Southwest Bank April 2, 2007 Siboney Learning Group, Inc. and Siboney Corporation Mr. William D. Edwards, President St. Louis, MO 63122 Dear Mr. Edwards:
Exhibit
10(h)
Southwest
Bank
April
2,
2007
Siboney
Learning Group, Inc. and
Siboney
Corporation
Xx.
Xxxxxxx X. Xxxxxxx, President
000
X.
Xxxxxxxx Xx., #000
Xx.
Xxxxx, XX 00000
Dear
Xx.
Xxxxxxx:
This
Letter Agreement (the “Agreement”) is made and entered into as of this
2nd
day of
April 2007 by and between Siboney Learning Group, Inc. and
Siboney Corporation (the “Borrower”) and Southwest Bank of St.
Louis (the “Lender”).
Borrower
covenants that so long as any obligation is owed to Lender or Lender has any
outstanding commitment to lend to Borrower, under the terms and conditions
of
(i) that certain Promissory Note dated as of April 2, 2007 in the principal
amount of up to $1,500,000.00 (the “Revolving Credit Limit”)
executed by Borrower in favor of Lender (the “Revolving Loan”), and (ii) that
certain Promissory Note dated as of April 2, 2007, in the original principal
amount of $1,125,000.00, executed by Borrower in favor of
Lender (the “Term Loan”) or under any note(s) evidencing a loan, (the “Note(s)”)
and all extensions, renewals or modifications of the Note(s). The Revolving
Loan(s) and Term Loan collectively are called (the “Loan(s)”):
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1.
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Lender
shall have received the following security documents (the “Security
Documents”) in form and substance satisfactory to
Lender:
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(i)
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The
Note(s);
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(ii)
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General
Business Security Agreements from Siboney Learning Group, Inc. and
Siboney
Corporation, dated as of June 1, 2003;
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(iii)
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UCC
Financing Statements as required by Lender;
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(iv)
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Organization
Perfection Certificates from Siboney Learning Group, Inc. and Siboney
Corporation;
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(v)
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Subordination
Agreement signed by Xxxxxxx X. Xxxxxxx; and
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(vi)
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Subordination
Agreement signed by Xxxxx X. Xxxxxxx.
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2.
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Borrower
shall furnish to Lender, as soon as available, such financial information
respecting Borrower as Lender from time to time requests, and without
request furnish to Lender:
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(i)
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Within
120 days after the end of each fiscal year of Borrower, a consolidated
balance sheet of Siboney Corporation and its subsidiaries as of the
close
of such fiscal year and related consolidated statements of income
and
retained earnings and cash flow for such year all in reasonable detail
and
satisfactory in scope to Lender, prepared in accordance with generally
accepted accounting principles applies on a consistent basis, audited
by
an
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independent
certified public accountant of Borrower, selected by borrower and
acceptable to Lender.
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(ii)
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Within
45 days after the end of each quarter, a balance sheet of Borrower
as of
the end of such quarter and related statements of income and retained
earnings and cash flow for the period from the beginning of the fiscal
year to the end of such quarter, prepared in accordance with generally
accepted accounting principles applied on a consistent basis certified,
subject to normal year-end adjustments, by a financial representative
of
Borrower.
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3.
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Borrower
shall timely perform and observe the following financial covenant(s),
calculated in accordance with generally accepted accounting principles
applies on a consistent basis:
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(i)
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Maintain
at all times a net worth, plus subordinated debt, of not less than
$2,300,000.00 as of March 31, 2007, and $2,700,000.00 as of June
30, 2007
and each quarter thereafter, tested quarterly.
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(ii)
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Maintain
at all times a ratio of total liabilities to net worth plus subordinated
debt of not greater than 1.5 to 1.00 as of March 31, 2007 and 1.25
to 1.00
as of June 30, 2007 and each quarter thereafter, tested
quarterly.
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4.
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This
Letter Agreement amends and restates in its entirety a Letter Agreement
dated March 31, 2006 between Siboney Learning Group, Inc. and Siboney
Corporation (the “Borrower”) and Southwest Bank of St. Louis (the
“Lender”).
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5.
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As
required by the terms of the Subordination Agreements referenced
above,
Lender hereby consents to the form, terms, provisions and conditions
of,
and arrangements contemplated by (i) that certain Note and Warrant
Purchase Agreement dated as of March 21, 2007 to be executed by and
among
Borrower, Xxxxxxx X. Xxxxxxx and Xxxxx X. Xxxxxxx, in the form attached
hereto as Exhibit
A,
(ii) the 10% Subordinated Secured Note to be executed by Borrower
in favor
of Xxxxxxx X. Xxxxxxx in form attached hereto as Exhibit
B,
(iii) the 10% Subordinated Secured Note to be executed by Borrower
in
favor of Xxxxx X. Xxxxxxx in the form attached hereto as Exhibit
C,
(iv) the Warrant to be given by Siboney Corporation in favor of Xxxxxxx
X.
Xxxxxxx in the form attached hereto as Exhibit
D,
(v) the Warrant to be given by Siboney Corporation in favor of Xxxxx
X.
Xxxxxxx in the form attached hereto as Exhibit
E
and (vi) the Security Agreement to be executed by Borrower in favor
of
Xxxxxxx X. Xxxxxxx and Xxxxx X. Xxxxxxx in the form attached hereto
as
Exhibit
F
(collectively, the “Subordinated
Debt Documents”).
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A
breach
of any term or condition in this Agreement shall constitute an additional event
of default under the Note(s) and Lender may, at its option, declare the Note(s)
due and payable, and may pursue all remedies available to it with regard to
the
Note(s). The undersigned shall reimburse Lender for all expenses incurred by
it
in protecting or enforcing its rights under this Note(s), including without
limitation, costs of administration of the Note(s) and costs of collection
before and after judgment, including reasonable attorney’s fees and legal
expenses.
In
the
case of any ambiguity or conflict between this Agreement, any note evidencing
a
Loan, or any Security Document, this Agreement will govern.
Please
confirm your acknowledgment and acceptance of the terms and conditions of this
Agreement by signing and dating below.
Very truly yours, | Very truly yours, |
By:
/s/ Xxxxxx X.
Xxxxxx
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By: /s/
Xxx X.
Xxxxxx
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Xxxxxx
X. Xxxxxx, Executive Vice President
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Title: Senior
Vice
President
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Accepted
and Agreed as of April 2, 2007
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Siboney
Learning Group, Inc.
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Siboney
Corporation
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By:
/s/ Xxxxxxx X. Edwards__________
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By: /s/
Xxxxxxx X.
Xxxxxxx
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Xxxxxxx
X. Xxxxxxx, President
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Xxxxxxx
X. Xxxxxxx, Executive Vice President
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By:
/s/ Xxxxxxx Braddock____________
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By: /s/
Xxxxxxx
Xxxxxxxx
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Xxxxxxx
Xxxxxxxx, Secretary
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Xxxxxxx
Xxxxxxxx, Secretary
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