Document:

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EXHIBIT 10.1

                             SUBSCRIPTION AGREEMENT

                           PLATINUM SUPERYACHTS, INC.

                              A NEVADA CORPORATION

         Platinum SuperYachts, Inc. (the "Company"), hereby agrees to issue and
sell 14,970,000 shares of common stock of the Company (the "Shares") and Santeo
Financial Corporation, a Canadian corporation (the "Purchaser"), hereby agrees
to purchase the Shares as follows:

         1. PURCHASE PRICE. The aggregate purchase price for the Shares shall be
$149,700 (the "Purchase Price"), which shall be payable by cancellation of
monies owed by the Company to Purchaser.

         2. REPRESENTATIONS AND WARRANTIES. Purchaser hereby represents and
warrants as follows, all of which representations and warranties are being
relied upon by the Company and will survive the acquisition of the Shares by
Purchaser:

                  2.1. Purchaser is not acquiring the Shares for resale or
further distribution to any person, corporation or other entity;

                  2.2. Purchaser, and Purchaser's advisers, have had a
reasonable opportunity to ask questions of and receive answers from the Company,
or persons acting on the Company's behalf, concerning the Company and the
Shares, and all such questions have been answered to the full satisfaction of
Purchaser.

                  2.3. Purchaser qualifies as an "Accredited Purchaser", as such
term is defined in Rule 501(a) of Regulation D under the Securities Act.

                  2.4. Purchaser's financial condition is such that (a)
Purchaser has adequate means of providing for Purchaser's current needs and
possible personal contingencies, (b) Purchaser has no need for liquidity in this
investment, (c) Purchaser is able to bear the substantial economic risks of an
investment in the Shares for an indefinite period of time, and (d) at the
present time, Purchaser could afford a complete loss of his or her investment in
the Shares.

                  2.5. Purchaser understands that the Shares as an investment
involve a high degree of risk.

                  2.6. Purchaser acknowledges and understands that the Shares
have not been registered under the Securities Act of 1933, as amended (the
"Securities Act") in reliance upon an exemption from registration for
non-public, offerings and certain related factors. Purchaser understands that
the Shares may not be sold and must be held indefinitely unless subsequently
registered under the Act (and qualified under any applicable state securities
laws) or the Company receives the written opinion of counsel acceptable to the
Company that an exemption from registration (and qualification) is available.
Purchaser further understands that the Company is under no obligation, nor has
any intention, to register (and qualify) the Shares on Purchaser's behalf or to
assist Purchaser in complying with any exemption from registration (and
qualification).

                                       1
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                  2.7. Purchaser directly, or through Purchaser's purchaser
representative, has such knowledge and experience in financial, tax, and
business matters in order (i) to enable Purchaser or the purchaser
representative to use the information made available to Purchaser to fully
evaluate the risks associated with such an investment, (ii) to evaluate the
merits and risks of Purchaser's prospective investment, (iii) to make an
informed investment decision, (iv) to protect Purchaser's interests in
connection with the subject investment, and (v) to determine whether an
investment in the Shares is appropriate for Purchaser.

                  2.8. Purchaser, if a corporation, partnership, limited
liability company, trust, or other legal entity, is authorized and otherwise
duly qualified to purchase and hold the Shares. Purchaser, if a corporation,
partnership, limited liability company, trust, or other legal entity, has its
principal place of business as set forth on the signature page of this
Subscription Agreement and has not been formed for the specific purpose of
acquiring the Shares.

                  2.9. Purchaser has a pre-existing personal or business
relationship with one or more of the officers or directors of the Company or has
the means and experience of evaluating investment opportunities of this nature
by reason of his business or financial experience or the business or financial
experience of his professional advisers who are unaffiliated with the Company.

         3. INDEMNIFICATION. Purchaser acknowledges that Purchaser understands
the meaning and legal consequences of the representations, warranties and
covenants set forth in Section 2 hereof and that the Company has relied and will
rely upon such representations, warranties, covenants and certifications, and
Purchaser hereby agrees to indemnify and hold harmless the Company and its
officers, directors, controlling persons, agents and employees, from and against
any and all loss, damage or liability, joint or several, and any action in
respect thereof, to which any such person may become subject due to or arising
out of Purchaser's breach of any such representation, warranty or covenant or
the inaccuracy of such certifications. Notwithstanding the foregoing, however,
no representation, warranty, acknowledgment or agreement made herein by
Purchaser shall in any manner be deemed to constitute a waiver of any rights
granted to Purchaser under federal or state securities laws.

         4. GOVERNING LAW. This Purchase Agreement will be governed by and
construed in accordance with the laws of the State of Nevada. This Purchase
Agreement is made and to be performed in Carson City County, Nevada.

         5. HEADINGS. The headings of this Purchase Agreement have been included
only for convenience, and may not in any manner modify or limit any of the
provisions of this Purchase Agreement, or be used in any manner in the
interpretation of this Purchase Agreement.

         6. SUCCESSORS-IN-INTEREST AND ASSIGNS. Purchaser may not assign or
delegate to any other person this Purchase Agreement or any rights or
obligations hereunder. Subject to the foregoing restriction on transferability,
this Purchase Agreement will be binding upon and will inure to the benefit of
the successors-in-interest and assigns of each party hereto.

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                                   COMPANY:

                                   Platinum SuperYachts, Inc.,
                                   a Nevada corporation

                                   By: /s/ Ron Ruskowsky
                                       -------------------------------------
                                       Ron Ruskowsky, President

                                   PURCHASER:

                                   Santeo Financial Corporation,
                                   a Canadian corporation

                                   By: /s/ Ron Ruskowsky

                                   Its: President

                                       3exv4w2

 

Exhibit 4.2

BUSINESS LOAN AGREEMENT

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Principal	 	Loan Date	 	Maturity	 	Loan No	 	Call / Coll	 	Account	 	Officer	 	Initials
	 
	$5,000,000.00
	 	07-31-2005	 	07-31-2006	 	7657418442-34	 	 	 	374563	 	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

 

THIS BUSINESS LOAN AGREEMENT dated July 31, 2005, is made and executed between Rocky Mountain
Chocolate Factory, Inc. (“Borrower”) and Wells Fargo Bank, National Association (“Lender”) on the
following terms and conditions. Borrower has received prior commercial loans from Lender or has
applied to Lender for a commercial loan or loans or other financial accommodations, including
those which may be described on any exhibit or schedule attached to this Agreement (“Loan”).
Borrower understands and agrees that: (A) in granting, renewing, or extending any Loan, Lender is
relying upon Borrower’s representations, warranties, and agreements as set forth in this
Agreement; (B) the granting, renewing, or extending of any Loan by Lender at all times shall be
subject to Lender’s sole judgment and discretion; and (C) all such Loans shall be and remain
subject to the terms and conditions of this Agreement.

TERM. This Agreement shall be effective as of July 31, 2005, and shall continue in full force and
effect until such time as all of Borrower’s Loans in favor of Lender have been paid in full,
including principal, interest, costs, expenses, attorneys’ fees, and other fees and charges, or
until such time as the parties may agree in writing to terminate this Agreement.

CONDITIONS PRECEDENT TO EACH ADVANCE. Lender’s obligation to make the initial Advance and each
subsequent Advance under this Agreement shall be subject to the fulfillment to Lender’s
satisfaction of all of the conditions set forth in this Agreement and in the Related Documents.

Loan Documents. Borrower shall provide to Lender the following documents for the Loan: (1) the
Note; (2) Security Agreements granting to Lender security interests in the Collateral; (3)
financing statements and all other documents perfecting Lender’s Security Interests; (4)
evidence of insurance as required below; (5) together with all such Related Documents as
Lender may require for the Loan; all in form and substance satisfactory to Lender and Lender’s
counsel.

Borrower’s Authorization. Borrower shall have provided in form and substance satisfactory to
Lender properly certified resolutions, duly authorizing the execution and delivery of this
Agreement, the Note and the Related Documents. In addition, Borrower shall have provided such
other resolutions, authorizations, documents and instruments as Lender or its counsel, may
require.

Payment of Fees and Expenses. Borrower shall have paid to Lender all fees, charges, and other
expenses which are then due and payable as specified in this Agreement or any Related
Document.

Representations and Warranties. The representations and warranties set forth in this
Agreement, in the Related Documents, and in any document or certificate delivered to Lender
under this Agreement are true and correct.

No Event of Default. There shall not exist at the time of any Advance a condition which would
constitute an Event of Default under this Agreement or under any Related Document.

REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as of the date of this
Agreement, as of the date of each disbursement of loan proceeds, as of the date of any renewal,
extension or modification of any Loan, and at all times any Indebtedness exists:

Organization. Borrower is a corporation for profit which is, and at all times shall be, duly
organized, validly existing, and in good standing under and by virtue of the laws of the State
of Colorado. Borrower is duly authorized to transact business in all other states in which
Borrower is doing business, having obtained all necessary filings, governmental licenses and
approvals for each state in which Borrower is doing business. Borrower maintains an office at
265 Turner Drive, Durango, CO 81303-7941. Unless Borrower has designated otherwise in writing,
the principal office is the office at which Borrower keeps its books and records including its
records concerning the Collateral. Borrower will notify Lender prior to any change in the
location of Borrower’s state of organization or any change in Borrower’s name.

Assumed Business Names. Borrower has filed or recorded all documents or filings required by
law relating to all assumed business names used by Borrower. Excluding the name of Borrower,
the following is a complete list of all assumed business names under which Borrower does
business: None.

Authorization. Borrower’s execution, delivery, and performance of this Agreement and all the
Related Documents have been duly authorized by all necessary action by Borrower and do not
conflict with, result in a violation of, or constitute a default under (1) any provision of
(a) Borrower’s articles of incorporation or organization, or bylaws, or (b) any agreement or
other instrument binding upon Borrower or (2) any law, governmental regulation, court decree,
or order applicable to Borrower or to Borrower’s properties.

Properties. Except as contemplated by this Agreement or as previously disclosed in Borrower’s
financial statements or in writing to Lender and as accepted by Lender, and except for
property tax liens for taxes not presently due and payable, Borrower owns and has good title
to all of Borrower’s properties free and clear of all liens and security interests, and has
not executed any security documents or financing statements relating to such properties. All
of Borrower’s properties are titled in Borrower’s legal name, and Borrower has not used or
filed a financing statement under any other name for at least the last five (5) years.

AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, so long as this Agreement
remains in effect. Borrower will:

Notices of Claims and Litigation. Promptly inform Lender in writing of (1) all material
adverse changes in Borrower’s financial condition, and (2) all existing and all threatened
litigation, claims, investigations, administrative proceedings or similar actions affecting
Borrower or any Guarantor which could materially affect the financial condition of Borrower or
the financial condition of any Guarantor.

Financial Records. Maintain its books and records in accordance with accounting principles
acceptable to Lender, applied on a consistent basis, and permit Lender to examine and audit
Borrower’s books and records at all reasonable times.

Financial Statements. Furnish Lender with such financial statements and other related
information at such frequencies and in such detail as Lender may reasonably request.

 

 

					
	Loan No: 7657418442-34
	 	BUSINESS LOAN AGREEMENT

(Continued)
	 	Page 2

 

Loan Proceeds. Use all Loan proceeds solely for Borrower’s business operations, unless
specifically consented to the contrary by Lender in writing.

Taxes, Charges and Liens. Pay and discharge when due all of its indebtedness and obligations,
including without limitation all assessments, taxes, governmental charges, levies and liens,
of every kind and nature, imposed upon Borrower or its properties, income, or profits, prior
to the date on which penalties would attach, and all lawful claims that, if unpaid, might
become a lien or charge upon any of Borrower’s properties, income, or profits.

Performance. Perform and comply, in a timely manner, with all terms, conditions, and
provisions set forth in this Agreement, in the Related Documents, and in all other instruments
and agreements between Borrower and Lender. Borrower shall notify Lender immediately in
writing of any default in connection with any agreement.

Operations. Maintain executive and management personnel with substantially the same
qualifications and experience as the present executive and management personnel; provide
written notice to Lender of any change in executive and management personnel; conduct its
business affairs in a reasonable and prudent manner.

Compliance with Governmental Requirements. Comply with all laws, ordinances, and regulations,
now or hereafter in effect, of all governmental authorities applicable to the conduct of
Borrower’s properties, businesses and operations, and to the use or occupancy of the
Collateral, including without limitation, the Americans With Disabilities Act. Borrower may
contest in good faith any such law, ordinance, or regulation and withhold compliance during
any proceeding, including appropriate appeals, so long as Borrower has notified Lender in
writing prior to doing so and so long as, in Lender’s sole opinion. Lender’s interests in the
Collateral are not jeopardized. Lender may require Borrower to post adequate security or a
surety bond, reasonably satisfactory to Lender, to protect Lender’s interest.

Inspection. Permit employees or agents of Lender at any reasonable time to inspect any and all
Collateral for the Loan or Loans and Borrower’s other properties and to examine or audit
Borrower’s books, accounts, and records and to make copies and memoranda of Borrower’s books,
accounts, and records. If Borrower now or at any time hereafter maintains any records
(including without limitation computer generated records and computer software programs for
the generation of such records) in the possession of a third party, Borrower, upon request of
Lender, shall notify such party to permit Lender free access to such records at all reasonable
times and to provide Lender with copies of any records it may request, all at Borrower’s
expense.

LENDER’S EXPENDITURES. If any action or proceeding is commenced that would materially affect
Lender’s interest in the Collateral or if Borrower fails to comply with any provision of this
Agreement or any Related Documents, including but not limited to Borrower’s failure to discharge
or pay when due any amounts Borrower is required to discharge or pay under this Agreement or any
Related Documents, Lender on Borrower’s behalf may (but shall not be obligated to) take any action
that Lender deems appropriate on any Collateral and paying all costs for insuring, maintaining and
preserving any Collateral. All such expenditures incurred or paid by Lender for such purposes will
then bear interest at the rate charged under the Note from the date incurred or paid by Lender to
the date of repayment by Borrower. All such expenses will become a part of the Indebtedness and,
at Lender’s option, will (A) be payable on demand; (B) be added to the balance of the Note and be
apportioned among and be payable with any installment payments to become due during either (1) the
term of any applicable insurance policy; or (2) the remaining term of the Note; or (C) be treated
as a balloon payment which will be due and payable at the Note’s maturity.

CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to Borrower, whether
under this Agreement or under any other agreement, Lender shall have no obligation to make Loan
advances or to disburse Loan proceeds if: (A) Borrower or any guarantor is in default under the
terms of this Agreement or any other agreement that Borrower or any guarantor has with Lender; (B)
Borrower or any guarantor dies, becomes incompetent or becomes insolvent, files a petition in
bankruptcy or similar proceedings, or is adjudged a bankrupt; (C) there occurs a material adverse
change in Borrower’s financial condition, in the financial condition of any guarantor, or in the
value of any collateral securing any Loan; or (D) any guarantor seeks, claims or otherwise
attempts to limit, modify or revoke such guarantor’s guaranty of the Loan or any other loan with
Lender; or (E) Lender in good faith deems itself insecure, even though no Event of Default shall
have occurred,

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.

DEFAULT. Each of the following shall constitute an Event of Default under this Agreement:

Payment Default. Borrower fails to make any payment when due under the Loan.

Other Default. Borrower fails to comply with any other term, obligation, covenant or condition
contained in this Agreement or in any of the Related Documents.

Default in Favor of Third Parties. Borrower 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 the Loans or perform Borrower’s obligations under this Agreement or any related
document.

False Statements. Any representation or statement made by Borrower to Lender is false in any
material respect.

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.

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.

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

Insecurity. Lender in good faith believes itself insecure.

EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where otherwise
provided in this Agreement or the Related Documents, all commitments and obligations of Lender
under this Agreement immediately will terminate (including any obligation to make further Loan
Advances or disbursements), and, at Lender’s option, all Indebtedness immediately will become due
and payable, all without notice of any kind to Borrower, except that in the case of an Event of Default of the type described in the
“Insolvency” subsection above, such acceleration shall be automatic and not optional. In addition,
Lender shall have all the rights and remedies provided in the Related Documents or available at
law, in equity,

 

 

					
	Loan No: 7657418442-34
	 	BUSINESS LOAN AGREEMENT

(Continued)
	 	Page 3

 

or otherwise. Except as may be prohibited by applicable law, all of Lender’s
rights and remedies shall be cumulative and may be exercised singularly or concurrently. Election
by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to
make expenditures or to take action to perform an obligation of Borrower or of any Grantor shall
not affect Lender’s right to declare a default and to exercise its rights and remedies.

LOAN AGREEMENT PROVISION. The following covenants apply to the loan evidenced by the Note and to
all other loans or other credit accommodations from Lender to Borrower now existing or
subsequently arising under any future confirmation letter, agreement or promissory note, excluding
any loans or financial accommodations which are not serviced by the Wells Fargo Business Banking
Group, or its successors (“Excluded Loans”). These covenants supersede and replace any prior
financial reporting and condition covenants and shall survive the payoff of the Loan, but shall
not affect any Excluded Loans or covenants which by their nature relate only to a specific credit
transaction.

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.

INSURANCE. Borrower shall assure that insurance is maintained pursuant to any insurance
requirements set forth in the Agreement To Provide Insurance and /or other Related Documents, if
applicable.

FINANCIAL CONDITION. Borrower shall maintain its financial condition as follows using generally
accepted accounting principles consistently applied and used consistently with prior practices
(except to the extent modified by the definitions herein):

Definitions:

“Cash Flow” means the sum of net income after taxes plus depreciation expense, amortization
expense, and interest expense less the sum of dividends and distributions.

“Current Maturities of Long Term Debt” means that portion of the Borrower’s long term debt and
capital leases maturing or scheduled to be paid in the prior period.

“Current Liabilities” means the aggregate amount of Borrower’s items properly shown as current
liabilities on its balance sheet less any portion of such current liabilities that constitute
Subordinated Debt.

“EBITDA” means net income before tax plus interest expense (net of capitalized interest expense),
depreciation expense and amortization expense.

“Net Worth” means total owner’s equity plus Subordinated Debt.

“Subordinated Debt” means debt that is expressly subordinated to Lender in a writing acceptable to
Lender.

“Tangible Net Worth” means Net Worth less any intangible assets.

“Total Liabilities” means the aggregate amount of Borrower’s items properly shown as liabilities
on its balance sheet less Subordinated Debt.

a. Current Ratio as of the end of each quarter not less than 2.0000 to 1.0, with “Current Ratio”
defined as current assets divided by Current Liabilities.

b. Working Capital as of the end of each quarter not less than $4,000,000.00, with “Working
Capital” defined as current assets minus Current Liabilities.

c. Tangible Net Worth as of the end of each quarter not less than $8,000,000.00.

d. Total Liabilities divided by Tangible Net Worth as of the end of each quarter not greater than
1.6000 to 1.0.

e. Debt Coverage Ratio as of the end of each quarter on a rolling four-quarter basis not less than
1.2500 to 1.0, with “Debt Coverage Ratio” defined as the ratio of Cash Flow to the sum of Current
Maturities of Long Term Debt plus interest expense.

NEGATIVE COVENANTS. Borrower further covenants that so long as Lender remains committed to extend
credit to Borrower pursuant hereto, or any liabilities (whether direct or contingent, liquidated
or un-liquidated) of Borrower to Lender under any of the Loan Documents remain outstanding, and
until payment in full of all obligations of Borrower subject hereto. Borrower will not without
Lender’s prior written consent:

a. CAPITAL EXPENDITURES. Make any additional investment in fixed assets in any fiscal year in
excess of an aggregate of $1,750,000.00.

b. DIVIDENDS, DISTRIBUTIONS (CORPORATION) Declare or pay any dividend or distribution in excess of
$4,000,000.00 annually in cash. If Borrower is a Subchapter S corporation, so long as Borrower
maintains its valid election as an S corporation, Borrower may pay cash dividends or distributions
to its shareholders in any fiscal year to cover its shareholders’ federal and state income tax
liability for the immediately preceding fiscal year arising as a direct result of Borrower’s
reported income for said fiscal year, but not to exceed the minimum amount so required, and
Borrower shall provide to Lender, upon request, any documentation required by Lender to
substantiate the appropriateness of amounts paid or to be paid.

LINE REST REQUIREMENT. Borrower shall maintain a zero balance on the line of credit governed by
this Agreement for a minimum of 30 consecutive days during the first twelve months of the line of
credit, and during each successive twelve-month period.

ACCOUNTS RECEIVABLE AND INVENTORY ADVANCE RATES. Limitation on Advances. Amounts outstanding under
any line of credit governed by this Agreement, to a maximum of the principal remaining available,
shall not exceed 75 of Borrowers Eligible Accounts Receivable and 50 of Eligible Inventory as
determined by Lender (“Borrowing Base”). All of the foregoing shall be determined by Lender upon
receipt and review of all collateral reports and borrowing base certificates required hereunder
and such other documents and collateral information as Lender may from time to time require.

As used herein, “eligible accounts receivable” shall consist solely of trade accounts created in
the ordinary course of Borrower’s business, upon which Borrower’s right to receive payment is
absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Lender
has a perfected security interest of first priority, and shall not include

a) any account which represents an obligation of an account debtor located in a foreign country,
except to the extent any such account, in Lender’s determination, is supported by a letter of
credit or insured under a policy of foreign credit insurance, in each case in form, substance and
issued by a party acceptable to Lender;

b) any account which represents an obligation of any account debtor when ten percent (10) or more
of Borrower’s accounts from such account debtor are greater than 90 days past due, unless Borrower
has provided extended payment terms acceptable to Lender and such extended payment accounts are
not more than 30 days past due;

c) any account deemed ineligible by Lender when Lender, in its sole discretion, deems the
creditworthiness or financial condition of the account debtor, or the industry in which the
account debtor is engaged, to be unsatisfactory.

 

 

					
	Loan No: 7657418442-34
	 	BUSINESS LOAN AGREEMENT

(Continued)
	 	Page 4

 

“Eligible Inventory” shall mean goods that in Lender’s determination have broad, well-defined
markets and for which grading and valuation are standardized, excluding:

a) goods with limited liquidation value, including but not limited to, work in process, and goods
that are obsolete, unsaleable, damaged, slow moving, custom, private labeled, proprietary or
perishable, packaging materials, supplies, samples, demos, prototypes or cost capitalized to
inventory for tax purposes;

b) goods over which Borrower has limited control, including but not limited to, goods consigned to
others, goods not on Borrower’s premises and goods in transit; and goods at public warehouses for
which proper protective documentation has not been executed; or

c) goods for which Lender does not hold a first priority perfected security interest, goods
subject to legal restrictions, including but not limited to, goods consigned to Borrower by
others, goods located in foreign nations, U.S. territories or possessions, bill and hold
inventory, goods subject to a vendor’s purchase money security interest or other lien, goods in
which there are questions of title or for which an assignment of license has not been perfected,
and in the case of agricultural commodities, goods associated with unsubordinated grower payables.

Eligible Inventory shall be valued at the lower of cost or market value, as determine by Lender
upon receipt and review of collateral reports and documents as Lender may require.

ACCOUNTS RECEIVABLE AND OTHER REPORTS. Borrower shall provide the following reports to Lender, all
in a form satisfactory to Lender:

Not later than 45 days following, and as of the end of each month, a Borrowing Base
certificate.

INTERIM FINANCIAL STATEMENTS. Borrower shall provide to Lender interim financial statements not
later than 45 days after and as of the end of each month, prepared by Borrower to include a
balance sheet as of the end of each such period. If Borrower has subsidiaries, interim financial
statements shall be provided on a consolidated and consolidating basis.

ADDITIONAL COVENANTS.

Use of $2.5MM of the LOC to repurchase stock.

Fiscal Business Plan.

Quarterly 10Q Report.

Annual 10 K Report.

LETTERS OF CREDIT AND FOREIGN EXCHANGE. Trade Finance Subfeatures. 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.

1. 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.

2. 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.

3. 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.

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.

DEFINITIONS. The following capitalized words and terms shall have the following meanings when used
in this Agreement. Unless specifically stated to the contrary, all references to dollar amounts
shall mean amounts in lawful money of the United States of America. Words and terms used in the
singular shall include the plural, and the plural shall include the singular, as the context may
require. Words and terms not otherwise defined in this Agreement shall have the meanings
attributed to such terms in the Uniform Commercial Code. Accounting words and terms not otherwise
defined in this Agreement shall have the meanings assigned to them in accordance with generally
accepted accounting principles as in effect on the date of this Agreement:

Advance. The word “Advance” means a disbursement of Loan funds made, or to be made, to
Borrower or on Borrower’s behalf on a line of credit or multiple advance basis under the terms
and conditions of this Agreement.

Agreement. The word “Agreement” means this Business Loan Agreement, as this Business Loan
Agreement may be amended or modified from time to time, together with all exhibits and
schedules attached to this Business Loan Agreement from time to time.

 

 

					
	Loan No: 7657418442-34
	 	BUSINESS LOAN AGREEMENT

(Continued)
	 	Page 5

 

Borrower. The word “Borrower” means Rocky Mountain Chocolate Factory, Inc.

Collateral. The word “Collateral” means all property and assets granted as collateral security
for a Loan, whether real or personal property, whether granted directly or indirectly, whether
granted now or in the future, and whether granted in the form of a security interest,
mortgage, collateral mortgage, deed of trust, assignment, pledge, crop pledge, chattel mortgage,
collateral chattel mortgage, chattel trust, factor’s lien, equipment trust, conditional sale,
trust receipt, lien, charge, lien or title retention contract, lease or consignment intended
as a security device, or any other security or lien interest whatsoever, whether created by
law, contract, or otherwise.

Event of Default. The words “Event of Default” mean any of the events of default set forth in
this Agreement in the default section of this Agreement.

Grantor. The word “Grantor” means each and all of the persons or entities granting a Security
Interest in any Collateral for the Loan, including without limitation all Borrowers granting
such a Security Interest.

Guarantor. The word “Guarantor” means any guarantor, surety, or accommodation party of any or
all of the Loan.

Guaranty. The word “Guaranty” means the guaranty from Guarantor to Lender, including without
limitation a guaranty of all or part of the Note.

Indebtedness. The word “Indebtedness” means the indebtedness evidenced by the Note or Related
Documents, including all principal and interest together with all other indebtedness and costs
and expenses for which Borrower is responsible under this Agreement or under any of the
Related Documents.

Lender. The word “Lender” means Wells Fargo Bank, National Association, its successors and
assigns.

Loan. The word “Loan” means any and all loans and financial accommodations from Lender to
Borrower whether now or hereafter existing, and however evidenced, including without
limitation those loans and financial accommodations described herein or described on any
exhibit or schedule attached to this Agreement from time to time.

Note. The word “Note” means the Note executed by Rocky Mountain Chocolate Factory, Inc. in the
principal amount of $5,000,000.00 dated July 31, 2005, together with all renewals of,
extensions of, modifications of, refinancings of, consolidations of, and substitutions for the
note or credit agreement.

Related Documents. The words “Related Documents” mean all promissory notes, credit agreements,
loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds
of trust, security deeds, collateral mortgages, and all other instruments, agreements and
documents, whether now or hereafter existing, executed in connection with the Loan.

Security Agreement. The words “Security Agreement” mean and include without limitation any
agreements, promises, covenants, arrangements, understandings or other agreements, whether
created by law, contract, or otherwise, evidencing, governing, representing, or creating a
Security Interest.

Security Interest. The words “Security Interest” mean, without limitation, any and all types
of collateral security, present and future, whether in the form of a lien, charge,
encumbrance, mortgage, deed of trust, security deed, assignment, pledge, crop pledge, chattel
mortgage, collateral chattel mortgage, chattel trust, factor’s lien, equipment trust,
conditional sale, trust receipt, lien or title retention contract, lease or consignment
intended as a security device, or any other security or lien interest whatsoever whether
created by law, contract, or otherwise.

BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT AND BORROWER
AGREES TO ITS TERMS. THIS BUSINESS LOAN AGREEMENT IS DATED JULY 31, 2005.

BORROWER:

ROCKY MOUNTAIN CHOCOLATE FACTORY, INC.

	 	 	 	 	 
	By:

	 	/s/ Frank Crail
	 	 
	 

	 	 	 	 
	 

	 	Frank Crail, President, CEO of Rocky Mountain
Chocolate Factory, Inc.	 	 

LENDER:

WELLS FARGO BANK, NATIONAL ASSOCIATION

	 	 	 	 	 
	By:

	 	/s/ Mary Nordquist-Green
	 	 
	 

	 	 	 	 
	 

	 	Authorized Signer

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