Exhibit 10.1

 

PORTIONS OF THIS EXHIBIT MARKED BY [**] HAVE BEEN OMITTED PURSUANT TO RULE
601(B)(10) OF REGULATION S-K. THE OMITTED INFORMATION IS (I) NOT MATERIAL AND
(II) WOULD LIKELY CAUSE COMPETITIVE HARM

TO THE REGISTRANT IF PUBLICLY DISCLOSED.

 

ROCKY MOUNTAIN CHOCOLATE FACTORY

 

EXCLUSIVE SUPPLIER OPERATING AGREEMENT

 

This EXCLUSIVE SUPPLIER OPERATING AGREEMENT (this “Agreement”) is made and
entered into on this 20th day of December, 2019 (the “Effective Date”) by and
between Rocky Mountain Chocolate Factory, Inc., a Delaware corporation (“RMCF”)
and Edible Arrangements, LLC, a Delaware limited liability company (“EA”). RMCF
and EA may be referred to herein individually as a “Party” or collectively as
the “Parties”. In consideration of the mutual covenants exchanged herein and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Parties agree as follows:

 

1.     Definitions. The following terms used herein have the following meanings:

 

(a)     “Action” means any demand, complaint, action, suit, countersuit,
arbitration, inquiry, proceeding or investigation.

 

(b)     “Affiliate” of any Person means a Person that controls, is controlled
by, or is under common control with such Person. As used herein, “control” means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such entity, whether through
ownership or voting securities or other interests, by contract or otherwise.

 

(c)     “Change of Control” means the occurrence of any of the following:

 

(i)     the sale, lease or transfer, in one or a series of related transactions,
of all or substantially all of the assets of RMCF; or

 

(ii)     any Person or group (within the meaning of Section 13(d)(3) or
Section 14(d)(2) of the Exchange Act, or any successor provision), in a single
transaction or in a related series of transactions, by way of merger,
consolidation or other business combination or purchase of beneficial ownership
(within the meaning of Rule 13d-3 under the Exchange Act, or any successor
provision) of 50% or more of the total voting power of voting stock of the
Company.

 

(d)     “Contract Year” will mean [**].

 

(e)     “EA Group” means EA, its Affiliates and their respective franchisees.

 

(f)     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

(g)    “Governmental Authority” means any nation or government, any state,
municipality or other political subdivision thereof, and any entity, body,
agency, commission, department, board, bureau, court, tribunal or other
instrumentality, whether federal, state, local, domestic, foreign or
multinational, exercising executive, legislative, judicial, regulatory,
administrative or other similar functions of, or pertaining to, government and
any executive official thereof.

 

 

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(h)    “Intellectual Property” means all intellectual property throughout the
world, including all U.S. and foreign (i) patents, patent applications,
invention disclosures, and all related continuations, continuations-in-part,
divisionals, provisionals, renewals, reissues, re-examinations, additions,
extensions (including all supplementary protection certificates),
(ii) trademarks, service marks, names, corporate names, trade names, domain
names, logos, slogans, trade dress, design rights, and other similar
designations of source or origin, together with the goodwill symbolized by any
of the foregoing, (iii) copyrights and copyrightable subject matter, (iv) rights
in computer programs (whether in source code, object code, or other form),
algorithms, databases, compilations and data, technology supporting the
foregoing, and all documentation, including user manuals and training materials,
related to any of the foregoing, (v) trade secrets and all other confidential
information, ideas, know-how, inventions, proprietary processes, formulae,
models, and methodologies, and (vi) all applications and registrations for the
foregoing.

 

(i)     “Law” means any United States or non-United States federal, national,
supranational, state, provincial, local or similar law (including common law),
statute, ordinance, regulation, rule, code, order, treaty, license, permit,
authorization, registration, approval, consent, decree, injunction, judgment,
notice of liability, request for information, binding judicial or administrative
interpretation or other requirement, in each case, enacted, promulgated, issued,
entered or otherwise put into effect by a Governmental Authority.

 

(j)     “Indemnitee” means any Person that is seeking indemnification pursuant
to the provisions of this Agreement.

 

(k)     “Indemnitor” means any Party to this Agreement from which any Indemnitee
is seeking indemnification pursuant to the provisions of this Agreement.

 

(l)     “Liabilities” means any and all indebtedness, claims, debts,
liabilities, demands, causes of actions, Actions and obligations, whether
accrued, fixed or contingent, mature or inchoate, known or unknown, reflected on
a balance sheet or otherwise, including those arising under any Law, Action or
any judgment of any court of any kind or any award of any arbitrator of any
kind, and those arising under any contract, commitment or undertaking.

 

(m)     “Losses” means any and all damages, losses, deficiencies, Liabilities,
taxes, obligations, penalties, judgments, settlements, claims, payments, fines,
charges, interest, costs and expenses resulting from third party claims,
including the costs and expenses of any and all Actions and demands,
assessments, judgments, settlements and compromises relating thereto and the
costs and expenses of attorneys’, accountants’, consultants’ and other
professionals’ fees and expenses incurred in the investigation or defense
thereof or the enforcement of rights hereunder.

 

(n)     “Person” means an individual, a general or limited partnership, a
corporation, a trust, a joint venture, an unincorporated organization, a limited
liability entity, any other entity and any Governmental Authority.

 

(o)     “Product” means all chocolates, candies and other confectionery products
produced by RMCF in a RMCF factory that bear the Rocky Mountain Chocolate
Factory brand. EA will be notified in writing of new Products after the
Effective Date in accordance with RMCF’s standard processes.

 

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(p)     “SAA” means the Strategic Alliance Agreement dated the Effective Date
between RMCF and EA.

 

(q)     “Territory” means anywhere in the world except for Canada; provided that
the Territory will include Canada if any current or future prohibitions in
existence on the Effective Date against RMCF authorizing an independent
distributor of Products in Canada are no longer effective (in which case RMCF
agrees to give EA written notice thereof).

 

(r)     “Warrant” means the Common Stock Purchase Warrant dated the Effective
Date issued by RMCF to EA.

 

2.     Appointment and Exclusivity.

 

(a)     Appointment. Subject to the terms and conditions of this Agreement,
during the Term (as defined below), RMCF hereby grants to EA a non-exclusive,
worldwide, non-sublicensable (except as set forth in this Section 2(a)),
nontransferable right to market, offer for sale, sell and distribute the
Products in the Territory, including through (i) retail stores and (ii) on-line
distribution channels such as Internet websites and applications for personal
computing devices (“E-Commerce Distribution Channel”), as an authorized and
independent distributor of the Products. Except to members of the EA Group, EA
will not appoint any sub-distributors, dealers or other representatives to sell,
market, offer for sale or distribute the Products without RMCF’s express prior
written approval.

 

(b)     Exclusivity. EA will not (and EA will cause the members of the EA Group
to not) purchase for resale any chocolates, candies and/or other confectionery
products in the same categories or subcategories as the Products (“Competitive
Products”) during the Term (by way of example and not limitation, if RMCF offers
for sale peanut brittle that is produced in the RMCF factory under its Rocky
Mountain Chocolate Factory brand, EA may not purchase peanut brittle from a
third party); provided that in no event shall any chocolate covered or dipped
fruit products (including any of the chocolate or fruit components thereof) be
considered Competitive Products. Notwithstanding the foregoing, EA may continue
to purchase Competitive Products from third parties with which EA had a
commercial agreement prior to the Effective Date or, with respect to new
Products that would be deemed Competitive Products, the date upon which EA is
notified in writing after the Effective Date of such new Product (“Competitive
Product Agreement”) provided that (i) EA will use commercially reasonable
efforts to wind down the Competitive Product Agreement and (ii) upon expiration
or termination of such Competitive Product Agreement, EA will cease to purchase
any Competitive Products from such third party and will purchase Products that
would otherwise be deemed Competitive Products from RMCF (by way of example and
not limitation, if EA is party to a Competitive Product Agreement with a vendor
of peanut brittle, EA may continue to purchase such peanut brittle from such
vendor so long as the Competitive Product Agreement is in effect, but upon
termination or expiration of the Competitive Product Agreement, EA would
purchase the peanut brittle from RMCF). In the event EA provides RMCF written
notice of nonrenewal pursuant to Section 11(a), subject to the terms and
conditions of this Agreements. EA will order no less than [**]% of the Products
ordered in the Contract Year in which such notice is given in the final two
Contract Years of the Term (by way of example and not limitation, if EA
purchased $[**] of Products in the third Contract Year, and provided a
termination notice at the end of such Contract Year, EA would purchase a minimum
of $[**] of Products in the fourth Contract Year and $[**] of Products in the
fifth Contract Year).

 

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(c)     E-Commerce Distribution Channel. RMCF agrees that it will not offer for
sale, sell or distribute any Product through any E Commerce Distribution Channel
with any Person without the prior written consent of EA, which will not be
unreasonably withheld or delayed if EA in good faith believes that such new E
Commerce Distribution Channel customer would not reasonably be expected to have
a material adverse effect on the sale of Products by EA. Notwithstanding the
foregoing, (i) RMCF may continue to market, offer for sale, sell or distribute
the Products through E-Commerce Distribution Channels pursuant to a commercial
agreement or purchase order between RMCF and a Person in effect prior to the
Effective Date; and (ii) until the transition of the e-commerce activities
contemplated by the Definitive Agreement (defined below) has been completed in
accordance with the terms of the Definitive Agreement, RMCF may continue to sell
Products on the domain https://www.rmcf.com. The Parties agree to as promptly as
practicable after the Effective Date to negotiate in good faith a definitive
agreement with respect to the E-Commerce Distribution Channel managed by EA
(“Definitive Agreement”).

 

3.     Forecasts, Orders, Acceptance; Returns.

 

(a)     Orders. Members of the EA Group may order Products by submitting written
purchase orders to RMCF in accordance with the then current ordering procedures
specified in writing by RMCF from time to time (each an “Order”). Orders will
contain, at a minimum: (i) Product type, (ii) Product quantity, (iii) requested
shipment window, (iv) delivery address, and (v) the Delivery Method (defined
below). RMCF may, in its sole discretion, reject any Orders in whole or in part;
provided that it shall notify EA in writing as promptly as reasonably
practicable after its receipt of an Order if any portion of the Order is
rejected (and the balance of the Order shall be deemed to be accepted). The
terms and conditions of this Agreement, and no others, will apply to all Orders.
Each Party hereby expressly rejects any and all different, conflicting, or
additional terms appearing on any Order or any other document, and such terms
will have no force or effect, whether through acceptance of such Order by RMCF
in writing or by performance. Neither Party may cancel all or any portion of an
accepted Order, without the other Party’s prior written consent, which, may be
withheld in the other Party’s reasonable discretion.

 

(b)     Acceptance and Returns. Members of the EA Group will use commercially
reasonable efforts to inspect Products upon receipt thereof to identify any
defects reasonably discoverable through visual inspection as promptly as
practicable; provided, however, if (i) the Products are delivered to EA and EA
does not provide a written notice of rejection to RMCF within thirty (30) days
after delivery or (ii) the Products are delivered to a member of the EA Group
other than EA and such member of the EA Group does not provide written notice of
rejection to RMCF within fourteen (14) days after delivery, such Products will
be deemed accepted by EA or such member of the EA Group, as applicable. The EA
Group may reject any Products delivered by RMCF, only if such Products (A)
exceed the number or type of units Ordered by the EA Group in the applicable
Order, (B) are not shipped within the mutually agreed upon shipping window,
(C) have been damaged during storage or handling prior to being shipped from
RMCF’s facilities, or (D) do not otherwise comply with the provisions of this
Agreement (“Properly Rejected Product”). The EA Group will not return any
Products for any reason unless it obtains prior authorization from RMCF and all
Products so returned have been marked with a return authorization number
supplied by RMCF. The EA Group will maintain all returns in their original
packaging. All return shipping charges and any other expenses associated with
the return or other disposition of Properly Rejected Products shall be the
responsibility of RMCF. Notwithstanding the foregoing, EA may request a credit
for any Products that are not satisfactory for sale in accordance with, and
subject to, RMCF’s then-current non-saleable product policy.

 

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4.     Delivery, Prices, Taxes and Payment.

 

(a)     Title; Delivery. RMCF will use commercially reasonable efforts to make
Products available to the EA Group in accordance with delivery method selected
on the applicable Order (“Delivery Method”) on or before the delivery date set
forth in such Order that has been accepted by RMCF in writing. All charges and
costs related to shipment and delivery will be invoiced to EA. Title to the
Products and all risk of loss or damage thereto will pass to the applicable
member of the EA Group when such Product is deemed “delivered” in accordance
with the following Delivery Method selected by such member of the EA Group:

 

(i)     RMCF Delivery. If the delivery address is in the continental United
States and the member of the EA Group requests that RMCF deliver the Products
using RMCF delivery network, the Products are deemed “delivered” when the
Products are delivered to the delivery address set forth in the applicable
Order.

 

(ii)     Third Party Delivery and International Delivery. If the member of the
EA Group requests that RMCF deliver the Products using a third party carrier or
if the delivery address set forth in the Order is located outside of the
continental United States, the Products are deemed “delivered” when the Products
are made available at the loading dock to such third party carrier at RMCF’s
then-current manufacturing facility. For clarity, EA is responsible for
transporting the Products to their final destination, including, without
limitation, loading the Products, all export procedures and costs, shipping and
freight, and any other costs arising after RMCF has made such Products available
at the RMCF loading dock.

 

(b)     Prices. The prices for the Products (“Prices”) will be: [**]. All Orders
will be invoiced by RMCF at the Price in effect at the time of shipment;
provided that RMCF will use commercially reasonable efforts to give EA at least
[**] days prior written notice of any increase in the prices. Notwithstanding
any suggested retail pricing or guides provided by RMCF to EA or published by
RMCF, the EA Group is permitted to establish the prices EA will charge to their
customers for Products.

 

(c)     Taxes. All Prices are exclusive of, and EA is responsible for all taxes,
charges, fees, levies, imposts, duties, tariffs or other assessments imposed by
or payable to any federal, state, local or foreign tax or governmental
authority, including without limitation sales, use, goods, services, value
added, transfer, customs, personal property, stamp duty, excise, withholding and
other obligations of the same or similar nature (individually and collectively,
“Taxes”); provided, however, that EA will not be responsible for any Taxes due
on the net income of RMCF. If RMCF is required by Law to collect Taxes from EA,
RMCF may add any such Taxes to invoices submitted to EA by RMCF.

 

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(d)     Payment. Members of the EA Group will pay all invoices for actual
quantities of Product delivered within [**] days from receipt of the invoice;
provided that the invoices for the first two Orders of Products from a
franchisee of EA will not be due and payable by such franchisee until [**] days
from receipt of the invoice. If a member of the EA Group in good faith believes
that a portion of an invoice relates to Properly Rejected Products, such member
may withhold the disputed amount until such dispute is resolved. Payment by EA
will not constitute a waiver of any of its rights under this Agreement. If any
member of the EA Group is late with payments that are not disputed in good
faith, and such member of the EA Group fails to cure such failure to pay or
provide RMCF assurances of payment that are acceptable to RMCF within [**] days
after receipt of written notice from RMCF, RMCF may in its sole discretion,
until such payment that is not disputed in good faith is paid in full, undertake
any or any combination of the following: (i) stop all shipments under this
Agreement to such member of the EA Group until such member of the EA Group
provides RMCF such assurances of payments and pays any past due amounts;
(ii) demand prepayment for new Orders from such member of the EA Group; or (iii)
delay shipments of any new Orders.

 

5.     Intellectual Property.

 

(a)     Marketing Materials. RMCF will provide EA, from time to time, certain
marketing materials, instruction books, technical pamphlets, catalogues,
photographs, support information, form contracts and other materials and
documentation that are useful to EA in performance of EA’s obligations hereunder
(“RMCF Materials”).

 

(b)     License to Marks. Subject to this Section 5(b), RMCF hereby grants EA
and the other members of the EA Group the non-exclusive and fully paid up right
to use and display the RMCF name and any other trade name or trademark of RMCF,
and such other designations (individually and collectively, such marks and
designations, the “Marks”) and the RMCF Materials, solely during the Term (and
any period following the termination thereof where the EA Group is expressly
permitted by RMCF in writing to use the Marks and the RMCF Materials) in the
Territory solely in the performance of its rights and obligations under this
Agreement. The EA Group will display the Marks solely in connection with the
marketing, sale or support of Products and with an appropriate trademark or
other notice (such as ® or ™) or other notice of proprietary rights in the Marks
as instructed in writing by RMCF. The EA Group will use the Marks and RMCF
Materials in advertising or other materials only in accordance with RMCF’s then
current written guidelines and any other written guidance made available to EA,
which RMCF may change from time to time, or with RMCF’s prior written consent,
which will not be unreasonably withheld or delayed. The EA Group will
immediately change or discontinue any use of any Marks, RMCF Materials or
promotional materials bearing such items as requested by RMCF. The EA Group will
not use any Mark in a way that implies any member of the EA Group is an
employee, agency, branch, affiliate or franchisee of RMCF.

 

(c)     Quality Control. The EA Group will use commercially reasonable efforts
to ensure that (i) the services rendered by the EA Group in connection with the
Marks, and (ii) all advertising, promotional or other uses of the Marks will at
all times (A) conform to the written quality standards and guidelines specified
by RMCF from time to time and (B) be in full compliance with all applicable
Laws; provided that the EA Group shall not be responsible for the contents of
the RMCF Materials that are incorporated into such advertising, promotions or
other uses. RMCF has the right, at all reasonable times, to inspect the manner
in which EA uses the Marks and the RMCF Material in its advertising and
promotional materials. Such inspection will be conducted, at the election of
RMCF, by personal visit to EA or by written request for information, which EA
will provide at no charge. EA will cooperate with such inspections at its
expense.

 

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(d)     Ownership. The EA Group will not take or encourage any action, during or
after the Term, that will in any way impair the rights of RMCF in and to the
Marks or the goodwill inherent therein. The EA Group use of the Marks and all
goodwill therein inures solely to the benefit of RMCF. The EA Group will not
acquire or claim any title to the Marks adverse to RMCF by virtue of the license
granted herein, or through their use of the Marks. To the extent any member of
the EA Group acquires any right, title or interest in and to the Marks or RMCF
Materials or any derivatives thereof, other than the limited license granted to
the EA Group in Section 5(a), EA hereby assigns such right, title or interest to
RMCF. EA will sign any lawful documents, make any lawful declaration or provide
any lawful declarations reasonably requested by RMCF in connection with any
trademark application or registration for the Marks, or the enforcement or
defense thereof.

 

(e)     EA Marks. RMCF acknowledges EA’s exclusive right, title and interest in
and to all of its trademarks, trade names, service marks, logos, assignees,
program and event names, identifications and other proprietary rights and
privileges (the “EA Marks”). This Agreement and its various provisions are not a
license or assignment of any right, title or interest in the EA Marks by EA to
RMCF. RMCF will not in any manner represent that it has any ownership in the
EA’s Marks and will not do or cause to be done anything impairing EA’s exclusive
ownership of the EA Marks. RMCF will not use, print or duplicate the EA Marks
except and only if RMCF has obtained EA’s prior written approval.

 

6.     Confidentiality. “Confidential Information” means all of the trade
secrets, business and financial information, business methods, procedures,
know-how and other information of every kind that relates to the business of
either Party and is marked or identified as confidential at the time of
disclosure, or disclosed in circumstances that would lead a reasonable person to
believe such information is confidential. The Party receiving Confidential
Information (“Recipient”) from the other Party (“Discloser”) will not use such
Confidential Information for any purpose other than in connection with this
Agreement, and will disclose such Confidential Information only to the employees
or contractors of the Recipient who have a need to know such Confidential
Information for purposes of this Agreement and who have signed a written
agreement imposing a duty of confidentiality no less restrictive than the
Recipient’s duty hereunder. The Recipient will protect the Discloser’s
Confidential Information from unauthorized use, access, or disclosure in the
same manner as the Recipient protects its own confidential or proprietary
information of a similar nature and with no less than a reasonable degree of
care. The Recipient will be liable to the Discloser for breaches of this Section
6 by its employees and contractors as if such breaches were those of the
Recipient. Confidential Information excludes any information that (a) was
already lawfully known to the Recipient at the time of disclosure by the
Discloser as shown by contemporaneous documentation; (b) is disclosed to the
Recipient by a third party who had the right to make such disclosure without any
confidentiality restrictions; or (c) is, or through no fault of the Recipient
has become, generally available to the public. Notwithstanding the foregoing,
the Recipient may disclose Confidential Information of the Discloser pursuant to
a subpoena or other court process only (a) after having given the Discloser
prompt notice of the Recipient’s receipt of such subpoena or other process and
(b) after the Recipient has given the Discloser a reasonable opportunity to
oppose such subpoena or other process or to obtain a protective order.
Confidential Information of the Discloser in the custody or control of the
Recipient will be promptly returned or destroyed upon the earlier of (i) the
Discloser’s written request or (ii) termination of this Agreement.

 

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7.     Certain Obligations of the Parties.

 

(a)    Promotional Materials. EA will obtain RMCF’s advanced written approval of
the form, manner, extent and wording of all advertising materials related to the
Products (not previously approved by RMCF in accordance with this Section 7(a)).
If EA creates any promotional literature, brochures, descriptions,
specifications, manuals and other materials relating to any Products (the “EA
Materials”), EA will ensure such EA Materials comply with RMCF’s then current
written guidelines and any other written guidelines made available to EA, which
RMCF may change from time to time.

 

(b)    Information. No less than quarterly during the Term, the respective
senior management of the Parties will meet to discuss and exchange information
relating to production, promotional and sales activities with respect to the
Products, including, but not limited to, (i) market trends and developments of
competing products, development of market prices, upcoming marketing
initiatives, and production and marketing activities expenditures and related
figures; (ii) the special situation of franchisees and any customer complaints;
and (iii) any other information mutually agreed to by the Parties in regard to
the sale and distribution of the Products.

 

(c)     Flow Down Terms. EA will cause its franchisees to abide by the terms set
forth in this Agreement that apply to the use of the Marks and/or sale or
distribution of the Products (the “Flow Down Terms”). EA represents and warrants
that it will promptly notify RMCF of any known or suspected violations of the
Flow Down Terms by any franchisee.

 

(d)     Complaint Resolution. The Parties will cooperate in dealing with
customer complaints concerning any of the Products and will take all reasonable
actions to resolve such complaints as mutually agreed.

 

(e)     Insurance. Each Party will maintain insurance coverage in amounts
(appropriate for and as otherwise would be suitable for similarly situated
companies.

 

(f)     Compliance. Each Party will obtain and maintain in effect at all times
during the Term the necessary registrations with any and all governmental
agencies, commercial registries, chambers of commerce and other offices which
are required under any applicable Law in order for each Party properly to
conduct its commercial business generally and in connection with this Agreement
in particular. Each Party will, at its own expense, comply, and ensure
compliance of its franchisees, with all applicable Laws, orders and regulations
of any Governmental Authority with jurisdiction over its activities in
connection with this Agreement and/or the Products, including, without
limitation, any privacy Laws.

 

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(g)    Certain Prohibitions. EA will refrain (and will prohibit all franchisees,
if any) from: (i) removing or altering, or permitting the removal or altering
of, any trade names, trademarks, trade dress, labels, tags or other identifying
marks affixed to any of the Products or their containers, including, without
limitation, modifying or altering the Products unless otherwise agreed by RMCF
or required by applicable Law; (ii) making any false representation regarding
RMCF or the Products in promoting sales of the Products (provided that the EA
Group will not be responsible for the representations included in the RMCF
Materials); and (iii) participating in any promotion, marketing or sale of any
imitation of any Product. Neither Party will engage in any trade practice which
would injure the reputation of the other Party or the Products.

 

(h)     Recall. In the event that RMCF is required to recall or, on its own
initiative, recalls any of the Products, EA will assist RMCF with such recall.
RMCF will pay all shipping charges and reasonable notification costs arising
from such recall. Each Party will keep the other fully and promptly informed of
any notification, event or other information, whether received directly or
indirectly, which market affect the marketability or safety of the Products or
might result in a recall of Products requested by any Governmental Authority.

 

(i)      Storage of Products. The EA Group will ensure that all Products under
its control will be stored and handled in a manner that is commercially
reasonable and otherwise would be suitable for similarly situated companies.

 

8.     Warranties and Disclaimers.

 

(a)    General Warranties. Each Party represents and warrants that: (i) it has
the power to enter into this Agreement and to exercise its rights and perform
its obligations hereunder; (ii) all corporate or other actions required to
authorize its execution of this Agreement and its performance of its obligations
hereunder have been duly taken; and (iii) its execution of this Agreement and
its exercise of its rights and performance of its obligations hereunder do not
constitute and will not result in any breach of any agreement.

 

(b)     RMCF Warranties. RMCF represents, warrants and covenants that:

 

(i)     the Products (A) comply with all applicable Laws and (B) will not
adulterated, misbranded, or otherwise prohibited from introduction into
interstate commerce;

 

(ii)     it will comply in all material respects with all applicable Laws
related to the performance of its obligations under this Agreement.

 

(c)     EA Warranties. EA represents, warrants and covenants that it will comply
in all material respects with all applicable Laws related to the performance of
its obligations under this Agreement.

 

(d)   Disclaimer. THE EXPRESS WARRANTIES SET FORTH IN THIS SECTION 8 ARE IN LIEU
OF AND RMCF HEREBY EXPRESSLY DISCLAIMS AND EXCLUDES ALL OTHER WARRANTIES,
EXPRESS, IMPLIED, OR STATUTORY, INCLUDING, WITHOUT LIMITATION, THE IMPLIED
WARRANTIES OF MERCHANTABILITY, TITLE, NON-INFRINGEMENT, FITNESS FOR A PARTICULAR
PURPOSE OR USE, AND WARRANTIES IMPLIED FROM A COURSE OF DEALING OR COURSE OF
PERFORMANCE.

 

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9.     Indemnification.

 

(a)     Indemnification by RMCF. RMCF will defend each member of the EA Group,
each of their Affiliates, each of their respective directors, officers,
employees and agents, and each of the heirs, executors, successors and assigns
of any of the foregoing (collectively, the “EA Indemnitees”) and indemnify and
hold harmless the EA Indemnitees from and against any and all Losses of the EA
Indemnitees to the extent arising out of any of the following items:

 

(i)     any Action alleging that the Products, the Marks or the RMCF Materials
violate, infringe or misappropriate any third party Intellectual Property rights
or applicable Laws; however, RMCF will not have any obligation to defend any
claim or indemnify EA againt any Loss if such claim arises from EA’s
modification or alteration of the Products, the Marks or the RMCF Materials;

 

(ii)     any Action alleging illness, injury, death or damage as a result of
the, consumption or use of any Products; provided, however, that RMCF will not
be responsible for, and will not be required to defend any claim or provide
indemnification against, any such Loss attributable to defects in the Products
that independent investigation discloses originated solely after the Products
were delivered to the EA Group and was not attributable to any act or omission
of RMCF prior to such Products being so delivered.

 

(b)     Indemnification by EA. EA will defend RMCF, its Affiliates, each of
their respective directors, officers, employees and agents, and each of the
heirs, executors, successors and assigns of any of the foregoing (collectively,
the “RMCF Indemnitees”) and indemnify and hold harmless the RMCF Indemnitees
from and against any and all Losses of the RMCF Indemnitees to the extent
arising out of any of the following items:

 

(i)     any Action alleging that the advertising or promotional materials used
by the EA Group in connection with the marketing and sale of the Products
violate, infringe or misappropriate any third party Intellectual Property Rights
or applicable Laws to the extent that RMCF is not obligated to indemnify EA for
such infringement under Section 9(a)(i);

 

(ii)     any Action alleging illness, injury, death or damage as a result of the
consumption or use of any Products attributable to defects in the Products that
independent investigation discloses originated solely after the Products were
delivered to the EA Group.

 

(c)     Indemnification Procedures.

 

(i)     If an Indemnitee receives notice or otherwise learn of the assertion by
a Person (including any Governmental Authority) who is not a Person in the EA
Group or RMCF of any claim or of the commencement by any such Person of any
Action with respect to which an Indemnitor may be obligated to provide
indemnification to such Indemnitee pursuant to Section 9(a) or Section 9(b)
(collectively, a “Third Party Claim”), such Indemnitee will give such Indemnitor
written notice thereof as promptly as practicable (and in any event within
thirty (30) days) after becoming aware of such Third Party Claim. Any such
notice will describe the Third Party Claim in reasonable detail. Notwithstanding
the foregoing, the failure of any Indemnitee or other Person to give notice as
provided in this Section 9(c) will not relieve the related Indemnitor of its
obligations under this Article 9, except to the extent, and only to the extent,
that such Indemnitor is materially prejudiced by such failure to give notice.

 

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(ii)     An Indemnitor may elect (but will not be required) to defend, at such
Indemnitor’s own expense and by such Indemnitor’s own counsel, any Third Party
Claim, provided that the Indemnitor will not be entitled to defend and will pay
the reasonable fees and expenses of one separate counsel for all Indemnitees if
the claim for indemnification relates to or arises in connection with any
criminal action, indictment or allegation. Within thirty (30) days after the
receipt of notice from an Indemnitee in accordance with Section 9(c) (or sooner,
if the nature of such Third Party Claim so requires), the Indemnitor will notify
the Indemnitee of its election whether the Indemnitor will assume responsibility
for defending such Third Party Claim, which election will specify any
reservations or exceptions to its defense. After notice from an Indemnitor to an
Indemnitee of its election to assume the defense of a Third Party Claim, such
Indemnitee will have the right to employ separate counsel and to participate in
(but not control) the defense, compromise, or settlement thereof, but the fees
and expenses of such counsel will be the expense of such Indemnitee; provided,
however, in the event that (A) the Indemnitor has elected to assume the defense
of the Third Party Claim but has specified, and continues to assert, any
reservations or exceptions in such notice or (B) the Third Party Claim involves
injunctive or equitable relief, then, in any such case, the reasonable fees and
expenses of one separate counsel for all Indemnitees will be borne by the
Indemnitor.

 

(iii)     If an Indemnitor elects not to assume responsibility for defending a
Third Party Claim, or fails to notify an Indemnitee of its election as provided
in Section 9(c)(ii), such Indemnitee may defend such Third Party Claim at the
cost and expense of the Indemnitor.

 

(iv)     Unless the Indemnitor has failed to assume the defense of the Third
Party Claim in accordance with the terms of this Agreement, no Indemnitee may
settle or compromise any Third Party Claim without the consent of the
Indemnitor. If an Indemnitor has failed to assume the defense of the Third Party
Claim within the time period specified in clause (b) above, it will not be a
defense to any obligation to pay any amount in respect of such Third Party Claim
that the Indemnitor was not consulted in the defense thereof, that such
Indemnitor’s views or opinions as to the conduct of such defense were not
accepted or adopted, that such Indemnitor does not approve of the quality or
manner of the defense thereof or that such Third Party Claim was incurred by
reason of a settlement rather than by a judgment or other determination of
liability.

 

(v)     In the case of a Third Party Claim, no Indemnitor will consent to entry
of any judgment or enter into any settlement of the Third Party Claim without
the consent of the Indemnitee if the effect thereof is (i) to permit any
injunction, declaratory judgment, other order or other non-monetary relief to be
entered, directly or indirectly, against any Indemnitee or (ii) to ascribe any
fault on any Indemnitee in connection with such defense.

 

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10.     Limitation of Liability. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN
THIS AGREEMENT AND EXCEPT FOR LIABILITY ARISING UNDER (A) SECTION 6
(CONFIDENTIALITY), (B) SECTION 9 (INDEMNIFICATION), (C) USE OF THE OTHER PARTY’S
INTELLECTUAL PROPERTY EXCEPT AS PERMITTED UNDER THIS AGREEMENT, OR (D) GROSS
NEGLIGENCE, WILLFUL MISCONDUCT, OR DAMAGE TO PROPERTY, OR PERSONAL INJURY OR
DEATH CAUSED BE EITHER PARTY’S ACTS OR OMISSIONS, EVEN IF SUCH DAMAGES COULD
HAVE BEEN FORESEEN OR IF EITHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES, AND REGARDLESS OF WHETHER SUCH DAMAGES ARE ARISING IN CONTRACT,
TORT, NEGLIGENCE OR OTHERWISE, IN NO EVENT WILL (I) EITHER PARTY OR ANY OF ITS
AFFILIATES BE LIABLE FOR DAMAGES FOR LOSS OF PROFIT, GOODWILL, OR OTHER SPECIAL,
INCIDENTAL, INDIRECT, OR CONSEQUENTIAL DAMAGES SUFFERED BY EA OR ITS
FRANCHISEES, OR (II) EITHER PARTY OR ANY OF ITS AFFILIATES TOTAL AND CUMULATIVE
LIABILITY FOR ALL CLAIMS OF ANY NATURE ARISING OUT OF THIS AGREEMENT EXCEED THE
GREATER OF (X) $2,000,000 AND (Y) THE TOTAL AMOUNTS PAID BY EA HEREUNDER IN THE
TWELVE (12) MONTHS IMMEDIATELY PRECEDING THE OCCURRENCE OF THE FIRST EVENT
GIVING RISE TO THE CLAIM UNDER THE AGREEMENT. Each Party acknowledges that the
Product prices and limitations of liability set forth in this Agreement reflect
the allocation of risk negotiated and agreed to by the Parties and that the
other Party would not enter into this Agreement without these limitations on its
liability. These limitations will apply notwithstanding any failure of essential
purpose of any limited remedy.

 

11.     Term and Termination.

 

(a)     Term. Unless otherwise terminated in accordance with its terms, this
Agreement will commence on the Effective Date and will continue until the end of
the fifth Contract Year (the “Initial Term”); thereafter, the Agreement will
continue for an additional term of three (3) years (the “Second Term”) unless
either Party gives the other at least twenty four (24) months’ written notice of
non-renewal prior to the end of the Initial Term; and thereafter the Agreement
will continue until either Party gives the other Party at least twenty four (24)
months’ written notice of termination (“Renewal Term”). The Initial Term, Second
Term and Renewal Term constitute the “Term” of this Agreement.

 

(b)     Extension upon Change of Control. Notwithstanding Section 11(a), neither
EA nor RMCF will, following a Change of Control of RMCF, issue a notice of
non-renewal that is effective to terminate this Agreement within four (4)
additional years following such Change of Control.

 

(c)     Bankruptcy. This Agreement will terminate automatically in the event
either Party becomes bankrupt or insolvent, or in the event that any agreement
or court proceeding is initiated relating to such Party’s financial instability.

 

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(d)     Material Breach. In the event of a material breach of any provision
hereof that is not cured within thirty (30) days of written notice of such
breach (a “Material Breach”), the non-breaching Party has the right to terminate
this Agreement immediately upon written notice to the breaching Party.

 

(e)     Termination Upon Change of Control. RMCF will provide EA with at least
thirty (30) days written notice prior to consummating a Change of Control of
RMCF (a “Change of Control Notice”). The Change of Control Notice will indicate
whether the acquiror wishes to to terminate this Agreement effective upon
consummation of such Change of Control. If RMCF delivers a Change of Control
Notice that includes an election by the acquirer to terminate the Agreement,
then this Agreement will terminate upon consummation of such Change of Control.
Upon termination of this Agreement in accordance with this Section 11(e), the
Warrant will vest in accordance with its terms.

 

(f)     Effects of Termination. Upon termination or expiration of this
Agreement, (i) the rights granted to EA in this Agreement, including the right
to act as RMCF’s distributor will immediately cease; provided, however, the EA
Group may continue selling those Products that are in the inventory of the EA
Group at the time of termination of this Agreement or are delivered to the EA
Group after such termination for a period not to exceed ninety (90) days and one
hundred eighty (180) days, respectively, from the date of such termination or
expiration;(ii) EA will (and will cause the members of the EA Group) within
ninety (90) days from the date of such termination or expiration remove from its
advertising literature (in any medium) all reference to RMCF, the Marks and the
Products and such references to EA’s acting as a distributor with respect to the
Products or on behalf of RMCF; and (iii) in the event this Agreement is
terminated by EA due to an uncured Material Breach by RMCF of Section 2(c), in
addition to any other remedies available at Law or in equity, all shares of
common stock of RMCF underlying the Warrant will immediately vest and become
exercisable in accordance with its terms. The termination of this Agreement for
any reasons will not release any Party hereto of any liability which at the time
of termination had already accrued to the other Party in respect to any act or
omission prior thereto. The following Sections will in all events survive the
expiration or termination of this Agreement: 6, 7(h), 9, 10, 11(e) and 12.

 

12.     Miscellaneous.

 

(a)     This Agreement will be governed by and construed in accordance with the
laws of Delaware, without regard to conflict of laws principles and the
provisions of the U.N. Convention on Contracts for the International Sale of
Goods.

 

(b)     Except for the payment of monies due hereunder, neither Party will be
liable for any breach of this Agreement caused by an act of God, labor dispute,
unavailability of transportation, goods, services or labor, governmental
restrictions or actions, war (declared or undeclared), terrorism or other
hostilities, or by any other event, condition or cause beyond the reasonable
control of such Party (“Force Majeure Event”). In the event of a Force Majeure
Event, the Party prevented from or delayed in performing will promptly give
notice to the other Party and will use commercially reasonable efforts to avoid
or minimize the delay.

 

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(c)     If any provision (or any part thereof) is unenforceable under or
prohibited by any present or future law, then such provision (or part thereof)
will be amended, and is hereby amended, so as to be in compliance with such law,
while preserving to the maximum extent possible the intent of the original
provision. Any provision (or part thereof) that cannot be so amended will be
severed from this Agreement; and, all the remaining provisions of this Agreement
will remain unimpaired.

 

(d)     Failure by a Party to complain of any act or failure to act of the other
Party or to declare the other Party in default, irrespective of the duration of
such default, will not constitute a waiver of rights hereunder.

 

(e)     This Agreement, together with the SAA and the Warrant, is the complete
agreement between the Parties regarding the subject matter hereof and may be
modified only by a writing duly executed by the Parties. Any notices given under
this Agreement must be in writing and may be delivered by hand or sent by
internationally-recognized courier service, e-mail or fax to the physical
address, e-mail address or facsimile number for each Party set forth below or at
such other address as such Party may hereafter designate as the appropriate
address for the receipt of such notice.

 

(f)     Any such notice will be deemed successfully given:

 

(i)     if delivered personally, at the time of delivery;

 

(ii)     in the case of an internationally-recognized courier service, at the
time such notice is provided to such service for delivery; or,

 

(iii)     in the case of e-mail or facsimile, at the time of successful
transmission.

 

(g)     Neither Party may assign this Agreement or any of their respective
rights or obligations hereunder, whether voluntarily or by operation of law,
without the prior written consent of the other Party; provided that either Party
may assign or transfer, directly, indirectly or by operation of law, this
Agreement in its sole discretion and without the consent of the other Party in
the event of or through a Change of Control of such Party.

 

(h)     This Agreement will be binding and inure to the benefit of such
assignees, transferees and other successors in interest of the Parties, in the
event of an assignment or other transfer made consistent with the provisions of
this Agreement. The Parties are independent contractors, and nothing herein will
be construed to create a partnership, agency, joint venture, or
employer-employee relationship, and neither Party may bind or incur obligations
on behalf of the other.

 

(i)     In any Action with respect to this Agreement, the prevailing Party will
be entitled to recover, in addition to any other amounts awarded, reasonable
attorney’s fees and all costs of proceedings incurred in enforcing this
agreement.

 

(j)     This Agreement may be executed in two or more counterparts, each of
which will be deemed an original, but all of which together will constitute one
and the same instrument.

 

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[Signature Page Follows]

 

 

 

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be effective as of
the Effective Date set forth above.

 

 

ROCKY MOUNTAIN CHOCOLATE FACTORY, INC.:

 

 

 

By: /s/ Bryan J. Merryman

Name: Bryan J. Merryman

Title: Chief Executive Officer and Chief Financial

  Officer

Address: 265 Turner Drive, Durango, Colorado

 81303

 

 

 

EDIBLE ARRANGEMENTS, LLC:

 

 

 

By: /s/ Tariq Farid

Name: Tariq Farid

Title: Chief Executive Officer

Address: 980 Hammond Dr., Suite 1000, Atlanta, 

 GA 30328

 

 

[Signature Page to Exclusive Supplier Operating Agreement]