FOURTH AMENDED AND RESTATED REVOLVING CREDIT, TERM LOAN AND SECURITY AGREEMENT

Exhibit 10.1

FOURTH AMENDED AND RESTATED

REVOLVING CREDIT, TERM LOAN

AND

SECURITY AGREEMENT

PNC BANK, NATIONAL ASSOCIATION

(AS LENDER AND AS AGENT),

PNC CAPITAL MARKETS LLC

(AS LEAD ARRANGER)

WITH

STREAM HOLDINGS CORPORATION

(AS BORROWING AGENT),

STREAM GLOBAL SERVICES, INC. (“SGS”)

(formerly known as GLOBAL BPO SERVICES CORP.)

(AS A GUARANTOR)

AND

THE OTHER LOAN PARTIES SIGNATORY HERETO

(AS LOAN PARTIES)

July 31, 2008

TABLE OF CONTENTS

 

List of Exhibits and Schedules

 

FOURTH AMENDED AND RESTATED

REVOLVING CREDIT, TERM LOAN

AND

SECURITY AGREEMENT

Fourth Amended and Restated Revolving Credit, Term Loan and Security Agreement dated as of July 31, 2008 by and among STREAM HOLDINGS CORPORATION, a Delaware corporation (“SHC”), STREAM FLORIDA INC., a Delaware corporation and a wholly-owned Subsidiary of SHC (“SFI”), STREAM INTERNATIONAL INC., a Delaware corporation and a wholly-owned Subsidiary of SHC (“Stream”), and STREAM NEW YORK INC. a Delaware corporation and a wholly-owned Subsidiary of SHC (“SNY”) (SFI, Stream and SNY, each a “US Borrower” and collectively the “US Borrowers”), STREAM INTERNATIONAL CANADA INC., a company organized under the laws of Ontario and a Subsidiary of Stream (“Stream Canada”), and STREAM INTERNATIONAL EUROPE B.V., a company organized under the laws of the Netherlands and a wholly-owned Subsidiary of Stream (“Stream BV”), STREAM INTERNATIONAL SERVICE EUROPE B.V., a company organized under the laws of the Netherlands and a wholly-owned Subsidiary of Stream International (Bermuda) Ltd. (“Stream Service BV”), STREAM INTERNATIONAL (N.I.) LTD., a company organized under the laws of Northern Ireland and a Subsidiary of Stream (“Stream UK”) and STREAM INTERNATIONAL GMBH, a company organized under the laws of Germany and a Subsidiary of Stream (“Stream Germany”) (Stream Canada, Stream BV, Stream Service BV, Stream UK and Stream Germany, each a “Foreign Borrower” and collectively the “Foreign Borrowers”) (US Borrowers and the Foreign Borrowers, each a “Borrower” and collectively the “Borrowers”), and STREAM GLOBAL SERVICES, INC. (formerly known as GLOBAL BPO SERVICES CORP.), a Delaware corporation and, as of the Closing Date, the owner of all of the issued and outstanding shares of the capital stock of SHC (“SGS”) (SHC and SGS, each a “Guarantor” and collectively the “Guarantors”; Borrowers and Guarantors, each a “Loan Party” and collectively the “Loan Parties”), the financial institutions which are now or which hereafter become a party hereto (collectively, the “Lenders” and individually a “Lender”) and PNC BANK, NATIONAL ASSOCIATION (“PNC”), as agent for Lenders (PNC, in such capacity, the “Agent”), PNC as “Swingline Lender” (as hereafter defined) and PNC CAPITAL MARKETS LLC., as sole lead arranger (“Lead Arranger”).

BACKGROUND

Loan Parties, Lenders and Agent entered into that certain Third Amended and Restated Revolving Credit, Term Loan and Security Agreement dated as of May 31, 2006 (as amended by Amendment No. 1 to Third Amended and Restated Revolving Credit, Term Loan and Security Agreement, Waiver and Consent, dated as of October 31, 2006, Amendment No. 2, Waiver and Consent to Third Amended and Restated Revolving Credit, Term Loan and Security Agreement dated as of August 30, 2007, and as same may hereafter be further amended, restated or otherwise modified from time to time, the “Third Restated Loan Agreement”) pursuant to which Agent and Lenders provide Borrowers with certain financial accommodations.

SGS (then known as Global BPO Services Corp. (“Global BPO”)) has entered into an Agreement and Plan of Merger by and among Global BPO, River Acquisition Subsidiary Corp. (a Delaware corporation which is a wholly-owned Subsidiary of Global BPO (“RASC”)) and

SHC dated as of January 27, 2008, as amended and restated on June 2, 2008 (the “Acquisition Agreement”), pursuant to which Global BPO shall have acquired 100% of the issued and outstanding shares of the capital stock of SHC (the “Acquisition”). Subsequent to consummation of the Acquisition, Global BPO shall have changed its name to Stream Global Services, Inc.

Notwithstanding the Acquisition, and the Change of Ownership provision contained in the Third Restated Loan Agreement, SGS has requested Agent and Lenders to continue the financing of Borrowers established under the Third Restated Loan Agreement, and to increase the aggregate credit facility to $107,809,697.60, to consist of (a) Term Loan US which, as of the date of this Agreement, shall be in the outstanding principal balance of $5,294,144.03 (of which $568,680.77 is attributable to Term Loan A and $4,725,463.26 is attributable to Term Loan C, as such terms are defined in the Third Restated Loan Agreement), (b) a Term Loan Foreign which, as of the date of this Agreement, shall be in the outstanding principal balance of $2,515,553.57 (of which $519,377.63 is attributable to Term Loan B and $1,996,175.94 is attributable to Term Loan D, as such terms are defined in the Third Restated Loan Agreement), and (c) an increased Maximum Revolving Credit Amount of $100,000,000 (of which not more than $50,000,000 may at any time be outstanding to Foreign Borrowers in the aggregate, nor more than $20,000,000 at any time outstanding to Stream Canada, nor more than $10,000,000 to Stream UK). Upon the terms and conditions set forth in this Agreement, Lenders have so agreed to provide such increased credit facilities.

Borrowers, Guarantor, Lenders and Agent now wish to amend and restate the Third Restated Loan Agreement on the terms and conditions set forth in this Agreement.

 

A.

AMENDMENT AND RESTATEMENT

As of the date of this Agreement, the terms, conditions, covenants, agreements, representations and warranties contained in the Third Restated Loan Agreement shall be deemed amended and restated in their entirety as follows and the Third Restated Loan Agreement shall be consolidated with and into and superseded by this Agreement; provided , however , that nothing contained in this Agreement shall impair, limit or affect the Liens heretofore granted, pledged and/or assigned to Agent and Lenders as security for Borrowers’ Obligations to Lender under the Third Restated Loan Agreement.

IN CONSIDERATION of the mutual covenants and undertakings herein contained, Borrowers, Lenders and Agent hereby agree as follows:

 

I.	DEFINITIONS .

1.1. Accounting Terms . As used in this Agreement, the Note, or any certificate, report or other document made or delivered pursuant to this Agreement, accounting terms not defined in Section 1.2 or elsewhere in this Agreement and accounting terms partly defined in Section 1.2 to the extent not defined, shall have the respective meanings given to them under GAAP; provided, however, whenever such accounting terms are used for the purposes of determining compliance with financial covenants in this Agreement, such accounting terms shall be defined in accordance with GAAP as applied in preparation of the audited financial statements of SHC for the fiscal year ended December 31, 2007.

 

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1.2. General Terms . For purposes of this Agreement the following terms shall have the following meanings:

“ Accountants ” shall have the meaning set forth in Section 9.7 hereof.

“ Acquisition ” shall have the meaning set forth in the Background paragraphs of this Agreement.

“ Acquisition Agreement ” shall have the meaning set forth in the Background paragraphs of this Agreement.

“ Advances ” shall mean the Revolving Advances, Swingline Advances, the Letters of Credit, as well as Term Loan US and Term Loan Foreign.

“ Advance Rates ” shall have the meaning set forth in Section 2.1(a) hereof.

“ Affiliate ” of any Person shall mean (a) any Person which, directly or indirectly, is in control of, is controlled by, or is under common control with such Person, or (b) any Person who is a director, managing member, general partner or executive officer (i) of such Person, (ii) of any Subsidiary of such Person or (iii) of any Person described in clause (a) above. For purposes of this definition, control of a Person shall mean the power, direct or indirect, (x) to vote 10% or more of the securities having ordinary voting power for the election of directors of such Person, or (y) to direct or cause the direction of the management and policies of such Person whether by contract or otherwise.

“ Agent ” shall have the meaning set forth in the preamble to this Agreement and shall include its successors and assigns.

“ Alternate Base Rate ” shall mean, for any day, a rate per annum equal to the higher of (i) the Base Rate in effect on such day and (ii) the Federal Funds Open Rate in effect on such day plus  ¹ / 2 of 1%.

“ Anti-Terrorism Laws ” shall mean any Laws relating to terrorism or money laundering, including Executive Order No. 13224, the USA Patriot Act, the Laws comprising or implementing the Bank Secrecy Act, and the Laws administered by the United States Treasury Department’s Office of Foreign Asset Control (as any of the foregoing Laws may from time to time be amended, renewed, extended, or replaced).

“ Applicable Law ” shall mean all laws, rules and regulations applicable to the Person, conduct, transaction, covenant, Other Document or contract in question, including all applicable common law and equitable principles; all provisions of all applicable state, provincial, federal and foreign constitutions, statutes, rules, regulations and orders of any Governmental Body, and all orders, judgments and decrees of all courts and arbitrators.

“ Applicable Margin ” for each type of Advance shall mean, as of the Closing Date, the applicable percentage specified below:

 

 

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Thereafter, effective as of the first Business Day following receipt by Agent of the financial statements of Borrowers on a Consolidated Basis for the fiscal year ending December 31, 2008 required under Section 9.7, and thereafter upon receipt of the quarterly financial statements of Borrowers on a Consolidated Basis required under Section 9.8 for the previous fiscal quarter (each day of such delivery, an “Adjustment Date”), the Applicable Margin for each type of Advance shall be adjusted, if necessary, to the applicable percent per annum set forth in the pricing table set forth below corresponding to the Fixed Charge Coverage Ratio for the trailing twelve month period ending on the last day of the most recently completed fiscal quarter prior to the applicable Adjustment Date (each such period, a “Calculation Period”):

 

If Loan Parties shall fail to deliver the financial statements, certificates and/or other information required under Section 9.8 by the dates required pursuant to such sections, each Applicable Margin shall be conclusively presumed to equal the highest Applicable Margin specified in the pricing table set forth above until the date of delivery of such financial statements, certificates and/or other information, at which time the rate will be adjusted based upon the Fixed Charge Coverage Ratio as required hereunder.

“ Ares Fund ” means Ares Corporate Opportunities Fund II, L.P., a Delaware limited partnership.

“ Ares Transaction ” means the sale of 150,000 shares of the preferred stock of SGS to Ares Fund as contemplated by the Ares Transaction Agreement.

“ Ares Transaction Agreement ” means that certain Preferred Stock Purchase Agreement, dated as of June 2, 2008, by and between Global BPO and Ares Fund, as amended by that certain Amendment No. 1 to Preferred Stock Purchase Agreement dated as of July 15, 2008, that certain Amendment No. 2 to Preferred Stock Purchase Agreement dated as of July 17, 2008, and as the same may be further amended prior to the Closing Date.

“ Authority ” shall have the meaning set forth in Section 4.19(d).

“ Base Rate ” shall mean the base commercial lending rate of PNC as publicly announced to be in effect from time to time, such rate to be adjusted automatically, without

 

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notice, on the effective date of any change in such rate. This rate of interest is determined from time to time by PNC as a means of pricing some loans to its customers and is neither tied to any external rate of interest or index nor does it necessarily reflect the lowest rate of interest actually charged by PNC to any particular class or category of customers of PNC.

“ Benefited Lender ” shall have the meaning set forth in Section 2.20(d).

“ Blocked Accounts ” shall have the meaning set forth in Section 4.15(h).

“ Blocked Person ” shall have the meaning assigned to such term in Section 5.25(b).

“ Borrower ” or “ Borrowers ” shall have the meaning set forth in the preamble to this Agreement and shall extend to all permitted successors and assigns of such Persons.

“ Borrowing Base Certificate ” shall mean a certificate duly executed by an officer of Borrowing Agent appropriately completed and in substantially the form of Exhibit A hereto.

“ Borrowers on a Consolidated Basis ” shall mean the consolidation in accordance with GAAP of the accounts of SHC, Borrowers and their respective Subsidiaries.

“ Borrowers’ Account ” shall have the meaning set forth in Section 2.8.

“ Borrowing Agent ” shall mean SHC.

“ Borrowing Group ” shall mean, as the context indicates, the US Borrowers taken as a whole and/or the Foreign Borrowers taken as a whole.

“ Business ” shall mean outsourced customer relationship management services, call center services, including, but not limited to technical support and any business substantially similar, related, incidental or complementary thereto.

“ Business Day ” shall mean any day other than Saturday or Sunday or a legal holiday on which commercial banks are authorized or required by law to be closed for business in East Brunswick, New Jersey and, if the applicable Business Day relates to any Eurodollar Rate Loans, such day must also be a day on which dealings are carried on in the London interbank market.

“ Canadian Stock Pledge Agreement ” shall mean the agreement, dated as of June 23, 2004, pursuant to which Stream pledged to Agent as Collateral for the Obligations 65% of the issued and outstanding shares of the Capital Stock of Stream Canada.

“ Capital Expenditures ” means, without duplication, all expenditures (including deposits) with respect to the purchase price of any fixed or capital assets (including capitalized leases) or capital improvements, or for replacements, substitutions or additions thereto, which have a useful life of more than one year.

 

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“ Capital Stock ” shall mean any and all shares, interests, participations or other equivalents (however, designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) including, without limitation, membership interests in a limited liability company and any and all warrants, rights or options to purchase any of the foregoing.

“ Cash Equivalents ” shall mean: (a) marketable direct obligations issued or unconditionally guaranteed by the United States Government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one (1) year from the date of acquisition thereof; (b) commercial paper maturing no more than 365 days from the date issued (i) by any Lender (or its holding company) or (ii) at the time of acquisition, having a rating of at least A-1 from Standard & Poor’s Rating Services or at least P-1 from Moody’s Investors Service, Inc.; (c) certificates of deposit or bankers’ acceptances maturing within 365 days from the date of issuance thereof issued by, or repurchase agreements backed by United States governmental securities from (i) any Lender or (ii) any commercial bank organized under the laws of the United States of America or any state thereof or the District of Columbia having combined capital and surplus of not less than $500,000,000 and whose debt obligations, or those of a holding company of which it is a Subsidiary, are rated not less than A (or the equivalent rating) by a nationally recognized investment rating agency and not subject to setoff rights in favor of such bank; and (d) United States money market funds that invest solely in obligations issued or guaranteed by the United States of America or an agency thereof.

“ CERCLA ” shall mean the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. §§9601 et seq.

“ Change of Ownership ” shall mean (a) 51% of any voting class of capital stock of any Borrower is no longer owned or controlled by SGS or any Affiliate of SGS (including, without limitation, Ares Fund and its Affiliates) or (b) any merger or consolidation, in which the relevant Borrower is not the surviving corporation, or sale of substantially all of the property or assets of any Borrower.

“ Charges ” shall mean all taxes, charges, fees, imposts, levies or other assessments, including, without limitation, all net income, gross income, gross receipts, sales, use, ad valorem, value added, transfer, franchise, profits, inventory, capital stock, license, withholding, payroll, employment, social security, unemployment, excise, severance, stamp, occupation and property taxes, custom duties, fees, assessments, liens, claims and charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts, imposed by any taxing or other authority, domestic or foreign (including, without limitation, the Pension Benefit Guaranty Corporation or any environmental agency or superfund), upon the Collateral, any Loan Party or any of its Affiliates.

“ Closing Date ” shall mean July 31, 2008 or such other date as may be agreed to by the parties hereto.

“ Code ” shall mean the Internal Revenue Code of 1986, as amended from time to time and the regulations promulgated thereunder.

 

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“ Collateral ” shall mean and include:

(a) all Receivables;

(b) all Equipment;

(c) all General Intangibles;

(d) all Inventory;

(e) all Investment Property;

(f) all Domestic Subsidiary Stock and 65% of the Capital Stock of each of Stream Canada, Stream UK, Stream BV, Stream Service BV and Stream Germany;

(g) all of each Borrower’s right, title and interest in and to (i) its respective goods and other property including, but not limited to, all merchandise returned or rejected by Customers, relating to or securing any of the Receivables; (ii) all of each Borrower’s rights as a consignor, a consignee, an unpaid vendor, mechanic, artisan, or other lienor, including stoppage in transit, setoff, detinue, replevin, reclamation and repurchase; (iii) all additional amounts due to any Borrower from any Customer relating to the Receivables; (iv) other property, including warranty claims, relating to any goods securing this Agreement; (v) all of each Borrower’s contract rights, rights of payment which have been earned under a contract right, instruments (including promissory notes), documents, chattel paper (including electronic chattel paper), warehouse receipts, deposit accounts, letters of credit, and money; (vi) all commercial tort claims (whether now existing or hereafter arising); (vii) if and when obtained by any Borrower, all real and personal property of third parties in which such Borrower has been granted a lien or security interest as security for the payment or enforcement of Receivables; and (viii) any other goods, personal property or real property now owned or hereafter acquired in which any Borrower has expressly granted a security interest or may in the future grant a security interest to Agent hereunder, or in any amendment or supplement hereto or thereto, or under any other agreement between Agent and any Borrower;

(h) all of each Borrower’s ledger sheets, ledger cards, files, correspondence, records, books of account, business papers, computers, computer software (owned by Borrower or in which it has an interest), computer programs, tapes, disks and documents relating to (a), (b), (c), (d), (e), (f) or (g) of this Paragraph;

(i) all money, bank accounts, certificates of deposit and anything constituting a “deposit account” (as defined in the Uniform Commercial Code); and

(j) all proceeds and products of (a), (b), (c), (d), (e), (f), (g), (h) or (i) in whatever form, including, but not limited to: cash, deposit accounts (whether or not comprised solely of proceeds), certificates of deposit, insurance proceeds (including hazard, flood and credit insurance), negotiable instruments and other instruments for the payment of money, chattel paper, security agreements, documents, eminent domain proceeds, condemnation proceeds and tort claim proceeds.

 

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“ Commitment Percentage ” of any Lender shall mean the percentage set forth below such Lender’s name on the signature page hereto, as same may be adjusted after the Closing Date upon the effective date of any assignment by a Lender pursuant to Section 17.3(b) hereof.

“ Commitment Transfer Supplement ” shall mean a document in the form of Exhibit 17.3 hereto, properly completed and otherwise in form and substance satisfactory to Agent by which the Purchasing Lender purchases and assumes a portion of the obligation of Lenders to make Advances under this Agreement.

“ Company Transaction Fees ” shall mean the meaning ascribed to such term in the Acquisition Agreement.

“ Consents ” shall mean all filings and all licenses, permits, consents, approvals, authorizations, qualifications and orders of governmental authorities and other third parties, domestic or foreign, necessary to carry on any Borrower’s business, including, without limitation, any Consents required under all applicable federal, state or other applicable law.

“ Conversion Payment ” shall mean the meaning ascribed to such term in the Acquisition Agreement.

“ Contract Rate ” shall mean, as applicable, the Revolving Interest Rate, the Swingline Advance Rate or the Term Loan Rate.

“ Controlled Group ” shall mean all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with any Loan Party, are treated as a single employer under Section 414 of the Code.

“ Customer ” shall mean and include the account debtor with respect to any Receivable and/or the prospective purchaser of goods, services or both with respect to any contract or contract right, and/or any party who enters into or proposes to enter into any contract or other arrangement with any Borrower, pursuant to which such Borrower is to deliver any personal property or perform any services.

“ Deed of Undisclosed Pledge of Receivables ” shall mean, severally and collectively, (a) the deed of undisclosed pledge of receivables among Stream BV and Agent dated March 22, 2006 and (b) the deed of undisclosed pledge of receivables among Stream BV, Stream Service BV and Agent dated on or about the Closing Date.

“ Deed of Disclosed Pledge of Bank Accounts ” shall mean, severally and collectively, (a) the deed of disclosed pledge of bank accounts among Stream BV and Agent dated March 22, 2006 and (b) the deed of disclosed pledge of bank accounts dated on or about the Closing Date among Stream BV, Stream Service BV and Agent.

“ Deed of Pledge of Shares ” shall mean, severally and collectively, (a) the deed of pledge of shares dated March 22, 2006 among Stream BV, Agent and Stream, pursuant to which Stream pledges to Agent as Collateral for the Parallel Debt US 65% of the issued and outstanding shares of the Capital Stock of Stream BV and (b) the deed of pledge of shares dated

 

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on or about the Closing Date among Stream BV, Agent and Stream, pursuant to which Stream pledges to Agent as Collateral for the Parallel Debt US 65% of the issued and outstanding shares of the Capital Stock of Stream BV.

“ Deed of Pledge of Bermuda Shares ” shall mean the deed of pledge of shares dated as of the Closing Date among Stream BV, Agent and Stream Bermuda, pursuant to which Stream Bermuda pledges to Agent as Collateral for the Parallel Debt Foreign 65% of the issued and outstanding shares of the Capital Stock of Stream Service BV.

“ Default ” shall mean an event, circumstance or condition which, with the giving of notice or passage of time or both, would constitute an Event of Default.

“ Default Rate ” shall have the meaning set forth in Section 3.1 hereof.

“ Defaulting Lender ” shall have the meaning set forth in Section 2.23(a) hereof.

“ Documents ” shall have the meaning set forth in Section 8.1(c) hereof.

“ Dollar ” and the sign “ $ ” shall mean lawful money of the United States of America.

“ Dollar Equivalent ” means, at the date of determination, the amount of Dollars that the Agent could purchase, in accordance with its normal practice, (a) with a specified amount of Canadian Dollars based on the Bank of Canada noon spot rate on such date and (b) with a specified amount of pounds sterling or Euros based upon the “New York spot rate” published in the Wall Street Journal on the immediately preceding Business Day.

“ Domestic Rate Loan ” shall mean any Advance that bears interest based upon the Alternate Base Rate.

“ Domestic Subsidiary Stock ” shall mean all of the issued and outstanding shares of the Capital Stock owned by each Loan Party of a Subsidiary formed under the laws of any state of the United States of America.

“ Dutch Security Agreements ” shall mean the Deed of Disclosed Pledge of Bank Accounts, the Deed of Pledge of Shares and the Deed of Undisclosed Pledge of Receivables, including any Supplemental Pledge (as defined in the Deed of Undisclosed Pledge of Receivables) and the Deed of Pledge of Bermuda Shares.

“ Earnings Before Interest and Taxes ” shall mean for any period the sum of (i) net income (or loss) of Borrowers on a Consolidated Basis for such period (excluding extraordinary gains and losses), plus (ii) all interest expense of Borrowers on a Consolidated Basis for such period, net of amounts determined under GAAP to be interest expense but attributable to the amortization of the lease market reserve of Borrowers on a Consolidated Basis, plus (iii) all charges against income of Borrowers on a Consolidated Basis for such period for federal, state, local and foreign taxes (which, for avoidance of doubt, shall not include sales taxes, payroll taxes or any other employee-related taxes which are collected or incurred by Borrowers and then remitted to the applicable taxing authorities) accrued for such period, plus all out-of-pocket

 

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expenses incurred by Borrowers and not capitalized in connection with the closing hereunder (but in no event shall such addition for expenses be applicable to any period commencing more than one year from the Closing Date), plus any proceeds received by any Borrower under any business interruption insurance policy, plus (v) for each calculation with respect to a period ending during calendar year 2008, all severance costs and expenses, all restructuring charges and all fees and expenses incurred and expensed during such period (and not capitalized) in connection with or related to the Acquisition or to the Ares Transaction, including without limitation all Company Transaction Fees, not to exceed, in the aggregate, the sum of (a) $7,000,000 plus (b) amounts which have been incurred and expensed during such period but funded by SGS in a subsequent period.

“ EBITDA ” shall mean for any period the sum of (i) Earnings Before Interest and Taxes for such period plus (ii) depreciation expenses for such period, plus (iii) amortization expenses for such period, plus (iv) without duplication of any of the foregoing, one time Non-Cash Expenses during such period, less any non-cash gains during such period.

“ ECE Ireland ” shall mean ECE EMEA Limited, an Irish corporation, which is a wholly-owned Subsidiary of SFI.

“ Eligible Foreign Receivables ” shall mean and include, with respect to Stream Canada, Stream UK, Stream BV and Stream Service BV, the invoice amount, net of all goods and services, harmonized taxes and sales taxes (which shall be the Dollar Equivalent at such time of any amount denominated in currency other than Dollars) owing on each account of such Person (after deducting any credit balance, returns, trade discounts, unapplied cash, unbilled amounts or retention or finance charges), of each Receivable of Stream Canada, Stream UK, Stream BV or Stream Service BV, as applicable, arising in the ordinary course of such Foreign Borrower’s business (which are not rendered ineligible by any of the criteria contained in this definition). A Receivable of a Foreign Borrower shall not be deemed eligible unless such Receivable is subject to Agent’s first priority perfected security interest and no other Lien (other than Permitted Encumbrances), and is evidenced by an invoice or other documentary evidence reasonably satisfactory to Agent. In addition, no Receivable of a Foreign Borrower shall be an Eligible Foreign Receivable if:

(a) it arises out of a sale made by any Foreign Borrower to an Affiliate or to a Person controlled by an Affiliate of any Loan Party (provided that sales to portfolio companies and Affiliates of Ares Capital Management LLC shall not be excluded by virtue of this clause (a) unless such exclusion would be applicable without regard to such entities’ or its Affiliates’ relationship with SGS);

(b) it is due and unpaid more than ninety (90) days after the original invoice date;

(c) fifty percent (50%) or more of the Receivables from such Customer are due and unpaid more than the applicable time period set forth in clause (b) above;

(d) any covenant, representation or warranty contained in this Agreement with respect to such Receivable has been breached;

 

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(e) the Customer shall (i) apply for, suffer, or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property or call a meeting of its creditors, (ii) admit in writing its inability, or be generally unable, to pay its debts as they become due or cease operations of its present business, (iii) make a general assignment for the benefit of creditors, (iv) commence a voluntary case under any state or federal bankruptcy laws (as now or hereafter in effect), (v) be adjudicated a bankrupt or insolvent, (vi) file a petition seeking to take advantage of any other law providing for the relief of debtors, (vii) acquiesce to, or fail to have dismissed, any petition which is filed against it in any involuntary case under such bankruptcy laws, or (viii) take any action for the purpose of effecting any of the foregoing;

(f) the sale or service is to a Customer outside the country in which such Foreign Borrower is located except, (1) in the case of Stream BV or Stream Service BV, if such Customer is located in the European Union or the United States of America and either (i) the governing law and the jurisdiction clause set forth in the contract which gave rise to the respective Receivable is Netherlands law and the Dutch competent court, respectively, or (ii) Agent has obtained a legal opinion from counsel in the country in which such Customer is located (which such counsel and such opinion shall be reasonably acceptable to Agent) that Agent has a perfected security interest in such Receivable enforceable in the country in which such Customer is located and/or such relevant country in which such Customer is located would enforce a judgment against such Customer which is obtained in the governing law jurisdiction set forth in the contract which gave rise to the respective Receivable and (2) in the case of Stream UK, if such Customer is located in the European Union or the United States of America and Agent has obtained a legal opinion from counsel in the country in which such Customer is located (which such counsel and such opinion shall be reasonably acceptable to Agent) that Agent has a perfected security interest in such Receivable enforceable in the country in which such Customer is located and/or such relevant country in which such Customer is located would enforce a judgment against such Customer which is obtained in the governing law jurisdiction set forth in the contract which gave rise to the respective Receivable;

(g) Agent believes, in its sole credit judgment, exercised in good faith, that collection of such Receivable is insecure or that such Receivable may not be paid by reason of the Customer’s financial inability to pay;

(h) the obligor of such account is a state, commonwealth, provincial, federal, foreign, territorial, or other court or governmental department, commission, board, bureau, agency or instrumentality other than the federal government of the United States of America, the federal government of Canada or the government of any province or territory of Canada or political subdivision thereof, and then only to the extent that the Borrower has complied in all respects with the relevant provisions of the Federal Assignment of Claims Act of 1940 (for a US account debtor) or the Financial Administration Act (Canada) or similar provincial or territorial legislation or municipal ordinance of similar purpose (for a Canadian account debtor);

(i) the goods giving rise to such Receivable have not been shipped to the Customer or the services giving rise to such Receivable have not been performed by the applicable Foreign Borrower or the Receivable otherwise does not represent a final sale or the providing of services;

 

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(j) the Receivables of the Customer exceed a credit limit determined by Agent, in its sole credit judgment, exercised in good faith, to the extent such Receivable exceeds such limit;

(k) the Customer (i) is also the applicable Foreign Borrower’s supplier or creditor and the Receivable is or may become subject to any right of setoff by the Customer, and such Customer has not entered into an agreement with Agent with respect to the waiver of rights of setoff which is in form and substance satisfactory to Agent, or (ii) has disputed liability with respect to such Receivable or asserted any defense or made any claim with respect to any other Receivable due from such Customer to such Loan Party, in which cases the Receivable shall be ineligible to the extent of (A) such setoff with respect to which an agreement as described in clause(i) above is not in effect, (B) such dispute or (C) such defense or claim;

(l) the applicable Foreign Borrower has made any agreement with any Customer for any deduction therefrom, except for discounts or allowances made in the ordinary course of business for prompt payment, all of which discounts or allowances are reflected in the calculation of the face value of each respective invoice related thereto;

(m) any return, rejection or repossession of the merchandise has occurred or the rendition of services has been disputed;

(n) such Receivable is not payable to a Foreign Borrower; or

(o) such Receivable is not otherwise satisfactory to Agent, as determined in good faith by Agent in the exercise of its discretion in a reasonable manner.

“ Eligible Reserves ” shall mean such amounts as Agent, in its sole credit judgment exercised in good faith, may from time to time establish, with substantially contemporaneous notice to Borrowing Agent, to reflect risks or contingencies which may affect its ability to realize upon any Collateral including, without limitation, with respect to Priority Payables or pursuant to Section 6.14.

“ Eligible Unbilled Foreign Receivables ” shall mean and include all Receivables of Stream Canada, Stream UK, Stream BV or Stream Service BV which would otherwise be considered Eligible Foreign Receivables but are not Eligible Foreign Receivables because they are not evidenced by an invoice or other documentary evidence, provided that such Eligible Foreign Receivables have been accrued and remain unbilled not more than forty-five (45) days from the earlier of (a) the date the related service was performed or (b) the date the revenue was accrued by such Foreign Borrower.

“ Eligible Unbilled US Receivables ” shall mean and include all Receivables of any US Borrower which would otherwise be considered Eligible US Receivables but are not Eligible US Receivables because they are not evidenced by an invoice or other documentary evidence, provided that such Eligible US Receivables have been accrued and remain unbilled not more than forty-five (45) days from the earlier of (a) the date the related service was performed or (b) the date the revenue was accrued by such US Borrower.

 

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“ Eligible US Receivables ” shall mean and include with respect to each US Borrower, each Receivable of such US Borrower arising in the ordinary course of such US Borrower’s business (which are not rendered ineligible by any of the criteria contained in this definition). A Receivable shall not be deemed eligible unless such Receivable is subject to Agent’s first priority perfected security interest and no other Lien (other than Permitted Encumbrances), and is evidenced by an invoice or other documentary evidence reasonably satisfactory to Agent. In addition, no Receivable shall be an Eligible Receivable if:

(a) it arises out of a sale made by any US Borrower to an Affiliate or to a Person controlled by an Affiliate of any Loan Party (provided that sales to portfolio companies and Affiliates of Ares Capital Management LLC shall not be excluded by virtue of this clause (a) unless such exclusion would be applicable without regard to such entities’ or its Affiliates’ relationship with SGS);

(b) it is due and unpaid more than ninety (90) days after the original invoice date;

(c) fifty percent (50%) or more of the Receivables from such Customer are due and unpaid more than the applicable time period set forth in clause (b) above;

(d) any covenant, representation or warranty contained in this Agreement with respect to such Receivable has been breached;

(e) the Customer shall (i) apply for, suffer, or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property or call a meeting of its creditors, (ii) admit in writing its inability, or be generally unable, to pay its debts as they become due or cease operations of its present business, (iii) make a general assignment for the benefit of creditors, (iv) commence a voluntary case under any state or federal bankruptcy laws (as now or hereafter in effect), (v) be adjudicated a bankrupt or insolvent, (vi) file a petition seeking to take advantage of any other law providing for the relief of debtors, (vii) acquiesce to, or fail to have dismissed, any petition which is filed against it in any involuntary case under such bankruptcy laws, or (viii) take any action for the purpose of effecting any of the foregoing;

(f) the sale or service is to a Customer outside the United States of America, unless (i) the sale or service is on letter of credit, guaranty or acceptance terms, in each case reasonably acceptable to Agent in its sole discretion, (ii) payment for such sale or service is to be received from a Customer domiciled in the United States of America or (iii) (1) the Customer of Stream with respect to Stream’s Receivable is located in France, (2) payment of Stream’s Receivable is covered by credit insurance issued to Stream in form and substance satisfactory to Agent and collaterally assigned to Agent and (3) Agent, for the benefit of the Lenders, has obtained a pledge over Stream’s Receivable, in form and substance satisfactory to Agent, enforceable under French law and provided, further, that (A) any Revolving Advance based upon a Receivable described in this clause (f)(iii) shall not exceed 85% of the Dollar

 

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Equivalent of the insured value thereof, as provided by the credit insurance described in clause (f)(iii)(2) hereof (which, for the avoidance of doubt means, for example, that if a Receivable of Stream is payable in francs, the Dollar Equivalent of which is $1,000, and Stream has obtained credit insurance therefor for 90% of the value thereof, or $900, Lenders may make a Revolving Advance based thereon in the sum of $765 (i.e. 85% of $900)), and (B) the total amount of Revolving Advances based upon this clause (f)(iii), together with any and all Unbilled Receivables with respect to which the Customer is located in France, shall not exceed the sum of $10,000,000 at any one time outstanding;

(g) Agent believes, in its sole credit judgment, exercised in good faith, that collection of such Receivable is insecure or that such Receivable may not be paid by reason of the Customer’s financial inability to pay;

(h) the Customer is the United States of America, any state or any department, agency or instrumentality of any of them, unless the applicable US Borrower assigns its right to payment of such Receivable to Agent pursuant to the Assignment of Claims Act of 1940, as amended (31 U.S.C. Sub-Section 3727 et seq. and 41 U.S.C. Sub-Section 15 et seq.) or has otherwise complied with other applicable statutes or ordinances;

(i) the goods giving rise to such Receivable have not been shipped to the Customer or the services giving rise to such Receivable have not been performed by the applicable US Borrower or the Receivable otherwise does not represent a final sale or the providing of services;

(j) the Receivables of the Customer exceed a credit limit determined by Agent, in its sole credit judgment, exercised in good faith, to the extent such Receivable exceeds such limit;

(k) the Customer (i) is also the applicable US Borrower’s supplier or creditor and the Receivable is or may become subject to any right of setoff by the Customer, and such Customer has not entered into an agreement with Agent with respect to the waiver of rights of setoff which is in form and substance satisfactory to Agent, or (ii) has disputed liability with respect to such Receivable or asserted any defense or made any claim with respect to any other Receivable due from such Customer to such Loan Party, in which cases the Receivable shall be ineligible to the extent of (A) such setoff with respect to which an agreement as described in clause(i) above is not in effect, (B) such dispute or (C) such defense or claim;

(l) the applicable US Borrower has made any agreement with any Customer for any deduction therefrom, except for discounts or allowances made in the ordinary course of business for prompt payment, all of which discounts or allowances are reflected in the calculation of the face value of each respective invoice related thereto;

(m) any return, rejection or repossession of the merchandise has occurred or the rendition of services has been disputed;

(n) such Receivable is not payable to a US Borrower; or

 

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(o) such Receivable is not otherwise satisfactory to Agent, as determined in good faith by Agent in the exercise of its discretion in a reasonable manner.

“ Environmental Complaint ” shall have the meaning set forth in Section 4.19(d) hereof.

“ Environmental Laws ” shall mean all foreign, federal, state, provincial and local environmental, land use, zoning, health, chemical use, safety and sanitation laws, statutes, ordinances and codes relating to the protection of the environment and/or governing the use, storage, treatment, generation, transportation, processing, handling, production or disposal of Hazardous Substances and the rules, regulations, interpretations, decisions, orders and directives of federal, state and local governmental agencies and authorities with respect thereto.

“ Equipment ” shall mean and include, as to each Borrower, all of such Borrower’s goods (other than Inventory) whether now owned or hereafter acquired and wherever located including, without limitation, all equipment, machinery, apparatus, motor vehicles, fittings, furniture, furnishings, fixtures, parts, accessories and all replacements and substitutions therefor or accessions thereto.

“ ERISA ” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time and the rules and regulations promulgated thereunder.

“ Euro ” or “ EUR ” shall mean the single currency introduced in the third stage of economic and monetary union pursuant to the treaty establishing the European Union, as amended from time to time.

“ Eurodollar Rate ” shall mean for any Eurodollar Rate Loan for the then current Interest Period relating thereto the interest rate per annum determined by Agent by dividing (i) the rate which appears on the Bloomberg Page BBAM1 (or on such other substitute Bloomberg page that displays rates at which US dollar deposits are offered by leading banks in the London interbank deposit market), or the rate which is quoted by another source selected by Agent which has been approved by the British Bankers’ Association as an authorized information vendor for the purpose of displaying rates at which US dollar deposits are offered by leading banks in the London interbank deposit market (an “Alternative Source”), at approximately 11:00 a.m., London time two (2) Business Days prior to the first day of such Interest Period (or if there shall at any time, for any reason, no longer exist a Bloomberg Page BBAM1 (or any substitute page) or any Alternate Source, a comparable replacement rate determined by the Agent at such time (which determination shall be conclusive absent manifest error)) for an amount comparable to such Eurodollar Rate Loan and having a borrowing date and a maturity comparable to such Interest Period by (ii) a number equal to 1.00 minus the Reserve Percentage.

The Eurodollar Rate shall be adjusted with respect to any Eurodollar Rate Loan that is outstanding on the effective date of any change in the Reserve Percentage as of such effective date. The Agent shall give prompt notice to the Borrowing Agent of the Eurodollar Rate as determined or adjusted in accordance herewith, which determination shall be conclusive absent manifest error.

 

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“ Eurodollar Rate Loan ” shall mean an Advance at any time that bears interest based on the Eurodollar Rate.

“ Event of Default ” shall mean the occurrence and continuance of any of the events set forth in Article X hereof which has not been waived in accordance with the provisions of this Agreement.

“ Excluded Entities ” shall mean each of SGS and any Subsidiaries of SGS other than Loan Parties.

“ Executive Order No. 13224 ” shall mean the Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, as the same has been, or shall hereafter be, renewed, extended, amended or replaced.

“ Federal Funds Open Rate ” shall mean, for any day, the rate per annum determined by Agent in accordance with its usual procedures (which determination shall be conclusive absent manifest error) to be the Open Rate for federal funds transactions as of the opening of business for federal funds transactions among members of the Federal Reserve System arranged by federal funds brokers on such day, as quoted by Garvin Guybutler, any successor entity thereto, or any other broker selected by Agent, as set forth on the applicable Telerate display page; provided , however , that if such day is not a Business Day, the Federal Funds Open Rate for such day shall be the Open Rate on the immediately preceding Business Day, or if no such rate shall be quoted by a federal funds broker at such time, such other rate as determined by Agent in accordance with its usual procedures.

“ Fee Letter ” shall mean that certain amended and rested fee letter dated July 28, 2008 between Global BPO, Agent and Lead Arranger.

“ Fixed Charge Coverage Ratio ” shall mean and include, with respect to any fiscal period, the ratio of (a) (i) EBITDA, minus (ii) Unfinanced Capitalized Expenditures made during such period, minus (iii) cash taxes (other than sales taxes, payroll taxes or any other employee-related taxes which are collected or incurred by Borrowers and then remitted to the applicable taxing authorities) paid during such period minus (iv) cash dividends or other distributions made by SHC during such period (other than dividends or other distributions made by SHC to SGS during such period, as permitted in accordance with Section 7.7), to (b) all Senior Debt Payments during such period.

“ Foreign Borrowers ” shall mean, subject to the provisions of Sections 16.3 and 16.4 hereof, jointly and severally, Stream BV, Stream Germany, Stream Service BV, Stream Canada and Stream UK.

“ Foreign Formula Amount ” shall have the meaning set forth in Section 2.1(c).

“ Foreign Obligations ” shall mean the aggregate of (a) the Obligations of each of the Foreign Borrowers and (b) the Obligations of the Guarantors under Section 15, to the extent they relate to the Obligations of the Foreign Borrowers, each as they may exist from time to time, other than the Parallel Debt Foreign.

 

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“ Foreign Security Agreements ” shall mean and include, jointly and severally (subject to Sections 16.3 and 16.4 hereof), (a) the Pledge of Receivables, (b) the General Security Agreement and the Canadian Stock Pledge Agreement, (c) the Northern Ireland Security Agreements, (d) the German Security Agreements and (e) the Dutch Security Agreements.

“ Foreign Subsidiaries ” shall mean and include ECE Ireland, Stream Bermuda, Stream Italy, Stream BV, Stream Service BV, Stream UK, Stream Germany, Stream India, Stream Servicios de Apoyo Informatico S.L., a company organized under the laws of Spain, Stream Canada, Stream International Nordic AB, a company organized under the laws of Sweden, Stream Mauritius Ltd. (formerly known as Stream Mauritius Ltd.), a company organized under the laws of Mauritius, Stream Tunisia S.A.R.L., a company organized under the laws of Tunisia, Stream International Sp. Z.O.D. (Poland), a company organized under the laws of Poland, Stream International Bulgaria EOOD, a company organized under the laws of Bulgaria, Stream International Costa Rica, S.A., a company organized under the laws of Costa Rica and Stream Ireland Limited, a company organized under the laws of Ireland.

“ Formula Amount ” shall have the meaning set forth in Section 2.1(a).

“ GAAP ” shall mean generally accepted accounting principles in the United States of America in effect from time to time.

“ General Intangibles ” shall mean and include, as to each Borrower, all of such Borrower’s general intangibles, whether now owned or hereafter acquired including, without limitation, all payment intangibles, choses in action, causes of action, commercial tort claims, corporate or other business records, inventions, designs, patents, patent applications, equipment formulations, manufacturing procedures, quality control procedures, trademarks, service marks, trade secrets, goodwill, copyrights, design rights, software, computer information, source codes, codes, records and updates, registrations, licenses, franchises, customer lists, tax refunds, tax refund claims, computer programs, and computer software, all claims under guaranties, security interests or other security held by or granted to such Borrower to secure payment of any of the Receivables by a Customer (other than to the extent covered by Receivables) all rights of indemnification and all other intangible property of every kind and nature (other than Receivables).

“ General Security Agreement ” shall mean the Amended and Restated General Security Agreement dated as of June 23, 2004 executed by Stream Canada in favor of Agent, as reaffirmed by Reaffirmation of Amended and Restated General Security Agreement dated as of May 31, 2006.

“ German Security Agreements ” shall mean, jointly and severally, the (i) Share Pledge Agreement dated June 25, 2004 between Stream, Agent and the Lenders, as reaffirmed by Reaffirmation of Share Pledge Agreement dated as of May 31, 2006, (ii) Global Assignment Agreement between Stream Germany, as assignor, and Agent, as assignee dated July 14, 2004, and (iii) Bank Account Assignment and Control Agreement between Stream Germany, as assignor, and Agent, as assignee, dated as of July 14, 2004 and governed by German law.

 

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“ Global BPO ” shall mean SGS prior to the effectiveness of the name change, as described in the second background paragraph of this Agreement.

“ Governmental Acts ” shall have the meaning set forth in Section 2.17.

“ Governmental Body ” shall mean any nation or government, any state, province or other political subdivision thereof or any entity exercising the legislative, judicial, regulatory or administrative functions of or pertaining to a government.

“ Guarantor ” shall mean the Persons identified as Guarantors in the first paragraph of this Agreement, their respective permitted successors and assigns, and any other Person who may hereafter guarantee payment or performance of the whole or any part of the Obligations and “Guarantors” means collectively all such Persons.

“ Guarantor Security Agreement ” shall mean the Stock Pledge Agreement and any other security agreement executed by any Guarantor in favor of Agent securing the Guaranty of such Guarantor.

“ Guaranty ” shall mean the guaranty set forth in Article XV of this Agreement and any other guaranty of the obligations of any Borrower executed by a Guarantor in favor of Agent for its benefit and for the ratable benefit of Lenders.

“ Hazardous Discharge ” shall have the meaning set forth in Section 4.19(d) hereof.

“ Hazardous Substance ” shall mean, without limitation, any flammable explosives, radon, radioactive materials, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum and petroleum products, methane, hazardous materials, Hazardous Wastes, hazardous or Toxic Substances or related materials as defined in CERCLA, the Hazardous Materials Transportation Act, as amended (49 U.S.C. Sections 1801, et seq.), RCRA, Articles 15 and 27 of the New York State Environmental Conservation Law or any other applicable Environmental Law and in the regulations adopted pursuant thereto.

“ Hazardous Wastes ” shall mean all waste materials subject to regulation under CERCLA, RCRA or applicable state law, or any similar foreign laws, whether national or local, and any other applicable federal, state or provincial laws now in force or hereafter enacted relating to hazardous waste disposal.

“ HIG ” shall mean H.I.G. Capital Partners III, L.P., a Delaware limited liability company.

“ Indebtedness ”, with respect to any Person, means, without duplication, the obligations of such Person for:

(a) borrowed money (including commercial paper and revolving credit line borrowings), or which is evidenced by bonds, debentures or notes or extensions of credit, whether or not representing obligations for borrowed money (other than trade, payroll and taxes payable):

(b) the deferred purchase price of property acquired by such Person (excluding accounts payable arising in the ordinary course of business but including all liabilities created or arising under any conditional sale or other title retention agreement with respect to any such property);

 

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(c) indebtedness of any other Person secured by any Lien existing on property owned by such Person (whether or not such liabilities have been assumed);

(d) capitalized leases of such Person;

(e) letters of credit, bankers’ acceptances or instruments serving a similar function issued or accepted by banks and other financial institutions for the account of such Person; and

(f) any Guaranty of such Person or any obligation or liability of another Person of the types listed in clause (a) through clause (e) of this definition of Indebtedness.

“ Ineligible Security ” shall mean any security which may not be underwritten or dealt in by member banks of the Federal Reserve System under Section 16 of the Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as amended.

“ Interest Period ” shall mean the period provided for any Eurodollar Rate Loan pursuant to Section 2.2(b).

“ Inventory ” shall mean and include, as to each Borrower, all of such Borrower’s now owned or hereafter acquired goods, merchandise and other personal property, wherever located, to be furnished under any consignment arrangement, contract of service or held for sale or lease, all raw materials, work in process, finished goods and materials and supplies of any kind, nature or description which are or might be used or consumed in such Borrower’s business or used in selling or furnishing such goods, merchandise and other personal property, and all documents of title or other documents representing them.

“ Investment Property ” shall mean and include as to each Borrower all of such Borrower’s now owned or hereafter acquired securities (whether certificated or uncertificated), securities entitlements, securities accounts, commodities contracts and commodities accounts.

“ Issuer ” or “ Issuing Bank ” shall mean any Person who issues a Letter of Credit pursuant to the terms hereof.

“ Junior Secured Indebtedness ” shall mean Indebtedness incurred by US Borrowers pursuant to a certain Note Purchase Agreement dated as of July 30, 2004, as amended, by and among US Borrowers, Sankaty Credit Opportunities, L.P., Sankaty High Yield Partners II L.P., Sankaty High Yield Partners III, L.P., RGIP LLC and other lenders.

“ Lead Arranger ” shall have the meaning set forth in the preamble to this Agreement and shall include its successors and assigns.

 

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“ Lender ” and “ Lenders ” shall have the meaning ascribed to such term in the preamble to this Agreement and shall include each Person which becomes a transferee, successor or assign of any Lender. Unless the context otherwise requires, the term “Lender” or “Lenders” includes the “Swingline Lender”.

“ Letter of Credit Application ” shall have the meaning set forth in Section 2.10(a).

“ Letter of Credit Borrowing ” shall have the meaning set forth in Section 2.12(d).

“ Letter of Credit Fees ” shall have the meaning set forth in Section 3.2(a).

“ Letter of Credit Sublimit ” shall mean, on the Closing Date, $20,000,000, subject to increase, from time to time, by Agent in its sole and absolute discretion following written request by Borrowing Agent to Agent and the obtaining of credit approval with respect thereto by each Lender from its credit committee.

“ Letters of Credit ” shall have the meaning set forth in Section 2.9.

“ Lien ” shall mean any mortgage, deed of trust, pledge, hypothecation, assignment, security interest, lien (whether statutory or otherwise), charge, claim or encumbrance, or preference, priority or other security agreement or preferential arrangement held or asserted in respect of any asset of any kind or nature whatsoever including, without limitation, any conditional sale or other title retention agreement, any lease having substantially the same economic effect as any of the foregoing, and the filing of, or agreement to give, any financing statement under the Uniform Commercial Code or comparable law of any jurisdiction.

“ Loan Party ” shall mean, individually, each Borrower and each Guarantor, and “Loan Parties” shall mean, collectively, Borrowers and Guarantors.

“ Material Adverse Effect ” shall mean a material adverse effect on (a) the condition, operations, assets or business of the Borrowers on a Consolidated Basis, (b) the ability of the Borrowers on a Consolidated Basis to pay the Obligations owed by such Borrowers in accordance with the terms thereof, (c) Agent’s 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 on Agent’s Liens on the Collateral) or (d) the practical realization of the benefits of Agent’s and each Lender’s rights and remedies under this Agreement and the Other Documents.

“ Maximum Face Amount ” shall mean with respect to any Letter of Credit, the face amount of such Letter of Credit including all automatic increases provided for in such Letter of Credit, whether or not any such automatic increase has become effective.

”Maximum Foreign Revolving Advance Amount ” shall mean $50,000,000; provided , however , that, subject to the provisions of Section 2.1(d), the maximum outstanding principal amount of Revolving Advances at any time shall not exceed (a) $20,000,000 with respect to Stream Canada or (b) $10,000,000 with respect to Stream UK.

 

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“ Maximum Revolving Advance Amount ” shall mean $100,000,000; provided , however , that when such term is used with respect solely to US Borrowers it shall mean the Maximum US Revolving Advance Amount and when used with respect solely to Foreign Borrowers it shall mean the Maximum Foreign Revolving Advance Amount.

“ Maximum Undrawn Amount ” shall mean with respect to any outstanding Letter of Credit, the amount of such Letter of Credit that is or may become available to be drawn, including all automatic increases provided for in such Letter of Credit, whether or not any such automatic increase has become effective.

“ Maximum US Revolving Advance Amount ” shall mean $100,000,000.

“ Multiemployer Plan ” shall mean a “multiemployer plan” as defined in Sections 3(37) and 4001(a)(3) of ERISA.

“ Net Proceeds ” shall mean, if in connection with (a) an asset disposition, cash proceeds net of (i) reasonable commissions, brokers’ fees, legal, accounting and professionals’ fees and other reasonable and customary transaction costs, fees and expenses properly attributable to such transaction and payable by such Loan Party in connection therewith (in each case, paid to non-Affiliates), (ii) transfer or similar taxes paid in connection therewith, (iii) amounts payable to holders of senior Liens on such asset (to the extent such Liens constitute Permitted Encumbrances hereunder) and not assumed by the applicable purchaser, if any, and (iv) cash taxes paid in connection therewith, (b) the issuance or incurrence of Indebtedness, cash proceeds net of attorneys’ fees, investment banking fees, accountants’ fees, underwriting discounts, fees and commissions and other customary fees, costs and expenses actually incurred in connection therewith, or (c) an equity issuance, cash proceeds net of reasonable underwriting discounts and commissions and other reasonable costs paid to non-Affiliates in connection therewith. In the case of clause (a) above, Net Proceeds shall exclude any non-cash proceeds received from any sale or other disposition of assets, but shall include such proceeds when and as converted by any Loan Party to cash or other immediately available funds.

“ Net Worth ” at a particular date, shall mean the stockholders’ equity in accordance with GAAP consistently applied on the balance sheet of SHC.

“ Non-Cash Expenses ” shall mean, with respect to any period, depreciation, amortization (including amortization of goodwill and other intangibles) and other non-cash expenses of Borrowers on a Consolidated Basis for such period, which shall include (a) non-cash equity compensation to employees and (b) unrealized foreign exchange gains and losses (including without limitation by and among Loan Parties in accordance with ongoing business practices in the ordinary course of business).

“ Northern Ireland Charge on Shares ” shall mean the agreement, dated as of June 23, 2004, pursuant to which Stream charged to Agent as Collateral for its Obligations 65% of the issued share capital of Stream UK.

 

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“ Northern Ireland Debenture ” shall mean the agreement, dated as of June 23, 2004, pursuant to which Stream UK charged to Agent as Collateral for its Obligations all its undertaking, property and assets, present and future.

“ Northern Ireland Fixed Charges ” shall mean the Fixed Charge on Book Debts owing to Stream Germany by Dell Computer GmbH, dated as of July 14, 2004.

“ Northern Ireland Security Agreements ” shall mean the Northern Ireland Charge on Shares, the Northern Ireland Fixed Charges, the Northern Ireland Debenture and each letter of confirmation relating thereto.

“ Notes ” shall mean, collectively, the Term Notes, the Swingline Note and the Revolving Credit Note.

“ Obligations ” shall mean and include any and all loans, advances, debts, liabilities, obligations, covenants and duties owing by any Loan Party to Agent, any Lender, any Issuer, or any Affiliate of Agent, any Lender or any Issuer (any of the foregoing, an “Obligee”) of any kind or nature, present or future (including, without limitation, any interest accruing thereon after maturity, or after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding relating to any Loan Party, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), arising under this Agreement or the Other Documents, or under any Swap Contract with any Obligee, including, without limitation, in connection with any extension of credit, opening of a Letter of Credit, loan or guarantee, or other similar agreement, or in any other manner, whether arising out of overdrafts or deposit or other accounts or electronic funds transfers (whether through automated clearing houses or otherwise) or out of any Obligee’s non-receipt of or inability to collect funds or otherwise not being made whole in connection with depository transfer check or other similar arrangements, whether direct or indirect (including those acquired by assignment or participation), absolute or contingent, joint or several (subject to the provisions of Sections 16.3 and 16.4 hereof), due or to become due, now existing or hereafter arising, liquidated or unliquidated, including, but not limited to, any and all of each Loan Party’s Indebtedness and/or liabilities under this Agreement, the Other Documents, any Swap Contract, or under any amendments, extensions, renewals or increases of any of the foregoing agreements, documents or contracts, and all costs and expenses of any Obligee incurred in the documentation, negotiation, modification, enforcement, collection or otherwise in connection with any of the foregoing, including but not limited to reasonable attorneys’ fees and expenses and all obligations of any Loan Party to any Obligee to perform acts or refrain from taking any action.

“ Other Documents ” shall mean, the Notes, the Fee Letter, each of the Foreign Security Agreements, the Questionnaire, each Guaranty, each Guarantor Security Agreement, and any and all other agreements, instruments and written contractual obligations, including, without limitation, guaranties, pledges and powers of attorney, heretofore, now or hereafter executed by Loan Parties or any Loan Party and/or delivered to Agent or any Lender in respect of the transactions contemplated by this Agreement.

“ Parallel Debt Foreign ” shall have the meaning set forth in Section 16.5(a).

 

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“ Parallel Debt US ” shall have the meaning set forth in Section 16.6(a).

“ Parent ” of any Person shall mean a corporation or other entity owning, directly or indirectly at least 50% of the shares of stock or other ownership interests having ordinary voting power to elect a majority of the directors of the Person, or other Persons performing similar functions for any such Person.

“ Participant ” shall mean each Person who shall be granted the right by any Lender to participate in any of the Advances and who shall have entered into a participation agreement in form and substance satisfactory to such Lender.

“ Participation Advance ” shall have the meaning set forth in Section 2.12(d).

“ Participation Commitment ” shall mean each Lender’s obligation to buy a participation of the Letters of Credit issued hereunder.

“ Payment Office ” shall mean initially Two Tower Center Boulevard, East Brunswick, New Jersey 08816; thereafter, such other office of Agent, if any, which it may designate by notice to Borrowing Agent and to each Lender to be the Payment Office.

“ PBGC ” shall mean the Pension Benefit Guaranty Corporation.

“ Pension Benefit Plan ” shall mean any employee benefit plan within the meaning of Section 3(2) of ERISA, maintained for employees of any Loan Party or any member of the Controlled Group or any such plan to which any Loan Party or any member of the Controlled Group is required to contribute on behalf of any of its employees.

“ Permitted Encumbrances ” shall mean (a) Liens in favor of Agent for the benefit of Agent and Lenders; (b) Liens for taxes, assessments or other governmental charges not delinquent or being contested in good faith and by appropriate proceedings and with respect to which proper reserves have been taken by the applicable Borrower; provided, that, the Lien shall have no effect on the priority of the Liens in favor of Agent or the value of the assets in which Agent has such a Lien and a stay of enforcement of any such Lien shall be in effect; (c) Liens disclosed in the financial statements referred to in Section 5.5, the existence of which Agent has consented to in writing; (d) deposits or pledges to secure obligations under worker’s compensation, social security or similar laws, or under unemployment insurance; (e) deposits or pledges to secure bids, tenders, contracts (other than contracts for the payment of money), leases, statutory obligations, surety and appeal bonds and other obligations of like nature arising in the ordinary course of any Borrower’s business; (f) judgment Liens that have been stayed or bonded and mechanics’, workers’, materialmen’s or other like Liens arising in the ordinary course of any Borrower’s business with respect to obligations which are not due or which are being contested in good faith by such Borrower; (g) Liens placed upon fixed assets hereafter acquired to secure a portion of the purchase price thereof, provided that (x) any such lien shall not encumber any other property of such Borrower and (y) the aggregate amount of Indebtedness secured by such Liens incurred as a result of such purchases during any fiscal year shall not exceed the amount provided for in Section 7.6; (h) landlord’s liens to the extent that same are not required to be waived pursuant to Section 4.2(ii); (i) Liens upon the assets of any of the Foreign Subsidiaries (other than Stream Italy and Stream BV), securing any Indebtedness incurred in accordance with

 

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Section 7.8(v), (j) ) Liens upon the assets of Stream Italy securing any Indebtedness incurred in accordance with Section 7.8(vi), (k) Liens disclosed on Schedule 1.2 and (l) Liens with respect to the Escrow Fund (as defined in the Acquisition Agreement).

“ Permitted Swap Obligations ” means all obligations (contingent or otherwise) of a Borrower existing or arising under Swap Contracts to which a Lender is a counterparty, provided that each of the following criteria is satisfied: (a) such obligations are (or were) entered into by such Person in the ordinary course of business for the purpose of directly mitigating risks associated with liabilities, commitments or assets held or reasonably anticipated by such Person, or changes in the value of securities issued by such Person in conjunction with a securities repurchase program not otherwise prohibited hereunder, and not for purposes of speculation or taking a “market view;” and (b) such Swap Contracts do not contain any provision (“walk-away” provision) exonerating the non-defaulting party from its obligation to make payments on outstanding transactions to the defaulting party.

“ Person ” shall mean any individual, sole proprietorship, partnership, corporation, business trust, joint stock company, trust, unincorporated organization, association, limited liability company, institution, public benefit corporation, joint venture, entity or government (whether federal, state, provincial, county, city, municipal or otherwise, including any instrumentality, division, agency, body or department thereof).

“ Plan ” shall mean any employee benefit plan within the meaning of Section 3(3) of ERISA, maintained for employees of any Loan Party or any member of the Controlled Group or any such Plan to which any Loan Party or any member of the Controlled Group is required to contribute on behalf of any of its employees.

“ Pledge of Receivables ” shall mean that certain Amended and Restated Pledge of Receivables dated as of June 23, 2004 executed by SHC and Stream in favor of Agent with respect to Stream’s Receivables due and owing from Customers located in France, as from time to time hereafter further amended, modified or supplemented.

“ Pre-Closing Balance Sheet ” shall have the meaning set forth in Section 5.5(a) hereof.

“ Pre-Closing Business Plan ” shall have the meaning set forth in Section 5.5(b) hereof.

“ Pre-Closing Financial Statements ” shall have the meaning set forth in Section 5.5(b) hereof.

“ Priority Payables ” means, with respect to any Person, any amount payable by such Person which is secured by a Lien in favor of a Governmental Authority which ranks or is capable of ranking prior to or pari passu with the Liens created by the Loan Documents in respect of any Eligible Accounts or Eligible Inventory, including, without limitation, amounts owing for wages, vacation pay, severance pay, employee deductions, sales tax, excise tax, tax payable pursuant to Part IX of the Excise Tax Act (Canada) (net of GST input credits), income tax, workers compensation, government royalties, pension fund obligations, overdue rents or taxes, applicable amounts included in the “categories of preferential debts” pursuant to The

 

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Insolvency (Northern Ireland) Order 1989 (such as debts due to HM Customs and Excise, social security contributions, and amounts constituting remuneration of employees as described in such law), and other statutory or other claims under applicable foreign law that have or may have priority over such Liens created by the Loan Documents.

“ Purchase Price ” shall mean the meaning ascribed to such term in the Acquisition Agreement.

“ Purchasing Lender ” shall have the meaning set forth in Section 17.3(c) hereof.

“ Questionnaire ” shall mean each Documentation Information Questionnaire furnished by Agent to Borrowers and the responses thereto provided by Loan Parties and delivered to Agent.

“ RASC ” shall have the meaning set forth in the second background paragraph of this Agreement.

“ RCRA ” shall mean the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et seq., as same may be amended from time to time.

“ Real Property ” shall mean all of each Borrower’s right, title and interest in and to all leased premises of Borrowers, including, without limitation, those leased as of the date of this Agreement, all of which are identified on Schedule 4.19 .

“ Receivables ” shall mean and include, as to each Borrower, all of such Borrower’s accounts, contract rights, instruments (including those evidencing indebtedness owed to each Borrower by its Affiliates), documents, chattel paper (including electronic chattel paper), general intangibles relating to accounts, drafts and acceptances, credit card receivables, and all other forms of obligations owing to any Borrower arising out of or in connection with the sale or lease of Inventory or the rendition of services, all supporting obligations, guarantees and other security therefor, whether secured or unsecured, now existing or hereafter created, and whether or not specifically sold or assigned to Agent hereunder.

“ Receivables Advance Rate ” shall have the meaning set forth in Section 2.1(a)(y)(i) hereof.

“ Register ” shall have the meaning set forth in Section 17.3(e) hereof.

“ Release ” shall have the meaning set forth in Section 5.7(c)(i) hereof.

“ Reportable Event ” shall mean a reportable event described in Section 4043(b) of ERISA or the regulations promulgated thereunder.

“ Required Lenders ” shall mean Lenders holding at least fifty-one percent (51%) of the Advances (exclusive of Swingline Advances) and, if no Advances are outstanding, shall mean Lenders holding at least fifty-one percent (51%) of the Commitment Percentages.

 

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“ Reserve Percentage ” shall mean the maximum effective percentage in effect on any day as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the reserve requirements (including, without limitation, supplemental, marginal and emergency reserve requirements) with respect to eurocurrency funding.

“ Revolving Advances ” shall mean the Advances made other than the Letters of Credit, Swingline Advances, Term Loan US and Term Loan Foreign.

“ Revolving Credit Note ” shall mean, collectively, the promissory notes referred to in Section 2.1(a) hereof, as any such Note may hereafter be amended or supplemented, and/or amended and restated, from time to time.

“ Revolving Interest Rate ” shall mean an interest rate per annum equal to (a) the sum of the Alternate Base Rate plus the Applicable Margin with respect to Domestic Rate Loans, and (b) the sum of the Eurodollar Rate plus the Applicable Margin with respect to Eurodollar Rate Loans.

“ Section 20 Subsidiary ” shall mean the Subsidiary of the bank holding company controlling PNC, which Subsidiary has been granted authority by the Federal Reserve Board to underwrite and deal in certain Ineligible Securities.

“ Senior Debt Payments ” shall mean and include all cash actually expended by Borrowers to make (a) interest payments on any Advances hereunder, plus (b) scheduled principal payments on the Term Loan, plus (c) payments for all fees, commissions and charges set forth herein and with respect to any Advances, except for closing fees with respect to this Agreement, plus (d) capitalized lease payments, plus (e) payments with respect to any other Indebtedness for borrowed money, other than the prepayment in full of the Junior Secured Indebtedness on or about the Closing Date.

“ Settlement ” shall have the meaning set forth in Section 2.5(c) hereof.

“ Settlement Date ” shall mean the Closing Date and thereafter Wednesday of each week unless such day is not a Business Day in which case it shall be the next succeeding Business Day.

“ Stock Pledge Agreement ” shall mean jointly and severally, (a) the Second Amended and Restated Stock Pledge Agreement dated as of June 23, 2004, as reaffirmed by Reaffirmation of Second Amended and Restated Pledge Agreement dated as of May 31, 2006, pursuant to which SHC pledged to Agent as Collateral for the Obligations 100% of the issued and outstanding shares of the Capital Stock of SFI, Stream and SNY (b) the Stock Pledge Agreement dated as of April 13, 2004 (as amended) pursuant to which Stream pledged to Agent as Collateral for the Obligations 100% of the issued and outstanding shares of the Capital Stock of Stream Nevada, the liabilities, obligations, terms and conditions of each of which shall have been reaffirmed as of the date of this Agreement, (c) the Deed of Pledge of Shares pursuant to which Stream pledged to Agent as Collateral for the Parallel Debt US 65% of the issued and outstanding shares of the Capital Stock of Stream BV and (d) the respective Foreign Security Agreements pursuant to which Stream (or, in the case of Stream Service BV, Stream Bermuda) pledged to Agent as Collateral 65% of the Capital Stock of each of Stream Canada, Stream UK, Stream Germany, Stream BV and Stream Service BV.

 

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“ Stream Bermuda ” shall mean Stream International (Bermuda) Ltd., a company organized under the laws of Bermuda.

“ Stream BV ” shall have the meaning set forth in the recitals hereto.

“ Stream Germany Security ” shall have the meaning set forth in Section 16.4(a) hereof.

“ Stream India ” shall mean Stream International Services Private Limited (formerly known as Stream Tracmail Private Limited), a company organized under the laws of India.

“ Stream Italy ” shall mean Stream Italy S.r.l. (formerly known as Solectron Global Services Italy S.r.l.), a company organized under the laws of Italy.

“ Stream Nevada ” shall mean, Stream International, Inc., a Nevada corporation.

“ Stream Service BV ” shall have the meaning set forth in the recitals hereto.

“ Subsidiary ” shall mean a corporation or other entity of whose shares of stock or other ownership interests having ordinary voting power (other than stock or other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the directors of such corporation, or other Persons performing similar functions for such entity, are owned, directly or indirectly, by such Person.

“ Swap Contract ” means any agreement, whether or not in writing, relating to any transaction that is a rate swap, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap or option, bond, note or bill option, interest rate option, forward foreign exchange transaction, cap, collar or floor transaction, currency swap, cross-currency rate swap, swaption, currency option or any other, similar transaction (including any option to enter into any of the foregoing) or any combination of the foregoing, and, unless the context otherwise clearly requires, any master agreement relating to or governing any or all of the foregoing.

“ Swingline Advance ” has the meaning set forth in Section 2.5(a) hereof.

“ Swingline Advance Rate ” shall mean an interest rate per annum equal to the (i) Alternate Base Rate, plus (ii) the Applicable Margin with respect to Domestic Rate Loans.

“ Swingline Lender ” shall mean PNC, in its capacity as Lender of the Swingline Advances.

“ Swingline Note ” shall mean the promissory note described in Section 2.5(c) hereof.

 

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“ Tender Offer ” shall have the meaning set forth in Section 8.1(o) hereof.

“ Term ” shall have the meaning set forth in Section 13.1 hereof.

“ Term Loans ” shall mean Term Loan US and Term Loan Foreign.

“ Term Loan A ” shall have the meaning ascribed to such term in the Third Restated Loan Agreement.

“ Term Loan B ” shall have the meaning ascribed to such term in the Third Restated Loan Agreement.

“ Term Loan C ” shall have the meaning ascribed to such term in the Third Restated Loan Agreement.

“ Term Loan D ” shall have the meaning ascribed to such term in the Third Restated Loan Agreement.

“ Term Loan US ” shall mean the Advances made to US Borrowers pursuant to Section 2.4 hereof.

“ Term Loan Foreign ” shall mean the Advances made to Foreign Borrowers pursuant to Section 2.4 hereof.

“ Term Loan Rate ” shall mean an interest rate per annum equal to (a) the sum of the Alternate Base Rate plus the Applicable Margin with respect to Domestic Rate Loans and (b) the sum of the Eurodollar Rate plus the Applicable Margin with respect to Eurodollar Rate Loans.

“ Term Notes ” shall mean, collectively, the promissory notes referred to in Section 2.4 hereof, as any such Note may hereafter be amended or supplemented, and/or amended and restated from time to time.

“ Termination Event ” shall mean (i) a Reportable Event with respect to any Pension Benefit Plan or Multiemployer Plan; (ii) the withdrawal of any Borrower or any member of the Controlled Group from a Pension Benefit Plan or Multiemployer Plan during a plan year in which such entity was a “substantial employer” as defined in Section 4001(a)(2) of ERISA; (iii) the providing of notice of intent to terminate a Pension Benefit Plan in a distress termination described in Section 4041(c) of ERISA; (iv) the institution by the PBGC of proceedings to terminate a Pension Benefit Plan or Multiemployer Plan; (v) any event or condition (a) which might constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Benefit Plan or Multiemployer Plan, or (b) that may result in termination of a Multiemployer Plan pursuant to Section 4041A of ERISA; or (vi) the partial or complete withdrawal within the meaning of Sections 4203 and 4205 of ERISA, of Borrower or any member of the Controlled Group from a Multiemployer Plan.

“ Third Restated Loan Agreement ” shall have the meaning set forth in the Background paragraphs of this Agreement.

 

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“ Toxic Substance ” shall mean and include any material present on the Real Property which has been shown to have significant adverse effect on human health or which is subject to regulation under the Toxic Substances Control Act (TSCA), 15 U.S.C. §§ 2601 et seq., applicable state law, or any other applicable federal or state laws now in force or hereafter enacted relating to toxic substances. “Toxic Substance” includes but is not limited to asbestos, polychlorinated biphenyls (PCBs) and lead-based paints.

“ Transferee ” shall have the meaning set forth in Section 17.3(b) hereof.

“ Unbilled Receivables ” shall mean all Receivables which have been earned by the applicable Borrower but which have not been billed to the Customer; provided , however , that with respect to any Unbilled Receivables where the Customer of Stream is located in France, (A) any Revolving Advance based thereupon shall not exceed 85% of the Dollar Equivalent of the insured value thereof, and (B) the total amount of Revolving Advances based upon Unbilled Receivables from Customers located in France, together with any and all Receivables with respect to which the Customer is located in France, shall not exceed the sum of $10,000,000 at any one time outstanding.

“ Undrawn Availability ” at a particular date shall mean an amount equal to (a) the lesser of (i) the Formula Amount or (ii) the Maximum Revolving Advance Amount, minus (b) the sum of (i) the outstanding amount of Advances (other than the Term Loan) plus (ii) all amounts due and owing to any Borrower’s trade creditors which are sixty (60) or more days past due, (unless a longer period is customary with respect to the applicable Borrower’s relationship with any such trade creditor) plus (iii) fees and expenses pursuant to this Agreement or the Other Documents for which any Borrower is liable but which have not been paid or charged to Borrowers’ Account.

“ Unfinanced Capital Expenditures ” shall mean all Capital Expenditures of Borrowers other than those made utilizing (a) financing provided by the applicable seller or third party lenders, (b) cash equity investments received by Borrowers within the twelve (12) months preceding the making of any Capital Expenditures utilizing such funds, or (c) cash reimbursed by landlords or customers. For the avoidance of doubt, Capital Expenditures made by any Borrower utilizing Revolving Advances shall be deemed Unfinanced Capital Expenditures.

“ USA Patriot Act ” shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56, as the same has been, or shall hereafter be, renewed, extended, amended or replaced.

“ US Borrowers ” shall mean, jointly and severally, SFI, Stream and SNY.

“ US Formula Amount ” shall have the meaning set forth in Section 2.1(b).

“ US Obligations ” shall mean the aggregate of the Obligations of each of the US Borrowers as they may exist from time to time, other than (a) the Foreign Obligations, (b) the Parallel Debt Foreign and (c) the Parallel Debt US.

 

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“ Week ” shall mean the time period commencing with the opening of business on a Wednesday and ending on the end of business the following Tuesday.

1.3. Uniform Commercial Code Terms . All terms used herein and defined in the Uniform Commercial Code as adopted in the State of New York from time to time shall have the meaning given therein unless otherwise defined herein. To the extent the definition of any category or type of Collateral is expanded by any amendment, modification or revision to the Uniform Commercial Code, such expanded definition will apply automatically as of the date of such amendment, modification or revision. With respect to Stream Canada, any reference to the Uniform Commercial Code shall be deemed to mean the Personal Property Security Act of the relevant province.

1.4. Certain Matters of Construction . The terms “herein”, “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular section, paragraph or subdivision. All references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement. Any pronoun used shall be deemed to cover all genders. Wherever appropriate in the context, terms used herein in the singular also include the plural and vice versa. All references to statutes and related regulations shall include any amendments of same and any successor statutes and regulations. Unless otherwise provided, all references to any instruments or agreements to which Agent is a party, including references to any of the Other Documents, shall include any and all modifications or amendments thereto and any and all extensions or renewals thereof. All references herein to the time of day shall mean the time in New York, New York. Whenever the words “including” or “include” shall be used, such words shall be understood to mean “including, without limitation” or “include, without limitation”. A Default or Event of Default shall be deemed to exist at all times during the period commencing on the date that such Default or Event of Default occurs to the date on which such Default or Event of Default is waived in writing pursuant to this Agreement or, in the case of a Default, is cured within any period of cure expressly provided for in this Agreement; and an Event of Default shall “continue” or be “continuing” until such Event of Default has been waived in writing by the Required Lenders. References herein to the phrase “upon the occurrence of an Event of Default” (or words of similar effect) shall be deemed to be followed by the phrase “and during the continuation thereof”. Any Lien referred to in this Agreement or any of the Other Documents as having been created in favor of Agent, any agreement entered into by Agent pursuant to this Agreement or any of the Other Documents, any payment made by or to or funds received by Agent pursuant to or as contemplated by this Agreement or any of the Other Documents, or any act taken or omitted to be taken by Agent, shall, unless otherwise expressly provided, be created, entered into, made or received, or taken or omitted, for the benefit or account of Agent and Lenders. Wherever the phrase “to the best of Borrowers’ knowledge” or words of similar import relating to the knowledge or the awareness of any Borrower are used in this Agreement or Other Documents, such phrase shall mean and refer to (i) the actual knowledge of a senior officer of any Borrower or (ii) the knowledge that a senior officer would have obtained if he had engaged in good faith and diligent performance of his duties, including the making of such reasonably specific inquiries as may be necessary of the employees or agents of such Borrower and a good faith attempt to ascertain the existence or accuracy of the matter to which such phrase relates. All covenants hereunder shall be given independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an

 

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exception to, or otherwise within the limitations of, another covenant shall not avoid the occurrence of a default if such action is taken or condition exists. In addition, all representations and warranties hereunder shall be given independent effect so that if a particular representation or warranty proves to be incorrect or is breached, the fact that another representation or warranty concerning the same or similar subject matter is correct or is not breached will not affect the incorrectness of a breach of a representation or warranty hereunder. With respect to each Foreign Borrower, any reference to “state” shall be deemed to mean the corresponding local equivalent and any reference to “federal” shall be deemed to be a reference to the applicable country or other national political unit so that, for example, with respect to Stream Canada, any reference to “state” shall be deemed to mean “province” and any reference to “federal” shall be deemed to be a reference to “Canada”.

 

II.	ADVANCES, PAYMENTS .

2.1. Advances, Payments .

(a) Revolving Advances . Subject to the terms and conditions set forth in this Agreement including, without limitation, Sections 2.1(b), (c) and (d), each Lender, severally and not jointly, will make Revolving Advances to Borrowers in aggregate amounts outstanding at any time equal to such Lender’s Commitment Percentage of the lesser of (x) the Maximum Revolving Advance Amount minus the sum of (1) the aggregate outstanding Swingline Advances plus (2) the aggregate Maximum Undrawn Amount of outstanding Letters of Credit and (y) the Formula Amount. The “Formula Amount” shall at all times be an amount equal to the Dollar Equivalent of the sum of the following:

(i) up to 85%, subject to adjustment pursuant to the provisions of Section 2.1(d) hereof (“ Receivables Advance Rate ”), of Eligible US Receivables and Eligible Foreign Receivables (except that with respect to Eligible Foreign Receivables due Stream BV and Stream Service BV from Customers located outside of the European Union or the United States of America, the Receivables Advance Rate shall be up to 50%), plus

(ii) up to 85%, subject to adjustment pursuant to the provisions of Section 2.1(d) hereof (“ Unbilled Receivables Advance Rate ”), of the value of the Eligible Unbilled US Receivables and Eligible Unbilled Foreign Receivables (except that with respect to Eligible Unbilled Foreign Receivables due Stream BV and Stream Service BV from Customers located outside of the European Union or the United States of America, the Unbilled Receivables Advance Rate shall be up to 50%) (the Receivables Advance Rate and the Unbilled Receivables Advance Rate shall be referred to collectively, as the “ Advance Rates ”), minus

(iii) the aggregate Maximum Undrawn Amount of outstanding Letters of Credit, minus

(iv) any Eligible Reserves, minus

(v) the outstanding Swingline Advances.

 

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The Revolving Advances shall be evidenced by secured promissory notes (which may be amended and restated promissory notes), issued by the US Borrowers with respect to their Revolving Advances and issued by the Foreign Borrowers with respect to their Revolving Advances (collectively, the “ Revolving Credit Note ”) substantially in the form attached hereto as Exhibits 2.1-US and 2.1-F .

(b) US Borrowing Group Sublimit . Notwithstanding the provisions of Section 2.1(a), and in addition to the discretionary rights set forth in Section 2.1(d) with respect to further limitations on any particular Borrower or Borrowers, in no event may the Revolving Advances to US Borrowers exceed the lesser of (x) the sum of (A) the Maximum US Revolving Advance Amount minus (B) the sum of (1) the aggregate outstanding Swingline Advances plus (2) the aggregate Maximum Undrawn Amount of outstanding Letters of Credit plus (3) the aggregate outstanding Revolving Advances to Foreign Borrowers or (y) an amount equal to the sum of:

(i) up to the Receivables Advance Rate of Eligible US Receivables, plus

(ii) up to the Unbilled Receivables Advance Rate of the value of the Eligible Unbilled US Receivables, minus

(iii) the aggregate Maximum Undrawn Amount of outstanding Letters of Credit, minus

(iv) any Eligible Reserves (established with respect to Revolving Advances made to US Borrowers), minus

(v) the outstanding Swingline Advances, minus

(vi) outstanding Revolving Advances to Foreign Borrowers.

The amount derived from (x) the sum of Sections 2.1(b)(y)(i) and (ii)  minus (y) the sum of Sections 2.1(b)(y)(iii), (iv), (v) and (vi) at any time and from time to time shall be referred to as the “ US Formula Amount ”.

(c) Foreign Borrowing Group Sublimit . Notwithstanding the provisions of Section 2.1(a), and in addition to the discretionary rights set forth in Section 2.1(d) with respect to further limitations on any particular Borrower or Borrowers, in no event may the Revolving Advances to Foreign Borrowers exceed the lesser of (x) the Maximum Foreign Revolving Advance Amount or (y) the Dollar Equivalent of an amount equal to the sum of:

(i) up to the Receivables Advance Rate of Eligible Foreign Receivables, plus

(ii) up to the Unbilled Receivables Advance Rate of the value of the Eligible Unbilled Foreign Receivables, minus

(iii) any Eligible Reserves (established with respect to Revolving Advances made to Foreign Borrowers).

 

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The amount derived from (x) the sum of Sections 2.1(c)(y)(i) and (ii) minus (y) the sum of Section 2.1(b)(y)(iii) at any time and from time to time shall be referred to as the “ Foreign Formula Amount ”.

(d) Discretionary Rights . The Advance Rates may be increased (subject to the provisions of Section 17.2(b) of this Agreement) or decreased by Agent at any time and from time to time in the exercise of its reasonable discretion. Each Borrower consents to any such increases or decreases and acknowledges that decreasing the Advance Rates or increasing the Eligible Reserves may limit or restrict Advances requested by Borrowing Agent. Agent shall give Borrowing Agent five (5) days prior written notice of its intention to decrease the Advance Rates. In addition to the limitations set forth in the definition of “Maximum Foreign Revolving Advance Amount”, which such limitations may be increased or decreased by Agent at any time and from time to time in the exercise of its reasonable discretion subject to the approval of Required Lenders, from time to time Agent may, upon five (5) Business Days prior written notice to Borrowing Agent of its intention to do so, but only after the occurrence and during the continuation of a Default or Event of Default or if Agent reasonably believes that an event or condition has occurred which is likely to result in or have a Material Adverse Effect, impose any other maximum revolving advance amount for any particular Borrower or group of Borrowers and/or limit the maximum Dollar amount of Revolving Loans which may be extended to any individual Borrower or group of Borrowers.

(e) Minimum Dutch Borrowing . The minimum first borrowing from any Lender to Stream BV or Stream Service BV shall at all times be at least EUR 50,000, its Dollar Equivalent or its equivalent in other foreign currency.

2.2. Procedure for Borrowing Advances .

(a) Borrowing Agent on behalf of any Borrower may notify Agent prior to 12:30 p.m. (New York time) on a Business Day of a Borrower’s request to incur, on that day, a Revolving Advance hereunder, and specifying which Borrower, or Borrowing Group, is to incur such Revolving Advance. Should any amount required to be paid as interest hereunder, or as fees or other charges under this Agreement or any other agreement with Agent or Lenders, or with respect to any other Obligation, become due, same shall be deemed a request for a Revolving Advance on behalf of the relevant Borrower or Borrowing Group as of the date such payment is due, in the amount required to pay in full such interest, fee, charge or Obligation under this Agreement or any other agreement with Agent or Lenders, and such request shall be irrevocable; provided , however , that unless an Event of Default has occurred which is then continuing, Agent shall provide Borrowing Agent on behalf of any Borrower with thirty (30) days notice of its intention to effectuate payments to third parties for fees and expenses incurred in the administration of the credit facility established under this Agreement, together with a copy of the related invoice, and Borrowing Agent may elect to pay such invoices directly to the applicable third party payee thereof and, if applicable, shall advise Agent of such election, and shall make such payments within such thirty (30) day period.

(b) Notwithstanding the provisions of (a) above, in the event any Borrower desires to obtain a Eurodollar Rate Loan, Borrowing Agent shall give Agent at least three (3) Business Days’ prior written notice submitted on or before 10:00 a.m. New York time,

 

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specifying (i) the date of the proposed borrowing (which shall be a Business Day), (ii) the type of borrowing and the amount on the date of such Advance to be borrowed and (iii) the duration of the first Interest Period therefor. Interest Periods for Eurodollar Rate Loans shall be for one, two, three or six months; provided, if an Interest Period would end on a day that is not a Business Day, it shall end on the next succeeding Business Day unless such day falls in the next succeeding calendar month in which case the Interest Period shall end on the next preceding Business Day. Each Eurodollar Rate Loan shall be in a minimum amount of (x) $500,000 and in integral multiples of $100,000 with respect to Revolving Advances and (y) $100,000 and in integral multiples of $50,000 with respect to the Term Loan. No Eurodollar Rate Loan shall be made available to any Borrower during the continuance of a Default or an Event of Default.

(c) Each Interest Period of a Eurodollar Rate Loan shall commence on the date such Eurodollar Rate Loan is made and shall end on such date as Borrowing Agent may elect as set forth in subsection (b) (iii) above provided that the exact length of each Interest Period shall be determined in accordance with the practice of the interbank market for offshore Dollar deposits and no Interest Period shall end after the last day of the Term.

Borrowing Agent shall elect the initial Interest Period applicable to a Eurodollar Rate Loan by its notice of borrowing given to Agent pursuant to Section 2.2(b) or by its notice of conversion given to Agent pursuant to Section 2.2(d), as the case may be. Borrowing Agent shall elect the duration of each succeeding Interest Period by giving irrevocable written notice to Agent of such duration not less than three (3) Business Days prior to the last day of the then current Interest Period applicable to such Eurodollar Rate Loan. If Agent does not receive timely notice of the Interest Period elected by Borrowing Agent, Borrowers shall be deemed to have elected to convert to a Domestic Rate Loan subject to Section 2.2(d) hereinbelow.

(d) Provided that no Event of Default shall have occurred and be continuing, any Borrower may, on the last Business Day of the then current Interest Period applicable to any outstanding Eurodollar Rate Loan, or on any Business Day with respect to Domestic Rate Loans, convert any such loan into a loan of another type in the same aggregate principal amount provided that any conversion of a Eurodollar Rate Loan shall be made only on the last Business Day of the then current Interest Period applicable to such Eurodollar Rate Loan. If a Borrower desires to convert a loan, Borrowing Agent shall give Agent not less than three (3) Business Days’ prior written notice to convert from a Domestic Rate Loan to a Eurodollar Rate Loan or one (1) Business Day’s prior written notice to convert from a Eurodollar Rate Loan to a Domestic Rate Loan, specifying the date of such conversion, the loans to be converted and if the conversion is from a Domestic Rate Loan to any other type of loan, the duration of the first Interest Period therefor. After giving effect to each such conversion, there shall not be outstanding more than five (5) Eurodollar Rate Loans, in the aggregate, with respect to Revolving Advances, or more than three (3) Eurodollar Rate Loans, in the aggregate, with respect to the Term Loan.

(e) At its option and upon three (3) Business Days’ prior written notice, any Borrower may prepay the Eurodollar Rate Loans in whole at any time or in part from time to time, without premium or penalty, but with accrued interest on the principal being prepaid to the date of such repayment. Such Borrower shall specify the date of prepayment of Advances which

 

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are Eurodollar Rate Loans and the amount of such prepayment. In the event that any prepayment of Eurodollar Rate Loan is required or permitted on a date other than the last Business Day of the then current Interest Period with respect thereto, such Borrower and each other Loan Party shall indemnify Agent and Lenders therefor in accordance with Section 2.2(f) hereof.

(f) Each Loan Party shall indemnify Agent and Lenders and hold Agent and Lenders harmless from and against any and all losses or expenses that Agent and Lenders may sustain or incur as a consequence of any prepayment, conversion of or any default by any Borrower in the payment of the principal of or interest on any Eurodollar Rate Loan or failure by any Borrower to complete a borrowing of, a prepayment of or conversion of or to a Eurodollar Rate Loan after notice thereof has been given, including, but not limited to, any interest payable by Agent or Lenders to lenders of funds obtained by it in order to make or maintain its Eurodollar Rate Loans hereunder. A certificate as to any additional amounts payable pursuant to the foregoing sentence submitted by Agent or any Lender to Borrowing Agent shall be conclusive absent manifest error.

(g) Notwithstanding any other provision hereof except Sections 16.3 and 16.4, if any applicable law, treaty, regulation or directive, or any change therein or in the interpretation or application thereof, shall make it unlawful for any Lender (for purposes of this subsection (g), the term “Lender” shall include any Lender and the office or branch where any Lender or any corporation or bank controlling such Lender makes or maintains any Eurodollar Rate Loans) to make or maintain its Eurodollar Rate Loans, the obligation of Lenders to make Eurodollar Rate Loans hereunder, shall forthwith be cancelled and Borrowers shall, if any affected Eurodollar Rate Loans are then outstanding, promptly upon request from Agent, either pay all such affected Eurodollar Rate Loans or convert such affected Eurodollar Rate Loans into loans of another type. If any such payment or conversion of any Eurodollar Rate Loan is made on a day that is not the last day of the Interest Period applicable to such Eurodollar Rate Loan, Borrowers shall pay Agent, upon Agent’s request, such amount or amounts as may be necessary to compensate Lenders for any loss or expense sustained or incurred by Lenders in respect of such Eurodollar Rate Loan as a result of such payment or conversion, including (but not limited to) any interest or other amounts payable by Lenders to lenders of funds obtained by Lenders in order to make or maintain such Eurodollar Rate Loan. A certificate as to any additional amounts payable pursuant to the foregoing sentence submitted by Lenders to Borrowing Agent shall be conclusive absent manifest error.

2.3. Disbursement of Advance Proceeds . All Advances shall be disbursed from whichever office or other place Agent may designate from time to time and, together with any and all other Obligations of Borrowers to Agent or Lenders, shall be charged to the respective Borrowers’ Account on Agent’s books. In no event, however, shall Agent disburse Advances other than to an account located in the United States of America. During the Term, Borrowers may use the Revolving Advances by borrowing, prepaying and reborrowing, all in accordance with the terms and conditions hereof. The proceeds of each Revolving Advance requested by Borrowers or deemed to have been requested by Borrowers under Section 2.2(a) hereof shall, with respect to requested Revolving Advances to the extent Lenders make such Revolving Advances, be made available to the applicable Borrower on the day so requested by way of credit to such Borrower’s operating account at PNC, or such other bank as Borrowing Agent may designate following notification to Agent, in immediately available federal funds or other

 

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immediately available funds or, with respect to Revolving Advances deemed to have been requested by any Borrower, be disbursed to Agent to be applied to the outstanding Obligations giving rise to such deemed request.

2.4. Term Loans . The outstanding principal balance of Term Loan A as of the date of this Agreement is $568,680.77, which sum remains due and owing by the US Borrowers. The outstanding principal balance of Term Loan B as of the date of this Agreement is $519,377.63, which sum remains due and owing by the Foreign Borrowers. The outstanding principal balance of Term Loan C as of the date of this Agreement is $4,725,463.26, which sum remains due and owing by the US Borrowers. The outstanding principal balance of Term Loan D as of the date of this Agreement is $1,996,175.94, which sum remains due and owing by the Foreign Borrowers. Term Loan A and Term Loan C shall be deemed consolidated into “Term Loan US” as of the Closing Date in the aggregate sum of $5,294,144.03 and each Lender, severally and not jointly, shall have funded its respective Commitment Percentage of the outstanding principal balance of Term Loan US, whether directly to Borrowers or by obtaining an assignment of a portion of the outstanding Term Loan US (or Term Loan A and/or Term Loan C) from the other Lenders. Term Loan B and Term Loan D shall be deemed consolidated into “Term Loan Foreign” as of the Closing Date in the aggregate sum of $2,515,553.57 and each Lender, severally and not jointly, shall have funded its respective Commitment Percentage of the outstanding principal balance of Term Loan Foreign, whether directly to Borrowers or by obtaining an assignment of a portion of the outstanding Term Loan Foreign (or Term Loan B and/or Term Loan D). Term Loan US and Term Loan Foreign shall be, with respect to principal, payable (a) each in a monthly installment, in the respective sums of $92,789 and $64,574 on August 1, 2008, and (b) thereafter in equal consecutive monthly installments, each in the respective sums of $133,880 and $81,932, commencing on September 1, 2008 and continuing on the first day of each month thereafter until the last day of the Term when the entire then unpaid principal sum of the Term Loans shall be payable in full, subject to acceleration upon the occurrence of an Event of Default under this Agreement or termination of this Agreement. The Term Loans shall be evidenced by the amended and restated secured promissory notes (collectively, the “Term Notes”) in substantially the forms attached hereto as Exhibit 2.4-US and 2.4-F.

2.5. Swingline Loans .

(a) Agent, Swingline Lender and Lenders agree that in order to facilitate the administration of this Agreement and the Other Documents, promptly after Borrowing Agent requests a Domestic Rate Loan on behalf of a Borrower, Swingline Lender may elect, in its sole discretion, to have the terms of this Section 2.5(a) apply to such Borrower’s request by advancing, on behalf of Lenders and in the amount requested, same day funds to the applicable Borrower on the applicable borrowing date (each such Advance made solely by the Swingline Lender pursuant to this Section 2.5(a) is referred to in this Agreement as a “ Swingline Advance ”), with settlement among them as to the Swingline Advance to take place on a periodic basis as set forth in Section 2.5(c). Each Swingline Advance shall be subject to all the terms and conditions applicable to other Domestic Rate Loans funded by Lenders, except that all payments thereon shall be payable to Swingline Lender solely for its own account. The aggregate amount of Swingline Loans outstanding at any time shall not exceed $10,000,000. All Swingline Advances shall be subject to Section 2.2 hereof and Swingline Advances may not be made if the Swingline Lender has been notified by Agent or Required Lenders that a Default exists and that

 

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Swingline Advance may not be made. All Swingline Advances shall be Domestic Rate Loans. The Swingline Loans shall be evidenced by a promissory note (the “ Swingline Note ”) in substantially the form attached as Exhibit 2.5(a).

(b) Upon the making of a Swingline Advance (whether before or after the occurrence of a Default or Event of Default and regardless of whether a Settlement has been requested with respect to such Swingline Advance), each Lender shall be deemed, without further action by any party hereto, to have unconditionally and irrevocably purchased from Swingline Lender, as the case may be, without recourse or warranty, an undivided interest and participation in such Swingline Advance in proportion to its Commitment Percentage. Swingline Lender or Agent may, at any time, require Lenders to fund their participations. From and after the date, if any, on which any Lender is required to fund, and funds, its participation in any Swingline Advances purchased hereunder, Agent shall promptly distribute to such Lender, such Commitment Percentage of all payments of principal and interest and all proceeds of Collateral received by the Agent in respect of such Swingline Advance.

(c) Agent, on behalf of Swingline Lender, shall request settlement (a “ Settlement ”) with Lenders on at least a weekly basis or on any date that Agent elects, by notifying Lenders of such requested Settlement by facsimile, telephone or Electronic Transmission no later than 12:00 p.m., New York City time on the date of such requested Settlement (the “ Settlement Date ”). Each Lender (other than Swingline Lender, in the case of the Swingline Advance) shall transfer the amount of such Lender’s Commitment Percentage of the outstanding principal amount of the applicable Swingline Advance with respect to which Settlement is requested to Agent, to such account of Agent as Agent may designate, not later than 3:00 p.m., New York City time, on such Settlement Date. Settlements may occur during the existence of a Default or Event of Default and whether or not the applicable conditions precedent set forth in Section 8.2 have then been satisfied. Such amounts transferred to Agent shall be applied against the amounts of Swingline Lender’s Swingline Advances and, together with Swingline Lender’s Commitment Percentage of such Swingline Advance, shall constitute Revolving Advances of such Lenders, respectively. If any such amount is not transferred to Agent by any Lender on such Settlement Date, Swingline Lender shall be entitled to recover such amount on demand from such Lender together with interest thereon as specified in Section 2.23.

2.6. Repayment of Advances .

(a) The Revolving Advances shall be due and payable in full on the last day of the Term subject to earlier prepayment as herein provided. The Term Loan shall be due and payable as provided in Section 2.4 hereof and in the Term Note, subject to earlier prepayments as herein provided.

(b) Each Borrower recognizes that the amounts evidenced by checks, notes, drafts or any other items of payment relating to and/or proceeds of Collateral may not be collectible by Agent on the date received. In consideration of Agent’s agreement to conditionally credit Borrowers’ Account as of the Business Day on which Agent receives those items of payment, each Borrower agrees that, in computing the charges under this Agreement, all items of payment shall be deemed applied by Agent on account of the Obligations one (1)

 

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Business Day after the Business Day Agent receives such payments via wire transfer or electronic depository check. Agent is not, however, required to credit Borrowers’ Account for the amount of any item of payment which is unsatisfactory to Agent and Agent may charge the relevant Borrowers’ Account for the amount of any item of payment which is returned to Agent unpaid.

(c) All payments of principal, interest and other amounts payable hereunder, or under any of the Other Documents shall be made to Agent at the Payment Office not later than 1:00 P.M. (New York Time) on the due date therefor in lawful money of the United States of America in federal funds or other funds immediately available to Agent. Agent shall have the right to effectuate payment on any and all Obligations due and owing hereunder by charging the relevant Borrowers’ Account or by making Advances, subject to the provisions of Section 2.2 hereof.

(d) Borrowers shall pay principal, interest, and all other amounts payable hereunder, or under any related agreement, without any deduction whatsoever, including, but not limited to, any deduction for any setoff or counterclaim, except to the extent required by law.

2.7. Repayment of Excess Advances . The aggregate balance of Advances outstanding at any time in excess of the maximum amount of Advances permitted hereunder by any Borrowing Group shall be immediately due and payable without the necessity of any demand, at the Payment Office, whether or not a Default or Event of Default has occurred.

2.8. Statement of Account . Agent shall maintain, in accordance with its customary procedures, a loan account for the US Borrowers and a loan account for the Foreign Borrowers (each a “ Borrowers’ Account ”), each in the name of Borrowing Agent, in which shall be recorded the date and amount of each Advance made by Agent and the date and amount of each payment in respect thereof; provided , however , the failure by Agent to record the date and amount of any Advance shall not adversely affect Agent or any Lender. Each month, Agent shall send Borrowing Agent a statement showing the accounting for the Advances made, payments made or credited in respect thereof, and other transactions between Agent and the respective Borrowing Group, during such month. The monthly statements shall be deemed correct and binding upon Borrowers in the absence of manifest error and shall constitute an account stated between Lenders and Borrowers unless Agent receives a written statement of Borrowers’ specific exceptions thereto within thirty (30) days after such statement is received by Borrowing Agent. The records of Agent with respect to the loan account shall be conclusive evidence absent manifest error of the amounts of Advances and other charges thereto and of payments applicable thereto.

2.9. Letters of Credit . Subject to the terms and conditions hereof, Agent shall, in its sole and absolute discretion, issue or cause the issuance of Letters of Credit (“ Letters of Credit ”) on behalf of any US Borrower; provided , however , that Agent will not be required to issue or cause to be issued any Letters of Credit to the extent that the issuance thereof would then cause the sum of (i) the outstanding Revolving Advances to all US Borrowers plus (ii) the Maximum Undrawn Amount of outstanding Letters of Credit plus (iii) the outstanding Revolving Advances to all Foreign Borrowers to exceed the lesser of (x) the Maximum US Revolving Advance Amount or (y) the US Formula Amount. The Maximum Undrawn Amount of outstanding

 

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Letters of Credit shall not exceed, in the aggregate at any time the Letter of Credit Sublimit then in effect. All disbursements or payments related to Letters of Credit shall be deemed to be Domestic Rate Loans consisting of Revolving Advances and shall bear interest at the applicable Revolving Interest Rate for Domestic Rate Loans. Letters of Credit that have not been drawn upon shall not bear interest.

2.10. Issuance of Letters of Credit .

(a) Borrowing Agent, on behalf of US Borrowers, may request Agent, upon three (3) Business Days’ prior written notice submitted on or before 10:00 a.m., New York time, to issue or cause the issuance of a Letter of Credit by delivering to Agent at the Payment Office, Agent’s form of Letter of Credit Application (the “ Letter of Credit Application ”) completed to the satisfaction of Agent; and, such other certificates, documents and other papers and information as Agent may reasonably request. Borrowing Agent, on behalf of US Borrowers, also has the right to give instructions and make agreements with respect to any application, any applicable letter of credit and security agreement, any applicable letter of credit reimbursement agreement and/or any other applicable agreement, any letter of credit and the disposition of documents, disposition of any unutilized funds, and to agree with Agent upon any amendment, extension or renewal of any Letter of Credit.

(b) Each Letter of Credit shall, among other things, (i) provide for the payment of sight drafts, other written demands for payment, or acceptances of usance drafts or other written demand for payment when presented for honor thereunder in accordance with the terms thereof and when accompanied by the documents described therein and (ii) have an expiry date not later than twelve (12) months after such Letter of Credit’s date of issuance and in no event, unless in each case otherwise agreed to by Agent in its sole and absolute discretion (and subject to terms and conditions satisfactory to Agent including, without limitation, the 105% cash collateralization requirement set forth in Section 3.2(b) of this Agreement), later than the last day of the Term. Each standby Letter of Credit shall be subject either to the Uniform Customs and Practice for Documentary Credits as most recently published by the International Chamber of Commerce at the time a Letter of Credit is issued ("UCP") or the International Standby Practices (ISP98-International Chamber of Commerce Publication Number 590) ("ISP98 Rules"), as determined by Agent, and each trade Letter of Credit shall be subject to UCP 500.

(c) Agent shall use its reasonable efforts to notify Lenders of the request by Borrowing Agent for a Letter of Credit hereunder.

2.11. Requirements For Issuance of Letters of Credit . Borrowing Agent shall authorize and direct any Issuer to name the applicable US Borrower as the “Applicant” or “Account Party” of each Letter of Credit. If Agent is not the Issuer of any Letter of Credit, Borrowing Agent shall authorize and direct the Issuer to deliver to Agent all instruments, documents, and other writings and property received by the Issuer pursuant to the Letter of Credit and to accept and rely upon Agent’s instructions and agreements with respect to all matters arising in connection with the Letter of Credit or the application therefor.

 

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2.12. Disbursements, Reimbursement .

(a) Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from Agent a participation in such Letter of Credit and each drawing thereunder in an amount equal to such Lender’s Commitment Percentage of the Maximum Face Amount of such Letter of Credit and the amount of such drawing, respectively.

(b) In the event of any request for a drawing under a Letter of Credit by the beneficiary or transferee thereof, Agent will promptly notify Borrowing Agent. Provided that it shall have received such notice, US Borrowers shall reimburse (such obligation to reimburse Agent shall sometimes be referred to as a “ Reimbursement Obligation ”) Agent prior to 12:00 Noon, New York time, on each date that an amount is paid by Agent under any Letter of Credit (each such date, a “ Drawing Date ”) in an amount equal to the amount so paid by Agent. In the event US Borrowers fail to reimburse Agent for the full amount of any drawing under any Letter of Credit by 12:00 Noon, New York time, on the Drawing Date, Agent will promptly notify each Lender thereof, and US Borrowers shall be deemed to have requested that a Domestic Rate Loan be made by the Lenders to be disbursed on the Drawing Date under such Letter of Credit, provided that the sum of (i) the outstanding Revolving Advances to all US Borrowers (including such Domestic Rate Loan then deemed to have been requested) plus (ii) the Maximum Undrawn Amount of outstanding Letters of Credit may not exceed the lesser of (x) the lesser of (A) the Maximum US Revolving Advance Amount or (B) an amount equal to (1) the Maximum Revolving Advance Amount minus (2) the then outstanding Revolving Advances to all Foreign Borrowers or (y) the US Formula Amount, and subject to Section 8.2. Any notice given by Agent pursuant to this Section 2.12(b) may be oral if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.

(c) Each Lender shall upon any notice pursuant to Section 2.12(b) make available to Agent an amount in immediately available funds equal to its Commitment Percentage of the amount of the drawing, whereupon the participating Lenders shall (subject to Section 2.12(d)) each be deemed to have made a Domestic Rate Loan to US Borrowers in that amount. If any Lender so notified fails to make available to Agent the amount of such Lender’s Commitment Percentage of such amount by no later than 2:00 p.m., New York time on the Drawing Date, then interest shall accrue on such Lender’s obligation to make such payment, from the Drawing Date to the date on which such Lender makes such payment (i) at a rate per annum equal to the Federal Funds Open Rate during the first three days following the Drawing Date and (ii) at a rate per annum equal to the rate applicable to Domestic Rate Loans on and after the fourth day following the Drawing Date. Agent will promptly give notice of the occurrence of the Drawing Date, but failure of Agent to give any such notice on the Drawing Date or in sufficient time to enable any Lender to effect such payment on such date shall not relieve such Lender from its obligation under this Section 2.12(c), provided that such Lender shall not be obligated to pay interest as provided in Section 2.12(c) (i) and (ii) until and commencing from the date of receipt of notice from Agent of a drawing. Each Lender’s Participation Commitment shall continue until the last to occur of any of the following events: (A) Agent ceases to be obligated to issue or cause to be issued Letters of Credit hereunder; (B) no Letter of Credit issued or created hereunder remains outstanding and uncancelled and (C) all Persons (other than the applicable US Borrower) have been fully reimbursed for all payments made under or relating to Letters of Credit.

 

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(d) With respect to any unreimbursed drawing that is not converted into a Domestic Rate Loan to US Borrowers in whole or in part as contemplated by Section 2.12(b), because of Borrowers’ failure to satisfy the conditions set forth in Section 8.2 (other than any notice requirements) or for any other reason, US Borrowers shall be deemed to have incurred from Agent a borrowing (each a “ Letter of Credit Borrowing ”) in the amount of such drawing. Such Letter of Credit Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the rate per annum applicable to a Domestic Rate Loan. Each Lender’s payment to Agent pursuant to Section 2.12(c) shall be deemed to be a payment in respect of its participation in such Letter of Credit Borrowing and shall constitute a “Participation Advance” from such Lender in satisfaction of its Participation Obligation under this Section 2.12.

(e) Each Lender’s Participation Commitment shall continue until the last to occur of any of the following events: (x) Agent ceases to be obligated to issue or cause to be issued Letters of Credit hereunder; (y) no Letter of Credit issued or created hereunder remains outstanding and uncancelled and (z) all Persons (other than the applicable US Borrower) have been fully reimbursed for all payments made under or relating to Letters of Credit.

2.13. Repayment of Participation Advances .

(a) Upon (and only upon) receipt by Agent for its account of immediately available funds from US Borrowers (i) in reimbursement of any payment made by the Administrative Agent under the Letter of Credit with respect to which any Lender has made a Participation Advance to Agent, or (ii) in payment of interest on such a payment made by Agent under such a Letter of Credit, Agent will pay to each Lender, in the same funds as those received by Agent, the amount of such Lender’s Commitment Percentage of such funds, except Agent shall retain the amount of the Commitment Percentage of such funds of any Lender that did not make a Participation Advance in respect of such payment by Agent.

(b) If Agent is required at any time to return to any Borrower, or to a trustee, receiver, liquidator, custodian, or any official in any insolvency proceeding, any portion of the payments made by US Borrowers to Agent pursuant to Section 2.13(a) in reimbursement of a payment made under the Letter of Credit or interest or fee thereon, each Lender shall, on demand of Agent, forthwith return to Agent the amount of its Commitment Percentage of any amounts so returned by Agent plus interest at the Federal Funds Open Rate.

2.14. Documentation . Each US Borrower agrees to be bound by the terms of the Letter of Credit Application and by Agent’s interpretations of any Letter of Credit issued for any US Borrower’s account and Agent’s written regulations and customary practices relating to letters of credit, though Agent’s interpretations may be different from such US Borrower’s own. In the event of a conflict between the Letter of Credit Application and this Agreement, this Agreement shall govern. It is understood and agreed that, except in the case of gross negligence or willful misconduct, Agent shall not be liable for any error, negligence and/or mistakes, whether of omission or commission, in following Borrowing Agent’s and any US Borrower’s instructions or those contained in the Letters of Credit or any modifications, amendments or supplements thereto.

 

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2.15. Determination to Honor Drawing Request . In determining whether to honor any request for drawing under any Letter of Credit by the beneficiary thereof, Agent shall be responsible only to determine that the documents and certificates required to be delivered under such Letter of Credit have been delivered and that they comply on their face with the requirements of such Letter of Credit and that any other drawing condition appearing on the face of such Letter of Credit has been satisfied in the manner so set forth.

2.16. Nature of Participation and Reimbursement Obligations . Each Lender’s obligation in accordance with this Agreement to make the Revolving Advances or Participation Advances as a result of a drawing under a Letter of Credit, and the obligations of US Borrowers to reimburse Agent upon a draw under a Letter of Credit, shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Section 2.16 under all circumstances, including the following circumstances:

(a) any set-off, counterclaim, recoupment, defense or other right which such Lender may have against Agent, any Borrower or any other Person for any reason whatsoever;

(b) the failure of any US Borrower or any other Person to comply, in connection with a Letter of Credit Borrowing, with the conditions set forth in this Agreement for the making of a Revolving Advance, it being acknowledged that such conditions are not required for the making of a Letter of Credit Borrowing and the obligation of the Lenders to make Participation Advances under Section 2.12;

(c) any lack of validity or enforceability of any Letter of Credit;

(d) any claim of breach of warranty that might be made by US Borrower or any Lender against the beneficiary of a Letter of Credit, or the existence of any claim, set-off, recoupment, counterclaim, crossclaim, defense or other right which any US Borrower or any Lender may have at any time against a beneficiary, any successor beneficiary or any transferee of any Letter of Credit or the proceeds thereof (or any Persons for whom any such transferee may be acting), Agent or any Lender or any other Person, whether in connection with this Agreement, the transactions contemplated herein or any unrelated transaction (including any underlying transaction between any US Borrower or any Subsidiaries of such US Borrower and the beneficiary for which any Letter of Credit was procured);

(e) the lack of power or authority of any signer of (or any defect in or forgery of any signature or endorsement on) or the form of or lack of validity, sufficiency, accuracy, enforceability or genuineness of any draft, demand, instrument, certificate or other document presented under or in connection with any Letter of Credit, or any fraud or alleged fraud in connection with any Letter of Credit, or the transport of any property or provisions of services relating to a Letter of Credit, in each case even if the Agent or any of Agent’s Affiliates has been notified thereof;

(f) payment by Agent under any Letter of Credit against presentation of a demand, draft or certificate or other document which does not comply with the terms of such Letter of Credit, other than as a result of the gross negligence or willful misconduct of the Agent as mutually agreed in writing by the Agent, all of the Lenders and each of the US Borrowers, or as determined by a final nonappealable judgment of a court of competent jurisdiction;

 

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(g) the solvency of, or any acts or omissions by, any beneficiary of any Letter of Credit, or any other Person having a role in any transaction or obligation relating to a Letter of Credit, or the existence, nature, quality, quantity, condition, value or other characteristic of any property or services relating to a Letter of Credit;

(h) any failure by the Agent or any of Agent’s Affiliates to issue any Letter of Credit in the form requested by any US Borrower, unless the Agent has received written notice from such US Borrower of such failure within three Business Days after the Agent shall have furnished such US Borrower a copy of such Letter of Credit and such error is material and no drawing has been made thereon prior to receipt of such notice;

(i) any Material Adverse Effect;

(j) any breach of this Agreement or any Other Document by any party thereto;

(k) the occurrence or continuance of an insolvency proceeding with respect to any Borrower or any Guarantor;

(l) the fact that a Default or Event of Default shall have occurred and be continuing;

(m) the fact that the Term shall have expired or this Agreement or the Obligations hereunder shall have been terminated; and

(n) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing.

2.17. Indemnity . In addition to amounts payable as provided in Section 17.5 hereof, each US Borrower hereby agrees to protect, indemnify, pay and save harmless the Agent and any of Agent’s Affiliates that have issued a Letter of Credit from and against any and all claims, demands, liabilities, damages, penalties, interest, judgments, losses, costs, charges and expenses (including reasonable fees, expenses and disbursements of counsel and allocated costs of internal counsel) which the Agent or any of Agent’s Affiliates may incur or be subject to as a consequence, direct or indirect, of the issuance of any Letter of Credit, other than as a result of (a) the gross negligence or willful misconduct of the Agent as mutually agreed in writing by the Agent, all of the Lenders and each of the US Borrowers, or as determined by a final nonappealable judgment of a court of competent jurisdiction or (b) the wrongful dishonor by the Agent or any of Agent’s Affiliates of a proper demand for payment made under any Letter of Credit, except if such dishonor resulted from any act or omission, whether rightful or wrongful, of any present or future de jure or de facto Governmental Body (all such acts or omissions herein called “ Governmental Acts ”).

2.18. Liability for Acts and Omissions . As between Borrowers, Agent and Lenders, each US Borrower assumes all risks of the acts and omissions of, or misuse of the Letters of

 

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Credit by, the respective beneficiaries of such Letters of Credit. In furtherance and not in limitation of the respective foregoing, Agent shall not be responsible for: (i) the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for an issuance of any such Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged (even if Agent shall have been notified thereof); (ii) the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any such Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (iii) the failure of the beneficiary of any such Letter of Credit, or any other party to which such Letter of Credit may be transferred, to comply fully with any conditions required in order to draw upon such Letter of Credit or any other claim of any US Borrower against any beneficiary of such Letter of Credit, or any such transferee, or any dispute between or among any US Borrower and any beneficiary of any Letter of Credit or any such transferee; (iv) errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher; (v) errors in interpretation of technical terms; (vi) any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any such Letter of Credit or of the proceeds thereof; (vii) the misapplication by the beneficiary of any such Letter of Credit of the proceeds of any drawing under such Letter of Credit; or (viii) any consequences arising from causes beyond the control of Agent, including any Governmental Acts, and none of the above shall affect or impair, or prevent the vesting of, any of Agent’s rights or powers hereunder. Nothing in the preceding sentence shall relieve Agent from liability for Agent’s gross negligence or willful misconduct in connection with actions or omissions described in such clauses (i) through (viii) of such sentence. In no event shall Agent or Agent’s Affiliates be liable to any US Borrower for any indirect, consequential, incidental, punitive, exemplary or special damages or expenses (including without limitation attorneys’ fees), or for any damages resulting from any change in the value of any property relating to a Letter of Credit.

Without limiting the generality of the foregoing, Agent and each of its Affiliates (i) may rely on any oral or other communication believed in good faith by Agent or such Affiliate to have been authorized or given by or on behalf of the applicant for a Letter of Credit; (ii) may honor any presentation if the documents presented appear on their face substantially to comply with the terms and conditions of the relevant Letter of Credit; (iii) may honor a previously dishonored presentation under a Letter of Credit, whether such dishonor was pursuant to a court order, to settle or compromise any claim of wrongful dishonor, or otherwise, and shall be entitled to reimbursement to the same extent as if such presentation had initially been honored, together with any interest paid by Agent or its Affiliates; (iv) may honor any drawing that is payable upon presentation of a statement advising negotiation or payment, upon receipt of such statement (even if such statement indicates that a draft or other document is being delivered separately), and shall not be liable for any failure of any such draft or other document to arrive, or to conform in any way with the relevant Letter of Credit; (v) may pay any paying or negotiating bank claiming that it rightfully honored under the laws or practices of the place where such bank is located; and (vi) may settle or adjust any claim or demand made on Agent or its Affiliate in any way related to any order issued at the applicant’s request to an air carrier, a letter of guarantee or of indemnity issued to a carrier or any similar document (each an “ Order ”) and honor any drawing in connection with any Letter of Credit that is the subject of such Order, notwithstanding that any drafts or other documents presented in connection with such Letter of Credit fail to conform in any way with such Letter of Credit.

 

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In furtherance and extension and not in limitation of the specific provisions set forth above, any action taken or omitted by Agent under or in connection with the Letters of Credit issued by it or any documents and certificates delivered thereunder, if taken or omitted in good faith, shall not put Agent under any resulting liability to any Loan Party or any Lender.

2.19. Additional Payments . Subject to the provisions of Section 2.2(a) hereof, any sums expended by Agent or any Lender due to any Loan Party’s failure to perform or comply with its obligations under this Agreement or any Other Document including, without limitation, any Loan Party’s obligations under Sections 4.2, 4.4, 4.12, 4.13, 4.14 and 6.1 hereof, may be charged to the relevant Borrowers’ Account as a Revolving Advance and added to the Obligations.

2.20. Manner of Borrowing and Payment .

(a) Each borrowing of Revolving Advances shall be advanced according to the applicable Commitment Percentages of Lenders. The Term Loans shall be deemed to have been advanced according to the Commitment Percentages of Lenders.

(b) Each payment (including each prepayment) by any Borrower on account of the principal of and interest on the Revolving Advances, shall be applied to the Revolving Advances of the relevant Borrowing Group pro rata according to the applicable Commitment Percentages of Lenders; provided , however , that any time any Swingline Advances are outstanding, such payments shall first be applied on account of the Swingline Advances. Each payment (including each prepayment) by Borrowers on account of the principal of and interest on the Term Notes, shall be made from or to, or applied to that portion of the Term Loans evidenced by the Term Note of the relevant Borrowing Group pro rata according to the Commitment Percentages of Lenders. Except as expressly provided herein, all payments (including prepayments) to be made by any Borrower on account of principal, interest and fees shall be made without set off or counterclaim and shall be made to Agent on behalf of the Lenders to the Payment Office, in each case on or prior to 1:00 P.M., New York time, in Dollars and in immediately available funds, provided that Swingline Advances shall be made as provided in Section 2.5 hereof.

(c) (i) Notwithstanding anything to the contrary contained in Sections 2.20(a) and (b) hereof, commencing with the first Business Day following the Closing Date, each borrowing of Revolving Advances shall be advanced by Agent and each payment by any Borrower on account of Revolving Advances shall be applied first to those Revolving Advances advanced by Agent. On or before 1:00 P.M., New York time, on each Settlement Date commencing with the first Settlement Date following the Closing Date, Agent and Lenders shall make certain payments as follows: (I) if the aggregate amount of new Revolving Advances made by Agent during the preceding Week (if any) exceeds the aggregate amount of repayments applied to outstanding Revolving Advances during such preceding Week, then each Lender shall provide Agent with funds in an amount equal to its applicable Commitment Percentage of the difference between (w) such Revolving Advances and (x) such repayments and (II) if the

 

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aggregate amount of repayments applied to outstanding Revolving Advances during such Week exceeds the aggregate amount of new Revolving Advances made during such Week, then Agent shall provide each Lender with funds in an amount equal to its applicable Commitment Percentage of the difference between (y) such repayments and (z) such Revolving Advances.

(ii) Each Lender shall be entitled to earn interest at the applicable Contract Rate on outstanding Advances which it has funded.

(iii) Promptly following each Settlement Date, Agent shall submit to each Lender a certificate with respect to payments received and Advances made during the Week immediately preceding such Settlement Date. Such certificate of Agent shall be conclusive in the absence of manifest error.

(d) If any Lender or Participant (a “ Benefited Lender ”) shall at any time receive any payment of all or part of its Advances, or interest thereon, or receive any Collateral in respect thereof (whether voluntarily or involuntarily or by set-off) in a greater proportion than any such payment to and Collateral received by any other Lender, if any, in respect of such other Lender’s Advances, or interest thereon, and such greater proportionate payment or receipt of Collateral is not expressly permitted hereunder, such Benefited Lender shall purchase for cash from the other Lenders a participation in such portion of each such other Lender’s Advances, or shall provide such other Lender with the benefits of any such Collateral, or the proceeds thereof, as shall be necessary to cause such Benefited Lender to share the excess payment or benefits of such Collateral or proceeds ratably with each of the other Lenders; provided , however , that if all or any portion of such excess payment or benefits is thereafter recovered from such Benefited Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest. Each Lender so purchasing a portion of another Lender’s Advances may exercise all rights of payment (including, without limitation, rights of set-off) with respect to such portion as fully as if such Lender were the direct holder of such portion.

(e) Unless Agent shall have been notified by telephone, confirmed in writing, by any Lender that such Lender will not make the amount which would constitute its applicable Commitment Percentage of the Advances available to Agent, Agent may (but shall not be obligated to) assume that such Lender shall make such amount available to Agent on the next Settlement Date and, in reliance upon such assumption, make available to Borrowers a corresponding amount. Agent will promptly notify Borrowing Agent of its receipt of any such notice from a Lender. If such amount is made available to Agent on a date after such next Settlement Date, such Lender shall pay to Agent on demand an amount equal to the product of (i) the daily average Federal Funds Open Rate (computed on the basis of a year of 360 days) during such period as quoted by Agent, times (ii) such amount, times (iii) the number of days from and including such Settlement Date to the date on which such amount becomes immediately available to Agent. A certificate of Agent submitted to any Lender with respect to any amounts owing under this paragraph (e) shall be conclusive, in the absence of manifest error. If such amount is not in fact made available to Agent by such Lender within three (3) Business Days after such Settlement Date, Agent shall be entitled to recover such an amount, with interest thereon at the rate per annum then applicable to such Revolving Advances hereunder, on demand from the applicable Borrowing Group; provided , however , that Agent’s right to such recovery shall not prejudice or otherwise adversely affect Borrowers’ rights (if any) against such Lender.

 

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2.21. Mandatory Prepayments .

(a) Subject to Section 4.3 hereof, when any Borrower sells or otherwise disposes of any Collateral, the respective Borrowing Group shall repay the Advances in an amount equal to the Net Proceeds of such sale, such repayments to be made promptly but in no event more than five (5) Business Days following receipt of such Net Proceeds, and until the date of payment, such proceeds shall be held in trust for Agent provided, however, that this Section 2.21(a) shall not apply to any disposition of Collateral consisting of Equipment which results in Net Proceeds of not more than $1,000,000 in the aggregate in any fiscal year. Notwithstanding the foregoing, unless and until an Event of Default has occurred and is continuing, Borrowers may sell or otherwise dispose of Collateral consisting of Equipment so long as (i) replacement Equipment is to be purchased having a fair market value equal to or greater than the fair market value of the Equipment which was sold, (ii) replacement Equipment is purchased by the applicable Borrower within one hundred and eighty (180) days of the Equipment sale, (iii) the replacement Equipment shall be subject to Agent’s security interest created hereunder and (iv) until such time as the proceeds of such disposal are used to acquire such replacement Equipment, such proceeds shall be applied as a repayment of Revolving Advances and an Eligible Reserve in the amount of such repayment shall be established. Such Eligible Reserve shall be released by Agent only in connection with the making of a Revolving Advance to be used by the Borrowers solely for the purposes of funding the acquisition of replacement Equipment pursuant to the terms of this Section 2.21(a); provided, however, that nothing contained herein shall waive or modify any conditions to the making of Revolving Advances or any other provisions of this Agreement. The foregoing shall not be deemed to be implied consent to any such sale otherwise prohibited by the terms and conditions hereof. Any repayments required pursuant to this Section 2.21(a), other than a repayment of Revolving Advances done in connection with the establishment of an Eligible Reserve, shall be held as cash collateral and then applied (a) in the case of any US Borrower, (x) first, to the outstanding principal installments of Term Loan US in the inverse order of the maturities thereof, and (y) second, to the remaining Advances in such order as Agent may determine, (b) in the case of any Foreign Borrower, (x) first, to the outstanding principal installments of Term Loan Foreign in the inverse order of the maturities thereof, and (y) second, to the remaining Advances extended to Foreign Borrowers in such order as Agent may determine, provided , however , that in no event shall there be any application of such cash collateral to any Eurodollar Rate Loans until the expiration of the applicable Interest Period for such Loan. To the extent there are no outstanding Advances, all cash collateral shall be released to the relevant Borrowers and, in the case of a sale or other disposition by a Foreign Borrower, all cash collateral shall be released to the relevant Foreign Borrower upon request therefor, unless an Event of Default relating to one or more Foreign Borrowers has occurred which is then continuing. Subject to the terms and provisions of this Agreement, Borrowers may reborrow Revolving Advances repaid hereunder in accordance with the terms hereof.

(b) In the event any Loan Party (other than SGS) receives the proceeds of any cash equity investment other than the Ares Transaction, the respective Borrowing Group shall repay the Revolving Advances in an amount equal to the Net Proceeds thereof, such repayments

 

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