Document:

ex10.20

 

 Exhibit 10.20
 

 

 THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM OR IN A TRANSACTION NOT SUBJECT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO REGISTRATION UNDER THE ACT. 
 AMENDED 
 10% CONVERTIBLE NOTE 
 FOR VALUE RECEIVED, Entest BioMedical Inc., a Nevada corporation (the “Borrower”), hereby promises to pay to Bio-Technology Partners Business Trust, a Nevada Business Trust, (the “Holder”) or its registered assigns or successors in interest, or order the sum of Thirty Thousand Dollars ($ 30,000.00) (the “Principal Amount”), all of which will be due and payable on December 31, 2012 (the “Maturity Date”) if not paid sooner in accordance with the terms hereof. 
 1. This Amended 10% Convertible Note (the “Note”) replaces and amends that certain a portion of that certain Line of Credit Promissory Note between Entest BioMedical Inc. and Bio-Technology Partners Business Trust dated December 1, 2010 in the amount of Two Hundred Thousand Dollars ($ 200,000.00) which has a current outstanding balance of Eighty Six Thousand Five Hundred Dollars ($ 86,500.00). The Borrower has additionally consented to certain amendments to this Note as reflected herein. 
 

 The following terms shall apply to the Note: 
 ARTICLE I 
 INTEREST, AMORTIZATION AND CONVERSION 
 1.1 Interest, Rate and Payments. This Note shall bear interest, on an annual basis, at the 
 

 rate of (10%) per annum from the date of the first making of this loan until such principal amount is paid in full. Interest hereunder shall be paid on the Maturity Date or on such earlier date as the principal amount under this Note becomes due and payable in accordance with the terms hereof and shall be computed on the basis of a 360 day year for the actual number of days elapsed, commencing on the date of this Note with the final such payment due on the Maturity Date, unless due sooner by acceleration or otherwise. 
 1.2 Interest Payments in Cash or Stock. Interest on this Note shall be payable in cash or stock, at the election of the Holder and subject to customary conditions for publicly traded companies’ stock. The Borrower shall pay the Holder an amount equal to 100% of the amount of the interest due and owing to the Holder on the Maturity Date in cash. If, however, the Holder elects to receive interest in shares (“Interest Shares”) of Common Stock, (“Common Stock”) of 
 the Borrower, the number of such shares to be issued by the Borrower to the Holder on such Maturity Date shall be the number determined by dividing (x) the portion of the interest amount payable in shares of Common Stock (“Common Shares”), by the Conversion Price (as defined below). The foregoing is conditioned upon the Interest Shares being registered under the Securities Exchange Act of 1934, as amended, or resale of the Interest Shares is exempt from registration and the Interest Shares are issued without any restrictive legend, and the Borrower having filed all reports due to be filed by it under such Act, and to the extent this condition is not satisfied at a particular Repayment Date, the Borrower shall be required to pay the amount due in cash only. 
 1.3 Conversion Price. For purposes of this Note, the "Conversion Price" shall equal the Variable Conversion Price. Variable Conversion Price (as defined herein) (subject to equitable adjustments as set forth herein). The "Variable Conversion Price" shall mean 50% multiplied by the Market Price (as defined herein) representing a discount of 50%. "Market Price" means the average of the lowest three (3) Trading Prices (as defined below) for the common stock during the 10 trading day period ending one Trading Day prior to the date the conversion notice is sent by the holder. "Trading Price" means the closing bid price on the Over the Counter Bulletin Board, or applicable trading market (the "OTCBB") as reported by a reliable reporting service and hereafter designated by Holder, or if the OTCBB is not the principal trading market for such security, the closing bid price of such security on the principal securities exchange or trading 
 

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 market where such security is listed or traded or, if no closing bid price of such security is available in any of the foregoing manners, the average of the closing bid prices of any market maker for such security that are listed in the "pink sheets" by the National Quotation Bureau, Inc. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by the Borrower and the Holder of the Note being converted for which the calculation of the Trading Price is required in order to determine the conversion price of this note. “Trading Day” shall mean any day on which the Common Stock is then being traded. 
 1.4 Principal Payments. (a) Subject to and upon compliance with the provisions hereof, the Holder shall have the right, at the Holder’s option, at any time or from time to time on or after the date hereof and prior to the close of business on December 31, 2012, to convert all or any part of the unpaid Principal Amount and interest accrued under this Note into Common Shares (the “Conversion Shares”), of the Borrower, at the Conversion Price. Upon any conversion of this Note, or any portion hereof, appropriate cash adjustment shall be made for or on account of any interest accrued up to the date of conversion hereon or on such portion, or for or on account of any dividends on any Common Shares issued upon such conversion, subject to the Borrower’s right to pay interest in shares pursuant to Section 1.2 and Holder’s right to convert such interest as provided in this Section 1.4. 
 (b) In order to exercise the conversion privilege, the Holder shall submit a notice of conversion to the Borrower at the principal executive offices of the Borrower, or, if less than the entire unpaid Principal Amount hereof and interest thereon is to be converted, the portion hereof to be converted. Such notice shall also state the name or names (with address or addresses) in which the certificate or certificates for Conversion Shares shall be issued. After the receipt of such notice, the Borrower shall issue and shall deliver at said offices to the Holder, or 
 on his written order, a certificate or certificates for the number of full Conversion Shares issuable (or portion hereof) and provision shall be made for any fraction of a Share as provided in subsection (c) hereof. Such conversion shall be deemed to have been effected immediately prior to the close of business on the date on which such notice shall have been received by the Borrower and conversion shall be at the Conversion Price in effect at such time on such date, and at such time the rights of the Holder as such Holder shall cease, in the event that the full Principal Amount and all interest thereon are converted, and the person or persons in whose name or names any certificate or certificates for Conversion Shares shall be deemed to have become the holder or holders of record of the Conversion Shares represented thereby. Upon conversion of only a part of the unpaid Principal Amount, the Borrower shall execute and deliver to or on the order of the Holder at said offices, at the expense of the Borrower if requested by Holder, a new Note in the principal amount equal to the unconverted portion of such unpaid Principal Amount and interest, which new Note shall be dated and bear interest from the date to which interest shall have been paid on such unconverted portion. 
 (c) No fractional Shares or scrip or warrants shall be issued upon conversion of the Note. If more than $1,000 principal amount of the Note shall be surrendered for conversion at any one time by the same Holder, the number of full Conversion Shares shall be computed on the basis of the aggregate unpaid principal amount of the Note (or portion thereof) so surrendered. Instead of any fractional Conversion Share which would otherwise be issuable upon conversion of the Note (or portion thereof), the Borrower shall pay a cash adjustment in respect of such fractional Conversion Share in an amount equal to the same fraction of the then current fair value of a Share, as reasonably determined by the Borrower. 
 (d) The number of Common Shares outstanding at any given time shall not 
 include Shares owned or held by or for the account of the Borrower, but the disposition of any such Shares shall be considered an issue or sale of Common Shares. 
 (e) In case the Borrower shall at any time subdivide its outstanding Common Shares into a greater number of Common Shares, the Conversion Price in effect immediately prior to such subdivision shall be proportionately reduced, and conversely, in case the outstanding Common Shares of the Borrower shall be combined into a smaller number of Common Shares, the Conversion Price in effect immediately prior to such combination shall be proportionately increased. 
 (f) If any consolidation or merger of the Borrower with or into another corporation, or the sale of all or substantially all its assets to another corporation shall be effected, or in case of any capital reorganization or reclassification of the capital stock of the corporation, then, as a condition of such consolidation, merger or sale, reorganization or reclassification, lawful and adequate provision shall be made whereby each holder of the Note shall thereafter have the right to receive upon the basis and upon the terms and conditions specified herein and in lieu of the Common Shares of the Borrower immediately theretofore receivable 
 

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 upon the conversion of the Note, such shares of stock, securities or assets as may be issued or payable with respect to or in exchange for a number of outstanding Shares equal to the number of Common Shares immediately theretofore so receivable by such holder had such consolidation, merger, sale, reorganization or reclassification not taken place, and in any such 
 case appropriate provision shall be made with respect to the rights and interests of such holder to the end that the provisions hereof (including without limitation provisions for adjustment of the Conversion Price) shall thereafter be applicable, as nearly as may be, in relation to any Common Shares of stock, securities or assets thereafter deliverable upon the exercise of such conversion rights. The Borrower shall not effect any such consolidation, merger, sale, reclassification or reorganization unless prior to or simultaneously with the consummation thereof the successor corporation (if other than the Borrower) resulting from such consolidation, merger, reclassification or reorganization or the corporation purchasing such assets shall assume by written instrument executed and mailed or delivered to the Holder, the obligation to deliver to the Holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, the Holder may be entitled to receive. 
 (g) Upon any adjustment of the Conversion Price, then and in each such case the Borrower shall give written notice thereof, by first class mail, postage prepared, to the Holder, which notice shall state the Conversion Price resulting from such adjustment, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. 
 (h) Upon receipt by the Borrower from the Holder of a facsimile transmission or e-mail (or other reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section 1.4, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates for the Common Stock issuable upon such conversion within three (3) business days after such receipt (the “Deadline”) (and, solely in the case of conversion of the entire unpaid principal amount hereof, surrender of this Note) in accordance with the terms hereof and the Purchase Agreement. 
 ( i ) Upon receipt by the Borrower of a Notice of Conversion, the Holder shall be deemed to be the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of accrued and unpaid interest on this Note shall be reduced to reflect such conversion, and, unless the Borrower defaults on its obligations under this Article I, all rights with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided, on such conversion. If the Holder shall have given a Notice of Conversion as provided herein, the Borrower’s obligation to issue and deliver the certificates for Common Stock shall be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against any person or any action to enforce the same, any failure or delay in the enforcement of any other obligation of the Borrower to the holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder of any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower to the Holder in connection with such conversion. The Conversion Date specified in the Notice of Conversion shall be the Conversion Date so long as the Notice of Conversion is received by the Borrower before 6:00 p.m., New York, New York time, on such date. 
 (j) Without in any way limiting the Holder’s right to pursue other remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock 
 issuable upon conversion of this Note is not delivered by the Deadline (other than a failure due to the circumstances described in Section 1.3 above, which failure shall be governed by such Section) the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the Deadline that the Borrower fails to deliver such Common Stock. The Borrower agrees that the right to convert is a valuable right to the Holder. The damages resulting from a failure, attempt to frustrate, interference with such conversion right are difficult if not impossible to qualify. Accordingly the parties acknowledge that the liquidated damages provision contained in this Section are justified. 
 (k) If the Borrower shall declare or make any distribution of its assets (or rights to 
 acquire its assets) to holders of Common Stock as a dividend, stock repurchase, by way of return of capital or otherwise (including any dividend or distribution to the Borrower’s shareholders in cash or shares (or rights to acquire shares) of capital stock of a subsidiary (i.e., a spin-off)) (a “Distribution”), then the Holder of this Note shall be entitled, upon any conversion of this Note after the date of record for determining shareholders entitled to such Distribution, to receive the amount of such assets which would have been 
 

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 payable to the Holder with respect to the shares of Common Stock issuable upon such conversion had such Holder been the holder of such shares of Common Stock on the record date for the determination of shareholders entitled to such Distribution 
 1.5 Authorized Shares. The Borrower covenants that during the period the conversion right exists, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of Common Stock upon the full conversion of this Note issued pursuant to the Purchase Agreement. The Borrower is required at all times to have authorized and reserved five times the number of shares that is actually issuable upon full conversion of the Note (based on the Conversion Price of the Notes in effect from time to time) (the “Reserved Amount”). The Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. In addition, if the Borrower shall issue any securities or make any change to its capital structure which would change the number of shares of Common Stock into which the Notes shall be convertible at the then current Conversion Price, the Borrower shall at the same time make proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Notes. The Borrower (i) acknowledges that it has irrevocably instructed its transfer agent to issue certificates for the Common Stock issuable upon conversion of this Note, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance with the terms and conditions of this Note. 
 If, at any time the Borrower does not maintain the Reserved Amount it will be considered an Event of Default under Section 3.2 of the Note. 
 ARTICLE II 
 REPAYMENT 
 2.1 No Prepayment. There shall be no prepayment of this Note. 
 ARTICLE III 
 EVENTS OF DEFAULT 
 Upon the occurrence and continuance of an Event of Default (as hereinafter defined) beyond any applicable grace period, the Holder may, by notice to Borrower, make all sums of principal, interest and other fees then remaining unpaid and all other amounts payable under this Note immediately due and payable without presentment, demand, protest or further notice of any kind, all of which are expressly waived by Borrower. In the event of an Event of Default pursuant to Section 3.3 below has occurred, then this entire Note shall automatically become due and payable without any notice or other action by Holder. In the event of such an acceleration, the amount due and owing to the Holder shall be 150% of the outstanding Principal Amount of the Note (plus accrued and unpaid interest and fees, if any) (the “Default Payment”). The Default Payment shall be applied first to accrued and unpaid interest due on this Note and then to the outstanding principal balance of this Note. 
 The occurrence of any of the following events set forth in Sections 3.1 through 3.3 inclusive, is an “Event of Default”: 
 3.1 Failure to Pay Principal and/or Interest. The Borrower fails to pay when due any Principal Amount or any installment of interest or other fees provided in this Note in accordance with this Note, and any such failure shall continue for a period of one day following the date upon which the payment was due. 
 3.2 Receiver or Trustee. The Borrower or any of its Subsidiaries shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business; or such a receiver or trustee shall otherwise be appointed. 
 3.3 Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any of its Subsidiaries and not stayed within thirty days. 
 3.4 Failure to Issue Shares upon Conversion. The Borrower fails to issue shares of Common Stock to the Holder upon exercise by the Holder of the conversion rights of the Holder in accordance with the terms of this Note, or the Borrower directs its transfer agent not to transfer or delays, impairs, and/or hinders its transfer agent in transferring (or issuing) (electronically or in certificated form) any certificate for shares of Common Stock to be issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note or fails to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer 
 instructions in respect thereof) on any certificate for any shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note and any such 
 

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 failure shall continue uncured for three (3) business days after the Holder shall have delivered a Notice of Conversion. It is an obligation of the Borrower to remain current in its obligations to its transfer agent. It shall be an event of default of this Note, if a conversion of this Note is delayed, hindered or frustrated due to a balance owed by the Borrower to its transfer agent. If at the option of the Holder, the Holder advances any funds to the Borrower’s transfer agent in order to process a conversion, such advanced funds shall be paid by the Borrower to the Holder within forty eight (48) hours of a demand from the Holder. 
 3.5 Delisting of Common Stock. The Borrower shall fail to maintain the listing of the Common Stock on at least one of the OTCBB or an equivalent replacement exchange. 
 3.6 Liquidation. Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business. 
 3.7 Cessation of Operations. Any cessation of operations by Borrower or 
 Borrower admits it is otherwise generally unable to pay its debts as such debts become due, provided, however, that any disclosure of the Borrower’s ability to continue as a “going concern” shall not be an admission that the Borrower cannot pay its debts as they become due. 
 3.8 Reverse Splits. The Borrower effectuates a reverse split of its Common 
 Stock without twenty (20) days prior written notice to the Holder. 
 Upon the occurrence and during the continuation of any Event of Default specified in Section 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due at the Maturity Date), the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the Default Sum (as defined herein). UPON THE OCCURRENCE AND DURING THE CONTINUATION OF ANY EVENT OF DEFAULT SPECIFIED IN SECTION 3.2, THE NOTE SHALL BECOME IMMEDIATELY DUE AND PAYABLE AND THE BORROWER SHALL PAY TO THE HOLDER, IN FULL SATISFACTION OF ITS OBLIGATIONS HEREUNDER, AN AMOUNT EQUAL TO: (Y) THE DEFAULT SUM (AS DEFINED HEREIN); MULTIPLIED BY (Z) TWO (2). Upon the occurrence and during the continuation of any Event of Default specified in Sections 3.1 and/or 3.2 (solely with respect to failure to pay the principal hereof or interest thereon when due on this Note upon a Trading Market Prepayment Event pursuant to Section 1.7 or upon acceleration), 3.3, 3.4, 3.6, 3.7, and 3.8 exercisable through the delivery of written notice to the Borrower by such Holders (the “Default Notice”), and upon the occurrence of an Event of Default specified the remaining sections of Articles III (other than failure to pay the principal hereof or interest thereon at the Maturity Date specified in Section 3,1 hereof), the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the greater of (i) 150% times the sum of (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the date of payment (the “Mandatory 
 Prepayment Date”) plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof (the then outstanding principal amount of this Note to the date of payment plus the amounts referred to in clauses (x), (y) and (z) shall collectively be known as the “Default Sum”) or (ii) the “parity value” of the Default Sum to be prepaid, where parity value means (a) the highest number of shares of Common Stock issuable upon conversion of or otherwise pursuant to such Default Sum in accordance with Article I, treating the Trading Day immediately preceding the Mandatory Prepayment Date as the “Conversion Date” for purposes of determining the lowest applicable Conversion Price, unless the Default Event arises as a result of a breach in respect of a specific Conversion Date in which case such Conversion Date shall be the Conversion Date), multiplied by (b) the highest Closing Price for the Common Stock during the period beginning on the date of first occurrence of the Event of Default and ending one day prior to the Mandatory Prepayment Date (the “Default Amount”) and all other amounts payable hereunder shall immediately become due and payable, all without demand, presentment or notice, all of which hereby are expressly waived, together with all costs, including, without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies available at law or in equity. 
 If the Borrower fails to pay the Default Amount within five (5) business days of written notice that such amount is due and payable, then the Holder shall have the right at any time, so long as the Borrower remains in default (and so long and to the extent that there are sufficient authorized shares), to require the Borrower, upon written notice, to immediately issue, in lieu of the Default Amount, the number of shares of Common Stock of the Borrower equal to the Default Amount divided by the Conversion Price then in effect. 
 

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 3.9 Cumulative Remedies. The remedies under this Note shall be cumulative. 
 ARTICLE IV 
 MISCELLANEOUS 
 4.1 Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder hereof in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available. 
 4.2 Notices. Any notice herein required or permitted to be given shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party notified, (b) when sent by confirmed telex or facsimile if sent during normal business hours of the recipient, if not, then on the next business day, (c) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the Borrower at the address provided in the Subscription Agreement executed in connection with this Note, and to the Holder at the address provided in the Subscription Agreement for such Holder, or at such other address as the Borrower or the 
 Holder may designate by ten days advance written notice to the other. A notice of conversion shall be deemed given when made to the Borrower. 
 4.3 Amendment Provision. The “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument as originally executed, or if later amended or supplemented, then as so amended or supplemented, and any successor instrument issued pursuant to Section 2.1 hereof, as it may be amended or supplemented. 
 4.4 Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to the benefit of the Holder and its successors and assigns, and may be assigned by the Holder in accordance with the requirements of applicable law, such assignment to be effective upon delivery of written notice to Borrower from Holder. This Note shall not be assigned by the Borrower without the consent of the Holder. 
 4.5 Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the state courts of New York or in the federal courts located in the state of New York. Both the Borrower and the Holder agree to submit to the jurisdiction of such courts. The prevailing party shall be entitled to recover from the other party its reasonable attorney’s fees and costs. In the event that any provision of this Note is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or unenforceability of any other provision of this Note. Nothing contained in this Note shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Borrower in any other jurisdiction to collect on the Borrower’s obligations to the Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court order in favor of the Holder. 
 4.6 Maximum Payments. Nothing contained herein shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum shall be credited against amounts owed by the Borrower to the Holder and thus refunded to the Borrower. 
 4.7 Collection. Should any part of the indebtedness evidenced hereby be collected by law or through an attorney-at-law, the Holder or any other holder of this Note shall, if permitted by applicable law, be entitled to collect from the Borrower all reasonable costs of collection, including, without limitation, attorneys’ fees and expenses. 
 4.8 Borrower hereby forever waives presentment, demand, presentment for payment, protest, notice of protest, and notice of dishonor of this Note and all other demands and notices in connection with the delivery, acceptance, performance and enforcement of this Note. 
 [SIGNATURE PAGE FOLLOWS]
 

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 IN WITNESS WHEREOF, the Borrower has caused this Note to be signed in its name effective as of December 20, 2011. 
 

 Entest BioMedical, Inc. 
 

 By: /s/David Koos
 Name: David Koos 
 Title: CEO
 

 

 

 

 

 

 

 

 

 

 

 

 

 7Exhibit10.1 - Fifth Amendment to Credit Agreement

Exhibit 10.1
FIFTH AMENDMENT 
TO CREDIT AGREEMENT
THIS FIFTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is dated as of April 5, 2012 and is entered into by and among SITEL, LLC, a Delaware limited liability company (the “U.S. Borrower”), CLIENTLOGIC HOLDING LIMITED, a company incorporated in England and Wales under company number 3530981 (the “UK Borrower”), SITEL CANADA CORPORATION (f/k/a ClientLogic Canada Corporation), an Ontario corporation (the “Canadian Borrower” and collectively with the U.S. Borrower and the UK Borrower, the “Borrowers”), SITEL WORLDWIDE CORPORATION (f/k/a ClientLogic Corporation), a Delaware corporation (“Holdings”), GOLDMAN SACHS CREDIT PARTNERS L.P. (“GSCP”), as Administrative Agent (“Administrative Agent”), acting with the consent of the Requisite Lenders, the Canadian Revolving Lenders, UK Revolving Lenders and U.S. Revolving Lenders listed on the signature pages hereto, the Canadian Dollars Swing Lien Lender, the U.S. Dollars Swing Line Lender, and, for purposes of Section IV hereof, the GUARANTORS listed on the signature pages hereto, and is made with reference to that certain CREDIT AGREEMENT dated as of January 30, 2007 (as amended through the date hereof, the “Credit Agreement”) by and among the Borrowers, Holdings, the subsidiaries of the Borrowers named therein, the Lenders, the Administrative Agent, the Collateral Agent and the other Agents named therein.  Capitalized terms used herein without definition shall have the same meanings herein as set forth in the Credit Agreement after giving effect to this Amendment.
RECITALS
WHEREAS, the Credit Parties have requested that the Requisite Lenders, each Canadian Revolving Lender, UK Revolving Lender and U.S. Revolving Lender, the Canadian Dollars Swing Line Lender and the U.S. Dollars Swing Line Lender, agree to amend certain provisions of the Credit Agreement and the Guaranty as provided for herein; and
WHEREAS, subject to certain conditions, the Requisite Lenders, each Canadian Revolving Lender, UK Revolving Lender and U.S. Revolving Lender, the Canadian Dollars Swing Line Lender and the U.S. Dollars Swing Line Lender are willing to agree to such amendments relating to the Credit Agreement and the Guaranty.
NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto agree as follows:
		
	SECTION I.    
	AMENDMENTS TO CREDIT AGREEMENT

		
	1.1
	Amendments to Section 1.3 of the Credit Agreement: Prepayments.

Section 1.3(b)(v) of the Credit Agreement is hereby amended by deleting the parenthetical 

“(excluding, in each case, (x) repayments of Revolving Loans or Swing Line Loans except to the extent the Revolving Commitments are permanently reduced in connection with such repayments and (y) any repayments funded with the proceeds of the Senior Notes on the Third Amendment Effective Date)” set forth therein and inserting in lieu thereof the following parenthetical:

“(excluding, in each case, (x) repayments of Revolving Loans or Swing Line Loans except to the extent the Revolving Commitments are permanently reduced in connection with such repayments, (y) any repayments funded with the proceeds of the Senior Notes on the Third Amendment Effective Date and (z) any repayments funded with the proceeds of the Senior Secured Notes on the Fifth Amendment Effective Date)”
		
	1.2
	Amendments to Section 5.10 of the Credit Agreement: Future Credit Parties.  

(a)     Section 5.10(b) of the Credit Agreement is hereby amended by adding the following new sentence at the end thereof:
“No Foreign Subsidiary domiciled under the laws of a jurisdiction other than those in which one or more other Credit Parties are domiciled shall become a Guarantor unless the Borrowers have provided the Collateral Agent with at least 30 days’ prior written notice thereof (or such shorter period as the Collateral Agent may agree to in its sole discretion) and the Collateral Agent has not been furnished with advice that acceptance of a Guaranty from such Person is reasonably likely to present legal, regulatory or other risks that are material.  As of the Fifth Amendment Effective Date, the Collateral Agent has not been furnished with advice that acceptance of a Guaranty from any Person organized in any jurisdiction set forth on Schedule 5.10 hereto is reasonably likely to present legal, regulatory or other risks that are material.”
(b)    Section 5.10(c) of the Credit Agreement is hereby amended by amending and restating clause (iv) of such Section in its entirety to read as follows:
“(iv) execute or deliver any Collateral Document with respect to any Subsidiary (A) that is an Immaterial Subsidiary (except as otherwise required by Section 5.16), (B) if Holdings has been advised by legal counsel that it is legally impermissible or inadvisable to deliver such Collateral Document with respect to such Subsidiary, (C) if Holdings and the Collateral Agent reasonably determine that the cost of obtaining any Collateral Document with respect to such Subsidiary outweighs the practical benefit afforded thereby, or (D) the Collateral Agent has been furnished with advice that acceptance of such Collateral Document is reasonably likely to present legal, regulatory or other risks that are material.”
		
	1.3
	Amendments to Section 5.16 of the Credit Agreement: Credit Parties.  

Section 5.16 of the Credit Agreement is hereby amended by inserting “(a)” at the beginning thereof and adding the following new clause (b) immediately after clause (a) thereof:
“(b)    If so requested by the U.S. Borrower by written notice to the Administrative 

Agent, Holdings may cause an Immaterial Subsidiary to become a Guarantor in connection with which it shall provide security in compliance with the provisions of Section 5.10, subject to the final two sentences of Section 5.10(b) and the terms of Section 5.10(c) (without regard to clause (iv)(A) thereof).”
		
	1.4
	Amendments to Section 6.1 of the Credit Agreement:  Mergers, Subsidiaries, Etc.

(a)    Section 6.1 of the Credit Agreement is hereby amended by amending and restating the first paragraph of such Section in its entirety to read as follows:
“No Credit Party shall, nor shall such Credit Party permit any of its Subsidiaries to, directly or indirectly, by operation of law or otherwise, (x) acquire any Subsidiary, or (y) merge or amalgamate with, consolidate with, acquire all or substantially all of the assets or Equity Interests of, or otherwise combine with or acquire, any Person, except:”
(b)    Section 6.1 of the Credit Agreement is hereby amended by deleting the “and” appearing at the end of clause (vi) thereof, inserting “and” at the end of clause (vii) thereof and adding the following new clause (viii) immediately after clause (vii) thereof:
“(viii)    Holdings and any Subsidiary of Holdings may form Subsidiaries;”
		
	1.5
	Amendments to Section 6.3 of the Credit Agreement: Indebtedness.

(a)    Section 6.3(a)(ix) of the Credit Agreement is hereby amended by deleting the following provision thereof”:
“such Indebtedness owed to Persons other than Credit Parties of any Foreign Subsidiary organized in France or any Subsidiary owned directly or indirectly by any Foreign Subsidiary organized in France shall not exceed $5,000,000 in the aggregate at any one time outstanding, and (b)”.
(b)    Section 6.3(a) of the Credit Agreement is hereby amended by amending and restating clause (xix) of such Section in its entirety to read as follows:
“(xix)    (A) unsecured Indebtedness of Credit Parties, (B) Indebtedness of Credit Parties secured by Liens that are subject to subordination provisions or an intercreditor agreement in form and substance reasonably acceptable to Administrative Agent or (C) Indebtedness of Credit Parties secured by Liens that are pari passu with the Liens securing the Obligations that are subject to an intercreditor agreement or other Lien priority sharing agreement in form and substance reasonably acceptable to Administrative Agent, provided that, in the case of clauses (xix)(A), (xix)(B) and (xix)(C), (w) with respect to up to $200,000,000 of the issuance of Senior Secured Notes on the Fifth Amendment Effective Date, 100% of the net cash proceeds thereof (net of underwriting discounts, debt issuance and commitment fees and commissions associated therewith and with the Fifth Amendment and other reasonable costs and expenses associated therewith and with the Fifth 

Amendment, including reasonable legal fees and expenses) (“Net Bond Proceeds”) shall be applied first, to prepay in full all then outstanding Original Term Loans, together with all accrued interest with respect thereto, second, to repay in full all then outstanding Revolving Loans (without an accompanying permanent reduction of Revolving Commitments or Swing Line Commitments) and third, may remain as cash on the balance sheet of the U.S. Borrower to be applied in accordance with Section 1.4 hereof and otherwise subject to the terms and conditions of this Agreement, (x) with respect to any issuance of Senior Secured Notes on the Fifth Amendment Effective Date in excess of $200,000,000, 100% of the Net Bond Proceeds remaining after the application of the proceeds thereof pursuant to clause (w) above shall be applied to prepay the outstanding principal of the Term Loans on a pro rata basis across tranches in direct order of maturity, (y) with respect to any issuance of Senior Secured Notes after the Fifth Amendment Effective Date, 100% of the Net Bond Proceeds shall be applied either (1) on a pro rata basis, (a) to refinance, repurchase or otherwise repay outstanding Senior Secured Notes and (b) to prepay the outstanding principal of the Term Loans on a pro rata basis across tranches in direct order of maturity or (2) to prepay the outstanding principal of the Term Loans on a pro rata basis across tranches in direct order of maturity and (z) in all other cases, such Indebtedness shall not exceed an aggregate principal amount outstanding at any time in excess of the amount of Revolving Commitments (both the utilized and unutilized portions thereof) that are being replaced therewith and/or the amount of Term Loans, as applicable, that are being refinanced therewith; provided further that, (1) immediately prior to, and after giving effect to, the incurrence of any such Indebtedness or the replacement of any such Revolving Commitments, no Default or Event of Default shall have occurred and be continuing, (2) Holdings and its Subsidiaries shall be in compliance with the covenants set forth in Section 6.9 on a pro forma basis after giving effect to the incurrence of any such Indebtedness or the replacement of any such Revolving Commitments, as applicable, as of the last day of the Fiscal Quarter most recently ended and (3) the stated maturity date of any such Indebtedness shall be no earlier than six months following the latest Term Loan Maturity Date.”

		
	1.6
	Amendments to Section 6.7 of the Credit Agreement: Liens; Restrictive Agreements.

Section 6.7 of the Credit Agreement is hereby amended by amending and restating clause (ii) of such Section in its entirety to read as follows:

“(ii) contained in any agreement governing any Indebtedness permitted by clause (i) of Section 6.3(a) (as to the assets financed with the proceeds of such Indebtedness) or clause (xvii) of Section 6.3(a) (to the extent limited to the accounts receivable Disposed of),”
		
	1.7
	Amendments to Section 6.8 of the Credit Agreement:  Sale of Equity Interests and Assets.  

Section 6.8 of the Credit Agreement is hereby amended by amending and restating clause (o) of such Section in its entirety to read as follows:

“(o) Dispositions by the Borrowers or any Subsidiaries of the Borrowers of accounts 

receivable pursuant to factoring arrangements to the extent that the face value of the receivables Disposed for all such Borrowers and Subsidiaries of the Borrowers does not exceed $30,000,000 in the aggregate per month.”
		
	1.8
	Amendments to Section 6.13 of the Credit Agreement: Holding Company.

Section 6.13 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:
“6.13    Restrictions on Activities of Holding Company, Senior Notes Co-Issuer(s) and Senior Secured Notes Co-Issuer(s).  

(a)    Holdings shall not engage in any trade or business, other than acting as a holding company and other activities ancillary thereto.  Holdings shall not own any assets (other than Equity Interests of its Subsidiaries and Intellectual Property it owns as of the Closing Date) or incur any Indebtedness or Guaranteed Indebtedness (other than the Obligations and as otherwise permitted under Section 6.3(a)(v), (a)(vi), (a)(x), (a)(xii), (a)(xv), (a)(xviii) and (a)(xix); and
(b)    No Senior Notes Co-Issuer or Senior Secured Notes Co-Issuer shall: (i) incur any Indebtedness (including Indebtedness permitted by Section 6.3(a)(xvi)) or any other direct obligation or liability whatsoever other than its obligations under the Senior Notes, the Senior Secured Notes, the Obligations and any other Indebtedness incurred pursuant to Section 6.3(a)(xix); (ii) create or suffer to exist any Lien upon any property or assets now owned or hereafter acquired, leased or licensed by it other than Liens securing the Obligations, Liens permitted by clause (aa) of the definition of Permitted Encumbrances and other Liens created by operation of law; (iii) engage in any business or activity or own any assets other than performing obligations and activities incidental thereto under the Senior Notes, the Senior Secured Notes and the Loan Documents; (iv) consolidate with or merge with or into, or convey, transfer, lease or license all or substantially all its assets to any Person; (v) create or acquire any Subsidiary or make or own any Investment in any Person; or (vi) fail to be a corporation under the laws of the State of Delaware.  Notwithstanding the foregoing, a Senior Notes Co-Issuer or a Senior Secured Notes Co-Issuer may be a co-obligor (or a guarantor) with respect to Indebtedness permitted to be incurred under Section 6.3(a)(xviii) or Section 6.3(a)(xix) if the U.S. Borrower is also a primary obligor of such Indebtedness and the net proceeds of such Indebtedness are received by the U.S. Borrower or one or more of the U.S. Borrower’s Subsidiaries other than the Senior Notes Co-Issuer or the Senior Secured Notes Co-Issuer, as applicable.  At any time after the U.S. Borrower or any successor to the U.S. Borrower is a corporation, the Senior Notes Co-Issuer or the Senior Secured Notes Co-Issuer may consolidate or merge with or into the U.S. Borrower or any Subsidiary of the U.S. Borrower.”
		
	1.9
	Amendments to Section 6.14 of the Credit Agreement: Amendments or Waivers with respect to Senior Notes and Senior Secured Notes.

Section 6.14 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:
“6.14    Amendments or Waivers with respect to Senior Notes and Senior Secured Notes.  No Credit Party shall, nor shall it permit any of its Subsidiaries to amend or otherwise change the terms of the Senior Notes or the Senior Secured Notes if the effect of such amendment or change is to shorten the Weighted Average Life to Maturity of the Senior Notes or the Senior Secured Notes or change (to earlier dates) any dates upon which payments of principal or interest are due thereon, except, (a) in the case of the Senior Notes, to the extent that prepayment thereof is being made with the proceeds of Senior Notes issued pursuant to clause (a)(ii) of the proviso to Section 6.3(a)(xviii) and (b) in the case of the Senior Secured Notes, to the extent that prepayment thereof is being made with the proceeds of Senior Secured Notes issued pursuant to clause (y) of the proviso in Section 6.3(a)(xix).”
		
	1.10
	Amendments to Annex A of the Credit Agreement:  Definitions.

A.        Annex A of the Credit Agreement is hereby amended by adding the following definitions in proper alphabetical sequence: 
“Fifth Amendment” means that certain Fifth Amendment to Credit Agreement, dated as of April 5, 2012, among the Borrowers, Holdings, Administrative Agent and the Lenders and the Guarantors listed on the signature pages thereto.
“Fifth Amendment Effective Date” means the date of satisfaction of the conditions referred to in Section II of the Fifth Amendment.  
“Net Bond Proceeds” has the meaning ascribed in Section 6.3(a)(xix). 
“Senior Secured Indenture” means the indenture governing the Senior Secured Notes entered into on the Fifth Amendment Effective Date by and among Holdings, the U.S. Borrower, as co-issuer, the Senior Secured Notes Co-Issuer, as co-issuer, the subsidiary guarantors named therein and U.S. Bank National Association, as trustee, as amended, supplemented, restated, modified, renewed, refunded, replaced (whether upon or after termination or otherwise) or refinanced in whole or in part from time to time in accordance with Section 6.14. 
“Senior Secured Notes” means (i) the senior secured notes in an original principal amount of up to $200,000,000 (as may be increased on or before the Fifth Amendment Effective Date) issued by the U.S. Borrower and the Senior Secured Notes Co-Issuer pursuant to the Senior Secured Indenture and (ii) any other secured notes issued by Holdings, the U.S. Borrower and the Senior Secured Notes Co-Issuer pursuant to the Senior Secured Indenture, including any supplement thereto; provided that (a) no such Senior Secured Notes shall mature earlier than, or require any scheduled amortization or other scheduled prepayments of principal, sinking fund payments, repurchases or redemptions of principal 

prior to, the date that is one hundred eighty days following the final Term Loan Maturity Date at the time such Senior Secured Notes are incurred and (b) no Subsidiary of Holdings that is not a Credit Party shall guarantee such Senior Secured Notes.
“Senior Secured Notes Co-Issuer” shall mean Sitel Finance Corp., a Delaware corporation and any other first-tier Subsidiary of Holdings (other than the U.S. Borrower) that is a co-issuer of Senior Secured Notes.
B.    The definition of “Canadian Dollars Swing Line Commitment” set forth in Annex A of the Credit Agreement is hereby amended and restated in its entirety to read as follows:
“Canadian Dollars Swing Line Commitment” means, as to the Canadian Dollars Swing Line Lender, the commitment of the Canadian Dollars Swing Line Lender to make Canadian Dollars Swing Line Advances in an amount equal to $10,000,000, which commitment constitutes a subfacility of the Canadian Revolving Commitment.
C.    The definition of “Permitted Joint Venture” set forth in Annex A of the Credit Agreement is hereby amended and restated in its entirety to read as follows:
“Permitted Joint Venture” means (i) CLI3L, ClientLogic Philippines, Sitel India Limited, Sitel de Columbia SA, Grupo Sitel de Mexico SA de CV, Sitmex USA, LLC (the owner of 100% of the Equity Interests of Sitel Panama, SA) and (ii) Investments permitted by Section 6.2 in any other Person that is a “Qualifying Person” (as defined below) to the extent that, without regard to director’s qualifying shares and investments by foreign nationals mandated by applicable local foreign laws, which interests shall be disregarded for purposes of these calculations: (x) Holdings and its Subsidiaries do not own, legally or beneficially, more than 50% of the Equity Interests having ordinary voting power of such Person, and (y) 50% or more of the Equity Interests having ordinary voting power of such Person are legally and beneficially owned by a Person or Persons not affiliated with Holdings. For purposes of this definition, a “Qualifying Person” is any Person (a) that is organized or incorporated under the laws of a jurisdiction other than the United States of America or its political subdivisions or (b) which is, or within one year after its formation becomes, a “Minority Business Enterprise” or other similar enterprise or entity, as certified by the National Minority Supplier Development Council, Inc. or its regional councils or divisions or other similarly recognized successor certification body.  U.S. Borrower may, upon 30 days’ notice to the Administrative Agent, re-designate as a Foreign Subsidiary (to the extent such Person otherwise qualifies as a Foreign Subsidiary) any such Person who was before such re-designation a Qualifying Person pursuant to clause (a) of the definition thereof, and from and after the passing of such notice period such Permitted Joint Venture will be treated as a Foreign Subsidiary for all purposes hereunder. In the event a Person who is a Qualifying Person pursuant to clause (b) of the definition thereof loses its certification as a Minority Business Enterprise, the U.S. Borrower shall take all commercially reasonable efforts to dissolve or divest itself of such Person and so long as such efforts are being diligently pursued such Person shall be deemed to not be a Subsidiary for any purpose hereunder.

D.    The definition of “Subsidiary” set forth in Annex A of the Credit Agreement is hereby amended and restated in its entirety to read as follows:
“Subsidiary” means, with respect to any Person, (a) any corporation of which an aggregate of more than 50% of the outstanding Equity Interests having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether, at the time, Equity Interests of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time, directly or indirectly, owned legally or beneficially by such Person or one or more Subsidiaries of such Person, or with respect to which any such Person has the right to vote or designate the vote of 50% or more of such Equity Interests whether by proxy, agreement, operation of law or otherwise, and (b) any partnership or limited liability company in which an aggregate of more than 50% of the outstanding Equity Interests having ordinary voting power (irrespective of whether, at the time, Equity Interests of any other class or classes of such entity shall have or might have voting power by reason of the happening of any contingency) is at the time, directly or indirectly, owned legally or beneficially by such Person or of which any such Person is a general partner or may exercise the powers of a general partner.  Unless the context otherwise requires, each reference to a Subsidiary shall be a reference to a Subsidiary of Holdings.  No Permitted Joint Venture shall be considered to be a Subsidiary of Holdings or the U.S. Borrower or any of their respective Subsidiaries for purposes hereof except as set forth in the definition of Permitted Joint Venture.
E.    The definition of “U.S. Dollars Swing Line Commitment” set forth in Annex A of the Credit Agreement is hereby amended and restated in its entirety to read as follows:
“U.S. Dollars Swing Line Commitment” means, as to the U.S. Dollars Swing Line Lender, the commitment of the U.S. Dollars Swing Line Lender to make U.S. Dollars Swing Line Advances in an amount equal to $20,000,000, which commitment constitutes a subfacility of the U.S. Revolving Commitment of the U.S. Dollars Swing Line Lender.
F.    Clause (b) of the definition of Adjusted EBITDA set forth in Annex A of the Credit Agreement is hereby amended by deleting the provision “to the extent deducted in determining Net Income, the sum of” set forth therein and inserting in lieu thereof the following provision:
“to the extent deducted in determining Net Income, the sum, without duplication, of”
G.    Clause (b)(xvi) of the definition of Adjusted EBITDA set forth in Annex A of the Credit Agreement is hereby amended and restated in its entirety to read as follows:
“(xvi) any losses resulting from any currency fluctuations in connection with (A) the prepayment of Term Loans with the proceeds of the Senior Notes and (B) the prepayment of Term Loans and/or Revolving Loans with the proceeds of the Senior Secured Notes”

H.    Clause (b) of the definition of “Canadian Revolving Commitment” set forth in Annex A of the Credit Agreement is hereby amended and restated in its entirety to read as follows:
“(b) as to all Canadian Revolving Lenders, the aggregate commitment in U.S. Dollars of all Canadian Revolving Lenders to make Canadian Revolving Credit Advances or incur Canadian Letter of Credit Obligations, which aggregate commitment shall be $10,000,000 on the Fifth Amendment Effective Date, as such amount may be adjusted, if at all, from time to time in accordance with the Agreement.”
I.    Clause (b) of the definition of “UK Revolving Commitment” set forth in Annex A of the Credit Agreement is hereby amended and restated in its entirety to read as follows:
“(b) as to all UK Revolving Lenders, the aggregate commitment in U.S. Dollars of all UK Revolving Lenders to make UK Revolving Credit Advances or incur UK Letter of Credit Obligations, which aggregate commitment shall be $0 on the Fifth Amendment Effective Date, as such amount may be adjusted, if at all, from time to time in accordance with the Agreement.”
J.    Clause (b) of the definition of “U.S. Revolving Commitment” set forth in Annex A of the Credit Agreement is hereby amended and restated in its entirety to read as follows:
“(b) as to all U.S. Revolving Lenders, the aggregate commitment in U.S. Dollars of all U.S. Revolving Lenders to make U.S. Revolving Credit Advances or incur U.S. Letter of Credit Obligations, which aggregate commitment shall be $75,000,000 on the Fifth Amendment Effective Date, as such amount may be adjusted, if at all, from time to time in accordance with the Agreement.”
		
	1.11
	Amendments to Annex F of the Credit Agreement: Financial Covenants.

A.    Annex F is hereby amended by deleting the portion of the chart in paragraph (b) commencing with the four Fiscal Quarter period ended March 31, 2012 in its entirety and replacing it with the following:     

	
		
	Four Fiscal Quarter 
Period Ended
	Interest Coverage Ratio

	March 31, 2012
	1.45:1.00

	June 30, 2012
	1.45:1.00

	September 30, 2012
	1.45:1.00

	December 31, 2012
	1.50:1.00

	March 31, 2013
	1.50:1.00

	June 30, 2013
	1.50:1.00

	September 30, 2013
	1.55:1.00

	December 31, 2013
	1.55:1.00

	March 31, 2014
	1.55:1.00

	June 30, 2014
	1.55:1.00

	September 30, 2014
	1.60:1.00

	December 31, 2014
	1.60:1.00

	March 31, 2015
	1.65:1.00

	June 30, 2015
	1.70:1.00

	September 30, 2015
	1.70:1.00

	December 31, 2015
	1.70:1.00

	March 31, 2016
	1.80:1.00

	June 30, 2016
	1.80:1.00

	September 30, 2016
	1.80:1.00

	December 31, 2016
	1.80:1.00

B.     Annex F is hereby amended by deleting the portion of the chart in paragraph (c) commencing with the four Fiscal Quarter period ended March 31, 2012 in its entirety and replacing it with the following:  

	
		
	Four Fiscal Quarter 
Period Ended
	Senior Secured Leverage Ratio

	March 31, 2012
	3.85:1.00

	June 30, 2012
	3.85:1.00

	September 30, 2012
	3.85:1.00

	December 31, 2012
	3.75:1.00

	March 31, 2013
	3.75:1.00

	June 30, 2013
	3.75:1.00

	September 30, 2013
	3.60:1.00

	December 31, 2013
	3.60:1.00

	March 31, 2014
	3.40:1.00

	June 30, 2014
	3.40:1.00

	September 30, 2014
	3.30:1.00

	December 31, 2014
	3.30:1.00

	March 31, 2015
	3.20:1.00

	June 30, 2015
	3.20:1.00

	September 30, 2015
	3.00:1.00

	December 31, 2015
	3.00:1.00

	March 31, 2016
	2.90:1.00

	June 30, 2016
	2.90:1.00

	September 30, 2016
	2.70:1.00

	December 31, 2016
	2.70:1.00

C.    The proviso set forth in the last paragraph of Annex F is hereby amended and restated in its entirety to read as follows:
“provided, that (A) solely for purposes of determining the Senior Secured Leverage Ratio for the Fiscal Quarter ending March 31, 2010 (and any financial calculations required to be made or included within such ratio), the issuance of the Senior Notes (and related repayment of Loans required pursuant to Section II.E of the Third Amendment) will be given pro forma effect as if it had been consummated on the last day of such Fiscal Quarter and (B) solely for purposes of determining the Senior Secured Leverage Ratio for the Fiscal Quarter ending March 31, 2012 (and any financial calculations required to be made or included within such ratio), the issuance of the Senior Secured Notes (and related repayment of Loans required pursuant to Section II.D. of the Fifth Amendment) will be given pro forma effect as if it had been consummated on the last day of such Fiscal Quarter.”
		
	1.12
	The Credit Agreement is hereby amended by adding a new Schedule 5.10 thereto in the form of Exhibit II to this Amendment.  

		
	1.13
	Amendments to Annex I of the Guaranty: Form of Assumption Agreement.

A.    Annex I of the Guaranty is hereby amended and restated in its entirety in the form attached as Exhibit I hereto.     
		
	SECTION II.
	CONDITIONS TO EFFECTIVENESS

This Amendment shall become effective only upon the satisfaction of all of the following conditions precedent (the date of satisfaction of such conditions being referred to herein as the “Fifth Amendment Effective Date”) and the modifications to the terms of the Credit Agreement set forth in Section I hereof shall thereafter be effective and accordingly the Borrowers will not have any obligation to comply with the terms of Section 6.9 of the Credit Agreement as such provisions existed prior to giving effect to this Amendment but instead will be obligated to comply with the terms of Section 6.9 of the Credit Agreement as amended by this Amendment: 
A.    Execution. Administrative Agent shall have received (i) a counterpart signature page of this Amendment duly executed by each of the Borrowers and all Guarantors, (ii) (x) consent and authorization from the Requisite Lenders to execute this Amendment on their behalf or (y) a counterpart signature of this Amendment duly executed by the Requisite Lenders and (iii) a counterpart signature of this Amendment duly executed by each Canadian Revolving Lender, UK Revolving Lender and U.S. Revolving Lender, the Canadian Dollars Swing Line Lender and the U.S. Dollars Swing Line Lender.
B.    Fees.  Administrative Agent shall have received all fees and other amounts due and payable on or prior to the Fifth Amendment Effective Date, including, without limitation, (i) in immediately available funds, for the account of each consenting Lender that has evidenced its agreement hereto by 5:00 PM (New York time) on or before April 5, 2012, (a) to the Lenders holding outstanding Original Term Loans (prior to giving effect to any Original Term Loans prepaid on the Fifth Amendment Effective Date), a non-refundable consent fee in an amount equal to 0.075% of the aggregate of such Lender’s Original Term Loans outstanding as of the date hereof (prior to giving effect to any Original Term Loans prepaid on the Fifth Amendment Effective Date) and (b) to the Lenders holding outstanding Extended Term Loans and Revolving Commitments, a non-refundable consent fee in an amount equal to 0.50% of the aggregate of such Lender’s Extended Term Loans and Revolving Commitments (whether used or unused) outstanding as of the date hereof and (ii) to the extent invoiced to the Borrowers, reimbursement or other payment of all out-of-pocket expenses (including the reasonable fees and expenses of Latham & Watkins LLP) required to be reimbursed or paid by Holdings or any of the Borrowers hereunder, any other Loan Document or any separate agreements entered into between Holdings, the Borrowers and Administrative Agent.
C.    Issuance of Senior Secured Notes.  The issuance and sale of the Senior Secured Notes shall have been consummated, or shall be consummated simultaneously with the effectiveness of this Amendment.
D.    Prepayment of Loans.  Concurrently with the effectiveness of this Amendment, (a) 

the Borrowers shall have applied 100% of the cash proceeds of the issuance of the Senior Secured Notes (net of underwriting discounts, debt issuance and commitment fees and commissions associated therewith and with the Fifth Amendment and other reasonable costs and expenses associated therewith and with the Fifth Amendment, including reasonable legal fees and expenses) as set forth in Section 1.5(b) and (b) the Borrower shall have repaid in full all outstanding UK Revolving Loans.  
E.    Necessary Consents.  Each Credit Party shall have obtained all material consents, including the approvals of its board of directors or similar governing body, necessary or advisable in connection with the transactions contemplated by this Amendment.
		
	SECTION III.
	REPRESENTATIONS AND WARRANTIES

In order to induce the Lenders to enter into this Amendment and to amend the Credit Agreement in the manner provided herein, each Credit Party which is a party hereto represents and warrants to each Lender that the following statements are true and correct in all material respects:
A.    Corporate Power and Authority.  Each Credit Party, which is party hereto, has all requisite power and authority to enter into this Amendment and to carry out the transactions contemplated by, and perform its obligations under, the Credit Agreement as amended by this Amendment (the “Amended Agreement”) and the other Loan Documents to which it is a party.
B.    Authorization of Agreements.  The execution and delivery of this Amendment and the performance of the Amended Agreement and the other Loan Documents have been duly authorized by all necessary action on the part of each Credit Party.
C.    No Conflict.  The execution and delivery by each Credit Party of this Amendment and the performance by each Credit Party of the Amended Agreement and the other Loan Documents to which it is a party:  (a) do not contravene any provision of such Person’s charter, bylaws or partnership or operating agreement, memorandum or articles of association (or equivalent) as applicable; (b) do not violate any applicable law or regulation, or any order or decree of any court or Governmental Authority except where such violation would not reasonably be expected to have a Material Adverse Effect; (c) do not conflict with or result in the breach or termination of, constitute a default under or accelerate or permit the acceleration of any performance required by, any indenture, mortgage, deed of trust, lease, agreement or other instrument to which such Person is a party or by which such Person or any of its property is bound except where such conflict, breach or default would not reasonably be expected to have a Material Adverse Effect; (d) do not result in the creation or imposition of any Lien upon any material property of such Person other than those in favor of Collateral Agent, on behalf of itself and Secured Parties, pursuant to the Loan Documents other than Liens permitted under the Credit Agreement; and (e) do not require the consent or approval of any Governmental Authority, other than those that have been (or will be within any applicable statutory time limits) duly obtained, made or complied with prior to the Fifth Amendment Effective Date.  

D.    Incorporation of Representations and Warranties from Credit Agreement. The representations and warranties contained in Section III of the Amended Agreement are and will be true and correct in all material respects on and as of the Fifth Amendment Effective Date to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case they were true and correct in all material respects on and as of such earlier date.
E.    Absence of Default.  No event has occurred and is continuing or will result from the consummation of the transactions contemplated by this Amendment that would constitute an Event of Default or a Default.
		
	SECTION IV.
	ACKNOWLEDGMENT AND CONSENT

Each Guarantor hereby acknowledges that it has reviewed the terms and provisions of the Credit Agreement and this Amendment and consents to the amendment of the Credit Agreement effected pursuant to this Amendment.  Each Guarantor hereby confirms that each Loan Document to which it is a party or otherwise bound and all Collateral encumbered thereby will continue to guarantee or secure, as the case may be, to the fullest extent possible in accordance with the Loan Documents the payment and performance of all “Obligations” under each of the Loan Documents to which it is a party (in each case as such terms are defined in the applicable Loan Document).
Each Guarantor acknowledges and agrees that any of the Loan Documents to which it is a party or otherwise bound shall continue in full force and effect and that all of its obligations thereunder shall be valid and enforceable and shall not be impaired or limited by the execution or effectiveness of this Amendment.  Each Guarantor represents and warrants that all representations and warranties contained in the Amended Agreement and the Loan Documents to which it is a party or otherwise bound are true and correct in all material respects on and as of the Fifth Amendment Effective Date to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case they were true and correct in all material respects on and as of such earlier date.
Each Guarantor acknowledges and agrees that (i) notwithstanding the conditions to effectiveness set forth in this Amendment, such Guarantor is not required by the terms of the Credit Agreement or any other Loan Document to consent to the amendments to the Credit Agreement effected pursuant to this Amendment and (ii) nothing in the Credit Agreement, this Amendment or any other Loan Document shall be deemed to require the consent of such Guarantor to any future amendments to the Credit Agreement.
		
	SECTION V.
	MISCELLANEOUS

A.    Reference to and Effect on the Credit Agreement and the Other Loan Documents. 
(i)    On and after the Fifth Amendment Effective Date, each reference in 

the Credit Agreement to “this Amendment,” “hereunder,” “hereof,” “herein” or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to the “Credit Agreement,” “thereunder,” “thereof” or words of like import referring to the Credit Agreement shall mean and be a reference to the Credit Agreement as amended by this Amendment.
(ii)    This Amendment shall be deemed a “Loan Document” for all purposes under the Credit Agreement.
(iii)    Except as specifically amended by this Amendment, the Credit Agreement and the other Loan Documents shall remain in full force and effect and are hereby ratified and confirmed.
(iv)    The execution, delivery and performance of this Amendment shall not constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of any Agent or Lender under, the Credit Agreement or any of the other Loan Documents.
B.    Binding Obligation.  This Amendment and the Amended Agreement have been duly executed and delivered by each of the Credit Parties party thereto and each constitutes a legal, valid and binding obligation of such Credit Party to the extent a party thereto, enforceable against such Credit Party in accordance with its terms, except as enforceability may be limited by (a) bankruptcy, insolvency, fraudulent conveyance, moratorium, reorganization or other similar laws affecting creditors’ rights generally and (b) the application of the general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether such enforceability is considered in equity or at law).
C.    Disclosure.  Holdings, the Borrowers and the Administrative Agent hereby each advises the Lenders that an affiliate of GSCP is party to an Interest Rate Protection Agreement with one or more of the Borrowers.  In such transaction, such affiliate of GSCP is acting solely as a principal (including with respect to any rights and remedies thereunder) and is not in any way acting as an agent or fiduciary for the Borrowers, Holdings or the Lenders, the Administrative Agent or any other person in connection therewith.
D.    Headings.  Section and Subsection headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose or be given any substantive effect.
E.    Applicable Law.  THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF THAT WOULD REQUIRE THE APPLICATION OF LAWS OTHER THAN THOSE OF THE STATE OF NEW YORK.

F.    Counterparts.  This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document.
G.    Electronic Execution.  The words “execution,” “signed,” “signature,” and words of like import shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

[Remainder of this page intentionally left blank.]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.

		
	U.S. BORROWER:
	SITEL, LLC

By:  /s/ Patrick Tolbert______________
Name: Patrick Tolbert
Title: Chief Financial Officer

		
	UK BORROWER:
	CLIENTLOGIC HOLDING LIMITED

By:  /s/ John Kellett    ______________
Name: John Kellett
Title: Director

		
	CANADIAN BORROWER
	SITEL CANADA CORPORATION

By:  /s/ Patrick Tolbert______________
Name: Patrick Tolbert
Title: Chief Financial Officer

		
	HOLDINGS:
	SITEL WORLDWIDE CORPORATION

By:  /s/ Patrick Tolbert______________
Name: Patrick Tolbert
Title: Global Chief Financial Officer

                        

		
	GUARANTORS:
	SITEL OPERATING CORPORATION

By:  /s/ Patrick Tolbert______________
Name: Patrick Tolbert
Title: Chief Financial Officer

SERVICE ZONE HOLDINGS, LLC

By:  /s/ Patrick Tolbert______________
Name: Patrick Tolbert
Title: Chief Financial Officer

CATALOG RESOURCES, INC.

By:  /s/ Patrick Tolbert______________
Name: Patrick Tolbert
Title: Chief Financial Officer

SITEL INTERNATIONAL HOLDINGS, INC.

By:  /s/ Patrick Tolbert______________
Name: Patrick Tolbert
Title: Chief Financial Officer

1293219 ONTARIO INC.

By:  /s/ Patrick Tolbert______________
Name: Patrick Tolbert
Title: Chief Financial Officer

1293220 ONTARIO INC.

By:  /s/ Patrick Tolbert______________
Name: Patrick Tolbert
Title: Chief Financial Officer

SITEL MEXICO S.A. DE C.V.

By:  /s/ Patrick Tolbert______________
Name: Patrick Tolbert
Title: Chief Financial Officer

CLIENTLOGIC (UK) HOLDING LIMITED

By:  /s/ John Kellett    ______________
Name: John Kellett
Title: Director

CLIENTLOGIC LIMITED

By:  /s/ John Kellett    ______________
Name: John Kellett
Title: Director

CLIENTLOGIC (UK) LIMITED

By:  /s/ John Kellett    ______________
Name: John Kellett
Title: Director

SITEL INTERNATIONAL, LLC

By:  /s/ Patrick Tolbert______________
Name: Patrick Tolbert
Title: Chief Financial Officer

NA LIQUIDATING COMPANY, INC. (F/K/A NATIONAL ACTION FINANCIAL SERVICES, INC.)

By:  /s/ Patrick Tolbert______________
Name: Patrick Tolbert
Title: Director

SITEL CUSTOMER CARE, INC.

By:  /s/ Patrick Tolbert______________
Name: Patrick Tolbert
Title: Chief Financial Officer

SITEL TELESERVICES CANADA, INC.

By:  /s/ Patrick Tolbert______________
Name: Patrick Tolbert
Title: Chief Financial Officer

SITEL (BVI) INTERNATIONAL, INC.

By:  /s/ Patrick Tolbert______________
Name: Patrick Tolbert
Title: Chief Financial Officer

SITEL EUROPE LIMITED

By:  /s/ John Kellett    ______________
Name: John Kellett
Title: Director

SITEL UK LIMITED

By:  /s/ John Kellett    ______________
Name: John Kellett
Title: Director

SITEL NEW ZEALAND LIMITED

By:  /s/ Steven Barker ______________
Name: Steven Barker
Title: Director

CLIENTLOGIC B.V.

By:  /s/ John Kellett    ______________
Name: John Kellett
Title: Director

SYSTEMS INTEGRATED TELEMARKETING NETHERLANDS B.V.

By:  /s/ John Kellett    ______________
Name: John Kellett
Title: Director

SITEL GMBH

By:  /s/ John Kellett    ______________
Name: John Kellett
Title: Director

SRM INKASSO GMBH

By:  /s/ John Kellett    ______________
Name: John Kellett
Title: Director

SITEL IBERICA TELESERVICES, S.A.U.

By:  /s/ John Kellett    ______________
Name: John Kellett
Title: Director

SITEL BELGIUM NV

By:  /s/ John Kellett    ______________
Name: John Kellett
Title: Director

SITEL FINANCE CORP.

By:  /s/ Patrick Tolbert______________
Name: Patrick Tolbert
Title: Chief Financial Officer

SITEL PANAMA, S.A.

By:  /s/ Patrick Tolbert______________
Name: Patrick Tolbert
Title: Chief Financial Officer

SITEL PHILIPPINES CORPORATION

By:  /s/ Steven Barker ______________
Name: Steven Barker
Title: Director

GOLDMAN SACHS CREDIT PARTNERS L.P.,
as Administrative Agent and U.S. Dollars Swing Line Lender

By:  /s/ Gabe Jacobson_________________
        Authorized Signatory

EXHIBIT I

ANNEX I TO GUARANTY

FORM OF ASSUMPTION AGREEMENT

ASSUMPTION AGREEMENT, dated as of [l], [l], made by [l], a [l] (the “Additional Guarantor”), in favor of GOLDMAN SACHS CREDIT PARTNERS L.P. as Administrative Agent (the “Administrative Agent”) for itself and for each other Agent (such capitalized term and all other capitalized terms used herein, including in this preamble and in the recitals set forth below, shall have the meanings assigned to them in the Credit Agreement referred to below, unless otherwise defined herein), each L/C Issuer, Lender and Lender Counterparty (collectively, the “Beneficiaries” and each a “Beneficiary”).
W I T N E S S E T H:
WHEREAS, pursuant to that certain Credit Agreement, dated January 30, 2007, by and among SITEL, LLC, a Delaware limited liability company (“U.S. Borrower”); CLIENTLOGIC HOLDING LIMITED, a company organized under the laws of England and Wales (“UK Borrower”); SITEL CANADA CORPORATION, an Ontario Corporation (“Canadian Borrower”; Canadian Borrower, collectively with U.S. Borrower and UK Borrower, the “Borrowers”); the other Credit Parties signatory thereto from time to time; the Persons signatory thereto from time to time as Lenders; GOLDMAN SACHS CREDIT PARTNERS L.P., as Joint Lead Arranger, Joint Bookrunner, Administrative Agent and Collateral Agent and GENERAL ELECTRIC CAPITAL CORPORATION, as Syndication Agent (including all annexes, exhibits and schedules thereto, as from time to time amended, restated, supplemented or otherwise modified, the “Credit Agreement”), Lenders have agreed to make Loans to, and the L/C Issuers have agreed to incur Letter of Credit Obligations for the benefit of Borrowers;
WHEREAS, the Additional Guarantor desires to become a party to the Guaranty; and 
WHEREAS, the Additional Guarantor has agreed to execute and deliver this Assumption Agreement in order to become a party to the Guaranty.
NOW, THEREFORE, IT IS AGREED:
1.Guaranty.  By executing and delivering this Assumption Agreement, the Additional Guarantor, as provided in Section 3 of the Guaranty, hereby becomes a party to the Guaranty as a Guarantor thereunder with the same force and effect as if originally named therein as a Guarantor and, without limiting the generality of the foregoing, hereby expressly assumes all obligations and liabilities of a Guarantor thereunder.  Each Additional Guarantor makes on behalf of itself and each of its subsidiaries, on the date of each Advance, the representations and warranties as to each Additional Guarantor contained in the Credit Agreement, in each case to the extent applicable to it and its subsidiaries, and each Additional Guarantor agrees on behalf of itself and each of its subsidiaries to comply with the covenants as to each Additional Guarantor contained in the Credit Agreement, in each case to the extent applicable to it and its subsidiaries, such representations, warranties and covenants are incorporated in to the Guaranty by reference.  The Additional Guarantor hereby represents and warrants that (a) each of the representations and warranties contained in Section 2 of the Guaranty is true and correct in all material respects on and as the date hereof (after giving effect to this Assumption Agreement) as if made on and as of such date and (b) to the best of its knowledge, neither the Additional Guarantor nor any of its Affiliates (i) is under investigation by any Governmental Authority for, or has been charged with, or convicted of, money laundering, drug trafficking, terrorist-related activities or other money laundering predicate crimes under any applicable law, including, without limitation, under (w) the Currency and Foreign Transactions Reporting Act, as amended (also known as the “Bank Secrecy Act”, 31 U.S.C. §§ 5311-5330 and 12 U.S.C. §§ 1818(s), 1820(b) and 1951-1959), (x) the Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended), and any other enabling legislation or executive order relating thereto, (y) the USA PATRIOT Act of 2001 (31 U.S.C. 5318 et seq, as amended) or (z) the Proceeds of Crime (money laundering) and Terrorist Financing Act (Canada), in each case, as amended (collectively, “AML Laws”), (ii) has been assessed civil penalties under any AML Laws or (iii) has had any of its funds seized or forfeited in an action under any AML Laws.  The Additional Guarantor has taken and will take reasonable measures to ensure that it is and will continue to be in compliance in all material respects with all applicable current and future AML Laws.  The Additional Guarantor agrees that it will not knowingly use any funds that constitute or are derived from the proceeds of illegal activity to repay its obligations under the Guaranty, or any portion thereof.  
2.GOVERNING LAW.  THIS ASSUMPTION AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY THE LAWS EXPRESSLY PROVIDED IN THE CREDIT AGREEMENT.  
[Signature page follows]
IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be duly executed and delivered as of the date first above written.
[ADDITIONAL GUARANTOR]
By:            Name:   
    Title:  
Acknowledged and accepted: 
 
GOLDMAN SACHS CREDIT PARTNERS L.P., as Administrative Agent 
 
 
By:           
    Authorized Signatory

EXHIBIT II

SCHEDULE 5.10

		
	1.
	Nicaragua

		
	2.
	Chile

		
	3.
	Brazil

		
	4.
	Portugal

		
	5.
	France

		
	6.
	Columbia

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