminated and the
transactions contemplated hereby may be abandoned:
a. at any time prior to the
Effective Date, by mutual written consent of the Company and Ares;
or
b. on or after February 15,
2010, by either party by written notice, if the Effective Date has
not occurred by such date.
In the event of termination of this
Agreement pursuant to this Section 7, the transactions
contemplated by this Agreement shall be deemed abandoned and this
Agree
