SUBORDINATION AGREEMENT
Exhibit
10(n)
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Principal
$1,125,000.00
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Loan
Date
03-21-2007
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Maturity
04-01-2008
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Loan
No
12030954-10000
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Call/Coll
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Account
00000122565
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Officer
32405
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Initials
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-
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References
in the shaded area are for Lender’s use only and do not limit the
applicability of this document to any particular loan or item. Any
item
above containing “***” has been omitted due to text length
limitations.
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Borrower:
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Siboney
Learning Group, Inc.
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Lender:
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Southwest
Bank of St. Louis
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Siboney
Corporation
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St.
Louis Region Commercial Lending
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000
Xxxxxxxx Xx. Xxx 000
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00000
Xxxxxxxxxx Xxxx
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Xx.
Xxxxx, XX 00000
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Xxx
Xxxxx, XX 00000
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Creditor:
THIS
SUBORDINATION AGREEMENT dated _______________, is made and executed among
Siboney Learning Group, Inc.; and Siboney Corporation; 000 Xxxxxxxx Xx. Xxx
000;
Xx Xxxxx, XX 00000 (“Borrower”);
________________, ______________________________ (“Creditor”); and
Southwest Bank of St. Louis, St Louis Region Commercial Lending, 00000
Xxxxxxxxxx Xxxx, Xxx Xxxxx, XX 00000 (“Lender”).
CURRENT
INDEBTEDNESS OWING TO CREDITOR.
As of
the date of this Agreement, Borrower is indebted to Creditor in the aggregate
amount of $100,000.00.
This
amount is the total indebtedness of every kind from Borrower to
Creditor.
REQUESTED
FINANCIAL ACCOMMODATIONS.
Creditor and Borrower each want Lender to provide financial accommodations
to
Borrower in the form of (A) new credit or loan advances, (B) an extension of
time to pay or other compromises regarding all or part of Borrower’s present
indebtedness to Lender, or (C) other benefits to Borrower. Borrower and Creditor
each represent and acknowledge to Lender that Creditor will benefit as a result
of these financial accommodations from Lender to Borrower, and Creditor
acknowledges receipt of valuable consideration for entering into this Agreement.
Based
on the representations and acknowledgments contained in this Agreement, Borrower
and Creditor agree with Lender as follows:
SUBORDINATED
INDEBTEDNESS.
The
words “Subordinated Indebtedness” as used in this Agreement mean the following
specific indebtedness from Borrower to Creditor, including all renewals,
extensions, modifications and substitutions for the indebtedness, including
principal, interest, and all costs and attorneys’ fees, relating to the
indebtedness: $100,000.00.
SUPERIOR
INDEBTEDNESS.
The
words “Superior Indebtedness” as used in this Agreement mean and include all
present and future indebtedness, obligations, liabilities, claims, rights,
and
demands of any kind which may be now or hereafter owing from Borrower
to Lender.
The
term “Superior Indebtedness” is used in its broadest sense and includes without
limitation all principal, all interest, all costs, attorneys’ fees, all sums
paid for the purpose of protecting Lender’s rights in security (such as paying
for insurance on collateral if the owner fails to do so), all contingent
obligations of Borrower (such as a guaranty), all obligations arising by reason
of Borrower’s accounts with Lender (such as an overdraft on a checking account),
and all other obligations of Borrower to Lender, secured or unsecured, of any
nature whatsoever.
SUBORDINATION.
All
Subordinated Indebtedness of Borrower to Creditor is and shall be subordinated
in all respects to all Superior Indebtedness of Borrower to Lender. If Creditor
holds one or more Security Interests, whether now existing or hereafter
acquired, in any of Borrower’s real property or personal property, Creditor also
subordinates all Creditor’s Security Interests to all Security Interests held by
Lender, whether now existing or hereafter acquired.
PAYMENTS
TO CREDITOR.
Borrower will not make and Creditor will not accept, at any time while any
Superior Indebtedness is owing to Lender, (A) any payment upon any Subordinated
Indebtedness, (B) any advance, transfer, or assignment of assets to Creditor
in
any form whatsoever that would reduce at any time or in any way the amount
of
Subordinated Indebtedness, or (C) any transfer of any assets as security for
the
Subordinated Indebtedness, except upon Lender’s prior written
consent.
In
the
event of any distribution, division, or application, whether partial or
complete, voluntary or involuntary, by operation of law or otherwise, of all
or
any part of Borrower’s assets, or the proceeds of Borrower’s assets, in whatever
form, to creditors of Borrower or upon any indebtedness of Borrower, whether
by
reason of the liquidation, dissolution or other winding-up of Borrower, or
by
reason of any execution sale, receivership, insolvency, or bankruptcy
proceeding, assignment for the benefit of creditors, proceedings for
reorganization, or readjustment of Borrower or Borrower’s properties, then and
in such event, (A) the Superior Indebtedness shall be paid in full before any
payment is made upon the Subordinated Indebtedness, and (B) all payments and
distributions, of any kind or character and whether in cash, property, or
securities, which shall be payable or deliverable upon or in respect of the
Subordinated Indebtedness shall be paid or delivered directly to Lender for
application in payment of the amounts then due on the Superior Indebtedness
until the Superior Indebtedness shall have been paid in full.
In
order
that Lender may establish its right to prove claims and recover for its own
account dividends based on the Subordinated Indebtedness, Creditor does hereby
assign all its right, title, and interest in such claims to Lender. Creditor
further agrees to supply such information and evidence, provide access to and
copies of such of Creditor’s records as may pertain to the Subordinated
Indebtedness, and execute such instruments as may be required by Lender to
enable Lender to enforce all such claims and collect all dividends, payments,
or
other disbursements which may be made on account of the Subordinated
Indebtedness. For such purposes, Creditor hereby irrevocably authorizes Lender
in its discretion to make and present for or on behalf of Creditor such proofs
of claims on account of the Subordinated Indebtedness as Lender may deem
expedient and proper and to vote such claims in any such proceeding and to
receive and collect any and all dividends, payments, or other disbursements
made
thereon in whatever form the same may be paid or issued and to apply the same
on
account of the Superior Indebtedness.
Should
any payment, distribution, security, or proceeds thereof be received by Creditor
at any time on the Subordinated Indebtedness contrary to the terms of this
Agreement, Creditor immediately will deliver the same to Lender in precisely
the
form received (except for the endorsement or assignment of Creditor if
necessary), for application on or to secure the Superior Indebtedness, whether
it is due or not due, and until so delivered the same shall be held in trust
by
Creditor as property of Lender. In the event Creditor fails to make any such
endorsement or assignment, Lender, or any of its officers on behalf of Lender,
is hereby irrevocably authorized by Creditor to make the same.
CREDITOR’S
NOTES.
Creditor agrees to deliver to Lender, at Lender’s request, all notes of Borrower
to Creditor, or other evidence of the Subordinated Indebtedness, now held or
hereafter acquired by Creditor, while this Agreement remains in effect. At
Lender’s request, Borrower also will execute and deliver to Creditor a
promissory note evidencing any book account or claim now or hereafter owed
by
Borrower to Creditor, which note also shall be delivered by Creditor to Lender.
Creditor agrees not to sell, assign, pledge or otherwise transfer any of such
notes except subject to all the terms and conditions of this
Agreement.
CREDITOR’S
REPRESENTATIONS AND WARRANTIES.
Creditor represents and warrants to Lender that: (A) no representations or
agreements of any kind have been made to Creditor which would limit or qualify
in any way the terms of this Agreement; (B) this Agreement is executed at
Borrower’s request and not at the request of Lender; (C) Lender has made no
representation to Creditor as to the creditworthiness of Borrower; and (D)
Creditor has established adequate means of obtaining from Borrower on a
continuing basis information regarding Borrower’s financial condition. Creditor
agrees to keep adequately informed from such means of any facts, events, or
circumstances
which might in any way affect Creditor’s risks under this Agreement, and
Creditor further agrees that Lender shall have no obligation to disclose to
Creditor information or material acquired by Lender in the course of its
relationship with Borrower.
CREDITOR’S
WAIVERS.
Creditor waives any right to require Lender: (A) to make, extend, renew, or
modify any loan to Borrower or to grant any other financial accommodations
to
Borrower whatsoever; (B) to make any presentment, protest, demand, or notice
of
any kind, including notice of any nonpayment of the Superior Indebtedness or
of
any nonpayment related to any Security Interests, or notice of any action or
nonaction on the part of Borrower, Lender, any surety, endorser, or other
guarantor in connection with the Superior Indebtedness, or in connection with
the creation of new or additional Superior Indebtedness; (C) to resort for
payment or to proceed directly or at once against any person, including
Borrower; (D) to proceed directly against or exhaust any Security Interests
held
by Lender from Borrower, any other guarantor, or any other person; (E) to give
notice of the terms, time, and place of any public or private sale of personal
property security held by Lender from Borrower or to comply with any other
applicable provisions of the Uniform Commercial Code; (F) to pursue any other
remedy within Lender’s power; or (G) to commit any act or omission of any kind,
at any time, with respect to any matter whatsoever.
LENDER’S
RIGHTS.
Lender
may take or omit any and all actions with respect to the Superior Indebtedness
or any Security Interests for the Superior Indebtedness without affecting
whatsoever any of Lender’s rights under this Agreement. In particular, without
limitation, Lender may, without notice of any kind to Creditor, (A) make one
or
more additional secured or unsecured loans to Borrower; (B) repeatedly alter,
compromise, renew, extend, accelerate, or otherwise change the time for payment
or other terms of the Superior Indebtedness or any part thereof, including
increases and decreases of the rate of interest on the Superior Indebtedness;
extensions may be repeated and may be for longer than the original loan term;
(C) take and hold Security Interests for the payment of the Superior
Indebtedness, and exchange, enforce, waive, and release any such Security
Interests, with or without the substitution of new collateral; (D) release,
substitute, agree not to xxx, or deal with any one or more of Borrower’s
sureties, endorsers, or guarantors on any terms or manner Lender chooses; (E)
determine how, when and what application of payments and credits, shall be
made
on the Superior Indebtedness; (F) apply such security and direct the order
or
manner of sale thereof, as Lender in its discretion may determine; and (G)
assign this Agreement in whole or in part.
DEFAULT
BY BORROWER.
If
Borrower becomes insolvent or bankrupt, this Agreement shall remain in full
force and effect. Any default by Borrower under the terms of the Subordinated
Indebtedness also shall constitute an event of default under the terms of the
Superior Indebtedness in favor of Lender.
DURATION
AND TERMINATION.
This
Agreement will take effect when received by Lender, without the necessity of
any
acceptance by Lender, in writing or otherwise, and will remain in full force
and
effect until Creditor shall notify Lender in writing at the address shown above
to the contrary. Any such notice shall not affect the Superior Indebtedness
owed
Lender by Borrower at the time of such notice, nor shall such notice affect
Superior Indebtedness thereafter granted in compliance with a commitment made
by
Lender to Borrower prior to receipt of such notice, nor shall such notice affect
any renewals of or substitutions for any of the foregoing. Such notice shall
affect only indebtedness of Borrower to Lender arising after receipt of such
notice and not arising from financial assistance granted by Lender to Borrower
in compliance with Lender’s obligations under a commitment. Any notes lodged
with Lender pursuant to the section titled “Creditor’s Notes” above need not be
returned until this Agreement has no further force or effect.
OTHER
TERMS AND CONDITIONS.
The
following provisions are a part of this Agreement: Payments permitted as
follows:
10.0%
per
annum payable quarterly, at the option of SBON (“Siboney Corporation”), either
in cash or by issuance of additional Notes (“Notes”)
with a principal
amount equal to the interest payment then due; interest would increase by 2%
per
annum during the pendency of an event of default.
ISDA.
Obligations include, without limitation all obligations and liabilities arising
pursuant to or in connection with any interest rate swap transaction, basis
swap, forward rate transaction, interest rate option or any similar transaction
between the Borrower and Lender, including all obligations under the ISDA Master
Agreement between the Borrower and Lender.
MISCELLANEOUS
PROVISIONS.
The
following miscellaneous provisions are a part of this Agreement:
Amendments.
This
Agreement, together with any Related Documents, constitutes the entire
understanding and agreement of the parties as to the matters set forth in this
Agreement. No alteration of or amendment to this Agreement shall be effective
unless given in writing and signed by the party or parties sought to be charged
or bound by the alteration or amendment.
Attorneys’
Fees; Expenses.
Creditor agrees to pay upon demand all of Lender’s costs and expenses, including
Lender’s attorneys’ fees and Lender’s legal expenses, incurred in connection
with the enforcement of this Agreement. Lender may hire or pay someone else
to
help enforce this Agreement, and Creditor shall pay the costs and expenses
of
such enforcement. Costs and expenses include Lender’s attorneys’ fees and legal
expenses whether or not there is a lawsuit, including attorneys’ fees and legal
expenses for bankruptcy proceedings (including efforts to modify or vacate
any
automatic stay or injunction), and appeals. Creditor also shall pay all court
costs and such additional fees as may be directed by the court.
Authority.
The
person who signs this Agreement as or on behalf of Creditor represents and
warrants that he or she has authority to execute this Agreement and to
subordinate the Subordinated Indebtedness and the Creditor’s security interests
in Creditor’s property, if any.
Caption
Headings.
Caption
headings in this Agreement are for convenience purposes only and are not to
be
used to interpret or define the provisions of this Agreement.
Governing
Law. This Agreement will be governed by federal law applicable to Lender and,
to
the extent not preempted by federal law, the laws of the State of Missouri
without regard to its conflicts of law provisions. This Agreement has been
accepted by Lender in the State of Missouri.
Choice
of Venue.
If
there is a lawsuit, Creditor agrees upon Lender’s request to submit to the
jurisdiction of the courts of St Louis County, State of Missouri.
Interpretation.
In all
cases where there is more than one Creditor, then all words used in this
Agreement in the singular shall be deemed to have been used in the plural where
the context and construction so require; and where there is more than one
Creditor named in this Agreement or when this Agreement is executed by more
than
one, the words “Creditor” shall mean all and any one or more of them. Reference
to the phrase “Creditor” includes the heirs, successors, assigns, and
transferees of each of them. All of the obligations of Creditor under this
Agreement (if more than one) shall be joint and several.
Successors
and Assigns.
This
Agreement shall be understood to be for the benefit of Lender and for such
other
person or persons as may from time to time become or be the holder or owner
of
any of the Indebtedness or any interest therein, and this Agreement shall be
transferable to the same extent and with the same force and effect as any such
Indebtedness may be transferable.
No
Waiver by Lender.
Lender
shall not be deemed to have waived any rights under this Agreement unless such
waiver is given in writing and signed by Lender. No delay or omission on the
part of Lender in exercising any right shall operate as a waiver of such right
or any other right. A waiver by Lender of a provision of this Agreement shall
not prejudice or constitute a waiver of Lender’s right otherwise to demand
strict compliance with that provision or any other provision of this Agreement.
No prior waiver by Lender, nor any course of dealing between Lender and
Creditor, shall constitute a waiver of any of Lender’s rights or of any of
Creditor’s obligations as to any future transactions. Whenever the consent of
Lender is required under this Agreement, the granting of such consent by Lender
in any instance shall not constitute continuing consent to subsequent instances
where such consent is required and in all cases such consent may be granted
or
withheld in the sole discretion of Lender.
DEFINITIONS.
The
following capitalized words and terms shall have the following meanings when
used in this Agreement. Unless specifically stated to the contrary, all
references to dollar amounts shall mean amounts in lawful money of the United
States of America. Words and terms used in the singular shall include the
plural, and the plural shall include the singular, as the context may require.
Words and terms not otherwise defined in this Agreement shall have the meanings
attributed to such terms in the Uniform Commercial Code:
Agreement.
The
word “Agreement” means this Subordination Agreement, as this Subordination
Agreement may be amended or modified from time to time, together with all
exhibits and schedules attached to this Subordination Agreement from time to
time.
Borrower.
The
word “Borrower” means Siboney Learning Group, Inc.; and Siboney Corporation and
includes all co-signers and co-makers signing the Note and all their successors
and assigns.
Creditor.
The
word “Creditor” means ________________.
Indebtedness.
The
word “Indebtedness” means the indebtedness evidenced by the Note or Related
Documents, including all principal and interest together with all other
indebtedness and costs and expenses for which Borrower is responsible under
this
Agreement or under any of the Related Documents.
Lender.
The
word “Lender” means Southwest Bank of St. Louis, its successors and
assigns.
Note.
The
word “Note” means the Note executed by Siboney Learning Group, Inc.; and Siboney
Corporation in the principal amount of $1,125,000.00 dated March 21, 2007,
together with all renewals of, extensions of, modifications of, refinancings
of,
consolidations of, and substitutions for the note or credit
agreement.
Related
Documents.
The
words “Related Documents” mean all promissory notes, credit agreements, loan
agreements, environmental agreements, guaranties, security agreements,
mortgages, deeds of trust, security deeds, collateral mortgages, and all other
instruments, agreements and documents, whether now or hereafter existing,
executed in connection with the Indebtedness.
Security
Interest.
The
words “Security Interest” mean, without limitation, any and all types of
collateral security, present and future, whether in the form of a lien, charge,
encumbrance, mortgage, deed of trust, security deed, assignment, pledge, crop
pledge, chattel mortgage, collateral chattel mortgage, chattel trust, factor’s
lien, equipment trust, conditional sale, trust receipt, lien or title retention
contract, lease or consignment intended as a security device, or any other
security or lien interest whatsoever whether created by law, contract, or
otherwise.
Subordinated
Indebtedness.
The
words “Subordinated Indebtedness” mean the indebtedness described in the section
of this Agreement titled “Subordinated Indebtedness”.
Superior
Indebtedness.
The
words “Superior Indebtedness” mean the indebtedness described in the section of
this Agreement titled “Superior Indebtedness”.
BORROWER
AND CREDITOR EACH ACKNOWLEDGE HAVING READ ALL THE PROVISIONS OF THIS
SUBORDINATION AGREEMENT, AND BORROWER AND CREDITOR
EACH AGREE TO ITS TERMS. THIS AGREEMENT IS DATED MARCH 21,
2007.
BORROWER:
SIBONEY
LEARNING GROUP, INC.
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By:
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/s/ Xxxxxxx X. Xxxxxxx |
By:
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/s/ Xxxxxxx Xxxxxxxx | |||
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Xxxxxxx
X. Xxxxxxx, President of
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Xxxxxxx
Xxxxxxxx, Secretary of
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Siboney
Learning Group, Inc.
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Siboney
Learning Group, Inc.
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SIBONEY
CORPORATION
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By:
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/s/ Xxxxxxx X. Xxxxxxx |
By:
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/s/ Xxxxxxx Xxxxxxxx | |||
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Xxxxxxx
X. Xxxxxxx, President of
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Xxxxxxx
Xxxxxxxx, Secretary of
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Siboney
Learning Group, Inc.
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Siboney
Learning Group, Inc.
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| CREDITOR: | ||||||
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X
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