Exhibit 10.3
AMENDMENT NO. 1
AND WAIVER TO
FIFTH AMENDED AND
RESTATED
REVOLVING CREDIT, TERM LOAN AND
SECURITY AGREEMENT
This Amendment No. 1 and Waiver
(“ Amendment No. 1 and Waiver ”) to the
Loan Agreement (as defined below) is entered into as of
March 2, 2009, 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 ”), STREAM NEW YORK INC. a Delaware corporation
and a wholly-owned Subsidiary of SHC (“ SNY ”)
and STREAM INTERNATIONAL EUROPE B.V., a company organized under the
laws of the Netherlands and a wholly-owned Subsidiary of Stream
(“ Stream BV ”), (SFI, Stream, SNY and Stream
BV, 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 ”), 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.) LIMITED, 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 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, a Delaware corporation and 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 to the Loan Agreement (collectively, the “
Lenders ” and individually a “ Lender
”), PNC BANK, NATIONAL ASSOCIATION (“ PNC
”), as agent for Lenders (PNC, in such capacity, “
Agent ”), PNC as “ Swingline Lender
” (as hereafter defined), STEEL CITY CAPITAL FUNDING, LLC
(“ SCCF ”), as agent for Term B Lenders (SCCF,
in such capacity, “ Term B Agent ”), PNC CAPITAL
MARKETS LLC., as sole lead arranger (in such capacity, “
Lead Arranger ”) and SIEMENS FINANCIAL SERVICES, INC.,
as documentation agent (in such capacity, “ Documentation
Agent ”).
BACKGROUND
Each of the Loan Parties, Agent,
Term B Agent and Lenders are parties to a Fifth Amended Restated
Revolving Credit, Term Loan and Security Agreement, dated as of
January 8, 2009 (as amended, restated or otherwise modified
from time to time, the “ Loan Agreement ”),
pursuant to which Agent, Term B Agent and Lenders provide Borrowers
with certain financial accommodations.
Agent has caused the issuance of
four (4) Letters of Credit for the benefit of US Borrowers in
the Maximum Face Amount of approximately $7,500,000 (subject to
currency fluctuations) in connection with the obligations of US
Borrowers under leases of Real Property (the “ Existing
Landlord L/Cs ”). In order to, inter alia , create
additional Undrawn Availability under the Loan Agreement, Loan
Parties have requested Ares Corporate Opportunities Fund II, L.P.,
a Delaware limited partnership (“ Ares II LP ”)
or one or more of its Affiliates (each such Affiliate being
referred to as an “ Ares Affiliate ”; and each
Ares Affiliate and Ares II LP being referred to collectively as the
“ Ares Guarantors ”) to cause the issuance of
letters of credit from one or more financial institutions or other
entities other than Lenders and their Affiliates, which will
replace the Existing Landlord L/Cs (“ Replacement L/Cs
”). In order to induce the Ares Guarantors to cause the
issuance of the Replacement L/Cs, SGS, SHC, SFI, Stream and SNY
(the “ Initial Ares-Obligated Loan Parties ”
and, together with any other Person that becomes a party thereto
pursuant to Section 9(b) of the Reimbursement Agreement, the
“ Ares-Obligated Loan Parties ”) have agreed to
enter into a Guarantee and Reimbursement Agreement in the form
annexed hereto as Exhibit A (the “ Reimbursement
Agreement ”) which includes grant of a Lien on the
Collateral of the Ares-Obligated Loan Parties in favor of Ares II
LP and certain of its Affiliates.
Section 7.10 of the Loan
Agreement restricts the ability of Loan Parties to enter into
transactions with Affiliates. Loan Parties have requested Agent,
Term Loan B Agent and Lenders to waive any failure to comply with
Section 7.10 of the Loan Agreement arising out of the entering
into and performance under the Reimbursement Agreement. Loan
Parties have also requested Agent, Term B Agent and Lenders to
amend (i) the definition of “Permitted
Encumbrances” appearing in the Loan Agreement,
(ii) Section 7.3 of the Loan Agreement and
(iii) Section 7.8 of the Loan Agreement, all so as to
permit the Ares-Obligated Loan Parties to enter into the
Reimbursement Agreement. Agent, Term B Agent, Revolving Lenders and
Term B Lenders are willing to grants such waiver (together with the
other waivers provided herein), and amend the Loan Agreement, all
on the terms and conditions set forth herein.
NOW, THEREFORE, based upon the
premises set forth above and in consideration of any loan or
advance or grant of credit heretofore or hereafter made to or for
the account of Loan Parties by Agent, Term B Agent and Lenders, and
for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Definitions . All
capitalized terms not otherwise defined herein shall have the
meanings given to them in the Loan Agreement.
2. Amendments to Loan
Agreement . Subject to satisfaction of the conditions precedent
set forth in Section 5 below, the Loan Agreement is hereby
amended as follows:
(a) The following defined terms are
inserted into Section 1.2 of the Loan Agreement, in the
appropriate alphabetical order:
“ Amendment No. 1 and
Waiver ” shall mean that certain Amendment No. 1 and
Waiver dated as of March 2, 2009, to the Fifth Amended
Restated Revolving Credit, Term Loan and Security Agreement, dated
as of January 8, 2009, by and among Loan Parties, Agent, Term
B Agent and Lenders.
2
“ Amendment No. 1
Effective Date ” shall mean the date upon which the
conditions precedent to the effectiveness of Amendment No. 1
and Waiver have been satisfied, as determined by Agent and Term B
Agent.
“ Ares II LP ”
shall mean Ares Corporate Opportunities Fund II, L.P., a Delaware
limited partnership.
“ Ares Guarantors
” shall mean Ares II LP and one or more of its
Affiliates.
“ Ares-Obligated Loan
Parties ” shall mean SGS, SHC, SFI, Stream and SNY and
any other Person that becomes a party thereto pursuant to
Section 9(b) of the Reimbursement Agreement.
“ Ares Subordination
Agreement ” shall mean that certain Subordination and
Intercreditor Agreement dated on or about the Amendment No. 1
Effective Date by and among the Loan Parties, Agent, Term B Agent
and Ares II LP, on behalf of the Ares Guarantors.
“ Reimbursement
Agreement ” shall mean the Guarantee and Reimbursement
dated as of March 2, 2009 between the Ares-Obligated Loan
Parties and Ares II LP.
“ Replacement L/Cs
” shall mean the letters of credit issued promptly following
the Amendment No. 1 Effective Date by financial institutions
or other entities acceptable to Agent and Term B Agent in favor of
certain landlords of Real Property leased by US Borrowers, in
exchange for Letters of Credit previously provided by Agent to such
landlords, the obligations under or in respect of which letters of
credit to be issued in replacement of Letters of Credit shall be
subject to reimbursement under the Reimbursement Agreement but
subject further to the provisions of the Ares Subordination
Agreement.
(b) The definition of
“Permitted Encumbrances” appearing in Section 1.2
of the Loan Agreement is hereby ame
