SECOND AMENDMENT TO CREDIT AGREEMENT
Exhibit 10.1
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS AMENDMENT TO CREDIT AGREEMENT (this "Amendment") dated September 20, 2023, is entered into by and between ROCKY MOUNTAIN CHOCOLATE FACTORY, INC., a Colorado corporation ("Borrower"), and XXXXX FARGO BANK, NATIONAL ASSOCIATION ("Bank").
RECITALS
WHEREAS, Xxxxxxxx is currently indebted to Bank pursuant to the terms and conditions of that certain Credit Agreement between Borrower and Bank dated October 13, 2021, as amended from time to time ("Credit Agreement").
WHEREAS, Bank and Borrower have agreed to certain changes in the terms and conditions set forth in the Credit Agreement and have agreed to amend the Credit Agreement to reflect said changes.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree that the Credit Agreement shall be amended as follows:
1. Section 1.1 (a) is hereby amended (a) by deleting "September 30, 2023" as the last day on which Bank will make advances under the Line of Credit, and by substituting for said date "September 30, 2024," and (b) by deleting "Five Million Dollars ($5,000,000.00)" as the maximum principal amount available under the Line of Credit, and by substituting for said amount "Four Million Dollars ($4,000,000.00)." Any promissory note delivered in connection with this Amendment shall replace and be deemed the Line of Credit Note defined in and made pursuant to the Credit Agreement.
2. Section 4.10 (a) is hereby deleted in its entirety, and the following substituted therefor:
| "(a) the outstanding principal balance of the Line of Credit not at any time greater than an aggregate of 50% of Borrower’s eligible accounts receivable (provided, however, that eligible accounts receivable shall not include (i) accounts more than 30 days past the payment due date, (ii) contra accounts, and (iii) related parties accounts as determined by Bank in its sole discretion), plus 50% of the value of Borrower’s eligible inventory (exclusive of work in process and inventory which is obsolete, unsaleable or damaged), with all collateral values determined by Bank." |
3. Section 5.2 is hereby deleted in its entirety, and the following substituted therefor:
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"SECTION 0.0.XXXXXXX EXPENDITURES. Make any additional investment in any fixed or capital assets (including assets leased under capital leases) in any fiscal year in excess of an aggregate of $3,500,000.00." |
4. The effective date of this Amendment shall be the date that all of the following conditions set forth in this Section have been satisfied, as determined by Bank and evidenced by Bank’s system of record. Notwithstanding the occurrence of the effective date of this Amendment, Bank shall not be obligated to extend credit under this Amendment or any other Loan Document until all conditions to each extension of credit set forth in the Credit Agreement have been fulfilled to Bank's satisfaction.
(a) Approval of Bank Counsel. All legal matters incidental to the effectiveness of this Amendment shall be satisfactory to Bank's counsel.
(b) Documentation. Bank shall have received, in form and substance satisfactory to Bank, each of the following, duly executed by all parties:
(i) This Amendment and each promissory note or other instrument or document required hereby.
(ii) Such other documents as Bank may require under any other Section of this Amendment.
(c) Regulatory and Compliance Requirements. All regulatory and compliance requirements, standards and processes shall be completed to the satisfaction of Bank.
(d) Change fee. Immediately upon signing this Amendment Borrower shall pay to Bank a non-refundable fee of $20,000.00.
5. Except as specifically provided herein, all terms and conditions of the Credit Agreement remain in full force and effect, without waiver or modification. All terms defined in the Credit Agreement shall have the same meaning when used in this Amendment. This Amendment and the Credit Agreement shall be read together, as one document.
6. Borrower hereby remakes all representations and warranties contained in the Credit Agreement and reaffirms all covenants set forth therein. Borrower further certifies that as of the date of this Amendment and as of the date of Xxxxxxxx’s execution of this Amendment there exists no Event of Default as defined in the Credit Agreement, nor any condition, act or event which with the giving of notice or the passage of time or both would constitute any such Event of Default.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have caused this Amendment to be effective as of the effective date set forth above.
| ROCKY MOUNTAIN | XXXXX FARGO BANK, | ||||
| CHOCOLATE FACTORY, INC. | NATIONAL ASSOCIATION | ||||
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| By: |
/s/ Xxxxx Xxxxxx |
By: |
/s/ Xxxx X. Xxxxx |
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XXXXX XXXXXX, |
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XXXX X. XXXXX, |
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CHIEF FINANCIAL OFFICER |
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VICE PRESIDENT |
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