PROMISSORY NOTE Exhibit 10.1

 
Principal
Loan Date
Maturity
Loan No
Call / Coll
Account
Officer
Initials
$2,500,000.00
11-07-2011
11-01-2017
   
11090126036
K0096
 
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
Any item above containing “***" has been omitted due to text length limitations.

 

Borrower:
Aspen Leaf Yogurt, LLC
265 Turner Drive
Durango, CO 81303
Lender: Wells Fargo Bank, National Association
Durango Main
200 West College Drive
Durango, CO 81301

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Principal Amount: $2,500,000.00
 
Date of Note: November 7, 2011

 
 
PROMISE TO PAY. . Aspen Leaf Yogurt, LLC ("Borrower") promises to pay to Wells
Fargo Bank, National Association ("Lender"), or order, in lawful money of the
United States of America, the principal amount of Two Million Five Hundred
Thousand & 00/100 Dollars ($2,500,000.00) or so much as may be outstanding,
together with interest on the unpaid outstanding principal balance of each
advance, calculated as described in the "INTEREST CALCULATION METHOD" paragraph
using an interest rate of 4.750%. Interest shall be calculated from the date of
each advance until repayment of each advance. The interest rate may change under
the terms and conditions of the "INTEREST AFTER DEFAULT" section.
 
PAYMENT. Borrower will pay this loan in accordance with the following payment
schedule;
 
Interest shall accrue on the outstanding unpaid principal balance of this Note
at a fixed rate equal to 4.75 percent. Advances are available in accordance with
the Line of Credit provision set forth below until November 01, 2013 (the
"Conversion Date). Advances will no longer be available after the Conversion
Date.
 
PAYMENT SCHEDULE. Accrued interest shall be due and payable monthly on the 1st
day of each month (the "Payment Date"), with such payments commencing on
December 01, 2011 and continuing to and including the Conversion Date. A payment
in the amount of $57,369.23 shall be due and payable on the first Payment Date
following the Conversion Date (the "First Principal and Interest Payment Date").
The unpaid balance of the Note (excluding any past due amounts) will then be
amortized to determine the payment amount which would fully repay the balance
and interest as it accrues in substantially equal monthly installments by
November 01, 2017. This payment amount will be due on each Payment Date
following the First Principal and Interest Payment Date. The Note shall mature
on November 01, 2017, at which time all unpaid principal, accrued interest, and
any other unpaid amounts shall be due and payable in full. Unless otherwise
agreed, all sums received from Borrower may be applied to interest, fees,
principal, or any other amounts due to Lender in any order at Lender's sole
discretion. If Lender fails for any reason to timely or properly adjust the
payment amount, Borrower shall notify Lender of the oversight, and Lender may
reamortize and adjust the payment amount to correct the oversight at any
subsequent time as may be necessary. In no event shall Lender's failure to
properly adjust the interest rate or payment amount result in a forgiveness of
any portion of the indebtedness.
 
Unless otherwise agreed or required by applicable law, payments will be applied
first to any accrued unpaid interest; then to principal; and then to any late
charges. Borrower will pay Lender at Lender's address shown above or at such
other place as Lender may designate in writing.
 
INTEREST CALCULATION METHOD. Interest on this Note is computed on a 365/360
basis; that is, by applying the ratio of the interest rate over a year of 360
days, multiplied by the outstanding principal balance, multiplied by the actual
number of days the principal balance is outstanding. All interest payable under
this Note is computed using this method.
 
PREPAYMENT. Borrower agrees that all loan fees and other prepaid finance charges
are earned fully as of the date of the loan and will not be subject to refund
upon early payment (whether voluntary or as a result of default), except as
otherwise required by law. Except for the foregoing, Borrower may pay without
penalty all or a portion of the amount owed earlier than it is due. Early
payments will not, unless agreed to by Lender in writing, relieve Borrower of
Borrower's obligation to continue to make payments of accrued unpaid interest.
Rather, early payments will reduce the principal balance due. Borrower agrees
not to send Lender payments marked "paid in full", "without recourse", or
similar language. If Borrower sends such a payment, Lender may accept it without
losing any of Lender's rights under this Note, and Borrower will remain
obligated to pay any further amount owed to Lender. All written communications
concerning disputed amounts, including any check or other payment instrument
that indicates that the payment constitutes "payment in full" of the amount owed
or that is tendered with other conditions or limitations or as full satisfaction
of a disputed amount must be mailed or delivered to: Wells Fargo Bank, National
Association, Attn: Commercial Loan Research Department, MAC # 17422-012, PO Box
659713 San Antonio, TX 78265.
 
LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged
5.000% of the unpaid portion of the regularly scheduled payment or $15.00,
whichever is greater.
 
INTEREST AFTER DEFAULT. Upon default, at Lender's option, and if permitted by
applicable law, Lender may add any unpaid accrued interest to principal and such
sum will bear interest therefrom until paid at the rate provided in this Note
(including any increased rate). Upon default, the interest rate on this Note
shall be increased by 4.000 percentage points. However, in no event will the
interest rate exceed the maximum interest rate limitations under applicable law.
 
DEFAULT. Each of the following shall constitute an event of default ("Event of
Default") under this Note:
 
Payment Default. Borrower fails to make any payment when due under this Note.
 
Other Defaults. Borrower fails to comply with or to perform any other term,
obligation, covenant or condition contained in this Note or in any of the
related documents or to comply with or to perform any term, obligation, covenant
or condition contained in any other agreement between Lender and Borrower.
 
Default in Favor of Third Parties. Borrower or any Grantor defaults under any
loan, extension of credit, security agreement, purchase or sales agreement, or
any other agreement, in favor of any other creditor or person that may
materially affect any of Borrower's property or Borrower's ability to repay this
Note or perform Borrower's obligations under this Note or any of the related
documents.
 
False Statements. Any warranty, representation or statement made or furnished to
Lender by Borrower or on Borrower's behalf under this Note or the related
documents is false or misleading in any material respect, either now or at the
time made or furnished or becomes false or misleading at any time thereafter.
 
 
 

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PROMISSORY NOTE
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Death or Insolvency. The dissolution of Borrower (regardless of whether election
to continue is made), any member withdraws from Borrower, or any other
termination of Borrowers existence as a going business or the death of any
member, the insolvency of Borrower, the appointment of a receiver for any part
of Borrower's property, any assignment for the benefit of creditors, any type of
creditor workout, or the commencement of any proceeding under any bankruptcy or
insolvency laws by or against Borrower.
 
Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture
proceedings, whether by judicial proceeding, self-help, repossession or any
other method, by any creditor of Borrower or by any governmental agency against
any collateral securing the loan. This includes a garnishment of any of
Borrower's accounts, including deposit accounts, with Lender. However, this
Event of Default shall not apply if there is a good faith dispute by Borrower as
to the validity or reasonableness of the claim which is the basis of the
creditor or forfeiture proceeding and if Borrower gives Lender written notice of
the creditor or forfeiture proceeding and deposits with Lender monies or a
surety bond for the creditor or forfeiture proceeding, in an amount determined
by Lender, in its sole discretion, as being an adequate reserve or bond for the
dispute.
 
Events Affecting Guarantor. Any of the preceding events occurs with respect to
any Guarantor of any of the indebtedness or any Guarantor dies or becomes
incompetent, or revokes or disputes the validity of, or liability under, any
guaranty of the indebtedness evidenced by this Note.
 
Adverse Change. A material adverse change occurs in Borrower's financial
condition, or Lender believes the prospect of payment or performance of this
Note is impaired.
 
Insecurity. Lender in good faith believes itself insecure.
 
LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance under this Note and all accrued unpaid interest immediately due, and
then Borrower will pay that amount.
 
ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help collect
this Note if Borrower does not pay. Borrower will pay Lender the reasonable
costs of such collection. This includes, subject to any limits under applicable
law, Lender's attorneys' fees and Lender's legal expenses, whether or not there
is a lawsuit, including without limitation attorneys' fees and legal expenses
for bankruptcy proceedings (including efforts to modify or vacate any automatic
stay or injunction), and appeals. If not prohibited by applicable law, Borrower
also will pay any court costs, in addition to all other sums provided by law.
 
GOVERNING LAW. This Note will be governed by federal law applicable to Lender
and, to the extent not preempted by federal law, the laws of the State of
Colorado without regard to its conflicts of law provisions. This Note has been
accepted by Lender in the State of Colorado.
 
RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a
right of setoff in all Borrower's accounts with Lender (whether checking,
savings, or some other account). This includes all accounts Borrower holds
jointly with someone else and all accounts Borrower may open in the future.
However, this does not include any IRA or Keogh accounts, or any trust accounts
for which setoff would be prohibited by law. Borrower authorizes Lender, to the
extent permitted by applicable law, to charge or setoff all sums owing on the
indebtedness against any and all such accounts, and, at Lender's option, to
administratively freeze all such accounts to allow Lender to protect Lender's
charge and setoff rights provided in this paragraph.
 
LINE OF CREDIT. This Note evidences a straight line of credit. Once the total
amount of principal has been advanced, Borrower is not entitled to further loan
advances. Advances under this Note may be requested either orally or in writing
by Borrower or by an authorized person. Lender may, but need not, require that
all oral requests be confirmed in writing. All communications, instructions, or
directions by telephone or otherwise to Lender are to be directed to Lender's
office shown above. Borrower agrees to be liable for all sums either: (A)
advanced in accordance with the instructions of an authorized person or (B)
credited to any of Borrower's accounts with Lender. The unpaid principal balance
owing on this Note at any time may be evidenced by endorsements on this Note or
by Lenders internal records, including daily computer print-outs. Lender will
have no obligation to advance funds under this Note if: (A) Borrower or any
guarantor is in default under the terms of this Note or any agreement that
Borrower or any guarantor has with Lender, including any agreement made in
connection with the signing of this Note; (B) Borrower or any guarantor ceases
doing business or is insolvent; (C) any guarantor seeks, claims or otherwise
attempts to limit, modify or revoke such guarantors guarantee of this Note or
any other loan with Lender; (D) Borrower has applied funds provided pursuant to
this Note for purposes other than those authorized by Lender; or (E) Lender in
good faith believes itself insecure.
 
PAYMENT DUE DATE DEFERRAL. Payment invoices will be sent on a date (the "billing
date") which is prior to each payment due date. If this Note is booked near or
after the billing date for the first scheduled payment, Lender may, in it's sole
discretion, defer each scheduled payment date and/or the maturity date by one or
more months.
 
FINANCIAL STATEMENTS. Borrower agrees to provide to Lender, upon request,
financial statements prepared in a manner and form acceptable to Lender, and
copies of such tax returns and other financial information and statements as may
be requested by Lender. Each financial statement shall give a full and complete
picture of Borrower's financial condition as of the statement's date, with
ownership accurately reflected, and shall be signed and dated or otherwise
authenticated to Lenders satisfaction. Borrower shall also furnish such
information regarding Borrower or the Collateral or the use of loan proceeds as
may be requested by Lender. Borrower warrants that all financial statements and
information provided to Lender are and will be accurate, correct and complete.
Borrower will permit Lender to examine or audit Borrower's books, accounts, and
records, including any records in the possession of a third party, at any
reasonable time upon request, at no cost to Lender. Such financial statements
and other financial information shall be signed and dated by Borrower, and by
any other party preparing such financial statements or otherwise authenticated
to Lender's satisfaction.
 
AUTOMATIC DEBIT OF PAYMENTS. Borrower agrees to maintain Borrowers deposit
account with Lender, account number XXXXXXXXXX from which Lender is authorized
to debit loan payments, fees and such other sums as may be payable under the
Note or related loan documents as they become due with respect to this loan and
any renewals and extensions of this loan, and shall keep such deposit account in
good standing at all times. This authorization shall remain in full force and
effect until discontinued by Lender, or until written revocation from Borrower
has been received and processed by Lender at the address of Lender set out in
the "PREPAYMENT" or "PREPAYMENT PENALTY" paragraph of the Promissory Note. If
this authorization is revoked, or if the account is not maintained in good
standing, or if Lender is not able to collect such amounts from the account as
they become due for any reason, then Lender may increase the pre-maturity
interest rate applicable to this Credit immediately and without notice by one
quarter percent (1/4%).
 
EXTENSION AND RENEWAL. Lender may, at Lenders discretion, renew or extend this
Note by written notice to Borrower. Such renewal or extension will be effective
as of the maturity date of this Note, and may be conditioned among other things
on modification of Borrower's obligations hereunder, including but not limited
to a decrease in the amount available under this Note, an increase in the
interest rate applicable to this Note and/or payment of a fee for such renewal
or extension Borrower will be deemed to have accepted the terms of such
extensions and renewals if Borrower does not deliver to Lender written rejection
of such renewal or extension within 10 days following the date of the written
notice of such changes, or if Borrower draws additional funds following receipt
of such notice. After any renewal or extension of Borrower's obligations under
this Note, the term "maturity date" as used in this Note will mean the new
maturity date set forth in the written notice of extension or renewal of this
Note. The Note may be modified, extended and renewed repeatedly in this manner.
 
 

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PROMISSORY NOTE
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LINE ADVANCES. Notwithstanding anything to the contrary, requests for advances
communicated to any office of Lender by any person believed by Lender in good
faith to be authorized to make the request, whether written, verbal, telephonic
or electronic, may be acted upon by Lender, and Borrower will be liable for sums
advanced by Lender pursuant to such request. Such requests for advances shall be
deemed authorized by Borrower, and Lender shall not be liable for such advances
made in good faith, and with respect to advances deposited to the credit of any
deposit account of Borrower, such advances, when so deposited, shall be
conclusively presumed to have been made to or for the benefit of Borrower
regardless of the fact that persons other than those authorized to request
advances may have authority to draw against such account. Borrower agrees to
indemnify and hold Lender harmless from and against all damages, liabilities,
costs and expenses (including attorney's fees) arising out of any claim by
Borrower or any third party against Lender in connection with Lender's
performance of transfers as described above.
 
CREDIT BUREAU INQUIRIES. The parties hereto, and each individual signing below
in a representative capacity, agree that Lender may obtain business and/or
personal credit reports and tax returns on each of them in their individual
capacities.
 
APPLICATION OF PAYMENTS. Notwithstanding the application of payment provided in
the Payment section of this Note, unless otherwise agreed, all sums received
from Borrower may be applied to interest, fees, principal, or any other amounts
due to Lender in any order at Lender's sole discretion. If a final payment
amount is set out in the Payment section of this Note, Borrower understands that
it is an estimate, and that the actual final payment amount will depend upon
when payments are received and other factors.
 
ADDITIONAL EVENTS OF DEFAULT. In addition to the Events of Default described
above, the following shall be an Event of Default, if applicable: (i) any change
in ownership of an aggregate of twenty-five percent (25%) or more of the common
stock, members' equity or other ownership interest in Borrower, (ii) the
withdrawal, resignation or expulsion of any one or more of the general partners
in Borrower with an aggregate ownership interest in Borrower of twenty-five
percent (25%) or more, or (iii) any of the preceding events occurs with respect
to any general partner of Borrower or guarantor of any indebtedness of Borrower
under this Note.
 
DEFAULT RATE. At Lender's option and without prior notice, upon default or at
any time during the pendency of any event of default under the Note or any
related loan documents, Lender may impose a default rate of interest (the
"Default Rate") equal to the pre-default interest rate plus four percent per
annum, not to exceed the maximum lawful rate. If the pre-default rate is a
floating or adjustable rate based upon an Index, it will continue to float or
adjust on the same periodic schedule, and the Default Rate will be a variable
rate per annum equal to the applicable Index plus the pre-default margin plus
four percent, not to exceed the maximum lawful rate. The Default Rate shall
remain in effect until the default has been cured and that fact has been
communicated to and confirmed by Lender. Lender may, from time to time in its
discretion, adjust or reamortize payments to take into account changes in the
interest rate. Lender shall give written notice to Borrower of Lender's
imposition of the Default Rate, except that if the Note is not paid at maturity,
Lender may impose the Default Rate from the maturity date to the date paid in
full without notice. Lender's imposition of the Default Rate shall not
constitute an election of remedies or otherwise limit Lender's rights concerning
other remedies available to Lender as a result of the occurrence of an event of
default. In the event of a conflict between the provisions of this paragraph and
any other provision of the Note or any related agreement, the provisions of this
paragraph shall control. If a default rate is prohibited by applicable law, then
the pre-default rate (including periodic rate adjustments for floating or
adjustable rates) shall continue to apply after default or maturity.
 
FURTHER ASSURANCES. The parties hereto agree to do all things deemed necessary
by Lender in order to fully document the loan evidenced by this Note and any
related agreements, and will fully cooperate concerning the execution and
delivery of security agreements, stock powers, instructions and/or other
documents pertaining to any collateral intended to secure the Indebtedness. The
undersigned agree to assist in the cure of any defects in the execution,
delivery or substance of the Note and related agreements, and in the creation
and perfection of any liens, security interests or other collateral rights
securing the Note. Borrower further agrees to pay Lender immediately upon demand
the full amount of all charges, costs and expenses (to include fees paid to
third parties) expended or incurred by Lender to monitor Lender's interest in
any real property pledged as collateral for this Note, including without
limitation all costs of appraisals.
 
CONSENT TO SELL LOAN. The parties hereto agree: (a) Lender may sell or transfer
all or part of this loan to one or more purchasers, whether related or unrelated
to Lender; (b) Lender may provide to any purchaser, or potential purchaser, any
information or knowledge Lender may have about the parties or about any other
matter relating to this loan obligation, and the parties waive any rights to
privacy it may have with respect to such matters; (c) the purchaser of a loan
will be considered its absolute owner and will have all the rights granted under
the loan documents or agreements governing the sale of the loan; and (d) the
purchaser of a loan may enforce its interests irrespective of any claims or
defenses that the parties may have against Lender.
 
FACSIMILE AND COUNTERPART. This document may be signed in any number of separate
copies, each of which shall be effective as an original, but all of which taken
together shall constitute a single document. An electronic transmission or other
facsimile of this document or any related document shall be deemed an original
and shall be admissible as evidence of the document and the signer's execution.
 
ELECTRONIC TRANSMISSION OF DOCUMENTS. Lender may, in its sole discretion, rely
upon any document, report, agreement or other communication ("Document") you
send by email, facsimile or other electronic means, treating the Document as
genuine and authorized to the same extent as if it was an original document
executed by you or your authorized representative. Lender may from time to time
in its sole discretion reject any such electronic Document and require a signed
original, or require you to provide acceptable authentication of any such
Document before accepting or relying on same. You understand and acknowledge
that there is a risk that Documents sent by electronic means may be viewed or
received be unauthorized persons, and you agree that by sending Documents by
electronic means, you shall be deemed to have accepted this risk and the
consequences of any such unauthorized disclosure.
 
COMMUNITY PROPERTY. In addition to the rights of Lender under any applicable
community property laws, any Borrower who has an interest in community property
under applicable law acknowledges and agrees that his/her obligation as borrower
is incurred in the interest of and to benefit the marital community (or domestic
partnership, if applicable), and expressly agrees that recourse may be had
against his or her separate property and his or her rights in community property
and community assets for all of his or her obligations to Lender, in addition to
any other property that may be subject to rights of Lender.
 
SECURITY INTEREST AND RIGHT OF SETOFF. In addition to all liens upon and rights
of setoff arising by law, Borrower pledges and grants to Lender as security for
Borrower's indebtedness and obligations under the Note (excluding any consumer
obligations subject to the Federal Truth In Lending Act) a security interest and
lien upon all monies, securities, securities accounts, brokerage accounts,
deposit accounts and other property of Borrower now or hereafter in the
possession of or on deposit with Lender or any Wells Fargo Affiliate, whether
held in a general or special account or for safekeeping or otherwise, excluding
however all IRA and Keogh accounts. No security interest, lien or right of
setoff will be deemed to have been waived by any act or conduct on the part of
Lender, or by any neglect to exercise such right, or by any delay in so doing,
and every right of setoff, lien and security interest will continue in full
force and effect until specifically waived or released by Lender in writing.
 
 
 

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LOAN FEE AUTHORIZATION. Borrower shall pay to Lender any and all fees as
specified in the "Disbursement Request and Authorization" executed by Borrower
in connection with this Note. Such fees are non-refundable and shall be due and
payable in full immediately upon Borrower's execution of this Note.
 
ADDITIONAL EVENTS OF DEFAULT. In addition to the Events of Default described
herein, the following shall be an Event of Default if applicable: (i) Borrower
or Guarantor fails to comply with any terms or conditions of any agreement with
Lender or any Wells Fargo Affiliate; or (ii) Borrower or Guarantor revoke or
dispute the validity of any of its liabilities or obligations under the
Agreement, or any Related Documents or any other agreement with Lender or any
Wells Fargo Affiliate. For purposes of this provision Wells Fargo Affiliate
shall mean Wells Fargo & Company and any present or future subsidiary of Wells
Fargo & Company.
 
ARBITRATION AGREEMENT. Arbitration - Binding Arbitration, Lender and each party
to this agreement hereby agree, upon demand by any party, to submit any Dispute
to binding arbitration in accordance with the terms of this Arbitration Program.
Arbitration may be demanded before the institution of a judicial proceeding, or
during a judicial proceeding, but not more than 60 days after service of a
complaint, third party complaint, cross-claim, or any answer thereto, or any
amendment to any of such pleadings. A "Dispute" shall include any dispute, claim
or controversy of any kind, whether in contract or in tort, legal or equitable,
now existing or hereafter arising, relating in any way to any aspect of this
agreement, or any related agreement incorporating this Arbitration Program (the
"Documents"), or any renewal, extension, modification or refinancing of any
indebtedness or obligation relating thereto, including without limitation, their
negotiation, execution, collateralization, administration, repayment,
modification, extension, substitution, formation, inducement, enforcement,
default or termination. DISPUTES SUBMITTED TO ARBITRATION ARE NOT RESOLVED IN
COURT BY A JUDGE OR JURY. TO THE EXTENT ALLOWED BY APPLICABLE LAW, THE PARTIES
IRREVOCABLY AND VOLUNTARILY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY
WITH RESPECT TO ANY DISPUTE ARBITRATED PURSUANT TO THIS ARBITRATION PROGRAM.
 
A.         Governing Rules, Any arbitration proceeding will (i) be governed by
the Federal Arbitration Act (Title 9 of the United States Code), notwithstanding
any conflicting choice of law provision in any of the documents between the
parties; and (ii) be conducted by the American Arbitration Association ("AAA"),
or such other administrator as the parties shall mutually agree upon, in
accordance with the AAA's commercial dispute resolution procedures, unless the
claim or counterclaim is at least $1,000,000.00 exclusive of claimed interest,
arbitration fees and costs, in which case the arbitration shall be conducted in
accordance with the AAA's optional procedures for large, complex commercial
disputes (the commercial dispute resolution procedures or the optional
procedures for large, complex commercial disputes are referred to herein, as
applicable, as the "Rules"). If there is any inconsistency between the terms
hereof and the Rules, the terms and procedures set forth herein shall control.
Arbitration proceedings hereunder shall be conducted at a location mutually
agreeable to the parties, or if they cannot agree, then at a location selected
by the AAA in the state of the applicable substantive law primarily governing
the Note. Any party who fails or refuses to submit to arbitration following a
demand by any other party shall bear all costs and expenses incurred by such
other party in compelling arbitration of any Dispute. Nothing contained herein
shall be deemed to be a waiver by any party that is a bank of the protections
afforded to it under 12 U.S.C. Section 91 or any similar applicable state law.
 
B.         No Waiver of Provisional Remedies. Self-Help and Foreclosure. The
arbitration requirement does not limit the right of any party to (i) foreclose
against real or personal property collateral; (ii) exercise self-help remedies
relating to collateral or proceeds of collateral such as setoff or repossession;
or (iii) obtain provisional or ancillary remedies such as replevin, injunctive
relief, attachment or the appointment of a receiver, before during or after the
pendency of any arbitration proceeding. This exclusion does not constitute a
waiver of the right or obligation of any party to submit any Dispute to
arbitration or reference hereunder, including those arising from the exercise of
the actions detailed in sections (i), (ii) and (iii) of this paragraph.
 
C.         Arbitrator Qualifications and Powers Any arbitration proceeding in
which the amount in controversy is $5,000,000.00 or less will be decided by a
single arbitrator selected according to the Rules, and who shall not render an
award of greater than $5,000,000.00. Any Dispute in which the amount in
controversy exceeds $5,000,000.00 shall be decided by majority vote of a panel
of three arbitrators; provided however, that all three arbitrators must actively
participate in all hearings and deliberations. Every arbitrator must be a
neutral practicing attorney or a retired member of the state or federal
judiciary, in either case with a minimum of ten years experience in the
substantive law applicable to the subject matter of the Dispute. The arbitrator
will determine whether or not an issue is arbitratable and will give effect to
the statutes of limitation in determining any claim. In any arbitration
proceeding the arbitrator will decide (by documents only or with a hearing at
the arbitrator's discretion) any pre-hearing motions which are similar to
motions to dismiss for failure to state a claim or motions for summary
adjudication. The arbitrator shall resolve all Disputes in accordance with the
applicable substantive law and may grant any remedy or relief that a court of
such state could order or grant within the scope hereof and such ancillary
relief as is necessary to make effective any award. The arbitrator shall also
have the power to award recovery of all costs and fees, to impose sanctions and
to take such other action as the arbitrator deems necessary to the same extent a
judge could pursuant to the Federal Rules of Civil Procedure, the applicable
state rules of civil procedure, or other applicable law. Judgment upon the award
rendered by the arbitrator may be entered in any court having jurisdiction. The
institution and maintenance of an action for judicial relief or pursuit of a
provisional or ancillary remedy shall not constitute a waiver of the right of
any party, including the plaintiff, to submit the controversy or claim to
arbitration if any other party contests such action for judicial relief.
 
D.         Discovery, In any arbitration proceeding discovery will be permitted
in accordance with the Rules. All discovery shall be expressly limited to
matters directly relevant to the Dispute being arbitrated and must be completed
no later than 20 days before the hearing date. Any requests for an extension of
the discovery periods, or any discovery disputes, will be subject to final
determination by the arbitrator upon a showing that the request for discovery is
essential for the party's presentation and that no alternative means for
obtaining information is available.
 
E.         Class Proceedings and Consolidations. No party hereto shall be
entitled to join or consolidate disputes by or against non-parties in any
arbitration, or to include in any arbitration any dispute as a representative or
member of a class, or to act in any arbitration in the interest of the general
public or in a private attorney general capacity. As used herein, "non-parties"
shall mean all persons and entities except Lender and the party(ies) executing
this agreement or any related Document.
 
F.         Miscellaneous. To the maximum extent practicable, the AAA, the
arbitrators and the parties shall take all action required to conclude any
arbitration proceeding within 180 days of the filing of the Dispute with the
AAA. No arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by
a party required in the ordinary course of its business or by applicable law or
regulation. If more than one agreement for arbitration by or between the parties
potentially applies to a Dispute, the arbitration provision most directly
related to the documents between the parties or the subject matter of the
Dispute shall control. This arbitration provision shall survive the repayment of
the Note and the termination, amendment or expiration of any of the Documents or
any relationship between the parties.
 
 
 

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PROMISSORY NOTE
(CONTINUED)
Page 5

 

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G.         Real Property Collateral. Notwithstanding anything herein to the
contrary, no Dispute shall be submitted to arbitration if the Dispute concerns
indebtedness secured directly or indirectly, in whole or in part, by any real
property and the Dispute is governed by the laws of California, Connecticut,
Idaho, Montana, Nevada, South Dakota or Utah, unless any conditions for
arbitration that may be set forth in the mortgage or deed of trust are
satisfied; if any such Disputes are not referred to arbitration, then any
provision in such mortgage or deed of trust providing for referral of Disputes
to a referee or master under the laws of California or Utah shall be applicable
to such Disputes.
 
H.         State Specific Provisions.
 
 If Delaware or Pennsylvania law governs the Dispute, the following provision is
included:
 
Confession of Judgment. Notwithstanding anything herein to the contrary, the
arbitration requirement does not limit or preclude the right of Lender to
confess judgment pursuant to a warrant of attorney provision set forth in the
Note or Related Documents. No party shall have the right to demand binding
arbitration of any claim, dispute or controversy seeking to (i) strike-off or
open a judgment obtained by confession pursuant to a warrant of attorney
contained in the Note or Related Documents, or (ii) challenge the waiver of a
right to prior notice and a hearing before judgment is entered, or after
judgment is entered, but before execution upon the judgment. Any claims,
disputes or controversies challenging the confession of judgment shall be
commenced and prosecuted in accordance with the procedures set forth, and in the
forum specified by the applicable state rules of civil procedure or other
applicable law.
 
If Maryland law governs the Dispute the following provision is included:
 
Confession of Judgment. Notwithstanding anything herein to the contrary, the
arbitration requirement does not limit or preclude the right of Lender to
confess judgment, and no party shall have the right to demand binding
arbitration of any claim, dispute or controversy seeking to open a judgment
obtained by confession. Nothing herein, including the arbitration requirement,
shall limit the right of any party to foreclose judicially or non-judicially
against any real or personal property collateral, or exercise judicial or
non-judicial power of sale rights. No provision regarding submission to a
jurisdiction and/or venue in any court or the waiver of any right to trial by
jury is intended or shall be construed to be in derogation of the provisions for
arbitration of any dispute. Any claim or counterclaim or defense raised in
connection with Lender's exercise of any rights set forth in the Note or Related
Documents shall be subject to the arbitration requirement.
 
If South Carolina law governs the Dispute the following provision is included:
 
WAIVER OF JURY TRIAL. NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, WITHOUT
INTENDING IN ANY WAY TO LIMIT THE PARTIES' AGREEMENT TO ARBITRATE ANY DISPUTE AS
SET FORTH IN THIS MORTGAGE, TO THE EXTENT ANY DISPUTE IS NOT SUBMITTED TO
ARBITRATION OR IS DEEMED BY THE ARBITRATOR OR BY ANY COURT WITH JURISDICTION TO
BE NOT ARBITRABLE OR NOT REQUIRED TO BE ARBITRATED, MORTGAGOR AND MORTGAGEE
WAIVE TRIAL BY JURY IN RESPECT OF ANY SUCH DISPUTE AND ANY ACTION ON SUCH
DISPUTE. THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY MORTGAGOR
AND MORTGAGEE, AND MORTGAGOR AND MORTGAGEE HEREBY REPRESENT THAT NO
REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY PERSON OR ENTITY TO
INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS
EFFECT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO
THE LOAN DOCUMENTS. MORTGAGOR AND MORTGAGEE ARE EACH HEREBY AUTHORIZED TO FILE A
COPY OF THIS SECTION IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER OF
JURY TRIAL. MORTGAGOR FURTHER REPRESENTS AND WARRANTS THAT IT HAS BEEN
REPRESENTED IN THE SIGNING OF THIS MORTGAGE AND IN THE MAKING OF THIS WAIVER BY
INDEPENDENT LEGAL COUNSEL, OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED BY
INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD THE
OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.
 
If Virginia law governs the Dispute the following provision is included:
 
Confession of Judgment. The arbitration requirement does not limit or preclude
the right of Lender to confess judgment pursuant to a warrant of attorney
provision set forth in the Note or Related Documents. No party shall have the
right to demand binding arbitration of any claim, dispute or controversy seeking
to (i) strike-off or open a judgment obtained by confession pursuant to a
warrant of attorney contained in the Note or Related Documents, (ii) challenge
the waiver of a right to prior notice and a hearing before judgment is entered,
or after judgment is entered, but before execution upon the judgment. Any
claims, disputes or controversies challenging the confession of judgment shall
be commenced and prosecuted in accordance with the procedures set forth, and in
the forum specified by the applicable state rules of civil procedure or other
applicable law.
 
SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and
upon Borrower's heirs, personal representatives, successors and assigns, and
shall inure to the benefit of Lender and its successors and assigns.
 
GENERAL PROVISIONS. If any part of this Note cannot be enforced, this fact will
not affect the rest of the Note. Lender may delay or forgo enforcing any of its
rights or remedies under this Note without losing them. Borrower and any other
person who signs, guarantees or endorses this Note, to the extent allowed by
law, waive presentment, demand for payment, and notice of dishonor. Upon any
change in the terms of this Note, and unless otherwise expressly stated in
writing, no party who signs this Note, whether as maker, guarantor,
accommodation maker or endorser, shall be released from liability. All such
parties agree that Lender may renew or extend (repeatedly and for any length of
time) this loan or release any party or guarantor or collateral; or impair, fail
to realize upon or perfect Lender's security interest in the collateral; and
take any other action deemed necessary by Lender without the consent of or
notice to anyone. All such parties also agree that Lender may modify this loan
without the consent of or notice to anyone other than the party with whom the
modification is made. The obligations under this Note are joint and several.
 
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE.
 
BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.
 
BORROWER:
 
ASPEN LEAF YOGURT, LLC
 

By:
/s/ Bryan Merryman
  Bryan Merryman, CFO/COO of Rocky Mountain
Chocolate Factory, Inc.