EXHIBIT 4.7
EIGHTH AMENDMENT AND MODIFICATION
TO LOAN AND SECURITY AGREEMENT
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THIS EIGHTH AMENDMENT AND MODIFICATION TO LOAN AND SECURITY AGREEMENT (the
"AMENDMENT") is made effective as of the ____ day of April, 1998, by and among
NOBEL EDUCATION DYNAMICS, INC. ("NOBEL"), IMAGINE EDUCATIONAL PRODUCTS, INC.
("IMAGINE"), MERRYHILL SCHOOLS, INC. ("MERRYHILL"), NEDI, INC. ("NEDI"),
MERRYHILL SCHOOLS NEVADA, INC. ("MERRYHILL NEVADA") and LAKE FOREST PARK
MONTESSORI SCHOOL, INC. ("LAKE FOREST") (collectively, the "OBLIGORS") and
SUMMIT BANK, formerly known as First Valley Bank ("BANK").
BACKGROUND
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A. Nobel, Imagine, Merryhill, NEDI and Bank are parties to that certain
Loan and Security Agreement dated August 30, 1995, as amended by amendments
dated September 1, 1995, April 4, 1996, July 23, 1996, November 1, 1996, March
20, 1997, May 5, 1997 and December 22, 1997 (as amended, the "LOAN AGREEMENT").
B. EDUCO, Inc., Montessori House, Inc. and Another Generation
Enterprises, Inc. were also parties to the Loan Agreement. However, (i) EDUCO,
Inc. and Another Generation Enterprises, Inc. have merged into Nobel with Nobel
being the surviving entity and (ii) Montessori House, Inc. merged into Merryhill
with Merryhill being the surviving entity.
C. Obligors and Bank desire to further amend the Loan Agreement in
accordance with the terms and conditions hereof.
D. Capitalized terms used herein and not otherwise defined shall have the
meanings provided for such terms in the Loan Agreement.
NOW, THEREFORE, intending to be legally bound hereby, the parties hereto
agree as follows:
1. ADDITIONAL OBLIGORS. From and after the date hereof, Merryhill Nevada
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and Lake Forest shall each be an "OBLIGOR" under the Loan Agreement and shall be
bound by all the terms and conditions thereof. Unless otherwise specifically
restated for Merryhill Nevada and Lake Forest hereunder, all representations,
warranties and covenants under the Loan Agreement shall be deemed to be the
representations, warranties and covenants of Merryhill Nevada and Lake Forest as
if Merryhill Nevada and Lake Forest were originally named as an "OBLIGOR" under
the Loan Agreement. All references to Obligors in the Loan Agreement and the
other Loan Documents shall hereafter be deemed to include both Merryhill Nevada
and Lake Forest.
2. SECURITY. As security for the full and timely payment and performance
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of all Bank Indebtedness, Merryhill Nevada and Lake Forest hereby grant to Bank
a security interest in all of the following:
a. All of such Obligor's present and future accounts, contract
rights, chattel paper, instruments and documents and all other rights to
the payment of money whether or not yet earned, for services rendered or
goods sold, consigned, leased or furnished by such parties or otherwise,
together with (i) all goods (including any returned, rejected, repossessed
or consigned goods), the sale, consignment, lease or other furnishings of
which shall be given or may give rise to any of the foregoing, (ii) all of
such Obligor's rights as a consignor, consignee, unpaid vendor or other
lienor in connection therewith, including stoppage in transit, set-off,
detinue, replevin and reclamation, (iii) all general intangibles related
thereto, (iv) all guaranties, mortgages, security interests, assignments,
and other encumbrances on real or personal property, leases and other
agreements or property
securing or relating to any accounts, (v) choses-in-action, claims and
judgments, (vi) any return or unearned premiums, which may be due upon
cancellation of any insurance policies, and (vii) all products and proceeds
of any of the foregoing.
b. All of such Obligor's present and future inventory (including but
not limited to goods held for sale or lease or furnished or to be furnished
under contracts for service, raw materials, work-in-process, finished goods
and goods used or consumed in such Obligor's business) whether owned,
consigned or held on consignment, together with all merchandise, component
materials, supplies, packing, packaging and shipping materials, and all
returned, rejected or repossessed goods sold, consigned, leased or
otherwise furnished by such parties and all products and proceeds of any of
the foregoing.
c. All of such Obligor's present and future general intangibles
(including but not limited to tax refunds and rebates, manufacturing and
processing rights, designs, patent rights and applications therefor,
trademarks and registration or applications therefor, trade names, brand
names, logos, inventions, copyrights and all applications and registrations
therefor), licenses, permits, approvals, software and computer programs,
license rights, royalties, trade secrets, methods, processes, know-how,
formulas, drawings, specifications, descriptions, label designs, plans,
blueprints, patterns and all memoranda, notes and records with respect to
any research and development, and all products and proceeds of any of the
foregoing.
d. All of such Obligor's present and future machinery, equipment,
furniture, fixtures, motor vehicles, tools, dies, jigs, molds and other
articles of tangible personal property of every type together with all
parts, substitutions, accretions, accessions, attachments, accessories,
additions, components and replacements thereof, and all manuals of
operation, maintenance or repair, and all products and proceeds of any of
the foregoing.
e. All of such Obligor's present and future general ledger sheets,
files, records, customer lists, books of account, invoices, bills,
certificates or documents of ownership, bills of sale, business papers,
correspondence, credit files, tapes, cards, computer runs and all other
data and data storage systems whether in the possession of such parties or
any service bureau.
f. All letters of credit now existing or hereafter issued naming such
parties as beneficiaries or assigned to such parties, including the right
to receive payment thereunder, and all documents and records associated
therewith.
g. All deposits, funds, instruments, documents, policies and evidence
and certificates of insurance, securities, chattel paper and other assets
of such parties or in which such parties have an interest and all proceeds
thereof, now or at any time hereafter on deposit with or in the possession
or control of Bank or owing by Bank to such parties or in transit by mail
or carrier to Bank or in the possession of any other Person acting on
Bank's behalf, without regard to whether Bank received the same in pledge,
for safekeeping, as agent for collection or otherwise, or whether Bank has
conditionally released the same, and in all assets of such parties in which
Bank now has or may at any time hereafter obtain a lien, mortgage, or
security interest for any reason.
3. ADDITIONAL DOCUMENTS. Merryhill Nevada and Lake Forest covenant and
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agree to execute and deliver or cause to be executed and delivered to Bank any
and all documents, agreements, corporate resolutions, certificates and opinions
as Bank shall request in connection with the execution and delivery of this
Amendment or any other documents in connection herewith, including, without
limitation, an Allonge to Revolving and Term Facility Note A and Revolving and
Term Facility Note B.
4. FURTHER AGREEMENTS AND REPRESENTATIONS. Obligors do hereby:
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a. ratify, confirm and acknowledge that the Loan Agreement, as
amended, and the other Loan Documents continue to be and are valid, binding
and in full force and effect;
b. covenant and agree to perform all obligations of Obligors
contained herein and under the Loan Agreement, as amended, and the other
Loan Documents;
c. acknowledge and agree that Obligors have no defense, set-off,
counterclaim or challenge against the payment of any sums owing under Loan
Documents, the enforcement of any of the terms of the Loan Agreement, as
amended, or the other Loan Documents;
d. represent and warrant that no Event of Default or event which with
the giving of notice or passage of time or both would constitute such an
Event of Default exists and all information described in the foregoing
Background is true, accurate and complete;
e. acknowledge and agree that nothing contained herein and no actions
taken pursuant to the terms hereof is intended to constitute a novation of
the Loan Agreement or any of the other Loan Documents, and does not
constitute a release, termination or waiver of any of the rights or
remedies granted to the Bank therein, which rights and remedies are hereby
ratified, confirmed, extended and continued as security for the obligations
of Obligors to Bank under the Loan Agreement and the other Loan Documents,
including, without limitation, this Amendment; and
f. acknowledge and agree that any Obligor's failure to comply with or
perform any of its covenants, agreements or obligations contained in this
Amendment shall constitute an Event of Default under the Loan Agreement and
each of the Loan Documents.
5. COSTS AND EXPENSES. Upon execution of this Amendment, Obligors shall
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pay to Bank, all costs and expenses incurred by Bank in connection with the
review, preparation and negotiation of this Amendment and all documents in
connection therewith, including, without limitation, all of Bank's attorneys'
fees and out-of-pocket expenses.
6. INCONSISTENCIES. To the extent of any inconsistency between the
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terms, conditions and provisions of this Amendment and the terms, conditions and
provisions of the Loan Agreement or the other Loan Documents, the terms,
conditions and provisions of this Amendment shall prevail. All terms,
conditions and provisions of the Loan Agreement and the other Loan Documents not
inconsistent herewith shall remain in full force and effect and are hereby
ratified and confirmed by Obligors.
7. CONSTRUCTION. All references to the Loan Agreement therein or in
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any other Loan Documents shall be deemed to be a reference to the Loan Agreement
as amended hereby.
8. NO WAIVER. Nothing contained herein and no actions taken pursuant to
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the terms hereof are intended to nor shall they constitute a waiver by the Bank
of any rights or remedies available to Bank at law or in equity or as provided
in the Loan Agreement or the other Loan Documents.
9. BINDING EFFECT. This Amendment shall be binding upon and inure to the
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benefit of the parties hereto and their respective successors and assigns.
10. GOVERNING LAW. This Amendment shall be governed by and construed in
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accordance with the laws of the Commonwealth of Pennsylvania.
11. HEADINGS. The headings of the sections of this Amendment are inserted
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for convenience only and shall not be deemed to constitute a part of this
Amendment.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment
effective as of the date first above written.
NOBEL EDUCATION DYNAMICS, INC.
[CORPORATE SEAL] By: __________________
Name/Title: ____________________________
IMAGINE EDUCATIONAL PRODUCTS, INC.
[CORPORATE SEAL] By: __________________
Name/Title: ____________________________
MERRYHILL SCHOOLS, INC.
[CORPORATE SEAL] By: ___________________________________
Name/Title: ____________________________
NEDI, INC.
[CORPORATE SEAL] By: ___________________________________
Name/Title: ____________________________
MERRYHILL SCHOOLS NEVADA, INC.
[CORPORATE SEAL] By: ___________________________________
Name/Title: ____________________________
LAKE FOREST PARK MONTESSORI SCHOOLS,
INC.
[CORPORATE SEAL] By: ___________________________________
Name/Title: _____________________________
SUMMIT BANK
By: ___________________________________
Xxxxx X. Xxxxx, Vice-President
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