Exhibit 10.2

SUBORDINATION AND INTERCREDITOR AGREEMENT

This Subordination and Intercreditor Agreement (this “Agreement”) dated as of
March 2, 2009 among PNC BANK, NATIONAL ASSOCIATION (“PNC”), as agent for
Revolving Lenders (as defined below) (PNC, in such capacity, “Agent”), STEEL
CITY CAPITAL FUNDING, LLC, as agent for Term B Lenders (as defined below) (in
such capacity, “Term B Agent”), ARES CORPORATE OPPORTUNITIES FUND II, L.P., a
Delaware limited partnership (“Ares II LP” or “Subordinated Lender”), and each
of 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”), 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”) 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, SFI, Stream,
SNY, Stream BV, Stream Canada, Stream Service BV, Stream UK, Stream Germany and
SGS, each a “Loan Party” and collectively the “Loan Parties”).

BACKGROUND

As an inducement for Agent, Term B Agent and Lenders to enter into a certain
Amendment No. 1 and Waiver to Fifth Amended and Restated Revolving Credit, Term
Loan and Security Agreement dated as of the date hereof (“Amendment No. 1 and
Waiver”) and to continue to provide a credit facility in favor of Loan Parties,
Subordinated Lender has agreed to enter into this Agreement to provide for the
subordination of (i) the “Subordinated Indebtedness” to the “Senior
Indebtedness” (as each term is defined below) and (ii) the “Liens” in the assets
of any Loan Party granted to Subordinated Lender to the “Liens” in such assets
of Loan Parties granted to Agent for its benefit and for the ratable benefit of
Lenders.

AGREEMENTS

NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto agree as follows:

1. Definitions.

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

“Agent” shall have the meaning set forth in the introductory paragraph of this
Agreement and shall include its successors and assigns.

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“Amendment No. 1 and Waiver” shall have the meaning set forth in the Background
paragraph of this Agreement.

“Collateral” shall mean all of the property and interests in property, tangible
or intangible, real or personal, now owned or hereafter acquired by any Loan
Party in or upon which Agent for its benefit and for the ratable benefit of
Lenders at any time has or has been granted a Lien under and pursuant to the
terms of the Loan Agreement and the other Documents, and including, without
limitation, all proceeds and products of such property and interests in
property.

“Creditor Agreements” shall mean, collectively, the Senior Lending Agreements
and the Subordinated Agreements.

“Creditors” shall mean, collectively, Agent (for its benefit and for the ratable
benefit of Lenders) and Subordinated Lender and their respective successors and
assigns.

“Default” shall have the meaning set forth in the Loan Agreement.

“Distribution” shall mean any payment, whether in cash, in kind, securities or
any other property, or security for any such Distribution other than the grant
of security pursuant to Section 3(a) of the Reimbursement Agreement, the payment
of the LC Fee (as defined in the Reimbursement Agreement) pursuant to
Section 2(a) of the Reimbursement Agreement and the payment of expenses under
Section 9(h) of the Reimbursement Agreement.

“Documents” shall have the meaning given to the term “Other Documents” in the
Loan Agreement.

“Event” shall have the meaning set forth in Section 2.2(c) hereof.

“Holder of Subordinated Indebtedness” or “Subordinated Lender” shall mean Ares
II LP, and any other Person(s) at any time or in any manner acquiring any right
or interest in any of the Subordinated Indebtedness, and any heirs,
administrators, executors, successor and assigns of such Person.

“Lenders” shall mean, jointly and severally, the Revolving Lenders and the Term
B Lenders.

“Loan Agreement” shall mean the Fifth Amended and Restated Revolving Credit,
Term Loan and Security Agreement dated as of January 8, 2009 among Agent, Term B
Agent, Revolving Lenders, Term B Lenders, PNC as Swingline Lender (as therein
defined), PNC Capital Markets LLC., as sole lead arranger and Siemens Financial
Services, Inc., as documentation agent, as amended as of the date hereof by
Amendment No. 1 and Waiver, and as the same may hereafter be further amended,
supplemented, modified or restated from time to time.

 

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“Loan Party” and “Loan Parties” shall have the meaning set forth in the
introductory paragraph of this Agreement and shall include their respective
successors and assigns.

“Person” shall mean an individual, a partnership, a corporation (including a
business trust), a joint stock company, a trust, an unincorporated association,
a joint venture, a limited liability company, a limited liability partnership or
other entity, or a government or any agency, instrumentality or political
subdivision thereof.

“Reimbursement Agreement” shall mean the Guarantee and Reimbursement Agreement
dated as of March 2, 2009 by and among Subordinated Lender and each of SHC, SFI,
Stream, SNY and SGS, as the same may hereafter be amended, supplemented,
modified or restated from time to time.

“Revolving Lenders” shall mean each of the financial institutions named as a
Revolving Lender in or which hereafter become a Revolving Lender party to the
Loan Agreement.

“Secured Lender Remedies” shall mean any action which results in the sale,
foreclosure, realization upon, or a liquidation of any of the Collateral
including, without limitation, the exercise of any of the rights or remedies of
a “secured party” under Article 9 of the Uniform Commercial Code, such as,
without limitation, the notification of account debtors; provided that “Secured
Lender Remedies” shall not include the delivery of reservation of rights letters
and the like, the imposition of default interest in accordance with the
Subordinated Agreements and the taking of steps to preserve and protect the
security interests in the Collateral granted in favor, or for the benefit, of
the Subordinated Lender (or any agent, representative or trustee on behalf
thereof).

“Senior Indebtedness” shall mean all obligations of any kind owed by Loan
Parties to Agent, Term B Agent and/or Lenders from time to time under or
pursuant to any of the Senior Lending Agreements including, without limitation,
all principal, interest accruing thereon, charges, expenses, fees and other sums
(including all interest, charges, expenses, fees and other sums accruing after
commencement of any case, proceeding or other action relating to the bankruptcy,
insolvency or reorganization of any Loan Party) chargeable to any Loan Party by
Lenders, Agent and/or Term B Agent, and reimbursement, indemnity or other
obligations due and payable to Lenders, Agent and/or Term B Agent. Senior
Indebtedness shall continue to constitute Senior Indebtedness, notwithstanding
the fact that such Senior Indebtedness or any claim for such Senior Indebtedness
is subordinated, avoided or disallowed under the federal Bankruptcy Code or
other applicable law. Senior Indebtedness shall also include any indebtedness of
Loan Parties incurred in connection with a refinancing of all or a portion of
the Senior Indebtedness under the Senior Lending Agreements.

“Senior Lending Agreements” shall mean the Loan Agreement and the other
Documents.

“Subordinated Indebtedness” shall mean all Reimbursement Obligations (as defined
in the Reimbursement Agreement) and all other principal, interest and other
amounts

 

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payable or chargeable in connection with the standby letters of credit,
guarantees and/or other forms of credit support provided under the Subordinated
Agreements. Subordinated Indebtedness shall continue to constitute Subordinated
Indebtedness, notwithstanding the fact that such Subordinated Indebtedness or
any claim for such Subordinated Indebtedness is subordinated, avoided or
disallowed under the federal Bankruptcy Code or other applicable law.
Subordinated Indebtedness shall also include any indebtedness of the
Subordinated Lender incurred in connection with a refinancing of all or a
portion of the Subordinated Indebtedness under the Subordinated Agreements.

“Subordinated Agreements” shall mean, collectively, the Reimbursement Agreement
and all promissory notes, agreements, documents and instruments now or at any
time hereafter executed and/or delivered by any Loan Party or any other Person
to, with or in favor of Subordinated Lender in connection therewith or related
thereto, as all of the foregoing now exist or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced.

“Term B Agent” shall have the meaning set forth in the introductory paragraph of
this Agreement and shall include its successors and assigns.

“Term B Lenders” shall mean each of the financial institutions named as a Term B
Lender in or which hereafter become a Term B Lender party to the Loan Agreement.

1.2. Other Terms. Capitalized terms not otherwise defined herein shall have the
meanings given to them in the Loan Agreement.

1.3. 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. 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. Except as expressly set forth
herein, all references to any instruments or agreements, including, without
limitation, references to any Creditor Agreements shall include any and all
modifications or amendments thereto and any and all extensions or renewals
thereof.

2. Covenants. Each Loan Party and each Holder of Subordinated Indebtedness
hereby covenants that until the Senior Indebtedness (other than contingent
reimbursement and indemnification obligations in respect of which no claim for
payment has been asserted) shall have been paid in full and satisfied in cash
and the commitments to advance funds under the Loan Agreement shall have been
terminated, all in accordance with the terms thereof, each will comply with such
of the following provisions as are applicable to it:

2.1. Transfers. Each Holder of Subordinated Indebtedness covenants that any
transferee from it (other than another existing Holder of Subordinated
Indebtedness) of any Subordinated Indebtedness shall, prior to acquiring such
interest, execute and deliver a counterpart of this Agreement to each other
party hereto.

2.2. Subordination Provisions. To induce Agent, Term B Agent and Lenders to
enter into Amendment No. 1 and Waiver, and to continue to make loans and
advances under

 

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the Loan Agreement, notwithstanding any other provision of the Subordinated
Indebtedness to the contrary, any Distribution with respect to the Subordinated
Indebtedness is and shall be expressly junior and subordinated in right of
payment to all amounts due and owing upon all Senior Indebtedness outstanding
from time to time in the manner and to the extent provided in this Agreement.

(a) Payments. No Loan Party shall make any Distribution on the Subordinated
Indebtedness until such time as the Senior Indebtedness (other than contingent
reimbursement and indemnification obligations in respect of which no claim for
payment has been asserted) shall have been paid in full in cash and the
commitments to advance funds under the Loan Agreement shall have been
terminated.

(b) Limitation on Acceleration. Until payment in full in cash of all Senior
Indebtedness (other than contingent reimbursement and indemnification
obligations in respect of which no claim for payment has been asserted) and the
termination of the commitments to advance funds under the Loan Agreement, no
Holder of Subordinated Indebtedness shall exercise any Secured Lender Remedies
or commence any other action or proceeding to recover any amounts due or to
become due with respect to Subordinated Indebtedness. Notwithstanding the
foregoing, any amounts received by any Holder of Subordinated Indebtedness upon
and after the occurrence of an Event shall be subject to the provisions of
Section 2.2(c) hereof.

(c) Prior Payment of Senior Indebtedness in Bankruptcy, etc. In the event of any
insolvency or bankruptcy proceedings relative to any Loan Party or its property,
or any receivership, liquidation, reorganization or other similar proceedings in
connection therewith, or, in the event of any proceedings for voluntary
liquidation, dissolution or other winding up of any Loan Party or distribution
or marshalling of its assets or any composition with creditors of any Loan
Party, whether or not involving insolvency or bankruptcy, or if any Loan Party
shall cease its operations, call a meeting of its creditors or no longer do
business as a going concern (each individually or collectively, an “Event”),
then all Senior Indebtedness (other than contingent reimbursement and
indemnification obligations in respect of which no claim for payment has been
asserted) shall be paid in full and satisfied in cash and the commitments to
advance funds under the Loan Agreement terminated before any Distribution shall
be made on account of any Subordinated Indebtedness. Any such Distribution which
would, but for the provisions hereof, be payable or deliverable in respect of
the Subordinated Indebtedness, shall be paid or delivered directly to Agent for
application to the Senior Indebtedness, until amounts owing upon Senior
Indebtedness (other than contingent reimbursement and indemnification
obligations in respect of which no claim for payment has been asserted) shall
have been paid in full in cash and the commitments to advance funds under the
Loan Agreement shall have been terminated.

(d) [Reserved]

(e) Power of Attorney. To enable Agent to assert and enforce its rights
hereunder in any proceeding referred to in Section 2.2(c) or upon the happening
of any Event, Agent or any person whom it may designate is hereby irrevocably
appointed attorney in fact for Subordinated Lender with full power to act in the
place and stead of Subordinated

 

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Lender (i) to make, present and file such claims, and/or proofs of claim,
against any Loan Party on account of all or any part of the Subordinated
Indebtedness as Agent may deem advisable upon the failure of Subordinated Lender
to do so fifteen (15) days prior to the expiration of the time to file any such
claim and/or proof of claim and (ii) to receive and collect any and all
dividends or other payments made thereon and to apply the same on account of the
Senior Indebtedness. Subordinated Lender will execute and deliver to Agent such
instruments as may be required by Agent to enforce any and all Subordinated
Indebtedness, to effectuate the aforesaid power of attorney and to effect
collection of any and all dividends or other payments which may be made at any
time on account thereof. Subordinated Lender hereby irrevocably appoints Agent
as the lawful attorney and agent of Subordinated Lender to execute financing
statements on behalf of Subordinated Lender, and Subordinated Lender hereby
further authorizes Agent, to file such financing statements in any appropriate
public office.

(f) Payments Held in Trust. Should any Distribution or the proceeds thereof, in
respect of the Subordinated Indebtedness, be collected or received by
Subordinated Lender or any Affiliate (as such term is defined in Rule 405 of
Regulation C adopted by the Securities and Exchange Commission pursuant to the
Securities Act of 1933) of Subordinated Lender at a time when Subordinated
Lender is not permitted under this Agreement to receive any such Distribution or
proceeds thereof including if same is collected or received when there is or
would be after giving effect to such payment a Default or an Event of Default
under any Senior Lending Agreement, then Subordinated Lender will forthwith
deliver, or cause to be delivered, the same to Agent, in precisely the form held
by Subordinated Lender (except for any necessary endorsement), and until so
delivered, the same shall be held in trust by Subordinated Lender, or any such
Affiliate, as the property of Agent.

(g) Subrogation. Subject to the prior payment in full in cash of the Senior
Indebtedness (other than contingent reimbursement and indemnification
obligations in respect of which no claim for payment has been asserted) and the
termination of the commitments to advance funds under the Loan Agreement, to the
extent that Agent has received any Distribution on the Senior Indebtedness
which, but for this Agreement, would have been applied to the Subordinated
Indebtedness, Subordinated Lender shall be subrogated to the then or thereafter
rights of Agent including, without limitation, the right to receive any
Distribution made on the Senior Indebtedness until the Subordinated Indebtedness
shall be paid in full; and, for the purposes of such subrogation, no
Distribution to Agent to which Subordinated Lender would be entitled except for
the provisions of this Agreement shall, as between each Loan Party, its
creditors (other than Agent, Term B Agent and Lenders) and Subordinated Lender,
be deemed to be a Distribution by Loan Parties to or on account of Senior
Indebtedness, it being understood that the provisions hereof are and are
intended solely for the purpose of defining the relative rights of Subordinated
Lender on the one hand, and Agent on the other hand.

(h) Scope of Subordination. The provisions of this Agreement are solely to
define the relative rights of any Holder of Subordinated Indebtedness and Agent.
Nothing in this Agreement shall impair, as between each Loan Party and
Subordinated Lender the unconditional and absolute obligation of such Loan Party
to punctually pay the principal, interest and any other amounts and obligations
owing under Subordinated Agreements in accordance with the terms thereof,
subject to the rights of Agent under this Agreement.

 

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3. Security.

3.1. Acknowledgment of Lien. Each Creditor hereby agrees and acknowledges that
the other Creditors have been granted a Lien upon the Collateral.

3.2. Priority. Notwithstanding the order or time of attachment, or the order,
time or manner of perfection, or the order or time of filing or recordation of
any document or instrument, or other method of perfecting a Lien in favor of
each Creditor in any Collateral and notwithstanding any conflicting terms or
conditions which may be contained in any of the Creditor Agreements, the Liens
upon the Collateral of Agent have and shall have priority over the Liens upon
the Collateral of Subordinated Lender and such Liens of Subordinated Lender are
and shall be, in all respects, subject and subordinate to the Liens of Agent
therein to the full extent of the Senior Indebtedness outstanding from time to
time. Subordinated Lender shall not take any action to foreclose or realize upon
the Collateral until such time as the Senior Indebtedness (other than contingent
reimbursement and indemnification obligations in respect of which no claim for
payment has been asserted) shall have been paid in full in cash and the
commitments to advance funds under the Loan Agreement shall have been
terminated, other than any actions expressly permitted by the proviso to the
definition of “Secured Lender Remedies”.

3.3. No Alteration of Priority. The Lien priorities provided in Section 3.2
hereof shall not be altered or otherwise affected by any amendment,
modification, supplement, extension, renewal, restatement or refinancing of any
Senior Indebtedness or the Subordinated Indebtedness.

3.4. Perfection. Each of Agent and Subordinated Lender shall be solely
responsible for perfecting and maintaining the perfection of its Lien in and to
each item constituting the Collateral in which Agent and Subordinated Lender
have been granted a Lien. The foregoing provisions of this Agreement are
intended solely to govern the respective lien priorities as between Subordinated
Lender on the one hand, and Agent on the other hand, and shall not impose on
Agent any obligations in respect of the disposition of proceeds of foreclosure
on any Collateral which would conflict with prior perfected claims therein in
favor of any other Person. Agent agrees that it will not contest the validity,
perfection, priority or enforceability of the Liens of Subordinated Lender in
the Collateral. Subordinated Lender agrees that it will not contest the
validity, perfection, priority or enforceability of the Liens of Agent in the
Collateral, and that as between Agent and Subordinated Lender, the terms of this
Agreement shall govern even if part or all of the Senior Indebtedness or the
Liens of Agent securing payment and performance thereof are avoided, disallowed,
set aside or otherwise invalidated in any judicial proceeding or otherwise.

3.5. Management of Collateral. Agent shall have the exclusive right to manage,
perform and enforce the terms of the Senior Lending Agreements to which it is a
party with respect to the Collateral and to exercise and enforce all privileges
and rights thereunder according to its discretion and its business judgment, in
each case exercised in good faith, and in compliance with the terms of this
Agreement and applicable law, including, without limitation, the exclusive right
to enforce or settle insurance claims, take or retake control or possession of
the Collateral and to hold, prepare for sale, process, sell, lease, dispose of,
or liquidate the Collateral. In connection therewith, Subordinated Lender waives
any and all rights to affect the method or challenge the appropriateness of any
action by Agent of the type or nature referred to in, and taken in accordance
with, the immediately preceding sentence.

 

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3.6. Sale of Collateral. Notwithstanding anything to the contrary contained in
any of the Creditor Agreements, only Agent shall have the right to restrict or
permit, or approve or disapprove, the sale, transfer or other disposition of
Collateral. Subordinated Lender will, immediately upon the request of Agent,
release or otherwise terminate its Liens upon the Collateral (but not the
proceeds thereof), to the extent (i) such Collateral is sold or otherwise
disposed of either by Agent, or any Loan Party with the consent of Agent, in
accordance with the terms of the Loan Agreement, and (ii) Agent concurrently
releases its Liens upon such Collateral (but not the proceeds thereof), and
Subordinated Lender, at Agent’s expense (as to which Agent shall be entitled to
reimbursement by the Loan Parties), will immediately deliver such release
documents as Agent may reasonably require in connection therewith.

3.7. Secured Lender Remedies. In no event shall Subordinated Lender exercise any
Secured Lender Remedies until such time as the Senior Indebtedness (other than
contingent reimbursement and indemnification obligations in respect of which no
claim for payment has been asserted) shall have been paid in full in cash and
the commitments to advance funds under the Senior Lending Agreements shall have
been terminated; nor shall Subordinated Lender join in, solicit any other person
to, or act to cause the commencement of, any case involving any Loan Party under
any state or federal bankruptcy or insolvency laws or seek the appointment of a
receiver for the affairs or property of any Loan Party until such time as the
Senior Indebtedness (other than contingent reimbursement and indemnification
obligations in respect of which no claim for payment has been asserted) shall
have been paid in full in cash and the commitments to advance funds under the
Senior Lending Agreements shall have been terminated. In the event Subordinated
Lender shall receive any payment or distribution of any kind representing
proceeds of any Collateral as to which its Lien in the Collateral is or is
required under this Agreement to be subordinated to the Lien of Agent before the
Senior Indebtedness (other than contingent reimbursement and indemnification
obligations in respect of which no claim for payment has been asserted) shall
have been paid in full in cash and the commitments to advance funds under the
Senior Lending Agreements shall have been terminated, such sums shall be held in
trust by Subordinated Lender for the benefit and on account of Agent and such
amounts shall be paid to Agent. Notwithstanding anything herein to the contrary,
nothing herein shall limit any rights of or actions by Ares II LP in its
capacity as a shareholder of SGS, including rights of or actions by its
designees serving on the Board of Directors of SGS or any of its Subsidiaries.

3.8. Section 9-611 Notice and Waiver of Marshaling. Subordinated Lender and
Agent acknowledge that this Agreement shall constitute notice of the respective
interests of Agent, Term B Agent and Lenders in the Collateral as provided by
Section 9-611 of the New York Uniform Commercial Code and each hereby waives any
right to compel any marshaling of any of the Collateral.

3.9. Bailee for Perfection.

(a) Agent hereby agrees to hold that part of the Collateral that is in its
possession (or in the possession of any of its agents or bailees) to the extent
that possession

 

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thereof is taken to perfect a security interest therein under the Uniform
Commercial Code (such Collateral, “Pledged Collateral”), as collateral agent for
the Lenders and as bailee (and as agent and/or sub-agent as applicable for
perfection) for the Subordinated Lender (such bailment or control being
intended, among other things, to satisfy the requirements of Sections 8-106,
8-301(a)(2), 9-104, 9-106, and 9-313(c) of the Uniform Commercial Code) and any
assignee solely for the purpose of perfecting the security interests granted
under the respective Creditor Agreements subject to the terms and conditions of
this Section 3.9.

(b) Agent shall have no obligation whatsoever to the Lenders or the Subordinated
Lender to ensure that the Pledged Collateral is genuine or owned by any of the
Loan Parties or to preserve rights or benefits of any Person except as expressly
set forth in this Section 3.9. The duties or responsibilities of Agent to the
Subordinated Lender under this Section 3.9 shall be limited solely to holding
the Pledged Collateral as bailee (and as agent and/or sub-agent, as applicable,
for perfection) in accordance with this Section 3.9 and delivering or assigning
the Pledged Collateral to it upon payment in full in cash of all Senior
Indebtedness (other than contingent reimbursement and indemnification
obligations in respect of which no claim for payment has been asserted) and the
termination of the commitments to advance funds under the Loan Agreement.

(c) Agent acting pursuant to this Section 3.9 shall not have by reason of the
Senior Lending Agreements, the Subordinated Agreements, this Agreement or any
other document a fiduciary relationship in respect of the Lenders or the
Subordinated Lender. Except as provided in Section 3.9(d), this Section 3.9
shall not impose upon Agent or any Lender any duty or obligation to take any
action or forbear from taking any action that it could otherwise have taken or
not taken.

(d) Upon payment in full in cash of all Senior Indebtedness (other than
contingent reimbursement and indemnification obligations in respect of which no
claim for payment has been asserted) and the termination of the commitments to
advance funds under the Loan Agreement, Agent shall deliver or assign the
remaining Pledged Collateral (if any) together with any necessary endorsements
to the Subordinated Lender if Subordinated Indebtedness remains outstanding (so
as to allow the Subordinated Lender to obtain possession or control of such
Pledged Collateral). Agent shall take all other actions reasonably requested by
the Subordinated Lender in connection with the Subordinated Lender obtaining a
first-priority security interest (subject only to security interests permitted
under the Subordinated Agreements) in the Collateral or as a court of competent
jurisdiction may otherwise direct, all at the expense of Subordinated Lender.

4. Miscellaneous.

4.1. Provisions of Reimbursement Agreement. From and after the date hereof, Loan
Parties and Subordinated Lender shall cause the Reimbursement Agreement to
contain a provision to the following effect:

“This Guarantee and Reimbursement Agreement is subject to the Subordination and
Intercreditor Agreement, dated as of March 2, 2009, among the Loan Parties, the
Agent, Term B Agent and Ares under which

 

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this Guarantee and Reimbursement Agreement and the Stream Entities’ obligations
hereunder are subordinated in the manner set forth therein to the prior payment
in full of certain obligations to the holders of Senior Indebtedness as defined
therein.”

Proof of compliance with the foregoing shall be promptly given to Agent.

If requested by Agent after the occurrence of an Event, each Holder of
Subordinated Indebtedness shall transfer, assign and endorse over to Agent the
Subordinated Agreements, as collateral for the obligations hereunder of any
Holders of Subordinated Indebtedness.

4.2. Additional Agreements. In the event that the Senior Indebtedness is
refinanced in full, Subordinated Lender agrees at the request of such
refinancing party to enter into a subordination and intercreditor agreement on
terms substantially similar to this Agreement.

4.3. Survival of Rights. The right of Agent to enforce the provisions of this
Agreement shall not be prejudiced or impaired by any act or omitted act of any
Loan Party or Agent including forbearance, waiver, consent, compromise,
amendment, extension, renewal, or taking or release of security in respect of
any Senior Indebtedness or noncompliance by any Loan Party with such provisions,
regardless of the actual or imputed knowledge of Agent.

4.4. Bankruptcy Financing Issues.

(a) This Agreement shall continue in full force and effect after the filing of
any petition (“Petition”) by or against any Loan Party under the United States
Bankruptcy Code (the “Code”) and all converted or succeeding cases in respect
thereof. All references herein to any Loan Party shall be deemed to apply to
such Loan Party as debtor-in-possession and to a trustee for such Loan Party. If
any Loan Party shall become subject to a proceeding under the Code, and if Agent
or any Lender shall desire to permit the use of cash collateral or to provide
post-Petition financing from Agent or any Lender to any Loan Party under the
Code, Subordinated Lender agree as follows: (1) adequate notice to Subordinated
Lender shall be deemed to have been provided for such consent or post-Petition
financing if Subordinated Lender receives notice thereof three (3) Business Days
(or such shorter notice as is given to Agent and/or Lenders) prior to the
earlier of (a) any hearing on a request to approve such post-Petition financing
or (b) the date of entry of an order approving same and (2) no objection will be
raised by Subordinated Lender to any such use of cash collateral or such
post-Petition financing from Agent or any Lender.

(b) Subordinated Lender shall not offer, or enter into, any post-Petition
financing which includes a proposal, or any provision, for (x) any lien granted
in connection with such use of cash collateral or such post-Petition financing
or (y) any post-Petition financing that shall benefit from any other priority
over the Senior Indebtedness or post-Petition financing to be provided by Agent
or any Lender, whether pursuant to Section 364(d) of the Code or otherwise.

(c) Subordinated Lender agrees that it will not contest (or support any other
Person contesting) any request by Agent or any Lender for adequate protection
(whether in

 

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the form of payments, liens, a priority administrative expense claim, or
otherwise) or any objection by Agent or any Lender to any motion, relief action,
or proceeding based on Agent or any Revolving Lender claiming a lack of adequate
protection (whether in the form of payments, liens, a priority administrative
expense claim, or otherwise); provided that if any such adequate protection
takes the form of liens on additional assets, Senior Lender will not contest (or
support any other Person contesting) any request by Subordinated Lender for a
junior lien on such assets, which, if granted, shall be subject to the terms of
this Agreement.

(d) Subordinated Lender shall not propose or support any plan of reorganization
that is inconsistent with the priorities or other provisions of this Agreement.

(e) Subordinated Lender shall not join in, solicit any other person to, or act
to cause the commencement of, any case involving any Loan Party under any state
or federal bankruptcy or insolvency laws or seek the appointment of a receiver
for the affairs or property of any Loan Party until such time as the Senior
Indebtedness (other than contingent reimbursement and indemnification
obligations in respect of which no claim for payment has been asserted) shall
have been paid in full in cash and the commitments to advance funds under the
Loan Agreement shall have been terminated.

4.5. Insurance Proceeds. Proceeds of the Collateral include insurance proceeds,
and therefore, notwithstanding the terms set forth in the Senior Lending
Agreements or Subordinated Agreements, the priorities set forth in Section 3.2
govern the ultimate disposition of casualty insurance proceeds. Agent, as the
holders of a senior security interest on the Collateral insured shall have the
sole and exclusive right as against Subordinated Lender, to adjust settlement of
insurance claims in the event of any covered loss, theft or destruction of such
Collateral and otherwise in accordance with the Loan Agreement until such time
as the Senior Indebtedness (other than contingent reimbursement and
indemnification obligations in respect of which no claim for payment has been
asserted) shall have been paid in full in cash and the commitments to advance
funds under the Loan Agreement shall have been terminated. All proceeds of such
insurance shall inure to Agent, to the extent of Agent’s claims, and
Subordinated Lender shall cooperate (if necessary) in a reasonable manner in
effecting the payment of insurance proceeds to Agent. In the event Agent, in its
sole discretion exercised in good faith or pursuant to agreement with Loan
Parties, permit any Loan Party to utilize the proceeds of insurance to replace
Collateral with other assets or property constituting Collateral, the consent of
Agent thereto shall be deemed to include the consent of Subordinated Lender.

4.6. No Amendment of Subordinated Agreements. Until such time as the Senior
Indebtedness (other than contingent reimbursement and indemnification
obligations in respect of which no claim for payment has been asserted) shall
have been paid in full in cash and the commitments to advance funds under the
Loan Agreement shall have been terminated, neither any Loan Party nor any Holder
of Subordinated Indebtedness shall enter into any amendment to or modification
of any Subordinated Agreements which relates to or affects the principal amount,
interest rate, payment terms, or any other material covenant or agreement of any
Loan Party thereunder (other than SGS) or in respect thereof, in each case in a
manner materially adverse to the interests of the Lenders, without the prior
written consent of Agent. For purpose of clarification, the imposition of any
increase of the interest rate pursuant to the Reimbursement Agreement in
accordance with the terms thereof, from five percent (5%) to up to seven percent
(7%), shall not be deemed to be an amendment or modification of any of the
Subordinated Agreements.

 

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4.7. Amendments to Senior Lending Agreements. Nothing contained in this
Agreement, or in any other agreement or instrument binding upon any of the
parties hereto, shall in any manner limit or restrict the ability of Agent from
increasing or changing the terms of the loans under the Senior Lending
Agreements, or to otherwise waive, amend or modify the terms and conditions of
the Senior Lending Agreements, in such manner as Agent and the respective Loan
Parties shall mutually determine. Each Holder of Subordinated Indebtedness
hereby consents to any and all such waivers, amendments, modifications and
compromises, and any other renewals, extensions, indulgences, releases of
collateral or other accommodations granted by Agent to any Loan Party from time
to time, and agrees that none of such actions shall in any manner affect or
impair the subordination established by this Agreement in respect of the
Subordinated Indebtedness.

4.8. Notices. Any notice or other communication required or permitted pursuant
to this Agreement shall be deemed given (a) when personally delivered to any
officer of the party to whom it is addressed, (b) on the earlier of actual
receipt thereof or three (3) days following posting thereof by certified or
registered mail, postage prepaid, or (c) upon actual receipt thereof when sent
by a recognized overnight delivery service or (d) upon actual receipt thereof
when sent by telecopier to the number set forth below with electronic
confirmation of receipt, in each case addressed to each party at its address or
telecopier number set forth below or at such other address or telecopier number
as has been furnished in writing by a party to the other by like notice:

 

If to Agent or PNC at:    PNC Bank, National Association    4720 Piedmont Row
Drive, Suite 300    Charlotte, NC 28210    Attention:   Scott Goldstein   
Telephone:   704.551.8511    Facsimile:   704.643.7918    E-mail:  
scott.goldstein@pnc.com and a copy to each of:    Hahn & Hessen LLP    488
Madison Avenue    New York, New York 10022    Attention:   Steven J. Seif, Esq.
   Telephone:   212.478.7370    Facsimile:   212.478.7400    E-mail:  
sseif@hahnhessen.com and:    PNC Agency Services    PNC Firstside Center    500
First Avenue    Pittsburgh, PA 15219    Attention:   Andrea Gibb    Telephone:  
412.762.7196    Facsimile:   412.705.2006    E-mail:   andrea.gibb@pnc.com

 

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If to Term B Agent at:    Steel City Capital Funding, LLC    c/o PNC Bank,
National Association    1600 Market Street, 31st Floor    Philadelphia,
Pennsylvania 19103    Attention:   Susanna Siskind    Telephone:   215.585.6877
   Facsimile:   215.585.4754    E-mail:   susanna.siskind@sccfunding.com with a
copy to:    Schulte, Roth & Zabel LLP    919 Third Avenue    New York, New York
10022    Attention:   Eliot L. Relles, Esq.    Telephone:   212.756.2000   
Facsimile:   212.593.5955    E-mail:   eliot.relles@srz.com
If to Subordinated Lender at:    c/o Ares Management, Inc.    2000 Avenue of the
Stars, 12th Floor    Los Angeles, California 90067    Facsimile:   (310)
201-4157    Attention:   Jeffrey Schwartz with a copy to:    Proskauer Rose LLP
   2049 Century Park East, Suite 3200    Los Angeles, California 90067   
Facsimile:   (310) 557-2193    Attention:   Thomas W. Dollinger, Esq.    E-mail:
  tdollinger@proskauer.com If to any Loan Party at:    Stream Holdings
Corporation    20 William Street, Suite 310    Wellesley, Massachusetts 02481   
Attention:   R. Scott Murray      Chief Executive Officer and Sheila M. Flaherty
     Chief Legal and Administrative Officer    Telephone:   617.517.3250   
Facsimile:   617.517.3247    E-mail:   scott.murray@stream.com and     
sheila.flaherty@stream.com

 

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with a copy to:    Wilmer Cutler Pickering Hale and Dorr LLP    60 State Street
   Boston, Massachusetts 02109    Attention:   Mitchel Appelbaum, Esq.   
Telephone:   617.526.6000    Facsimile:   617.526.5000    E-mail:  
mitchel.appelbaum@wilmerhale.com

4.9. Reimbursement Agreement Obligations. Nothing in this Agreement shall be
construed to restrict or otherwise limit a Stream Entity from performing its
obligations under Section 1(c) of the Reimbursement Agreement to the extent
permitted by the Loan Agreement, including, without limitation, by replacing an
Ares Letter of Credit or other form of LC Guarantee (each, as defined in the
Reimbursement Agreement) with one or more Letters of Credit issued pursuant to,
and in accordance with, the Loan Agreement.

4.10. Binding Effect; Other. This Agreement shall be a continuing agreement,
shall be binding upon and, subject to Sections 2.2(h) and 8, shall inure to the
benefit of the parties hereto from time to time and their respective successors
and assigns, shall be irrevocable and subject to Section 2.2(g) and any other
provisions of this Agreement that provide that they are to survive the
termination of this Agreement, shall remain in full force and effect until the
Senior Indebtedness (other than contingent reimbursement and indemnification
obligations in respect of which no claim for payment has been asserted) shall
have been satisfied or paid in full in cash and the commitments to advance funds
under the Loan Agreement shall have been terminated, but shall continue to be
effective, or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any amount paid by or on behalf of any Loan Party with regard
to the Senior Indebtedness is rescinded or must otherwise be restored or
returned upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of any Loan Party, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee, custodian, or similar
officer, for any Loan Party or any substantial part of its property, or
otherwise, all as though such payments had not been made. No action which Agent,
any Lender or any Loan Party may take or refrain from taking with respect to the
Senior Indebtedness, including any amendments thereto, shall affect the
provisions of this Agreement or the obligations of Subordinated Lender
hereunder. Any waiver or amendment hereunder must be evidenced by a signed
writing of the party to be bound thereby, and shall only be effective in the
specific instance. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York. The headings in this
Agreement are for convenience of reference only, and shall not alter or
otherwise affect the meaning hereof.

5. Representations and Warranties.

(a) Subordinated Lender represents and warrants to Agent that Subordinated
Lender is the holder of the Subordinated Indebtedness and Liens which secure or
will secure the Subordinated Indebtedness. Subordinated Lender agrees that it
shall not assign or transfer (other than to another existing Holder of
Subordinated Indebtedness) any of the Subordinated Indebtedness or Liens without
(i) prior notice being given to Agent and (ii) such assignment or transfer being
made expressly subject to the terms of this Agreement. Subordinated Lender
further warrants to Agent that it has the full right, power and authority to
enter into this Agreement.

 

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(b) Agent represents and warrants to Subordinated Lender that it is the holder
of the Liens, on behalf of Lenders, which secure or will secure the Senior
Indebtedness. Agent further warrants to Subordinated Lender that it has full
right, power and authority to enter into this Agreement and, to the extent Agent
is an agent or trustee for other parties, that this Agreement shall fully bind
all such other parties.

6. Proceedings. ANY JUDICIAL PROCEEDING BROUGHT BY OR AGAINST ANY PARTY HERETO
WITH RESPECT TO THIS AGREEMENT OR ANY RELATED AGREEMENT MAY BE BROUGHT IN ANY
COURT OF COMPETENT JURISDICTION IN THE CITY OF NEW YORK, STATE OF NEW YORK,
UNITED STATES OF AMERICA, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT EACH
PARTY THERETO ACCEPTS FOR THEMSELVES AND IN CONNECTION WITH THEIR PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS, AND IRREVOCABLY AGREE TO BE BOUND BY ANY FINAL JUDGMENT RENDERED THEREBY
IN CONNECTION WITH THIS AGREEMENT. NOTHING HEREIN SHALL AFFECT THE RIGHT TO
SERVE PROCESS IN ANY MANNER PERMITTED BY LAW. EACH PARTY HERETO WAIVES ANY
OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION INSTITUTED HEREUNDER AND SHALL
NOT ASSERT ANY DEFENSE BASED ON LACK OF JURISDICTION OR VENUE OR BASED UPON
FORUM NON CONVENIENS.

7. Waiver Of Jury Trial. EACH PARTY HERETO HEREBY EXPRESSLY WAIVES ANY RIGHT TO
TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING UNDER
THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH, OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF ANY CREDITOR OR ANY LOAN PARTY OR ANY OF THEM WITH
RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED BY THEM IN CONNECTION HEREWITH, OR THE TRANSACTIONS
RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE, AND EACH PARTY
HERETO HEREBY AGREES AND CONSENTS THAT ANY CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT JURY, AND THAT ANY OF THEM MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THEIR CONSENT TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

8. Loan Party Acknowledgement. Each Loan Party agrees that (i) nothing contained
in this Agreement shall be deemed to amend, modify, supersede or otherwise alter
the terms of the respective agreements between each Loan Party and each Creditor
and (ii) this Agreement is solely for the benefit of the Creditors and shall not
give any Loan Party, its successors or assigns or any other person any rights
vis-à-vis any Creditor.

 

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9. Counterparts; Facsimile. This Agreement may be executed by the parties hereto
in one or more counterparts, each of which shall be deemed an original and all
of which when taken together shall constitute one and the same agreement. Any
signature delivered by a party by facsimile transmission or by other electronic
method of transmission (including, without limitation, in “pdf” format) shall be
deemed an original signature hereto.

[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the undersigned have entered into this Agreement as of this
2nd day of March, 2009.

 

PNC BANK, NATIONAL ASSOCIATION, as Agent and on behalf of the Revolving Lenders
By:  

/s/ Scott Goldstein

Name:   Scott Goldstein Title:   Vice President

STEEL CITY CAPITAL FUNDING, LLC,

as Term B Agent and on behalf of the Term B Lenders

By:  

/s/ Susanna Siskind

Name:   Susanna Siskind Title:   Vice President SUBORDINATED LENDER: ARES
CORPORATE OPPORTUNITIES FUND II, L.P. By:   ACOF OPERATING MANAGER II, L.P.,  
Its Manager By:  

/s/ Jeffrey Schwartz

Name:   Jeffrey Schwartz Title:   Vice President

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

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[SIGNATURES CONTINUED FROM PRIOR PAGE]

 

LOAN PARTIES: STREAM HOLDINGS CORPORATION, By:  

/s/ R. Scott Murray

Name:   R. Scott Murray Title:   President and Treasurer STREAM FLORIDA INC. By:
 

/s/ R. Scott Murray

Name:   R. Scott Murray Title:   President and Chief Executive Officer STREAM
INTERNATIONAL INC. By:  

/s/ R. Scott Murray

Name:   R. Scott Murray Title:   President STREAM NEW YORK INC. By:  

/s/ R. Scott Murray

Name:   R. Scott Murray Title:   President STREAM INTERNATIONAL CANADA INC. By:
 

/s/ R. Scott Murray

Name:   R. Scott Murray Title:   President [signatures continued on following
page]

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STREAM INTERNATIONAL (N.I.) LIMITED By:  

/s/ R. Scott Murray

Name:   R. Scott Murray Title:   Director STREAM INTERNATIONAL GMBH By:  

/s/ R. Scott Murray

Name:   R. Scott Murray Title:   Director STREAM INTERNATIONAL EUROPE B.V. By:  

/s/ R. Scott Murray

Name:   R. Scott Murray Title:   Director STREAM INTERNATIONAL SERVICE EUROPE
B.V. By:  

/s/ R. Scott Murray

Name:   R. Scott Murray Title:   Director STREAM GLOBAL SERVICES, INC. By:  

/s/ R. Scott Murray

Name:   R. Scott Murray Title:   President and Chief Executive Officer