AGREEMENT AND RELEASE
Exhibit
99.1
THIS AGREEMENT AND RELEASE
(the “Agreement”) is made and entered into as of this 20th day of March, 2009,
by and between Southwest Bank, an M & I Bank (“Bank”), and Siboney Learning
Group, Inc. (“SLGI”) and Siboney Corporation (“Siboney,” together with SLGI, the
“Borrowers”).
A. WHEREAS, the Borrowers are
engaged in the publishing of educational software primarily for
schools;
B. WHEREAS, Bank made loans to
the Borrowers, including without limitation, the following loans (the “Loans”)
with collateral security documents (the “Collateral Agreements”) (the Loans,
Collateral Agreements and documents referenced therein or otherwise related to
obligations of the Borrowers to Bank are referred to as the “Loan
Documents”):
(a) Promissory
Note dated January 2, 2009 in the original principal amount of $1,325,000.00
(“Note A”); and
(b) Promissory
Note dated January 2, 2009 in the original principal amount of $634,197.92
(“Note B,” and together with Note A, the “Notes”);
C. WHEREAS, the Borrowers
acknowledge that they are in default under the Notes as described in a Notice of
Default from Bank dated March 3, 2009, and that as a result Bank is entitled to
exercise its rights under the Collateral Agreements and other Loan Documents and
applicable law;
D. WHEREAS, an offer has been
made to Bank by Educational Options, Inc. to have its affiliate (“Buyer”)
purchase certain assets of SLGI as described in the draft Xxxx of Sale
evidencing the transaction (the “Assets”) for an amount sufficient to pay the
full amount of indebtedness under the Notes, which offer is acceptable to
Bank;
NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, but subject to all the conditions and provisions contained in the
Loan Documents, except as herein modified, the Borrowers hereby agree to and
with Bank as follows:
1. Recitals. All of the foregoing
recitals and statements are hereby affirmed by each of the parties hereto as
true statements of fact.
2. Defined
Terms. Capitalized terms not
defined herein shall have the meaning set forth in the applicable Loan
Document.
3. Consent
to, Surrender of Assets. The Borrowers hereby
consent to the sale of the Assets to Buyer and agree to take all steps
reasonably necessary to allow such sale to be pursued and consummated, including
without limitation: providing access to Buyer and its agents and attorneys to
perform due diligence, promptly providing requested information, and negotiating
with counterparties to designated contracts for assignment of such contracts to
Buyer, as well as the surrender and/or delivery of physical possession of the
Assets.
4. Representations
and Warranties. The Borrowers hereby
represent and warrant to Bank that each has the respective legal power and
authority to enter into this Agreement and that when executed and delivered by
the Borrowers, this Agreement shall constitute the respective valid and binding
obligations of the Borrowers. The Borrowers further represent and warrant to
Bank that the terms and conditions of this Agreement are satisfactory and in the
best interests of the Borrowers and that the Borrowers have voluntarily decided,
with the advice and assistance of counsel, to undertake the actions contemplated
herein.
5. Releases. The following releases
shall become effective upon Bank’s receipt of the purchase price for the Assets
sufficient to pay the indebtedness under the Notes:
(a) By Borrowers. In
consideration for this Agreement, Bank, its officers, employees, directors,
attorneys, agents and representatives (collectively, the “Bank Releasees”), are
forever released and discharged by Borrowers from and against any and all
rights, claims or causes of action directly or indirectly arising from actions
or inactions by Bank Releasees or any of them with respect to the sale of the
Assets to Buyer.
(b) By Bank. In
consideration for this Agreement and Buyer’s payment of the purchase price for
the Assets, each of the Borrowers and its officers, employees, directors,
attorneys, agents and representatives (collectively, the “Siboney Releasees”),
are forever released and discharged by Bank from and against any and all rights,
claims or causes of action directly or indirectly arising from the Loans and any
of the Loan Documents.
6. Balance
of Indebtedness, Interest. The Borrowers
acknowledge that as of March 20, 2009, the following amounts were due and owing
under the Loans:
(a) Note
A: $1,325,000.00 principal, $3,146.88 in accrued interest (plus $165.63 per diem
thereafter), plus late fees and costs of collection including attorneys fees;
and
(b) Note
B: $615,447.92 in principal, plus $1,461.69 in accrued interest (plus $76.93 per
diem thereafter), plus late fees and costs of collection including attorneys
fees.
7. Security
Interests. Effective upon the
surrender and/or physical delivery by Borrowers of the Assets pursuant to
paragraph 3 (or if later, the receipt by Bank of the cash consideration to be
paid by Buyer), SLGI shall be and is authorized to file all terminations and
releases of security interests as it shall deem appropriate to evidence the
release by Bank of all of its security interests and liens in assets of SLGI,
including but not limited to the Assets. For the avoidance of doubt, Bank hereby
represents, warrants and acknowledges that it does not hold and does not claim
any security interests or other liens in the assets of Siboney.
8. Miscellaneous.
(a) In
addition to those fees and expenses recoverable under the Loan
2
Documents,
all fees and costs, including, without limitation, attorneys’ fees and expenses
incurred by Bank in connection with the Borrowers’ defaults under the terms of
the Loan Documents, all fees and out of pocket expenses incurred in connection
with this Agreement and sale of the Assets shall be payable to Bank by SLGI
immediately upon demand and such amount shall become a part of the indebtedness
of SLGI to Bank under the Loan Documents without notice to SLGI;
(b) This
Agreement may not be modified or extended in any manner, except by written
agreement signed by all parties hereto;
(c) No
course of dealings heretofore or hereafter between SLGI and/or Siboney on one
hand, and Bank, nor any failure or delay on the part of Bank in exercising any
rights or remedies under this Agreement, any document executed pursuant hereto,
the Loan Documents or existing law shall operate as a waiver of any right or
remedy of Bank with respect to the Loans, and any single or partial exercise of
any right or remedy hereunder shall not operate as a waiver or preclusion of the
exercise of any of the rights or remedies Bank may have under the Loan Documents
or otherwise. Nothing in this subparagraph shall impair the rights of the
parties under this Agreement;
(d) The
following notice is provided pursuant to section 432.047, X.X.Xx. As used
herein, “borrower(s)” means SLGI and Siboney, “creditor” means Bank, and each of
“the credit agreement” and “this writing” means this Agreement and the other
Loan Documents: ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR
TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR
RENEW SUCH DEBT ARE NOT ENFORCEABLE, REGARDLESS OF THE LEGAL THEORY UPON WHICH
IT IS BASED. TO PROTECT YOU (BORROWER(S)) AND US (CREDITOR) FROM
MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH
MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE
STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING
TO MODIFY IT;
(e) Notwithstanding
anything herein to the contrary, nothing herein shall be construed as a
commitment by Bank to extend further credit to the Borrowers or increase the
amount of any obligation due to Bank;
(f) This
Agreement and all documents executed pursuant hereto shall be governed and
controlled by the laws of the State of Missouri as to interpretation,
enforcement, validity, construction, effect, choice of law and in all other
respects, but excluding perfection, which shall be governed and controlled by
the laws of the relevant jurisdiction;
(g) Except
as expressly provided herein, all terms and provisions of the Loan Documents
shall remain in full force and effect, and SLGI shall comply with
same;
(h) The
Borrowers, upon request of Bank, shall duly execute and deliver, or cause to be
duly executed and delivered to Bank such further instruments, and do or cause to
be done such further acts as may be necessary or proper in the reasonable
judgment of
3
Bank to
carry out the provisions and purpose of this Agreement;
(i) This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective heirs, legal representatives, successors and
assigns; and
(j) This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
document.
The
Remainder of this Page Left Intentionally Blank
4
IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed as of the day and the
year first above written.
|
SOUTHWEST
BANK, an M & I BANK
|
|
|
By /s/ Xxxxxxx
Xxxx
|
|
|
Authorized Officer
|
|
|
SIBONEY
LEARNING GROUP, INC.
|
|
|
By /s/ Xxxxxxx X.
Xxxxxxx
|
|
|
Authorized Officer
|
|
|
SIBONEY
CORPORATION
|
|
|
By /s/ Xxxxxxx X.
Xxxxxxx
|
|
|
Authorized
Officer
|
5
