Document:

exv4w3

 

Exhibit 4.3

PROMISSORY NOTE

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Principal	 	Loan Date	 	Maturity	 	Loan No	 	Call / Coll	 	Account	 	Officer	 	Initials
	$5,000,000.00
	 	 	07-31-2006	 	 	 	07-31-2007	 	 	 	7657418442-34	 	 	 	 	 	 	 	482375	 	 	 	K5997	 	 	 	 	 

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:

	 	Rocky Mountain Chocolate Factory, Inc.
	 	Lender: Wells Fargo Bank, National Association
	 

	 	265 Turner Drive
	 	Durango Main
	 

	 	Durango, CO 81303-7941
	 	200 West College Drive
	 

	 	 	 	Durango, CO 81301

	 	 	 	 	 
	Principal Amount: $5,000,000.00

	 	Initial Rate: 7.750
	 	Date of Note: July 31, 2006

PROMISE TO PAY. Rocky Mountain Chocolate Factory, Inc. (“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 Five Million & 00/100 Dollars ($5,000,000.00) or so much as may
be outstanding, together with interest on the unpaid outstanding principal balance of each
advance. Interest shall be calculated from the date of each advance until repayment of each
advance.

PAYMENT. Borrower will pay this loan in one payment of all outstanding principal plus all accrued
unpaid interest on July 31, 2007. In addition, Borrower will pay regular monthly payments of all
accrued unpaid interest due as of each payment date, beginning August 31, 2006, with all
subsequent interest payments to be due on the last day of each month after that. 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. The annual interest rate for this Note
is computed on a 365/360 basis; that is, by applying the ratio of the annual 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. Borrower will pay Lender at Lender’s address shown
above or at such other place as Lender may designate in writing.

VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from time to time
based on changes in an index which is the floating rate equal to the Prime Rate set from time to
time by Lender that serves as the basis upon which effective rates of interest are calculated for
those loans making reference thereto (the “Index”). The Index is not necessarily the lowest rate
charged by Lender on its loans and is set by Lender in its sole discretion. If the Index becomes
unavailable during the term of this loan, Lender may designate a substitute index after notifying
Borrower. Lender will tell Borrower the current Index rate upon Borrower’s request. The interest
rate change will not occur more often than each time the Index changes. Each change in the Prime
Rate of interest hereunder shall become effective on the date each Prime Rate change is announced
within Lender. The “initial rate” is the rate per annum which Borrower and Lender agree shall be
the initial rate of this Note, and the “index currently” is the Index amount upon which said
initial rate is based; they do not necessarily reflect the Index in effect on the date of this
Note. Borrower understands that Lender may make loans based on other rates as well. The Index
currently is 8.250% per annum. The interest rate to be applied to the unpaid principal balance of
this Note will be at a rate of 0.500 percentage points under the Index, resulting in an initial
rate of 7.750% per annum. NOTICE: Under no circumstances will the interest rate on this Note be
more than the maximum rate allowed by applicable law.

PREPAYMENT. 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 Ann: Commercial Loan Research Department, PO Box 659713 San
Antonio, TX 78265.

LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged $50.00.

INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final maturity, 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, Lender, at its option, may, if permitted under
applicable law, increase the variable interest rate on this Note 4.000 percentage points. The
interest rate will not exceed the maximum rate permitted by 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.

Insolvency. The dissolution or termination of Borrower’s existence as a going business, 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.

 

 

	 	 	 	 	 
	 

	 	PROMISSORY NOTE	 	 
	Loan No: 7657418442-34

	 	(Continued)
	 	Page 2

Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor,
endorser, surety, or accommodation party of any of the indebtedness or any guarantor,
endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes
the validity of, or liability under, any guaranty of the indebtedness evidenced by this Note.

Change In Ownership. Any change in ownership of twenty-five percent (25) or more of the common
stock of Borrower.

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 on 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 revolving line of credit. 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 Lender’s internal records, including daily computer print-outs.

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. Borrower shall also furnish
such information regarding Borrower or the Collateral 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.

EXTENSION AND RENEWAL. Lender may, at Lender’s discretion, renew or extend this Note by written
notice (“Renewal Notice”) to Borrower. Such renewal or extension shall 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. In addition, Lender may increase the principal amount available
under the Note at any time. Borrower shall be deemed to have accepted the terms of each Renewal
Notice, including any notice of an increase in availability, if Borrower does not deliver to
Lender written rejection of such renewal or extension within 10 days following receipt of such
Renewal Notice, or if Borrower draws additional funds following the date of notification. After
any renewal or extension of Borrower’s obligations under this Note, the term “maturity date” as
used in this Note shall mean the new maturity date set forth in the Renewal Notice. This Note may
be renewed and extended repeatedly in this manner.

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. If the Borrower is a partnership, in addition to the Events of
Default described above, the following shall also be an Event of Default: (a) the resignation or
expulsion of any general partner with an ownership interest of twenty-five percent (25%) or more
in any Borrower which is a partnership or (b) if any general partner of Borrower is generally not
paying its debts as they become due.

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 this Note or any related loan documents. Lender may
increase the interest rate applicable to the Note by four percent (4.0%) (the “Default Rate”), not
to exceed the maximum lawful rate. (If the applicable rate is a floating or variable rate, then
the Default Rate will be a varying rate equal to the sum of the normally applicable Index and
spread, plus four percent.) 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 shall give written
notice to Borrower of Lender’s imposition of the Default Rate. 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 this Note or any related agreement, the provisions of
this paragraph shall control. If a default rate is prohibited by applicable law, then the interest
rate applicable after default or maturity shall be the prematurity rate which would be applicable
in the absence of any default.

 

 

	 	 	 	 	 
	 

	 	PROMISSORY NOTE	 	 
	Loan No: 7657418442-34

	 	(Continued)
	 	Page 3

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.

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.

ADDITIONAL SECURITY. Notwithstanding anything to the contrary in this or any related agreement, to
further secure the indebtedness and obligations of the Note and related loan documents. Borrower
pledges and grants to Lender a contractual right of offset and security interest in Borrower’s
accounts with Lender and Borrower’s accounts with any Wells Fargo Affiliate, whether checking,
savings, investment, or some other account, including without limitation, accounts held jointly
with others and accounts opened in the future, excluding however all IRAs, Keogh accounts, and
trust accounts to the extent a security interest would be invalid or prohibited by law. As used
herein, “Wells Fargo Affiliate” means any present or future subsidiary of Wells Fargo & Company,
and any subsidiary thereof, and any successors of such financial service companies.

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.

LETTERS OF CREDIT AND FOREIGN EXCHANGE. Borrower shall have available a Letter of Credit
Subfeature and a Foreign Exchange Subfeature as described in this section, in a total amount not
to exceed the available principal amount of the line of credit evidenced by this Note.

A. Letter of Credit Subfeature. As a Subfeature this Note, Lender may from time to time issue or
cause to be issued by a Wells Fargo Affiliate (such Lender or Wells Fargo Affiliate being referred
to herein as the “Issuer”) for your account, commercial and/or standby letters of credit (each
individually, a “Letter of Credit” and collectively “Letters of Credit”); provided however, that
the form and substance of each Letter of Credit shall be the subject to approval by the Issuer in
its sole discretion. Each Letter of Credit shall be issued for a term designated by Borrower;
provided however, that no Letter of Credit shall have an expiration subsequent to the maturity of
the Note. Each Letter of Credit shall be subject to the terms and conditions of a Letter of Credit
Agreement and related documents, if any, required by Issuer in connection with the issuance of
such Letter of Credit (each individually a “Letter of Credit Agreement” and collectively, the
“Letter of Credit Agreements”). Each draft paid by Issuer under a Letter of Credit and reimbursed
by Lender and shall be paid with an advance under the Note and shall be repaid by Borrower in
accordance with the terms and conditions of the Note applicable to such advances; provided
however, that if advances under the Note are not available, for any reason whatsoever, at the time
any amount is paid by Lender, then the full amount of such advance shall be immediately due and
payable, together with interest thereon, from the date such amount is paid by Issuer or Lender to
the date such amount is fully repaid by Borrower, at the rate of interest applicable to advances
under the Note. In such event, Borrower agrees that Issuer or Lender, at Issuer’s or Lender’s sole
discretion, may debit Borrower’s deposit account(s) with Lender or a Wells Fargo Affiliate for the
amount of any such draft. Upon the issuance of an amendment to a Letter of Credit, upon the
reimbursement by Lender of a draft under any Letter of Credit, and otherwise as agreed by Borrower
and Issuer pursuant to the Letter of Credit Agreements, Borrower shall pay to Issuer or Lender
fees determined in accordance with Issuer’s/Lender’s standard fees and charges at such time.

B. Foreign Exchange Subfeature. As a Subfeature of this Note, Lender or a Wells Fargo Affiliate
(such Lender or Wells Fargo Affiliate being referred to herein as the “Exchanger”) may make
available to Borrower a foreign exchange facility under which Exchanger, from time to time up to
and including the maturity date of the Note, will enter into foreign exchange contracts for the
account of Borrower for the purchase and/or sale by Borrower in United States Dollars of the
foreign currency or currencies specified in the foreign exchange agreement establishing the
foreign exchange facility. Each foreign exchange transaction shall be subject to the terms and
conditions of the foreign exchange agreement, the form and substance of which must be acceptable
to the Exchanger in all respects in its sole discretion.

C. Subfeature Limits. The outstanding amount of all Letters of Credit and foreign exchange
contracts, plus the reserve percentage applicable to foreign exchange contracts, shall be reserved
under the Note and shall not be available for Note advances. If the Trade Finance Subfeature
relates to a non-revolving line of credit, the amounts described in the preceding sentence shall
permanently reduce the remaining amount available under the non-revolving line of credit. The
amount of all outstanding foreign exchange contracts plus a reserve percentage of 20 of said
amount, plus the aggregate principal amount of all outstanding Letters of Credit, plus the
principal amounts of any advances outstanding under the Note, shall not at any time exceed the
principal amount of the Note, unless allowed by Lender at Lender’s full discretion. Any excess
amount shall be fully due and payable immediately without notice. As used herein, Wells Fargo
Affiliate means any present or future subsidiary of Wells Fargo & Company, any subsidiary thereof,
and any successors of such financial service companies.

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. 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 this Agreement or any related agreement incorporating
this Arbitration Program (the “Documents”), or any past, present, or future loans, transactions,
contracts, agreements, relationships, incidents or injuries of any kind whatsoever relating to or
involving Business Banking, Regional Banking, or any successor group or department of Lender.
DISPUTES SUBMITTED TO ARBITRATION ARE NOT RESOLVED IN COURT BY A JUDGE OR JURY.

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 AAA (American Arbitration
Association), 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 to be referred to, 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 Credit. Any party who fails or
refuses to submit to arbitration following a demand by any other party

 

 

	 	 	 	 	 
	 

	 	PROMISSORY NOTE	 	 
	Loan No: 7657418442-34

	 	(Continued)
	 	Page 4

shall bear all costs and expenses incurred by such other party in compelling arbitration of any
Dispute. Arbitration may be demanded at any time, and may be compelled by summary proceedings in
Court. 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. The arbitrator shall award all costs and expenses of the arbitration
proceeding. 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. °91 or any similar applicable state law.

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.

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 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.

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 and within 180 days
of the filing of the Dispute with the AAA. 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.

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. The resolution of any Dispute shall be determined by a separate
arbitration proceeding and such Dispute shall not be consolidated with other disputes or included
in any class proceeding. 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 termination,
amendment or expiration of any of the documents or any relationship between the parties.

State-Specific Provisions.

If California law governs the Dispute, the following provision is included:

Real Property Collateral; Judicial Reference. 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 unless the holder of the mortgage, lien or
security interest specifically elects in writing to proceed with the arbitration. If any such
Dispute is not submitted to arbitration, the Dispute shall, at the election of any party, be
referred to a referee in accordance with California Code of Civil Procedure Section 638 et seq.,
and this general reference agreement is intended to be specifically enforceable in accordance with
said Section 638. A referee with the qualifications required herein for arbitrators shall be
selected pursuant to the AAA’s selection procedures. Judgment upon the decision rendered by a
referee shall be entered in the court in which such proceeding was commenced in accordance with
California Code of Civil Procedure Sections 644 and 645.

If Idaho law governs the Dispute, the following provision is included:

Real Property Collateral; Judicial Reference. 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 unless (i) the holder of the mortgage, lien
or security interest specifically elects in writing to proceed with the arbitration, or (ii) all
parties to the arbitration waive any rights or benefits that might accrue to them by virtue of the
single action rule statute of Idaho, thereby agreeing that all indebtedness and obligations of the
parties, and all mortgages, liens and security interests securing such indebtedness and
obligations, shall remain fully valid and enforceable.

If Montana law governs the Dispute, the following provision is included;

Real Property Collateral; Judicial Reference. 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 unless (i) the holder of the mortgage, lien
or security interest specifically elects in writing to proceed with the arbitration, or (ii) all
parties to the arbitration waive any rights or benefits that might accrue to them by virtue of the
single action rule statute of Montana, thereby agreeing that all indebtedness and obligations of
the parties, and all mortgages, liens and security interests securing such indebtedness and
obligations, shall remain fully valid and enforceable.

If Nevada law governs the Dispute, the following provision is included:

Real Property Collateral; Judicial Reference. 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 unless (i) the holder of the mortgage, lien
or security interest specifically elects in writing to proceed with the arbitration, or (ii) all
parties to the arbitration waive any rights or benefits that might accrue to them by virtue of the
single action rule statute of Nevada, thereby agreeing that all indebtedness and obligations of
the parties, and all mortgages, liens and security interests securing such indebtedness and
obligations, shall remain fully valid and enforceable.

If Utah law governs the Dispute, the following provision is included:

 

 

	 	 	 	 	 
	 

	 	PROMISSORY NOTE	 	 
	Loan No: 7657418442-34

	 	(Continued)
	 	Page 5

Real Property Collateral; Judicial Reference. 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 unless the holder of the mortgage, lien or
security interest specifically elects in writing to proceed with the arbitration. If any such
Dispute is not submitted to arbitration, the Dispute shall, at the election of any party, be
referred to a master in accordance with Utah Rule of Civil Procedure 53, and this general
reference agreement is intended to be specifically enforceable. A master with the qualifications
required herein for arbitrators shall be selected pursuant to the AAA’s selection procedures.
Judgment upon the decision rendered by a master shall be entered in the court in which such
proceeding was commenced in accordance with Utah Rule of Civil Procedure 53(e).

EFFECTIVE DATE. The undersigned intends and agrees that the date of this agreement shall be its
effective date, though it is being signed on a later date.

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. 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 OP THIS NOTE,
INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE.

BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.

BORROWER:

ROCKY MOUNTAIN CHOCOLATE FACTORY, INC.

	 	 	 	 	 
	By:

	 	  /s/ Bryan Merryman
 

	 	 
	 

	 	Bryan Merryman, CFO/COO of Rocky Mountain	 	 
	 

	 	Chocolate Factory, Inc.QuickLinks
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Exhibit 10.3  

 
 

SECOND AMENDMENT AND WAIVER TO
  MV PARTNERS, LLC CREDIT AGREEMENT    
    

September 5,
2006 

RECITALS:

        Reference
is made to that certain Credit Agreement dated as of December 21, 2005 (as amended, supplemented or modified from time to time, the "Credit
Agreement"), by and among MV Partners, LP, a Kansas limited partnership (now MV Partners, LLC, a Kansas limited liability company, by conversion), as Borrower, Bank of America,
N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, and the other Lenders party thereto. Capitalized terms used but not defined herein shall have the meanings given to such terms in the
Credit Agreement. 

        Borrower
has requested that Administrative Agent and Required Lenders amend the covenant in Section 7.11(b) of the Credit Agreement to allow Borrower to enter into Swap Contracts
relating to Projected Oil and Gas Production of greater than 36 months, but less than 60 months, and to the extent that Borrower is currently in Default of its covenant in this regard
under Section 7.11(b), waive such Default. 

AGREEMENT: 

        Borrower,
the Required Lenders and the Administrative Agent hereby agree that, subject to the terms and conditions set forth herein, effective as of the date hereof,
Section 7.11(b) of the Credit Agreement, relating to Swap Contracts entered into with the purpose and effect of fixing prices on Projected Oil and Gas Production, is hereby amended to change
the words "36 months" to "60 months". 

        Further,
to the extent that Borrower is in Default of its covenant under Section 7.11(b) of the Credit Agreement as a result of entering into Swap Contracts relating to Projected
Oil and Gas Production of greater than 36 months, but less than 60 months, in the future prior to the effectiveness of this Second Amendment and Waiver, but which is otherwise in
compliance with Section 7.11, Administrative Agent and Required Lenders hereby waive such Default. 

        This
Second Amendment and Waiver shall become effective as of the date first above written when, and only when, Administrative Agent shall have received, at Administrative Agent's Office
on or before September 5, 2006, a counterpart of this Second Amendment and Waiver executed and delivered by Borrower and Required Lenders. 

        Borrower
hereby represents and warrants to Administrative Agent and each Required Lender the following: 

        (a)   Immediately
after giving effect to this Second Amendment and Waiver, there shall exist no Default or Event of Default and immediately after giving effect to this Second
Amendment and Waiver all representations and warranties contained herein, in the Credit Agreement or otherwise made in writing by any Loan Party in connection herewith or therewith shall be true and
correct in all material respects with the same force and effect as if those representations and warranties had been made on and as of the date hereof. 

        (b)   The
representations and warranties contained in the Loan Documents are true and correct at and as of the time of the effectiveness hereof. 

        (c)   Borrower
(i) is duly authorized to execute and deliver any documents hereunder to which it is a party and is and will continue to be duly authorized to perform
its obligations thereunder and (ii) has duly taken all limited partnership action necessary to authorize the execution and delivery of said documents to which it is a party and to authorize the
performance of the obligations of Borrower thereunder. 

 

        Except
as expressly waived or agreed herein, all covenants, obligations and agreements of the Loan Parties contained in the Credit Agreement shall remain in full force and effect in
accordance with their terms. Without limitation of the foregoing, the waivers and agreements set forth herein are limited precisely to the extent set forth herein and shall not be deemed to
(a) be a consent or an agreement to, or waiver or modification of, any other term or condition of the Credit Agreement or any of the documents referred to therein, or (b) except as
expressly set forth herein, prejudice any right or rights which Administrative Agent and Lenders may now have or may have in the future under or in connection with the Credit Agreement or any of the
documents referred to therein. Except as expressly modified or amended hereby, the terms and provisions of the Credit Agreement and any other documents or instruments executed in connection with any
of the foregoing, are and shall remain in full force and effect, and the same are hereby ratified and confirmed by Borrower in all respects. Any reference to the Credit Agreement in any Loan Document
shall be deemed to be a reference to the Credit Agreement as modified and amended hereby. The Credit Agreement as hereby amended is hereby ratified and confirmed in all respects. 

        Borrower
agrees to reimburse and save Administrative Agent harmless from and against liabilities for the payment of all out-of-pocket costs and expenses arising
in connection with the preparation, execution, delivery, amendment, modification, waiver and enforcement of, or the preservation of any rights under, this Second Amendment and Waiver, including,
without limitation, the reasonable fees and expenses of legal counsel to Administrative Agent which may be payable in respect of, or in respect of any modification of, this Second Amendment and
Waiver. 

        This
Second Amendment and Waiver and the rights and obligations of the parties hereunder shall be construed in accordance with and be governed by the laws of the State of New York. 

        This
Second Amendment and Waiver is a "Loan Document" as defined and described in the Credit Agreement and all of the terms and provisions of the Credit Agreement relating to Loan
Documents shall apply hereto. 

        This
Second Amendment and Waiver may be separately executed in counterparts and by the different parties hereto in separate counterparts, each of which when so executed shall be deemed
to constitute one and the same agreement. 

        THIS SECOND AMENDMENT AND WAIVER AND THE DOCUMENTS REFERRED TO HEREIN 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.

[Remainder of page intentionally left blank.]

2

        IN WITNESS WHEREOF, the undersigned parties have executed this Second Amendment and Waiver as of the date first written above. 

	 	 	BANK OF AMERICA, N.A., as Administrative Agent
	

 	
 	

By:	

/s/ TODD MACNEILL

	 	 	 	Name:	Todd MacNeill
	 	 	 	Title:	Vice President

Agency Management Officer III
	

 	
 	

BANK OF AMERICA, N.A., as a Lender, L/C Issuer and Swing Line Lender
	

 	
 	

By:	

/s/ GREGORY B. HANSON

	 	 	 	Name:	Gregory B. Hanson
	 	 	 	Title:	Principal

	MV PARTNERS, LLC	 	 
	

By:	

MV Energy, LLC, as its sole manager	
 	

 
	 	By:	Murfin, Inc., as member	 	 
	

 	

By:	

/s/ ROBERT D. YOUNG
 Robert D. Young

President	
 	

 

	UNION BANK OF CALIFORNIA, N.A.	 	 
	

By:	

/s/ JARROD BOURGEOIS
	
 	

 
	 	Name:	Jarrod Bourgeois	 	 
	 	Title:	Vice President	 	 
	

By:	

/s/ SEAN MURPHY
	
 	

 
	 	Name:	Sean Murphy	 	 
	 	Title:	Vice President	 	 

	GENERAL ELECTRIC CAPITAL CORPORATION	 	 
	

By:	

            
	
 	

 
	 	Name:	 	 	 
	 	Title:	 	 	 

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SECOND AMENDMENT AND WAIVER TO MV PARTNERS, LLC CREDIT AGREEMENT

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