Document:

exh10-11_agreement.htm

 

 

 

 

 

 

 

 

 

EXHIBIT 10.11

 

INTERCOMPANY ADVANCE AGREEMENT BETWEEN

ROCKY MOUNTAIN CHOCOLATE FACTORY, INC. AND

U-SWIRL, INC. DATED MARCH 27, 2013

 

 

 

  

  

  

INTERCOMPANY ADVANCE AGREEMENT

 

This Intercompany Advance Agreement (the “Agreement”) is entered into on March 27, 2013 (the “Effective Date”) by and between Rocky Mountain Chocolate Factory, Inc., a Colorado corporation (“RMCF”), and U-Swirl, Inc., a Nevada corporation (“U-Swirl”).

 

Recitals

 

A.         RMCF owns a 60% controlling interest in U-Swirl.

 

B.         In order to support the working capital needs of U-Swirl, RMCF desires to make certain intercompany loans and advances to U-Swirl from time to time up to $250,000 during each fiscal year pursuant to the terms and conditions of this Agreement.

 

Agreement

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows

 

1.  Advances.  Subject to and upon the terms and conditions set forth in this Agreement, RMCF shall advance funds to U-Swirl from time to time (each an “Advance” and collectively the “Advances”) beginning on the Effective Date and ending upon termination of this Agreement, provided that the aggregate Advances during any Fiscal Year (as defined below) shall not exceed $250,000 (the “Advance Cap”).  “Fiscal Year” means the fiscal year of RMCF beginning on March 1st of each year and ending on the last day of February of the next year.

 

2.  Request for Advances.

 

(a)         Subject to the Advance Cap, U-Swirl may request an Advance at any time (an “Advance Request”) provided that U-Swirl does not have sufficient working capital to support its operations.  Each Advance Request shall be in writing and be accompanied by such back-up documentation as RMCF may reasonably request to substantiate whether U-Swirl has sufficient working capital to support its operations.

 

(b)         RMCF, in its sole discretion, may deny an Advance Request if it reasonably determines that U-Swirl has sufficient working capital to support its operations at the time of the Advance Request.  RMCF shall provide written notice to U-Swirl of its decision to approve or deny an Advance Request.  RMCF shall approve or deny any Advance Request within five (5) business days of receipt of the Advance Request, and upon approval of any Advance Request, RMCF shall disburse funds to U-Swirl within three (3) business days of such approval of the Advance Request.

 

3.  Interest on Advances; Repayment; Prepayment.  Interest shall accrue on any outstanding Advances at the rate of 6% per annum.  All outstanding Advances, together with accrued interest, shall be due and payable by U-Swirl, and shall be repaid to RMCF, no earlier than March 1, 2014 on terms to be negotiated between RMCF and U-Swirl.  All repayments of Advances shall be applied first to the payment of accrued interest and, after all such interest has been paid, any remainder shall be applied to reduction of the principal balance of the Advances.  

 

  

  

  

 

U-Swirl may prepay at any time, in whole or in part, without notice, penalty or premium, the outstanding principal amount of the Advances, together with accrued interest to the date of such prepayment on the principal amount of Advances to be prepaid.  All prepayments shall be applied first to accrued interest on the Advances and then to the outstanding principal balance of the Advances.

 

4.  Promissory Notes and Company-Owned Aspen Leaf Stores.  RMCF and U-Swirl agree that nothing in this Agreement shall affect the promissory notes made by U-Swirl to Aspen Leaf Yogurt, LLC or RMCF’s commitment to U-Swirl with respect to the funding of the company-owned Aspen Leaf Yogurt stores.

 

5.  Events of Default.  Upon the occurrence of any one or more of the following events of default (each an “Event of Default”), the entire unpaid principal balance of the Advances, together with all accrued interest, shall become immediately due and payable upon notice by RMCF to U-Swirl:

 

(a)         Failure of U-Swirl to pay any part of the principal or interest on the Advances when due, which failure is not cured within ten (10) business days.

 

(b)         Any default in the performance of any obligation of U-Swirl hereunder, which default is not cured within ten (10) business days.

 

(c)         U-Swirl is unable, or admits in writing its inability, to pay its debts, or shall not pay its debts generally as they come due, or shall make any assignment for the benefit of creditors.

 

(d)         Any of the following events occurs with respect to U-Swirl: liquidation or dissolution; merger, consolidation, or other corporate reorganization of U-Swirl or any of its subsidiaries; sale of all or any material portion of U-Swirl’s or any of its subsidiaries’ assets; termination of U-Swirl’s or any subsidiary’s existence; insolvency; business failure; or cessation of the conduct of any substantial part of U-Swirl’s or any of its subsidiaries’ business in the ordinary course.

 

(e)         U-Swirl commences, or there is commenced against U-Swirl, any case, proceeding, or other action seeking to have an order for relief entered with respect to U-Swirl, or to adjudicate U-Swirl as a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, liquidation, dissolution, or composition under any law relating to bankruptcy, insolvency, reorganization, or relief of debtors or seeking appointment of a receiver, trustee, custodian, or other similar fiduciary, with respect to any part of U-Swirl’s business or property.

 

(f)         U-Swirl defaults on any other debts, obligations, or liabilities to RMCF or its subsidiaries.

 

6.  Termination.  This Agreement may be terminated at any time by either party upon thirty (30) days’ written notice to the other party.

 

7.  Notices.  All notices, requests, and other communications which are required to be or may be given under this Agreement shall be in writing and shall be deemed to have been duly 

 

  

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given if sent by facsimile or other electronic transmission, delivered by recognized overnight courier or mailed, certified first class mail, postage prepaid, return receipt requested, to the parties hereto at the following addresses:

 

 

	To RMCF:	
Rocky Mountain Chocolate Factory, Inc.

	 	
265 Turner Drive

Durango, Colorado  81303

Attention:  Bryan Merryman, Chief Financial Officer

Facsimile:  (970) 382-2218

Email:  bjmerrym@rmcf.net

	 	 
	To U-Swirl:	U-Swirl, Inc.
	 	
1175 American Pacific Suite C

Henderson, NV  89074

Attention:  Ulderico Conte

Facsimile:  702-834-8444

Email:  ricoconte1@yahoo.com

 

or to such other address as any party shall have furnished to the other by notice given in accordance with this Section.  Such notice shall be effective when received.

 

8.  Entire Agreement; Amendments.  This Agreement embodies the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral or written, with respect thereto.  This Agreement may not be modified orally, but only by an agreement in writing signed by the party or parties against whom any waiver, change, amendment, modification, or discharge may be sought to be enforced.

 

9.  Binding Effect; Assignment.  This Agreement is binding upon and inures to the benefit of the parties hereto and their respective successors, heirs, and permitted assigns.  No party hereto may assign or delegate either this Agreement or any of its rights, interests, or obligations under this Agreement without the prior written consent of the other party.

 

10.  Severability.  Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction does not affect the validity or enforceability of the remaining terms and provisions of this Agreement or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.

 

11.  Governing Law.  The validity, performance, and enforcement of this Agreement, unless expressly provided to the contrary, shall be governed by the laws of the State of Colorado, without giving effect to the principles of conflicts of law of such state.

 

12.  Headings.  The section and other headings in this Agreement are for reference purposes only and will not affect the meaning of interpretation of this Agreement.

 

13.  Counterparts Signatures.  This Agreement may be executed in any number of counterparts, each of which, when executed, shall be deemed to be an original and all of which 

 

  

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together will be deemed to be one and the same instrument.  Facsimile or other electronic signatures are valid to the same extent as original signatures.

 

	
[Signature Page Follows]

 

 

  

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

RMCF:

ROCKY MOUNTAIN CHOCOLATE FACTORY, INC.

By:    /s/ Bryan J. Merryman                            

Name: Bryan J. Merryman

Title: Chief Financial Officer

 

U-SWIRL:

U-SWIRL, INC.

By:   /s/ Ulderico Conte                                

Name: Ulderico Conte

Title: Chief Executive Officer

 

 

 

 

Signature Page to Intercompany Advance Agreementeleventh_bankamend.htm

  

  

  

ELEVENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT

This Eleventh Amendment to Loan and Security Agreement (this “Amendment”) is made and entered into as of September 12, 2012 (“Effective Date”), by and between THE F&M BANK & TRUST COMPANY (“Lender”), acting as a lender on its own behalf, as Agent under the Loan Agreement (as defined below), and as collateral agent on behalf of CARGILL, INCORPORATED, a Delaware corporation (“Cargill”) as a Hedge Provider, and TENGASCO, INC., a Delaware corporation (“Borrower”), TENNESSEE LAND & MINERAL CORPORATION (“TLMC”), TENGASCO PIPELINE CORPORATION (“TPC”) and MANUFACTURED METHANE CORPORATION (“MMC”) (each of TLMC, TPC, and MMC are a “Guarantor” and collectively “Guarantors”) (collectively referred to herein as the “Parties”).

RECITALS

A.           Borrower and Lender’s predecessor-in-interest, Citibank, N.A., a national banking association formerly known as Citibank Texas, N.A., as Agent and as a Bank (“Citibank”), (which was succeeded by Sovereign Bank (“Sovereign”) and Lender) previously entered into that certain Loan and Security Agreement dated effective June 29, 2006, (as assigned, assumed, amended, supplemented, or restated to the date hereof, the “Loan Agreement”); whereby the Banks party to the Credit Agreement agreed to extend a Line of Credit to Borrower equal to the Commitment Amount, pursuant to the terms and conditions set forth in the Loan Agreement (the “Loan”);

B.           To evidence the Loan, Borrower executed and delivered to Citibank that certain Promissory Note dated June 29, 2006 (as amended and replaced the “Note”), payable to the order of Citibank in the original principal sum of Fifty Million and No/100 Dollars ($50,000,000), bearing interest and being payable as therein provided, and such Note has been (i) assigned to Sovereign by that certain Assignment of Note and Liens, dated as of December 17, 2007, by and between Citibank (as assignor) and Sovereign (as assignee) and (ii) further assigned to Lender by that certain Assignment of Note and Liens dated as of July 30, 2010, by and between Sovereign (as assignor) and Lender (as assignee); and

C.           The Parties now desire to further amend the Loan Agreement to decrease the current Revolving Credit Borrowing Base and to modify various other provisions of the Loan Agreement, as herein set forth.

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

  

  

  

ARTICLE I

CAPITALIZED TERMS; DEFINITIONS

Section 1.01                      Definitions.  Capitalized terms used in this Amendment, to the extent not otherwise defined herein, shall have the same definitions assigned to such terms in the Loan Agreement, as amended hereby. To the extent applicable, the term “Lender” as used in this Amendment shall also refer to Lender in its capacity as Agent and as a Bank under the Loan Agreement.

ARTICLE II

AMENDMENTS TO THE LOAN AGREEMENT

Section 2.01                      Section 1.15 of the Loan Agreement (Commitment Amount). As of the Effective Date, and subject to the conditions precedent required by the provisions of Article III of this Amendment, Section 1.15 of the Loan Agreement is deleted in its entirety and replaced with the following:

“1.15.   Commitment Amount shall mean, as of the Eleventh Amendment Effective Date, Twenty One Million Five Hundred Thousand Dollars ($21,500,000), or such other amount as agreed to in writing by Borrower, Banks, and Agent, but in no event in excess of the lesser of (a) the Maximum Line of Credit Amount of (b) the Revolving Credit Borrowing Base, as adjusted and redetermined from time to time pursuant to the provisions of Article III.”

Section 2.02                      Section 1.45.1 of the Loan Agreement (Eleventh Amendment Effective Date). As of the Effective Date, and subject to the conditions precedent required by the provisions of Article III of this Amendment, Section 1.45.2 is added to the Loan Agreement to read as follows:

“1.45.2   Eleventh Amendment Effective Date shall mean the effective date of that certain Eleventh Amendment to Loan and Security Agreement amending the Agreement.”

Section 2.03                      Section 3.1 of the Loan Agreement (Borrowing Base). As of the Effective Date, and subject to the conditions precedent required by the provisions of Article III of this Amendment, Section 3.1 of the Loan Agreement is hereby amended by deleting the last sentence at the end of Section 3.1 and replacing it with the following:

“Until further determination by Agent pursuant to the semiannual determinations or otherwise pursuant to the terms hereof, Agent and Borrower agree and stipulate that the Revolving Credit Borrowing Base as of the Tenth Amendment Effective Date shall be $21,500,000.”

Section 2.04                      Section 3.2(a) (Revolving Credit Borrowing Base Redeterminations).  The defined term “Semi-Annual Borrowing Base Redetermination Dates” set forth in Section 3.2(a) of the Loan Agreement is amended to mean each March 31st and September 30th.

  

  

  

ARTICLE III

CONDITIONS PRECEDENT

Section 3.01                      Conditions Precedent. When all of the following conditions precedent have been fulfilled to the satisfaction of Lender, this Amendment shall become effective:

(a)           The representations and warranties contained herein and in each of the other Loan Documents shall be true and correct as of the date hereof as if made on the date hereof;

(b)           No Default or Event of Default shall have occurred and be continuing;

(c)           Borrower and each Guarantor shall have executed and delivered this Amendment and such other documents and agreements as Lender may reasonably request;

(d)           All corporate proceedings taken in connection with the transactions contemplated by this Amendment and all documents, instruments, and other legal matters incident thereto shall be satisfactory to Lender and its legal counsel in their sole discretion;

(e)           Lender shall have received such other documents, instruments, or agreements as Lender shall reasonably request in connection with the execution of this Amendment; and

(f)           Borrower shall pay the legal fees and expenses of Lender’s counsel in connection with the preparation, negotiation, and execution of this Amendment.

ARTICLE IV

RATIFICATIONS, REPRESENTATIONS, AND WARRANTIES

Section 4.01                      Ratifications by Borrower. The terms and provisions set forth in this Amendment shall modify and supersede all inconsistent terms and provisions set forth in the Loan Agreement and, except as expressly modified and superceded by this Amendment, the terms and provisions of the Loan Agreement are ratified and confirmed and shall continue in full force and effect. The Loan Agreement as amended by this Amendment shall continue to be legal, valid, binding, and enforceable in accordance with its terms. Borrower acknowledges and agrees that there are no claims or offsets against, or defenses or counterclaims to, the terms and provisions of the Loan Agreement or any Note or the indebtedness, obligations, and liabilities of Borrower to Lender or the liens and security interests securing such indebtedness (including without limitation any defenses or offsets resulting from or arising out of breach of contract or duty, the amounts of interest charged, collected or received heretofore on any Note or other indebtedness, or breach of any commitments or promises of any type).

Section 4.02                      Renewal and Extension of Security Interests and Liens.  Each of Borrower and Guarantors hereby renews, affirms, and ratifies all security interests and liens created and granted by it to secure the indebtedness, obligations and liabilities of Borrower and Guarantors to Lender. Each of Borrower and Guarantors agrees that this Amendment shall in no manner affect or impair the liens and security interests securing such indebtedness, obligations, and liabilities, and that such liens and security interests shall not in any manner be waived, the purposes of this Amendment begin to modify the Loan Agreement as herein provided, and to carry forward all liens and security interests securing the indebtedness, obligations and liabilities of Borrower and Guarantors to Lender, which security interests and liens are acknowledged by Borrower and Guarantors to be valid and subsisting. Further, Borrower and Guarantors hereby covenant and agree that Lender may, without the signature of Borrower, file UCC Financing Statements in any jurisdiction to perfect any security interest now or hereafter granted to Lender.

Section 4.03                      Representations and Warranties. Borrower represents and warrants to Lender as follows: (i) the execution, delivery, and performance of this Amendment and any and all documents, agreements, and instruments executed and/or delivered in connection herewith have been authorized by all requisite corporate action on the part of Borrower and will not violate the Articles of Incorporation or bylaws of Borrower or any agreement to which Borrower is a party; (ii) the representations and warranties contained in the Loan Agreement as amended hereby and in each of such other documents, agreements, and instruments are true and correct on and as of the date hereof as though made on and as of the date hereof; (iii) except as disclosed to Lender, no default or Event of Default under the Loan Agreement has occurred and is continuing, and (iv) except as disclosed to Lender, Borrower is in full compliance with all covenants and agreements contained in the Loan Agreement, as amended hereby.

ARTICLE V

MISCELLANEOUS

Section 5.01                      Survival of Representations and Warranties. All representations and warranties made in the Loan Agreement or any other documents, agreements, or instruments executed in connection therewith, shall survive the execution and delivery of this Amendment, and no investigation by Lender or any closing shall affect such representations and warranties or the right of Lender to rely thereon.

Section 5.02                      Reference to Loan Agreement. Each of the Loan Documents and the Loan Agreement and any and all other agreements, documents, or instruments now or hereafter executed and delivered pursuant to the terms hereof or pursuant to the terms of the Loan Agreement as amended hereby, are hereby amended so that any reference in such documents, agreements, and instruments to the Loan Agreement shall mean a reference to the Loan Agreement as amended hereby.

Section 5.03                      Severability. Any provision of this Amendment held by a court of competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this Amendment and the effect thereof shall be confined to the provision so held to be invalid or unenforceable.

Section 5.04                      APPLICABLE LAW. THIS AMENDMENT SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE PERFORM ABLE IN AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.

Section 5.05                      Successors and Assigns. This Amendment is binding upon and shall inure to the benefit of the Parties and their respective successors, assigns, heirs, executors, and legal representatives, except that none of the Parties other than Lender may assign or transfer any of its rights or obligations hereunder without the prior written consent of Lender.

Section 5.06                      Counterparts.  This Amendment may be executed in one or more counterparts, each of which when so executed shall be deemed to be an original, but all of which, when taken together, shall constitute one and the same instrument.

Section 5.07                      Effect of Waiver. No consent or waiver, express or implied, by Lender to or for any breach of or deviation from any covenant, condition, or duty by Borrower, shall be deemed a consent to or waiver of any other breach of the same or any other covenant, condition, or duty.

Section 5.08                      Headings. The headings, captions, and arrangements used in this Amendment are for convenience only and shall not affect the interpretation of this Amendment.

Section 5.09                      Conflicting Provisions. If any provision of the Loan Agreement as amended hereby conflicts with any provision of any other Loan Document, the provision in the Loan Agreement shall control.

Section 5.10                      RELEASE. FOR AND IN CONSIDERATION OF THIS AMENDMENT AND OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, BORROWER HEREBY VOLUNTARILY AND KNOWINGLY RELEASES AND FOREVER DISCHARGES LENDER, ITS AGENTS, EMPLOYEES, SUCCESSORS, AND ASSIGNS, FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL, AT LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS AMENDMENT IS EXECUTED, WHICH BORROWER MAY NOW OR HEREAFTER HAVE AGAINST LENDER, ITS AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF (I) CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, (II) ANY LOAN, (III) ANY CONTRACTING FOR, CHARGING, TAKING, RESERVING, COLLECTING, OR RECEIVING INTEREST IN EXCESS OF THE HIGHEST LAWFUL RATE APPLICABLE, (IV) THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THIS AMENDMENT, THE LOAN AGREEMENT OR THE OTHER LOAN DOCUMENTS, OR (V) THE NEGOTIATION, EXECUTION, OR DELIVERY OF THIS AMENDMENT, THE LOAN AGREEMENT, OR ANY OTHER LOAN DOCUMENTS.

Section 5.11                      ENTIRE AGREEMENT. THIS AMENDMENT, THE LOAN AGREEMENT AS AMENDED HEREBY, AND ALL OTHER LOAN DOCUMENTS EXECUTED AND DELIVERED IN CONNECTION WITH AND PURSUANT TO THIS AMENDMENT AND THE LOAN AGREEMENT, REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

Section 5.12                      Legal Fees and Expenses. Notwithstanding anything contained in the Loan Agreement, as amended, to the contrary, Borrower shall pay all costs, fees, and expenses (including legal fees and expenses) incurred by Lender arising out of or in connection with (i) the Loan Agreement, this Amendment, and the Loan, (ii) the negotiation, preparation, execution, delivery, and enforcement of the Loan Agreement, as amended, and (iii) the collection of the Loan. Borrower hereby authorizes Lender to deduct from Borrower’s accounts maintained with Lender, the amount of any costs, fees, and expenses owed by Borrower when due.

[Signatures on following pages.]

  

  

  

IN WITNESS WHEREOF, Borrower and Lender have caused this Amendment to be executed as on the day and date first above written.

LENDER:

The F&M Bank & Trust Company, in

its capacity as Agent, as a Bank, and as

Collateral Agent

By: S/Christina Kitchens

           Christina Kitchens,

Senior Vice President

BORROWER:

Tengasco, Inc., a Delaware corporation

By: S/Jeffrey R. Bailey

Jeffrey R. Bailey

Chief Executive Officer

  

  

  

Acknowledged and Accepted this 12th day

of September, 2012, by the following Loan Parties:

Tennessee Land & Mineral Corporation,

a Tennessee corporation

By:  S/Jeffrey R. Bailey

Jeffrey R. Bailey

President

Tengasco Pipeline Corporation,

a Tennessee corporation

By: _S/Jeffrey R. Bailey

Jeffrey R. Bailey

President

Manufactured Methane Corporation,

a Tennessee corporation

By: S/Jeffrey R. Bailey _

Jeffrey R. Bailey

Vice-President

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