Exhibit 10.01

 

 NINTH AMENDMENT LOAN AGREEMENT

 

THIS NINTH AMENDMENT TO LOAN AGREEMENT (this "Amendment") is made and entered
into as of February ___, 2019 (the "Effective Date"), by and between EDUCATIONAL
DEVELOPMENT CORPORATION, a Delaware corporation ("Borrower"), and MIDFIRST BANK,
a federally charted savings association ("Lender").

 

BACKGROUND RECITALS

A. Borrower and Lender are parties to that certain Loan Agreement dated as of
December 1, 2015, as amended by that certain First Amendment to Loan Agreement
dated as of March 10, 2016, as amended by that certain Second Amendment to Loan
Agreement dated as of June 15, 2016, as further amended by that certain Third
Amendment to Loan Agreement dated as of June 28, 2016, as further amended by
that certain Fourth Amendment to Loan Agreement dated as of February 7, 2017, as
further amended by that certain Fifth Amendment to Loan Agreement dated as of
June 15, 2017, as further amended by that certain Sixth Amendment to Loan
Agreement dated as of September 1, 2017, as further amended by that certain
Seventh Amendment to Loan Agreement dated as of February 15, 2018, and as
further amended by that certain Eighth Amendment to Loan Agreement dated as of
June 15, 2018 (as amended, the "Loan Agreement"). Unless the context otherwise
requires, capitalized terms used in this Amendment and not otherwise defined
herein have the respective meanings assigned to them in the Loan Agreement.

 

B. Borrower has requested that Lender permit it to use proceeds of advances made
under the Revolving Loan for stock buybacks in an aggregate amount not to exceed
$4,000,000, and Lender has agreed to such request, but only upon the terms and
conditions set forth in this Amendment.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the Parties agree as
follows:

 

1.

STOCK BUYBACKS.

 

1.1. Stock Buybacks. Section 2.2(a)(i) of the Loan Agreement is hereby amended
in its entirety to read as follows:

 

(i) The proceeds of all advances made under the Revolving Loan will be used
solely for (A) working capital purposes and (B) stock buybacks in an aggregate
amount not to exceed $4,000,000. Except for stock buybacks in an aggregate
amount not to exceed $4,000,000 and Borrower's strict compliance with Section
4.1(bb), no advance to be made under the Revolving Loan shall be used, directly
or indirectly, for the purpose of purchasing or carrying any margin security or
margin stock within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System.

1.2. Representation. Section 3.1(m) of the Loan Agreement is hereby amended in
its entirety to read as follows:

 

(m) Purpose. The Loan is solely for the purpose of carrying on or acquiring
Borrower's business, and is not for personal, family, household or agricultural
purposes. Borrower does not use any portion of the Property as Borrower's
residence or business homestead and, therefore, no portion of the Property is
exempt from forced sale under Applicable Bankruptcy Law or any other Applicable
Law. Except as expressly permitted by Section 2.3(a)(i) and Section 4.1(bb),
Borrower will not use any Loan proceeds to purchase or carry "margin stock"
within the meaning of Federal Reserve Regulation U (12 C.F.R. §§ 221 et seq., as
amended). 1.3. Additional Covenant. A new subsection (bb) is hereby added to
Section 4.1 the Loan Agreement to read as follows:

(bb) Stock Buybacks; Reporting. Borrower shall not use the proceeds of advances
made under the Revolving Loan for stock buybacks in an aggregate amount in
excess of $4,000,000. If requested by Lender, Borrower will

 

 

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promptly (and in any event not later than five Business Days) furnish to Lender
a Form FR U-1 or Form FR G-3, as applicable (or an amendment to a Form FR U-1 or
Form FR G-3 previously furnished), and any other necessary forms or statements,
properly completed and confirming compliance with Regulations U, T and X of the
Board of Governors of the Federal Reserve System.

 

2.

CONDITIONS TO EFFECTIVENESS.

 

This Amendment will be effective as of the Effective Date, but subject to
satisfaction of each of the following conditions precedent:

 

2.1. Execution of Amendment Documents. The following documents (collectively,
the "Amendment Documents") shall have been executed by the applicable parties
and delivered to Lender, each in form and substance satisfactory to Lender:

 

(a) this Amendment; and

 

(b) a Form FR U-1 or Form FR G-3, as applicable, properly completed by Borrower,
with respect to any margin stock included as Collateral.

 

2.2. Legal Matters. All legal matters incident to this Amendment shall be
satisfactory to Lender and its counsel, including compliance with all applicable
requirements of Regulations U, T and X of the Board of Governors of the Federal
Reserve System.

 

3. REPRESENTATIONS AND WARRANTIES.

 

3.1. Reaffirmation. Borrower confirms that all representations and warranties
made by it in the Loan Agreement and the other Loan Documents are, and as of the
Effective Date will be, true and correct in all material respects, and all of
such representations and warranties are hereby remade and restated as of the
Effective Date and shall survive the execution and delivery of this Amendment.

 

3.2. Additional Representations and Warranties.

 

3.2.1. Power; Transactional Authority; Enforceability. Borrower has the
requisite power and authority to execute, deliver and carry out the terms and
provisions of this Amendment, and has taken all necessary action to authorize
its execution, delivery and performance of this Amendment. Borrower has duly
executed and delivered this Amendment. This Amendment constitutes Borrower's
legal, valid and binding obligations, enforceable in accordance with the terms
of the Loan Documents, as amended by this Amendment, subject to (i) the effect
of any Applicable Bankruptcy Law, or (ii) general principles of equity.

 

3.2.2. No Violation; No Consent. Borrower's execution, delivery and performance
of this Amendment, and compliance with the terms and provisions of the Loan
Documents, as amended by this Amendment, will not (i) contravene any Applicable
Law, (ii) conflict or be inconsistent with or result in any breach of any term,
covenant, condition or provision of, or constitute a default under, or result in
the creation or imposition of (or the obligation to create or impose) any lien
upon any of the Property or Borrower's other assets pursuant to the terms of any
indenture, mortgage, deed of trust, agreement or other instrument to which
Borrower is a party or by which Borrower or any of the Property or Borrower's
other assets is bound or may be subject, or (iii) violate any term of Borrower's
certificate of incorporation or other documents and agreements governing
Borrower's existence, management or operation. Borrower is not required to
obtain the consent of any other party, including any Governmental Authority, in
connection with the execution, delivery, performance, validity or enforceability
of the Loan Documents, as amended by this Amendment.

 

 

 

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3.2.3. Financial Matters. Each Borrower Party financial statement previously
delivered to Lender was prepared in accordance with GAAP and completely,
correctly and fairly present the financial condition and the results of
operations of each Borrower Party on the date and for the period covered by the
financial statements. All other reports, statements and other data that any
Borrower Party furnished to Lender in connection with the Loan are true and
correct in all material respects and do not omit any fact or circumstance
necessary to ensure that the statements are not misleading. Each Borrower Party
(i) is solvent, (ii) is not bankrupt, and (iii) has no outstanding liens, suits,
garnishments, bankruptcies or court actions which may render such Borrower Party
insolvent or bankrupt. Since the date of the last financial statements each
Borrower Party delivered to Lender, no event, act, condition or liability has
occurred or exists, which has had, or may reasonably be expected to have, a
material adverse effect upon (A) such Borrower Party's business, condition
(financial or otherwise) or operations, or (B) such Borrower Party's ability to
perform or satisfy, or Lender's ability to enforce, any of the Indebtedness.

 

3.2.4. Litigation. There are no suits or proceedings (including condemnation)
pending or (to Borrower's knowledge, after reasonable inquiry) threatened
against or affecting any Borrower Party or the Property or involving the
validity, enforceability or priority of any of the Loan Documents. Borrower has
not received notice from any Governmental Authority alleging that any Borrower
Party or the Property is violating any Applicable Law.

 

3.2.5. No Default. No Event of Default currently exists or would exist after
giving effect to the transactions contemplated by this Amendment.

 

4.

MISCELLANEOUS.

 

4.1. Effect of Amendment. The terms of this Amendment shall be incorporated into
and form a part of the Loan Agreement. Except as expressly amended, modified and
supplemented by this Amendment, the Loan Agreement shall continue in full force
and effect in accordance with its original stated terms, all of which are hereby
reaffirmed in every respect as of the Effective Date. In the event of any
irreconcilable inconsistency between the terms of this Amendment and the terms
of the Loan Agreement, the terms of this Amendment shall control and govern, and
the agreements shall be interpreted so as to carry out and give full effect to
the intent of this Amendment. All references to the Loan Agreement appearing in
any of the Loan Documents shall hereafter be deemed references to the Loan
Agreement as amended, modified and supplemented by this Amendment.

 

4.2. No Course of Dealing; Past Acceptance. This Amendment shall not establish a
course of dealing or be construed or relied upon as evidence of any willingness
on Lender's part to grant any future consent or amendment, should any be
requested. Lender acknowledges that Lender and its agents in the past may have
accepted, without exercising the remedies to which Lender was entitled, payments
and performance by Borrower that constituted Events of Default under the Loan
Documents. Borrower acknowledges that no such acceptance or grace granted by
Lender or its agents in the past, or Lender's agreement to the modifications
evidenced hereby, has in any manner diminished Lender's right in the future to
insist that Borrower Parties strictly comply with the terms of the Loan
Documents, as modified by the terms of this Amendment. Furthermore, Borrower
specifically acknowledges that any future grace or forgiveness of any Events of
Default shall not constitute a waiver or diminishment of any right of Lender
with respect to any future Event of Default, whether or not similar to any Event
of Default with respect to which Lender has in the past chosen, or may in the
future choose, not to exercise all of the rights and remedies granted to it
under the Loan Documents.

 

4.3. Release. Borrower hereby releases, remises, acquits and forever discharges
Lender and any co-lender or loan participant, together with their respective
employees, agents, representatives, consultants, attorneys, fiduciaries,
servants, officers, directors, partners, predecessors, successors and assigns,
subsidiary corporations, parent corporations, and related corporate divisions
(all of the foregoing the "Released Parties"), from any and all actions and
causes of action, judgments, executions, suits, liens, debts, claims,
counterclaims, defenses, demands, liabilities, obligations, damages and expenses
of any and every character (collectively, "Claims"), known or unknown, direct or
indirect, at law or in equity, of whatsoever kind or nature, whether heretofore
or hereafter accruing, for or because of any matter or things done, omitted or
suffered to be done by any of the Released Parties prior to and including the
Effective Date, and in any way directly or indirectly arising out of or

 

 

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in any way connected to this Amendment or the other Loan Documents, or any of
the transactions associated therewith, or the Property, including specifically
but not limited to claims of usury, lack of consideration, fraudulent transfer
and lender liability, that it now has or may hereafter have against any Released
Party, and hereby agrees to indemnify and hold harmless Lender and each other
Released Party for all Claims that any Person may bring against any such
Released Party that arise under or in connection with the Loan Agreement based
on facts existing on or before the Effective Date. THE FOREGOING RELEASE
INCLUDES ACTIONS AND CAUSES OF ACTION, JUDGMENTS, EXECUTIONS, SUITS, DEBTS,
CLAIMS, DEMANDS, LIABILITIES, OBLIGATIONS, DAMAGES AND EXPENSES ARISING AS A
RESULT OF THE NEGLIGENCE OR STRICT LIABILITY OF ONE OR MORE OF THE RELEASED
PARTIES.

 

4.4. Ratification and Affirmation. Borrower hereby acknowledges the terms of
this Amendment and ratifies and affirms its obligations under, and acknowledges,
renews and extends its continued liability under, each Loan Document to which it
is a party and agrees that each Loan Document to which it is a party remains in
full force and effect.

 

4.5. No Modification. This Amendment along with the Loan Documents supersedes
and merges all prior and contemporaneous promises and agreements. No
modification of this Amendment or any other Loan Document, or any waiver of
rights under any of the foregoing, shall be effective unless made by
supplemental agreement, in writing, executed by the Parties. The Parties further
agree that the Loan Agreement, as amended by this Amendment, may not in any way
be explained or supplemented by a prior, existing or future course of dealings
between the Parties or by any prior, existing, or future performance between the
Parties pursuant to this Amendment, the Loan Agreement or otherwise.

 

4.6. Headings. The headings of the sections and subsections of this Amendment
are for convenience of reference only and will not affect the scope or meaning
of the sections of this Amendment.

 

4.7. Applicable Law. This Amendment and the rights and obligations of Borrower
and Lender are in all respects governed by, and construed and enforced in
accordance with the Governing Law (without giving effect to its principles of
conflicts of law), except for those terms of the Security Instruments pertaining
to the creation, perfections, validity, priority or foreclosure of the liens or
security interests on the Property located within the State, which terms will be
governed by, and construed and enforced in accordance with the laws of the State
(without giving effect to its principles of conflicts of law).

 

4.8. Counterparts; Miscellaneous. This Amendment may be executed in any number
of counterparts with the same effect as if all signers executed the same
instrument. All counterparts of this Amendment must be construed together and
will constitute one instrument. This Amendment is a Loan Document. Time is of
the essence with respect to this Amendment. The Parties acknowledge and confirm
that each of their respective attorneys has participated or has had the
opportunity to participate jointly in the review and revision of this Amendment
and that it has not been written solely by counsel for one party. The Parties
therefore stipulate and agree that the rule of construction to the effect that
any ambiguities are to or may be resolved against the drafting Party will not
favor either Party against the other. The terms and provisions of this Amendment
are binding upon and inure to the benefit of the Parties and their successors
and assigns.

 

4.9. Reimbursement of Expenses. Borrower agrees to pay or reimburse Lender for
all reasonable out-of-pocket expenses, including Attorneys' Fees, incurred by
Lender in connection with the negotiation, preparation, execution and delivery
of this Amendment and the consummation of the transactions contemplated hereby.

 

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BORROWER'S SIGNATURE PAGE TO NINTH AMENDMENT TO LOAN AGREEMENT

 

 

WITNESS WHEREOF, the parties have caused this Amendment to be duly executed
effective as of the Effective Date.

 

Borrower: EDUCATIONAL DEVELOPMENT CORPORATION,

a Delaware corporation

 

 

By:

Name: Randall W. White

Title: Chairman, President and CEO

 

LENDER'S SIGNATURE PAGE TO NINTH AMENDMENT TO LOAN AGREEMENT

 

Lender: MIDFIRST BANK, a federally chartered savings association

By:

Name: Marc Short

Title: Senior Vice President