--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 
 
 
 
 
 
 
 
EXHIBIT 10.12
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 

--------------------------------------------------------------------------------

 
SECURED PROMISSORY NOTE
 

 

 U.S. $70,000  Durango, Colorado    July 16, 2013

 
FOR VALUE RECEIVED, the undersigned (“Maker”) promises to pay to the order of
ROCKY MOUNTAIN CHOCOLATE FACTORY, INC., a Colorado corporation with its
principal business address at 265 Turner Drive, Durango, Colorado 81303, or its
successors or assigns (sometimes referred to herein as “Holder”), the principal
sum of Seventy Thousand DOLLARS (U.S. $70,000.00) or so much as may be
outstanding,  with interest on the unpaid outstanding principal balance at the
rate of Six percent (6.00%) per annum.  The Maker will pay this loan in sixty
(60) payments of equal installments of principal and accrued but unpaid interest
due as of each payment date, with the first payment to be paid on 15 October
2013 and successive payments due and payable on the 15th day of each month
thereafter, with the final payment of the entire unpaid principal balance and
all accrued and unpaid interest, if not sooner paid, due and payable on 15
September 2018.  All accrued but unpaid interest from the date hereof through
the first payment date shall be added to principal on a monthly basis from the
date hereof, and shall thereafter bear interest as provided herein.
 
Maker hereby ackowledges and agrees that the proceeds received in exchange for
this Note shall be used exclusively for the purchase and installation of
equipment necessary to convert Maker's U-Swirl store located at 9795 West
Charleston Blvd. Suite 101, Las Vegas, NV 89117 into a co-branded Rocky Mountain
Chocolate Factory and U-Swirl store.  Maker hereby grants Holder a purchase
money security interest in all of the equipment purchased with the proceeds of
this Note as security for the full and prompt payment in cash and performance of
Maker's obligations hereunder.  Holder shall have all of the rights and remedies
of a secured party under the Uniform Commercial Code and all other applicable
law, all of which rights and remedies shall be cumulative and nonexclusive to
the extent permitted by law.
 
By signing this Note, the Maker authorizes the Holder to initiate debit entries
and/or credit correction entries to the Maker’s checking or savings account
indicated on Exhibit A to this Note related to the Authorization of Prearranged
Payments attached to this Note as Exhibit A, and authorizes the depository named
on Exhibit A (“Depository”) to debit such account pursuant to the Holder’s
instructions.  In the event the Holder does not initiate debit entries to the
Makers checking or savings account, all payments shall be payable to Holder at
the address set forth above, or at such other place as Holder hereof may
designate from time to time in writing.
 
All payments shall be first applied to the payment of interest due hereunder,
then to the payment of any other sums payable hereunder and finally to the
principal amount then remaining unpaid.
 
The indebtedness evidenced by this Note may be prepaid in whole or in part
without notice, penalty or premium.
 
At the option of Holder, the entire unpaid principal sum and all accrued
interest shall become immediately due and payable, without notice or demand,
upon the occurrence of any one or
 
1
 
 
 

--------------------------------------------------------------------------------

 
 
more of the following events of default or default on any other obligations of
Maker owed to Holder or its successors or assigns:
 
(a)           failure of Maker to pay any part of the principal or interest on
or before the 10th day after such payment is due;
 
(b)           any default in the performance of any obligation of Maker
hereunder or under any instrument or agreement executed and delivered to secure
payment of this Note;
 
(c)           Maker shall be unable, or admit 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 Maker:  death;
liquidation or dissolution; merger, consolidation, or other corporate
reorganization; termination of existence; insolvency; business failure; or
cessation of the conduct of any substantial part of Maker's business in the
ordinary course;
 
(e)           Maker shall commence, or there shall be commenced against Maker,
any case, proceeding, or other action seeking to have an order for relief
entered with respect to Maker, or to adjudicate Maker 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
Maker's business or property;
 
(f)           Maker defaults on any other debts, obligations, or liabilities to
Holder or to any other person or entity;
 
(g)           Maker takes any action in contemplation of any of the matters set
forth in the previous subparagraphs (in which case Maker is obligated to advise
Holder within forty-eight (48) hours of the occurrence of such action); or
 
(h)           Holder's belief in good faith that the prospect of payment,
performance or realization on the collateral is impaired.
 
It is further agreed that, upon the occurence of an event of default, any unpaid
balance shall bear interest at the lesser of 18% per annum or the maximum rate
permitted by the laws of the State of Colorado, from the date of default until
paid in full.
 
Maker, endorsers and other persons liable hereunder expressly grant to Holder
the right to release or to agree not to sue any other person, or to suspend the
right to enforce this Note against any such person or to otherwise discharge
such per­son; and each such Maker, endorser or other person liable hereunder
agrees that the exercise of such rights by the Holder will have no effect upon
the liability of any other person liable hereunder.  Maker, endorsers or other
persons liable hereunder, waive(s) delinquency in collection, demand for
payment, presentment for payment, protest, notice of protest, notice of dishonor
and all duties or obligations of Holder to effect, protect, perfect, retain or
enforce any security for payment of this Note or to proceed against any
collateral before otherwise enforcing this Note.  This Note shall be the joint
and several obligation of each
 
2
 
 
 

--------------------------------------------------------------------------------

 
 
person comprising the Maker, endorsers and other persons liable hereunder and
shall be binding upon them, their personal repre­sentatives, heirs, successors
and assigns.  Furthermore, Maker, endorsers or other persons liable hereunder
agree that the time for payment hereunder may be extended from time to time by
Holder without in any way affecting the liability of Maker, endorsers or other
persons liable hereunder.
 
Maker, endorsers and all other persons liable hereunder unconditionally
guarantee(s) prompt satisfaction when due, whether by acceleration or
other­wise, of the entire out­standing principal balance and all accrued and
unpaid interest, and amounts of any additional advancements of this Note, and
further agree(s) to immediately pay to Holder hereof, upon demand, all losses,
costs and expenses (including attorneys’ fees) incurred by Holder for collection
and enforcement of this Note in the event of default or other­wise.
 
Each individual executing this Note represents and warrants that he or she duly
is authorized to execute and deliver this Note on behalf of the person or entity
for which he or she is so executing and that this Note is binding upon the
undersigned Maker in accordance with its terms, except to the extent that
enforcement of remedies is limited by applicable bankruptcy, insolvency, and
other laws affecting the enforcement of credi­tors’ rights generally.
 
This Note shall be interpreted and enforced in accordance with the laws of the
State of Colorado.  In the event of default, Maker consents to the enforcement
of this Note in either the federal or state courts located in the City and
County of Denver, Colorado, and waives any rights to contest venue or
jurisdiction of those courts.
 

  MAKER:     U-Swirl, Inc.          
Date: ____________________
By:
/s/ Rico Conte      Rico Conte, Chief Executive Officer  

 
 

  SECURED PARTY:     Rocky Mountain Chocolate Factory, Inc.          
Date:  7/24/2013     
By:
/s/ Jeremy Kinney      Jeremy Kinney, Vice President-Finance  

3

 
 

--------------------------------------------------------------------------------

 

EXHIBIT A
TO SECURED PROMISSORY NOTE

EXHIBIT TO
SECURED PROMISSORY NOTE RELATED TO AUTHORIZATION
OF PREARRANGED PAYMENTS
(DIRECT DEBITS)

1.           Prearranged Payments.  Under the terms of the Secured Promissory
Note dated July 16, 2013 (the “Note”), the Maker authorizes the Holder to
initiate debit entries and/or credit correction entries to the Maker’s checking
and/or savings account identified below and authorizes the depository identified
below (“Depository”) to debit such account pursuant to the Maker’s instructions.

 

 US Bank                               Charleston                       
 Depository Branch       Las Vegas                          
Nevada                              City
State                                                                           
Zip Code      121201694                       153753348082               Bank
Transit/ABA Number
                                                                      Account
Number

 
 
 

  MAKER:     U-Swirl, Inc.          
Date: ____________________
 /s/ Rico Conte      Rico Conte, Chief Executive Officer    
 
 
 
AND (In case the above individual is not an authorized signer on the account, or
the account is jointly held):
                      Authorized Signer    Date: ____________________       By:
_________________________________________________     Title:
_______________________________________________  

 
 
1

 
 

--------------------------------------------------------------------------------

 
SECURED PROMISSORY NOTE
 

 U.S. $70,000  Durango, Colorado    July 16, 2013

 
FOR VALUE RECEIVED, the undersigned (“Maker”) promises to pay to the order of
ROCKY MOUNTAIN CHOCOLATE FACTORY, INC., a Colorado corporation with its
principal business address at 265 Turner Drive, Durango, Colorado 81303, or its
successors or assigns (sometimes referred to herein as “Holder”), the principal
sum of Seventy Thousand DOLLARS (U.S. $70,000.00) or so much as may be
outstanding,  with interest on the unpaid outstanding principal balance at the
rate of Six percent (6.00%) per annum.  The Maker will pay this loan in sixty
(60) payments of equal installments of principal and accrued but unpaid interest
due as of each payment date, with the first payment to be paid on 15 October
2013 and successive payments due and payable on the 15th day of each month
thereafter, with the final payment of the entire unpaid principal balance and
all accrued and unpaid interest, if not sooner paid, due and payable on 15
September 2018.  All accrued but unpaid interest from the date hereof through
the first payment date shall be added to principal on a monthly basis from the
date hereof, and shall thereafter bear interest as provided herein.
 
Maker hereby ackowledges and agrees that the proceeds received in exchange for
this Note shall be used exclusively for the purchase and installation of
equipment necessary to convert Maker's U-Swirl store located at 6592 N. Decatur
Blvd #100 & 105, Las Vegas, NV 89131 into a co-branded Rocky Mountain Chocolate
Factory and U-Swirl store.  Maker hereby grants Holder a purchase money security
interest in all of the equipment purchased with the proceeds of this Note as
security for the full and prompt payment in cash and performance of Maker's
obligations hereunder.  Holder shall have all of the rights and remedies of a
secured party under the Uniform Commercial Code and all other applicable law,
all of which rights and remedies shall be cumulative and nonexclusive to the
extent permitted by law.
 
By signing this Note, the Maker authorizes the Holder to initiate debit entries
and/or credit correction entries to the Maker’s checking or savings account
indicated on Exhibit A to this Note related to the Authorization of Prearranged
Payments attached to this Note as Exhibit A, and authorizes the depository named
on Exhibit A (“Depository”) to debit such account pursuant to the Holder’s
instructions.  In the event the Holder does not initiate debit entries to the
Makers checking or savings account, all payments shall be payable to Holder at
the address set forth above, or at such other place as Holder hereof may
designate from time to time in writing.
 
All payments shall be first applied to the payment of interest due hereunder,
then to the payment of any other sums payable hereunder and finally to the
principal amount then remaining unpaid.
 
The indebtedness evidenced by this Note may be prepaid in whole or in part
without notice, penalty or premium.
 
At the option of Holder, the entire unpaid principal sum and all accrued
interest shall become immediately due and payable, without notice or demand,
upon the occurrence of any one or
 
1
 
 
 

--------------------------------------------------------------------------------

 
 
more of the following events of default or default on any other obligations of
Maker owed to Holder or its successors or assigns:
 
(a)           failure of Maker to pay any part of the principal or interest on
or before the 10th day after such payment is due;
 
(b)           any default in the performance of any obligation of Maker
hereunder or under any instrument or agreement executed and delivered to secure
payment of this Note;
 
(c)           Maker shall be unable, or admit 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 Maker:  death;
liquidation or dissolution; merger, consolidation, or other corporate
reorganization; termination of existence; insolvency; business failure; or
cessation of the conduct of any substantial part of Maker's business in the
ordinary course;
 
(e)           Maker shall commence, or there shall be commenced against Maker,
any case, proceeding, or other action seeking to have an order for relief
entered with respect to Maker, or to adjudicate Maker 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
Maker's business or property;
 
(f)           Maker defaults on any other debts, obligations, or liabilities to
Holder or to any other person or entity;
 
(g)           Maker takes any action in contemplation of any of the matters set
forth in the previous subparagraphs (in which case Maker is obligated to advise
Holder within forty-eight (48) hours of the occurrence of such action); or
 
(h)           Holder's belief in good faith that the prospect of payment,
performance or realization on the collateral is impaired.
 
It is further agreed that, upon the occurence of an event of default, any unpaid
balance shall bear interest at the lesser of 18% per annum or the maximum rate
permitted by the laws of the State of Colorado, from the date of default until
paid in full.
 
Maker, endorsers and other persons liable hereunder expressly grant to Holder
the right to release or to agree not to sue any other person, or to suspend the
right to enforce this Note against any such person or to otherwise discharge
such per­son; and each such Maker, endorser or other person liable hereunder
agrees that the exercise of such rights by the Holder will have no effect upon
the liability of any other person liable hereunder.  Maker, endorsers or other
persons liable hereunder, waive(s) delinquency in collection, demand for
payment, presentment for payment, protest, notice of protest, notice of dishonor
and all duties or obligations of Holder to effect, protect, perfect, retain or
enforce any security for payment of this Note or to proceed against any
collateral before otherwise enforcing this Note.  This Note shall be the joint
and several obligation of each
 
2
 
 
 

--------------------------------------------------------------------------------

 
 
person comprising the Maker, endorsers and other persons liable hereunder and
shall be binding upon them, their personal repre­sentatives, heirs, successors
and assigns.  Furthermore, Maker, endorsers or other persons liable hereunder
agree that the time for payment hereunder may be extended from time to time by
Holder without in any way affecting the liability of Maker, endorsers or other
persons liable hereunder.
 
Maker, endorsers and all other persons liable hereunder unconditionally
guarantee(s) prompt satisfaction when due, whether by acceleration or
other­wise, of the entire out­standing principal balance and all accrued and
unpaid interest, and amounts of any additional advancements of this Note, and
further agree(s) to immediately pay to Holder hereof, upon demand, all losses,
costs and expenses (including attorneys’ fees) incurred by Holder for collection
and enforcement of this Note in the event of default or other­wise.
 
Each individual executing this Note represents and warrants that he or she duly
is authorized to execute and deliver this Note on behalf of the person or entity
for which he or she is so executing and that this Note is binding upon the
undersigned Maker in accordance with its terms, except to the extent that
enforcement of remedies is limited by applicable bankruptcy, insolvency, and
other laws affecting the enforcement of credi­tors’ rights generally.
 
This Note shall be interpreted and enforced in accordance with the laws of the
State of Colorado.  In the event of default, Maker consents to the enforcement
of this Note in either the federal or state courts located in the City and
County of Denver, Colorado, and waives any rights to contest venue or
jurisdiction of those courts.
 
 

  MAKER:     U-Swirl, Inc.          
Date: ____________________
By:
/s/ Rico Conte      Rico Conte, Chief Executive Officer  

 
 

  SECURED PARTY:     Rocky Mountain Chocolate Factory, Inc.          
Date:  7/24/2013     
By:
/s/ Jeremy Kinney      Jeremy Kinney, Vice President-Finance  

 

3

 
 

--------------------------------------------------------------------------------

 

EXHIBIT A
TO SECURED PROMISSORY NOTE

EXHIBIT TO
SECURED PROMISSORY NOTE RELATED TO AUTHORIZATION
OF PREARRANGED PAYMENTS
(DIRECT DEBITS)

1.           Prearranged Payments.  Under the terms of the Secured Promissory
Note dated July 16, 2013 (the “Note”), the Maker authorizes the Holder to
initiate debit entries and/or credit correction entries to the Maker’s checking
and/or savings account identified below and authorizes the depository identified
below (“Depository”) to debit such account pursuant to the Maker’s instructions.

 

 Bank of America                Decatur                            Depository
Branch       Las Vegas                          
Nevada                              City
State                                                                           
Zip Code      122400724                       5010 0767 0013              Bank
Transit/ABA Number
                                                                      Account
Number

 
 
 

  MAKER:     U-Swirl, Inc.          
Date: ____________________
 /s/ Rico Conte      Rico Conte, Chief Executive Officer    
 
 
 
AND (In case the above individual is not an authorized signer on the account, or
the account is jointly held):
                      Authorized Signer    Date: ____________________       By:
_________________________________________________     Title:
_______________________________________________  

 
 
 
1
 
 
 
 
 

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------