Amended and Restated Loan Agreement between Siboney Learning Group, Inc., Siboney Corporation, and Southwest Bank of St. Louis (April 2, 2007)

 

1.

Lender shall have received the following security documents (the “Security Documents”) in form and substance satisfactory to Lender:

 

 

(i)

The Note(s);

 

 

(ii)

General Business Security Agreements from Siboney Learning Group, Inc. and Siboney Corporation, dated as of June 1, 2003;

 

 

(iii)

UCC Financing Statements as required by Lender;

 

 

(iv)

Organization Perfection Certificates from Siboney Learning Group, Inc. and Siboney Corporation;

 

 

(v)

Subordination Agreement signed by Timothy J. Tegeler; and

 

 

(vi)

Subordination Agreement signed by Lewis B. Shepley.

 

2.

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:

 

 

(i)

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

 

independent certified public accountant of Borrower, selected by borrower and acceptable to Lender.

 

 

(ii)

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.

 

3.

Borrower shall timely perform and observe the following financial covenant(s), calculated in accordance with generally accepted accounting principles applies on a consistent basis:

 

 

(i)

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.

 

 

(ii)

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.

 

4.

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”).

 

5.

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, Timothy J. Tegeler and Lewis B. Shepley, in the form attached hereto as Exhibit A, (ii) the 10% Subordinated Secured Note to be executed by Borrower in favor of Timothy J. Tegeler in form attached hereto as Exhibit B, (iii) the 10% Subordinated Secured Note to be executed by Borrower in favor of Lewis B. Shepley in the form attached hereto as Exhibit C, (iv) the Warrant to be given by Siboney Corporation in favor of Timothy J. Tegeler in the form attached hereto as Exhibit D, (v) the Warrant to be given by Siboney Corporation in favor of Lewis B. Shepley in the form attached hereto as Exhibit E and (vi) the Security Agreement to be executed by Borrower in favor of Timothy J. Tegeler and Lewis B. Shepley in the form attached hereto as Exhibit F (collectively, the “Subordinated Debt Documents”).

By:  /s/ Thomas E. Wilcox                                       

By: /s/ Roy C. Postel                                                  

Thomas E. Wilcox, Executive Vice President

Title: Senior Vice President                                      

Accepted and Agreed as of April 2, 2007

By:    /s/ William D. Edwards__________

By:  /s/ William D. Edwards                                        

William D. Edwards, President

William D. Edwards, Executive Vice President

By:   /s/ Rebecca Braddock____________

By:   /s/ Rebecca Braddock                                          

Rebecca Braddock, Secretary

Rebecca Braddock, Secretary