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| OOO > SEC Filings for OOO > Form 8-K on 20-Aug-2009 | All Recent SEC Filings |
20-Aug-2009
Entry into a Material Definitive Agreement, Termination of a Materia
General
On August 14, 2009, Stream Global Services, Inc. ("Stream") entered into a Share Exchange Agreement (the "Exchange Agreement") with EGS Corp., a Philippine corporation ("EGS"), EGS Dutchco B.V., a corporation organized under the laws of the Netherlands ("EGS Dutchco") and NewBridge International Investment Ltd., a British Virgin Islands company ("NewBridge" and, together with EGS Dutchco, the "EGS Stockholders"). At the closing of the transactions contemplated by the Exchange Agreement (the "Closing"), the EGS Stockholders will transfer to Stream and Stream will acquire all of the capital stock of EGS then issued and outstanding owned by the EGS Stockholders (the "EGS Shares"), and NewBridge and/or its affiliate will contribute to Stream, and Stream will accept from NewBridge and/or its affiliate, the rights of such transferor with respect to $35,840,988 in principal under the Tranche B Convertible Bridge Loan of EGS (the "Bridge Loan"). Such acquisition of the EGS Shares and acceptance of the contribution of the Bridge Loan will be accomplished by means of a share exchange (the "Exchange"), pursuant to which, at the Closing, in consideration for the transfer and acquisition of the EGS Shares and contribution of the Bridge Loan to Stream, Stream will issue and deliver to the EGS Stockholders an aggregate of 33,653,446 shares of common stock of Stream ("Stream Common Stock") (or, if elected by Stream or EGS, up to 9,800,000 shares of non-voting common stock of Stream ("Stream Non-Voting Common Stock") or, if elected by Stream, cash of up to $9,990 in substitution for a portion of such shares of Stream Common Stock).
The Exchange Agreement
The following is a summary of the material terms of the Exchange Agreement and the transactions contemplated thereby, a copy of which is attached as Exhibit 2.1 to this Current Report on Form 8-K and incorporated herein by reference. This summary does not purport to be complete and is qualified in its entirety by reference to the Exchange Agreement.
Representations and Warranties
The Exchange Agreement contains customary representations and warranties by each
of Stream, EGS and the EGS Stockholders. The representations and warranties of
Stream and EGS relate to, among other things: (a) proper organization and
similar corporate matters; (b) the capital structure of each constituent
company; (c) the authorization, performance and enforceability of the Exchange
Agreement; (d) governmental filings and no violations; (e) financial
information; (f) disclosure documents; (g) absence of undisclosed liabilities;
(h) absence of certain changes; (i) litigation; (j) employee benefits;
(k) compliance with laws; (l) environmental matters; (m) tax matters; (n) labor
matters; (o) intellectual property; (p) title to properties; (q) contracts;
(r) insurance; (s) no vote required; (t) brokers and finders; and (u) customers.
The representations and warranties of the EGS Stockholders relate to, among
other things: (a) title to shares; (b) authority; (c) no violations; (d) brokers
and finders; and (e) securities laws matters.
Covenants
The Exchange Agreement contains customary covenants, including Stream and EGS agreeing to continue to operate their respective businesses in the ordinary and usual course prior to the Closing. Stream and EGS have also agreed not to take certain specified actions before the Closing without the prior written consent of the other party.
General Conditions
Consummation of the transactions contemplated by the Exchange Agreement is conditioned upon closing conditions that include:
• approval by the requisite vote of holders of Stream's capital stock (which such approval has occurred);
• expiration of the applicable waiting period under the Hart-Scott-Rodino Act;
• no issuance of any order, executive order, stay, decree, judgment or injunction by any governmental authority, nor any statute, rule, regulation or law being enacted, which has the effect of making the Exchange illegal or otherwise prohibiting consummation of the Exchange or the other transactions contemplated by the Exchange Agreement;
• approval for listing on the NYSE Amex of the shares of Stream Common Stock to be issued in the Exchange;
. . .
The termination, as of the Closing, of the Ares Stockholders Agreement pursuant to the Letter Agreement described under Item 1.01 above is incorporated herein by reference.
In connection with the reconstitution of the Stream board of directors in accordance with the Stockholders Agreement, each of G. Drew Conway and Stephen D.R. Moore intend to resign as a member of the board of directors, and any committee thereof, of Stream, effective upon the Closing.
Certificate of Amendment of Certificate of Incorporation
On August 14, 2009, Stream's board of directors and stockholders approved a
certificate of amendment to be filed with the Secretary of State of the State of
Delaware upon the Closing (the "Certificate of Amendment"). The Certificate of
Amendment will amend Stream's certificate of incorporation, as amended, to among
other things: (a) increase the total number of authorized shares of Stream's
capital stock to 212,000,000, consisting of 200,000,000 shares of Stream Common
Stock, 11,000,000 shares of Stream Non-Voting Common Stock and 1,000,000 shares
of preferred stock; (b) authorize 11,000,000 for Stream Non-Voting Common Stock,
which shall be equivalent to Stream Common Stock except that Stream Non-Voting
Common Stock shall have no voting rights other than as required by law and shall
be convertible into Stream Common Stock after the earliest of (i) the first
anniversary of the Closing, (ii) termination of Stream's existing credit
agreement as of August 14, 2009 or (iii) the consummation of a Change of
Control; (c) define a quorum of Stream's board of directors and any committee of
the board of directors in accordance with the By-laws summarized below;
(d) amend the definition of "Acceleration Event" in the Certificate of
Designations of the Series A Convertible Preferred Stock, filed with the
Secretary of State of the State of Delaware on August 7, 2008 to treat Stream's
A copy of the Certificate of Amendment is attached as Exhibit 3.1 to this Current Report on Form 8-K and incorporated herein by reference. This summary is qualified in its entirety by reference to the Certificate of Amendment.
Amended and Restated By-Laws
On August 14, 2009, Stream approved an amendment and restatement to its Second
Amended and Restated By-laws (the "By-laws") that shall be effective upon the
Closing. Effective upon the Closing, the By-laws are amended to, among other
things: (a) remove the section defining the record date for determination of the
stockholders entitled to notice of or to vote at any meeting of stockholders;
(b) include references to the Stockholders Agreement; (c) limit the scope of the
inspector of election's duties to ascertaining the number of shares of capital
stock and the voting power of each share, determining the shares represented at
the stockholders meeting and the validity of proxies and ballots, counting all
votes, determining and retaining for a reasonable period a record of any
challenges made to any determination by the inspectors, and certifying the
inspectors' determination of the number of shares represented at the meeting and
the count of all votes and ballots; (d) change the definition of a quorum of the
board of directors to require that at least one director nominated by each
Significant Investor shall be required to constitute a quorum; (e) increase the
notice time for special meetings of the board of directors to 48 hours advance
notice in person, or four days advance notice by first-class mail; and
(f) define a quorum for a committee of the board of directors as a majority of
the members of any committee, provided that as long as a director nominated by
each Significant Investor serves on the committee, the presence of such director
shall be required to constitute a quorum.
A copy of the By-laws is attached as Exhibit 3.2 to this Current Report on Form 8-K and incorporated herein by reference. This summary is qualified in its entirety by reference to the By-laws.
On August 14, 2009, Stream issued a press release announcing the Exchange, a copy of which is attached as Exhibit 99.1 to Stream's Form 8-K filed with the Securities and Exchange Commission on August 14, 2009 and incorporated herein by reference.
See Exhibit Index attached hereto.
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