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EXHIBIT 10.2     App No. 6906008 PROMISSORY NOTE – TERM (Paycheck Protection
Program)

 

Total Amount of Loan: $1,429,500.00

Interest Rate:

Fixed Rate: 1.00% per annum.

 

Payment Schedule:

Specific Repayment Schedule

No principal or interest payments shall be due for the first six (6) months of
this Note. Commencing on the seventh (7th) month anniversary of the date
Customer executes this Note (“Note Date”) and continuing on the same day of each month thereafter, Customer shall make a monthly principal payment on
the outstanding principal balance (after application of any loan forgiveness) in
an amount that shall fully amortize the outstanding principal balance of the
Loan by the Loan Due Date. Accrued interest shall be due and payable with each
monthly principal payment. Bank will apply each installment payment
first to pay interest accrued to the day Bank received the payment, then to bring principal current, and apply any remaining balance to reduce principal. The
Note is payable in full on the Loan Due Date without further demand or action of
the Bank.

 

First Payment Due Date: NOVEMBER 13, 2020 (Bank to Complete)

Loan Due Date: Two (2) years from the Date of Initial Disbursement (specified
below)

SBA Approval Date: 04/10/2020

SBA Loan Number: 19705971-00

 

 

1.

This Promissory Note (“Note”) is executed and delivered pursuant to the Loan
Agreement (Unsecured) dated April 9, 2020 (“Agreement”) between ROCKY MOUNTAIN
CHOCOLATE FACTORY, INC. (“Customer”) and 1st Source Bank (“Bank”). This Note
memorializes a “loan” as defined in and made under the Agreement. All terms that
are capitalized in this Note which are not otherwise defined in this Note shall
have the meanings ascribed in the Agreement. This Note is subject in all
respects to, the terms and conditions contained in the Agreement, all of which
are incorporated by reference into this Note. These terms and conditions cover,
among other things, events and circumstances that constitute a default by
Customer, and Bank’s rights and remedies in respect of a Customer default.

 

 

2.

Customer promises to pay to Bank or to Bank’s order, at such office as Bank may
direct, the unpaid principal balance of this Note and all other sums which
become due under the Agreement, with interest commencing on the Date of Initial
Disbursement, at the Interest Rate per annum specified herein, according to the
Payment Schedule described above. The entire balance due under this Note is due
and payable in full on the Loan Due Date.

 

 

3.

This is a “term” loan and is not a revolving credit arrangement. Customer has no
right to receive a re-advance in the future of loan proceeds due to payments or
other principal reductions in this Note. If the Total Amount of Loan shown above
is not fully disbursed at the Date of Initial Disbursement, then Bank will make
no further disbursement after sixty (60) days from the SBA Approval Date or if a
default (as defined in the Agreement) exists. If that occurs, then Bank may
recompute the amortization and repayment schedules and notify Customer of the
recomputed payment schedule.

 

 

4.

Notwithstanding anything in this Note, the Agreement or any documents evidencing
this loan (collectively, “Loan Documents”) to the contrary, Customer may prepay
this Note. Customer may prepay twenty percent (20%) or less of the unpaid
principal balance at any time without notice. If Customer prepays more than
twenty percent (20%) and the loan has been sold on the secondary market,
Customer must:

 

 

a.

Give Bank written notice;

 

 

b.

Pay all accrued interest; and

 

 

c.

If the prepayment is received less than twenty-one (21) days from the date Bank
receives the notice, pay an amount equal to twenty-one (21) days’ interest from
the date Bank receives the notice, less any interest accrued during the
twenty-one (21) days and paid under subparagraph b., above.

 

If Customer does not prepay within thirty (30) days from the date Bank receives
the notice, Customer must give Bank a new notice.

 

 

5.

This loan is being made by Bank to Customer pursuant to the Paycheck Protection
Program (“PPP”), which is part of the Coronavirus Aid, Relief, and Economic
Security Act (“Act”), and the provisions of the Act and the rules, regulations,
and guidance applicable to loans under the PPP, as amended from time to time
(“Rules”), are incorporated herein by reference. If a conflict exists between
the terms of the Loan Documents and the Act or Rules, the Act or Rules will
control and the terms of the Loan Documents will be amended by the effect and
operation of the Act or Rules so that the legal effect of the Loan Documents
conforms to the provisions of the Act and Rules, and the Loan Documents as
amended shall remain in full force and effect in accordance with the Act and
Rules. If all or part of any term of the Loan Documents is disallowed or
impermissible under the Act or Rules, such term shall be deemed to be stricken
from the Loan Documents, and the Loan Documents as amended shall remain in full
force and effect in accordance with the Act and Rules. Customer represents and
warrants that it will use the loan proceeds in compliance with the Act and Rules
and only for permissible costs and expenses under the Act and Rules. Customer
represents and warrants that all representations, authorizations, and
certifications made by Customer in its application for the loan under the PPP
are true, accurate, and correct as of the date hereof.

 

 

6.

All or part of the loan may be forgiven if Customer satisfies and complies with
the terms and conditions for loan forgiveness under the Act and Rules. All loan
forgiveness amounts must be calculated in accordance with the Act and Rules.
Customer agrees to submit to Bank verifying documentation for loan forgiveness
in accordance with the Act and Rules. No loan forgiveness will be available
absent submission of the required verifying documentation.

 

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7.

Notwithstanding any terms to the contrary in the Loan Documents, (a) Bank shall
not collect any fees or costs from Customer relating to this loan; (b) no
collateral and no personal guarantee is required in connection with the loan;
and (c) Bank and SBA shall have no recourse against any individual shareholder,
member or partner of Customer for non-payment of the loan, except to the extent
that such shareholder, member, or partner uses the loan proceeds for an
unauthorized purpose.

 

 

8.

Customer may not assign its rights in or delegate its duties under this Note
without the prior written consent of Bank. Bank may assign its rights in or
delegate its duties under this Note at any time without the consent of or notice
to Customer.

 

 

9.

At the request of Bank, Customer agrees to promptly re-execute this Note and any
other Loan Document if the loan was closed using a copy and/or to execute a
replacement note and other Loan Documents as Bank may deem necessary or
appropriate, in its sole discretion, to comply with the Act or Rules.

 

 

10.

Customer further represents, warrants, and certifies to Bank: (a) Customer has
received a copy of the SBA Authorization (Paycheck Protection Program) regarding
the loan; (b) Customer acknowledges that if Customer defaults on the loan, SBA
may be required to pay Bank under the SBA Guarantee under the PPP, and SBA may
then seek recovery on the loan (to the extent any balance remains after loan
forgiveness); (c) Customer will keep books and records in a manner satisfactory
to Bank, furnish financial statements as requested by Bank, and allow Bank and
SBA to inspect and audit books, records and papers relating to Customer’s
financial or business condition; and (d) Customer will not, without Bank’s
consent, change its ownership structure, make any distribution of company assets
that would adversely affect its financial condition, or transfer (including
pledging) or dispose of any assets, except in the ordinary course of business.

 

 

11.

When the SBA is the holder, this Note will be interpreted and enforced under
federal law, including SBA regulations. Bank or SBA may use state or local
procedures for filing papers, recording documents, giving notice, foreclosing
liens, and other purposes. By using such procedures, SBA does not waive any
federal immunity from state or local control, penalty, tax, or liability. As to
this Note, Customer may not claim or assert against SBA any local or state law
to deny any obligation, defeat any claim of SBA, or preempt federal law.
Notwithstanding anything herein to the contrary, this Note is unsecured.

 

  Executed by Customer on April 13     _, 20 20                  ROCKY MOUNTAIN
CHOCOLATE FACTORY, INC.             By:        /s/ Bryan Merryman       Bryan
Merryman, CEO  

 

 

  FOR BANK USE ONLY:     Date of Initial Disbursement: April 14     , 20 20     
 

 

 

 

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