exv10w14






Exhibit 10.14




TEST LICENSE AGREEMENT



THIS TEST LICENSE AGREEMENT (“Test Agreement”) between Cold Stone Creamery, Inc. (“CSC”) and Rocky
Mountain Chocolate Factory, Inc. (“RMCF”) is made and entered into this 16 day of April, 2009 (the
“Effective Date”), by and between RMCF and CSC pursuant to the recitals and terms herein. CSC and
RMCF shall be collectively referred to as the “Parties.”



WHEREAS, RMCF franchises gourmet chocolate and confection stores and manufactures an extensive line
of premium chocolates and other confectionery products;



WHEREAS, CSC franchises super-premium ice cream and frozen dessert stores;



WHEREAS, CSC and RMCF desire to enter into this Test Agreement whereby CSC will be authorized to
offer several new and existing franchisees the right to sell RMCF products in their stores pursuant
to the terms of this Test Agreement and an ADDENDUM to COLD STONE CREAMERY Franchise Agreement, a
copy of which is attached hereto as Exhibit A;



NOW, THEREFORE, in consideration of the above recitals and for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:





	1.	 	DEFINITIONS. The following terms used herein shall have the following definitions:






	 	1.1.	 	“Test Agreement” shall mean this Test Agreement.
	 
	 	1.2.	 	“Test Location” shall mean the RMCF co-branded store added to a Cold Stone
Creamery franchisee’s store.
	 
	 	1.3.	 	“Test Franchisee” shall mean each of the franchisees authorized to utilize
the CSC and RMCF Systems pursuant to this Test Agreement
	 
	 	1.4.	 	“Confidential Information” shall have the meaning set forth in Section 13.1
of this Test Agreement.
	 
	 	1.5.	 	“Effective Date” shall mean the date set forth in the preamble of this Test
Agreement.
	 
	 	1.6.	 	“Indemnitee” shall mean a party seeking indemnification pursuant to the
provisions of Section 16 hereof.
	 
	 	1.7.	 	“Indemnitor” shall mean a party from which indemnification is sought pursuant
to the provisions of Section 16 hereof.
	 
	 	1.8.	 	“CSC System” shall mean the business operation utilized by CSC and the Test
Franchisees pursuant to this Test Agreement, including trade dress, specifications for
equipment and fixtures, preparation methods, standard operating and administrative
procedures and management and technical training programs.
	 
	 	1.9.	 	“RMCF System” shall mean the business operation utilized by RMCF and the Test
Franchisees pursuant to this Test Agreement including trade dress,




 









 






	 	 	 	specifications for equipment and fixtures, preparation methods, standard operating
and administrative procedures and management and technical training programs.
	 
	 	1.10.	 	“Marks” shall mean the “COLD STONE CREAMERY®” and/or the “ROCKY MOUNTAIN
CHOCOLATE FACTORY®” name and service mark, and such other trademarks, service marks,
logo types and commercial symbols as CSC and RMCF may from time to time authorize the
Test Franchisees to use in connection with the operation of a Test Location.
	 
	 	1.11.	 	“Menu Items” shall mean the items set forth in Exhibit A attached
hereto and incorporated herein by reference plus any additional items mutually agreed
to by RMCF and CSC.
	 
	 	1.12.	 	“Net Sales” shall mean the total of all sales by Test Franchisees of all
products from each Test Location, including catering, internet and off-site sales of
such products, whether for on-site or off-site consumption, but shall exclude (i) the
amount of any state or local sales or use tax actually paid by Test Franchisee,
(ii) refunds or returns and (iii) the discounted portions of goods sold, including but
not limited to sales under coupon or promotion so long as such discounts are not
provided in exchange for any rights, goods or services. The Parties recognize and
agree that under certain circumstances it may not be practical to track sales
discounts and coupons separately between the RMCF products and the CSC products when
such sales are recorded on a shared POS system. In such cases to the extent the
discounts and coupons are not specifically tracked to one brand or the other, the
discounts and coupons will be allocated between RMCF sales and CSC sales based upon
the proportions of the total net sales from each brand on a monthly basis.
	 
	 	1.13.	 	“RMCF Royalty Share” (This material has been omitted pursuant to a request
for confidential treatment and such material has been filed separately with the
Commission.)
	 
	 	1.14.	 	“Opening Date” shall mean the date upon which a particular Test Location
initially opens for business.
	 
	 	1.15.	 	“Primary Contact” shall have the meaning set forth in Section 17.1 hereof.
	 
	 	1.16.	 	“Royalties” shall have the meaning set forth in Section 4.3 hereof.
	 
	 	1.17.	 	“Term” shall have the meaning set forth in Section 2 hereof.






	2.	 	Term. The Test Agreement shall be effective as of the Effective Date and expire one (1) year
from the opening date of the last Test Location as agreed by the parties in Section 3 below.
The expiration of the Test Agreement shall not impact the terms of the applicable Franchise
Agreement(s) for the Test Franchisees.
	 
	3.	 	Number of Test Locations. During the Term of this Test Agreement, the parties may open as
many Test Locations throughout the United States at locations approved by both CSC and RMCF as
the parties deem necessary to evaluate the results of the co-branded Test Locations. As of
the Effective Date, the parties anticipate opening up to seven Test Locations, four (4) of
which shall be selected by CSC and three (3) of which shall be




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	 	 	selected by RMCF. The parties shall agree at a later date which one of the Test Locations
is the last.






	4.	 	Franchise Agreements/Fees/Royalties






	 	4.1.	 	Franchise Fee: Neither CSC nor RMCF will charge any Franchise Fee to any Test
Franchisee in conjunction with the addition of either the CSC or RMCF Systems to an
existing location or in conjunction with the opening of a Test Location pursuant to
this Test Agreement.
	 
	 	4.2.	 	Royalties and Advertising Fees. (This sentence has been omitted pursuant to
a request for confidential treatment and such material has been filed separately with
the Commission.) In addition, CSC shall assess additional Royalties and Advertising
Fees on Net Sales of RMCF and CSC Products. CSC shall pay RMCF an amount equal to the
collected RMCF Royalty Share, payable monthly not later than the 20th day
of each month based upon any such RMCF Royalty Share amount collected from Test
Franchisees during the prior calendar month. CSC shall retain the remainder of
Royalties and Advertising Fees assessed on Net Sales of RMCF products and CSC
products. RMCF shall not be entitled to and shall not receive any royalties or other
payments from the Test Franchisees or the Test Locations from the sale of any Cold
Stone Creamery (or nrgize) ice cream, frozen yogurt, frozen desserts or other CSC
products. RMCF shall be entitled, however, to charge the Test Franchisees a bona fide
wholesale price, that may be greater than the prices charged to its standard store
franchisees for chocolates and other products that allows RMCF to derive additional
revenue in consideration for the license of the RMCF Marks and the RMCF System to Test
Franchisees. (This sentence has been omitted pursuant to a request for confidential
treatment and such material has been filed separately with the Commission.)
	 
	 	4.3.	 	Maintenance of Records. During the Term of this Test Agreement, CSC shall
keep full and accurate books of account and records in sufficient detail to show the
sales of Menu Items by all Test Locations. CSC shall provide RMCF with monthly reports
of Net Sales of RMCF products and CSC products at each Test Location not later than
the day each month when CSC pays RMCF its share of Net Sales for the prior month. CSC
shall also provide RMCF with copies of all other reports on sales, income, costs and
expenses, including all financial statements, supplied to CSC by a Test Franchisee.
RMCF acknowledges and understands that such books of account and records shall be in
the form and format CSC maintains in the ordinary course of its business and that such
records shall be maintained for the same period of time as CSC retains records in the
ordinary course of its business.
	 
	 	4.4.	 	Term of Franchise Agreement. The Franchise Agreements signed by the Test
Franchisees shall be effective in accordance with the terms thereof. Upon the
expiration of the initial term of the Franchise Agreements, they will only be subject
to renewal as co-branded Stores if RMCF and CSC have entered into an agreement that
succeeds this Test Agreement to co-brand additional stores after this Test Agreement
expires. If no such successor co-brand agreement is in effect upon expiration of the
Franchise Agreements, then each Test Franchisee will be permitted to renew by signing
the then current form of Franchise




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	 	 	 	Agreement offered to new franchisees of either CSC or RMCF, depending on whether
the Test Franchisee first had a business relationship with CSC or RMCF before the
Effective Date.






	5.	 	OBLIGATIONS OF CSC.






	 	5.1.	 	Initial Design and Set-Up. CSC shall assist with the design for each Test
Location, based on specifications and criteria established by CSC and RMCF. Such
design shall include design intent drawings, colors and textures.
	 
	 	5.2.	 	Training. CSC shall provide the following training with respect to each Test
Location:






	 	5.2.1.	 	CSC shall train up to two (2) representatives of each Test Franchisee
through CSC’s current training program. The training shall be conducted at
CSC’s headquarters in Scottsdale, Arizona in a scheduled training class. CSC
is not responsible for any costs or expenses incurred by any Test Franchisee
in conjunction with sending its representatives through CSC’s training
program.
	 
	 	5.2.2.	 	Each Test Franchisee who has not already successfully completed CSC’s
current training program must do so before they shall be approved to
participate in the Test.
	 
	 	5.2.3.	 	CSC personnel who have successfully completed RMCF’s training program shall
train up to two (2) representatives of each Test Franchisee on the operation
of a ROCKY MOUNTAIN CHOCOLATE FACTORY Store at the Test Location.
	 
	 	5.2.4.	 	The Test Franchisee’s representatives trained at CSC’s current training
program shall be authorized to train non-managerial employees working at the
Test Location which may be conducted at the Test Location.
	 
	 	5.2.5.	 	CSC may provide additional training if any such additional training is
needed.






	 	5.3.	 	Opening Assistance. CSC shall furnish one person experienced in the CSC
System and who has successfully completed RMCF’s training program to assist Test
Franchisees in conjunction with the opening of each Test Location opened pursuant to
this Test Agreement at no cost to RMCF or Test Franchisee.
	 
	 	5.4.	 	Test Franchisee Support. On RMCF’s behalf, CSC shall assign a field level
employee to support, evaluate, assist, and consult with each of the Test Locations on
an as-needed basis during the Term. CSC personnel providing such support will consult
with RMCF’s Dedicated Account Manager if and when questions arise related to RMCF
operating procedures and other matters. CSC shall submit a copy of each Quality,
Service, Cleanliness and Experience (QSCE) evaluation it conducts on a Test Franchisee
to RMCF and copy RMCF on all correspondence to and from the Test Franchisees.




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	 	5.5.	 	Non-Disparagement. CSC must not disparage to any person RMCF, its employees,
representatives or agents, its products or the Service Marks.






	6.	 	OBLIGATIONS OF RMCF.






	 	6.1.	 	Initial Design and Set-Up. RMCF shall assist with the design for each Test
Location, based on specifications and criteria established by CSC and RMCF. Such
design shall include design intent drawings, colors and textures.
	 
	 	6.2.	 	Training. RMCF shall train five (5) representatives of CSC through RMCF’s
current training program. The training shall be conducted at RMCF’s headquarters in
Durango, Colorado in a special training class tailored to the Test Program. RMCF is
not responsible for any costs or expenses incurred by CSC in conjunction with sending
its representatives through RMCF’s training program.






	 	6.2.1.	 	The representatives of CSC trained at RMCF’s training program shall train
managerial employees of each Test Franchisee at the Test Location. CSC’s
representatives will provide each Test Franchisee with a copy of RMCF’s
Operations Manual as part of the training.
	 
	 	6.2.2.	 	Each Test Franchisee must successfully complete the RMCF training conducted
by the representatives of CSC before they shall be approved to participate in
the Test.
	 
	 	6.2.3.	 	RMCF may send a representative to the Test Location to provide additional
training if any such additional training is needed in CSC’s or in RMCF’s
determination.






	 	6.3.	 	Opening Assistance. At CSC’s request, RMCF shall furnish one person
experienced in the RMCF System to assist Test Franchisees for up to 3 days in
conjunction with the opening of a Test Location at no cost to CSC or Test Franchisee.
	 
	 	6.4.	 	Non-Disparagement. RMCF must not disparage to any person CSC, its employees,
representatives or agents, its products or the Service Marks.






	7.	 	OBLIGATIONS OF TEST FRANCHISEES. CSC and RMCF agree that each Test Franchisee shall be
required to comply with the following requirements as part of their participation in the Test.






	 	7.1.	 	Supplies and Materials. Test Franchisee shall purchase all necessary
furniture, fixtures, equipment, supplies and signage for the Test Location including
proprietary items (“Proprietary Items”) from CSC or RMCF, as applicable, or CSC and
RMCF’s approved distributors, as applicable, as directed by CSC or RMCF.
	 
	 	7.2.	 	Standards of Operation. CSC and RMCF agree that they will require each of
the Test Franchisees to comply with the following terms.






	 	7.2.1.	 	CSC and RMCF will lend to each Test Franchisee, upon satisfactory completion
of their respective Training Programs, one copy of their




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	 	 	 	respective Operating Manuals per Test Location (which is comprised of a
series of volumes under various titles), for use by Test Franchisee
strictly in accordance with the terms of the Franchise Agreement governing
the Test Location. Each Test Franchisee will sign the form of Franchise
Agreement, including an addendum licensing the RMCF Marks and the RMCF
System, attached hereto as Exhibit B. Each Test Franchisee must
operate the Test Location strictly in accordance with the Operating
Manuals, as amended from time to time, and with the rules, regulations,
instructions, policies and procedures as may from time to time be issued
by CSC and RMCF for the conduct of the Test Location as CSC and RMCF deem
appropriate.
	 
	 	7.2.2.	 	Test Franchisee shall cause all of its employees, while working at a Test
Location, to comply with the dress requirements required by CSC and RMCF.
	 
	 	7.2.3.	 	Test Franchisee shall adhere to the food preparation, service standards and
other operational requirements provided in the Operating Manuals.
	 
	 	7.2.4.	 	Test Franchisee must offer and sell at each Test Location all products
designated by CSC and RMCF, consistent with CSC and RMCF’s comprehensive
standards and requirements. Test Franchisee must purchase chocolate candy and
other products from RMCF as the designated supplier of those items and comply
with RMCF’s standards for the mix of products offered at the Test Locations.
In addition, Test Franchisee must fully participate in all local, regional,
seasonal, promotional and other programs, initiatives and campaigns adopted by
CSC and RMCF that CSC and RMCF require Test Franchisee to participate in.
	 
	 	7.2.5.	 	Test Franchisee shall maintain at all times a sufficient supply of all
approved products for both CSC and RMCF to meet the demands of its customers.
	 
	 	7.2.6.	 	Test Franchisee must operate each Test Location with the highest integrity
and good business standards, and must use its best efforts to enhance, to the
satisfaction of CSC and RMCF, the goodwill associated with the Marks.
	 
	 	7.2.7.	 	Test Franchisee must not disparage to any person CSC or RMCF or their
employees, representatives or agents, products or the Marks.
	 
	 	7.2.8.	 	Test Franchisee must purchase the equipment and signage for each Test
Location through CSC and RMCF, as applicable, or their affiliates, unless
authority to purchase elsewhere is granted in writing by CSC and RMCF.
	 
	 	7.2.9.	 	Test Franchisee must cause the Test Location premises to be constructed,
equipped and decorated in strict compliance with CSC and RMCF’s requirements.
If these requirements, plans and specifications are not followed in all
significant respects or if changes were not approved in




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	 	 	 	writing prior to being implemented, Test Franchisee may not open the Test
Location to the public. Test Franchisee must engage licensed contractors
and architects, who are subject to CSC and RMCF’s approval, obtain
appropriate construction documents, and all mechanical, plumbing,
electrical and architectural plans must be sealed and stamped, as CSC and
RMCF may require, even if the site’s local government does not require
same.
	 
	 	7.2.10.	 	Test Franchisee must cause each Test Location to be consistent in color,
design and style with the standards adopted and approved by CSC and RMCF
pursuant to this Test Agreement. Any proposed remodeling of a Test Location
shall only be implemented after both CSC and RMCF have given their approval in
writing. The equipment and premises used in connection with each Test
Location must comply with the standards that CSC and RMCF requires of the Test
Franchisees.
	 
	 	7.2.11.	 	Each Test Location must be directly supervised “on-premises” by a manager
who has been approved by both CSC and RMCF and who has satisfactorily
completed the Training Programs required by CSC and RMCF.
	 
	 	7.2.12.	 	Insurance






	 	7.2.12.1.	 	Each Test Franchise must obtain and maintain during the term of
this Test Agreement, such insurance policies as CSC requires under
the terms of CSC’s Franchise Agreement, in its sole discretion.
These insurance policies must name CSC and RMCF, (and any other
Affiliates of CSC or RMCF that they may reasonably require) as
additional insureds. CSC shall cause each Test Franchisee to provide
RMCF with evidence of the effectiveness of such insurance policies
and the naming of RMCF as an additional insured within 10 days of the
opening of each Test Location. The insurance must be placed with an
insurance carrier or carriers satisfactory to CSC and RMCF, must be
satisfactory in form to CSC and RMCF and may not be subject to
cancellation or any material change except after 30 days’ prior
written notice to CSC. The insurance policies must provide that no
failure of Test Franchisee to comply with any term, condition or
provision of the contract, or other conduct by Test Franchisee, will
void or otherwise affect the protection afforded to CSC or RMCF (or
other Affiliates of CSC or RMCF that it may reasonably require) under
the policy. Certificates of insurance with respect to these
insurance policies must be provided to CSC and RMCF with respect to
all insurance policies in effect during the term of this Test
Agreement, promptly after the issuance of the insurance policies and
as may be requested by CSC or RMCF.




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	 	7.2.12.2.	 	If Test Franchisee fails to pay any premium when due or any
policy is in default, CSC or RMCF may, but will not be obligated to,
pay any premium and/or take any action necessary to cure the default.
In this event, Test Franchisee must immediately pay to CSC or RMCF
the amount so paid or the amount expended to cure such default, plus
interest at the rate of 18% per annum from the date paid or expended
by CSC.






	 	7.2.13.	 	The transfer provisions in CSC’s form of Franchise Agreement shall govern
each Test Franchisee’s transfer process, if applicable. CSC agrees that RMCF
shall be provided with copies of all information that CSC receives in order to
approve a proposed transferee and that RMCF’s written approval will be
required before a proposed transferee is approved.






	8.	 	DEDICATED ACCOUNT MANAGER. Both CSC and RMCF shall designate one person, known as the
“Dedicated Account Manager,” in their organizations to serve as the initial point of contact
for all issues that arise during the Term of this Test Agreement. The Dedicated Account
Manager shall be responsible for coordinating the resolution of problems suffered by the Test
Franchisees, providing assistance to Test Franchisees, and working out solutions with the
other Dedicated Account Manager.
	 
	9.	 	REPRESENTATIONS AND WARRANTIES.






	 	9.1.	 	CSC. CSC hereby represents and warrants that (i) CSC is free to enter into
this Test Agreement and to grant the rights herein granted without violating the
rights of any third party and is not subject to any obligations which would have a
material adverse effect on CSC’s ability to substantially perform its obligations
hereunder; (ii) CSC will comply with all laws, regulations, orders and ordinances
applicable to its performance of this Test Agreement as set forth herein; and (iii) at
no time during the Term will CSC disparage its association with RMCF or any RMCF
product or service. CSC further represents and warrants that it has the requisite
power and authority to bind its parent company, Kahala Franchise Corp., to the extent
necessary to effect the transactions contemplated by this Test Agreement.
	 
	 	9.2.	 	RMCF. RMCF hereby represents and warrants that (i) RMCF is free to enter
into this Test Agreement and to grant the rights herein granted without violating the
rights of any third party and is not subject to any obligations which would have a
material adverse effect on RMCF’s ability to substantially perform its obligations
hereunder; (ii) RMCF will comply with all laws, regulations, orders and ordinances
applicable to the performance of its obligations as set forth herein; (iii) at no time
during the Term will RMCF disparage its association with CSC or any other product or
service of CSC.






	10.	 	PRICING. Test Franchisees shall determine, in their independent sole discretion, the prices
charged to their customers for the Menu Items.




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	11.	 	ADVERTISING AND MARKETING.






	 	11.1.	 	Advertising Approval. No marketing or advertising regarding the Test
Locations may be utilized by Test Franchisee, CSC or RMCF without the prior written
approval of both CSC and RMCF. The party wishing to utilize the marketing or
advertising shall present all proposed advertising, promotional or marketing materials
for approval to CSC or RMCF or both, as applicable, who shall each have five (5)
business days in which to approve or reject such materials.
	 
	 	11.2.	 	Press Releases. CSC and RMCF shall cooperate with one another and shall
mutually agree upon any press release or other public announcement made by either
party relating to the existence or substance of this Test Agreement. The Test
Franchisees may not issue a press release without the written consent of both CSC and
RMCF.






	12.	 	MARKS.






	 	12.1.	 	Ownership.






	 	12.1.1.	 	CSC represents and warrants that (i) it is the owner of the CSC Marks in
and all rights, registrations, applications and filings with respect to the
CSC Marks and all renewals and extensions of any such registrations,
applications and filings; and (ii) it has the right to utilize the CSC Marks
in the manner set forth herein.
	 
	 	12.1.2.	 	RMCF represents and warrants that (i) it is the owner of the RMCF Marks in
and all rights, registrations, applications and filings with respect to the
RMCF Marks and all renewals and extensions of any such registrations,
applications and filings; and (ii) it has the right to utilize the RMCF Marks
in the manner set forth herein.






	 	12.2.	 	Use. Both parties represent and agree that they shall use the Marks only
for the purposes stated herein and pursuant to the terms and conditions of this Test
Agreement.
	 
	 	12.3.	 	Acknowledgement. CSC acknowledges and agrees that the RMCF Marks and all
rights therein and goodwill pertaining thereto belong exclusively to RMCF and all use
of the RMCF Marks by CSC or Test Franchisees, whether authorized or unauthorized,
shall inure to the benefit of RMCF. RMCF acknowledges that the CSC Marks and all
rights therein and goodwill pertaining thereto belong exclusively to CSC and all use
of the CSC Marks by RMCF or Test Franchisees, whether authorized or unauthorized shall
inure to the benefit of CSC.
	 
	 	12.4.	 	Protection of Rights. Both CSC and RMCF shall take all reasonable steps
necessary to prosecute and maintain all appropriate registrations for the Marks during
the term of this Test Agreement. The parties shall cooperate fully and in good faith
with each other for the purpose of securing and preserving their respective rights in
and to the Marks. The parties shall cause to appear on and in connection with its use
of the Marks such statutory trademark notices as both CSC and RMCF may reasonably
request. Each party shall inform the other party




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	 	 	 	promptly after it has knowledge or becomes aware of any infringement of the Marks
and shall take such action as is necessary or appropriate, in its reasonable
judgment, with respect to any possible infringement of the Marks by any third
parties. CSC shall have the initial right to determine whether or not any action
shall be taken on account of any infringement of the CSC Marks. RMCF shall have
the initial right to determine whether or not any action shall be taken on account
of any infringement of the RMCF Marks. If either fails to take prompt action with
respect to a particular infringement, the other may undertake such action at its
expense. If either party initiates legal proceedings pursuant to the foregoing on
account of any such infringement, the other party shall cooperate with and assist
the initiating party, to the extent reasonably necessary to protect the Marks,
including without limitation, being joined as a necessary or desirable party to
such proceedings.






	13.	 	CONFIDENTIALITY/NON-DISCLOSURE






	 	13.1.	 	Definition of Confidential Information. The term “Confidential Information”
means all data, software, processes, recipes, procedures, know-how, documents,
concepts, designs, improvements, inventions, materials, trade secrets and other
information (collectively, “Information”) with respect to or relating to CSC or RMCF’s
business, business plans, marketing plans, financial information, products, personnel,
suppliers, vendors, customers, policies and operational methods and manuals,
including, without limitation, the formulation, research and development, whether oral
or written, whether textual, graphic or machine-readable form, regardless of whether
the Information is marked or otherwise identified as “confidential.” Notwithstanding
the foregoing, the term Confidential Information shall not include Information that:






	 	13.1.1.	 	Is in the public domain through no action or failure to act of the party
receiving the Information;
	 
	 	13.1.2.	 	Prior to the Effective Date of this Test Agreement, was already lawfully in
receiving party’s possession without any obligation of confidentiality to the
disclosing party; or
	 
	 	13.1.3.	 	Subsequent to the Effective Date of this Test Agreement, is obtained by
receiving party on a non-confidential basis from a third party who has the
right to disclose such information to receiving party.






	 	13.2.	 	Non-Disclosure. CSC and RMCF agrees, with respect to Confidential
Information with respect to which it is the receiving party:






	 	13.2.1.	 	To use the same degree of care (and, in no event, less than reasonable
care) in protecting the Confidential Information that the receiving party
would use to protect its own Confidential Information of a similar nature;
	 
	 	13.2.2.	 	Not to copy, publish, show, reveal or disclose the Confidential Information
to any individual or entity (other than the receiving party’s employees,
agents and representatives who have a need to know, but only to the extent of
that need, or unless ordered to be or otherwise required to be disclosed by
receiving party by a court of law or other




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	 	 	 	governmental body, but only strictly to the extent so ordered or required,
and provided that the disclosing party is notified of such order or
requirement and given a reasonable opportunity to intervene);
	 
	 	13.2.3.	 	Not to use, for its own purposes or benefit or for the purposes or benefit
of any other individual or entity, the Confidential Information, except in
connection with this Test Agreement or the Test Locations;
	 
	 	13.2.4.	 	To store the Confidential Information only in secure places;
	 
	 	13.2.5.	 	Not to remove any copyright, trademark, service mark or other proprietary
rights notice attached to, or included in, any Confidential Information.
	 
	 	13.2.6.	 	To return the Confidential Information to the disclosing party in
accordance with Section 13.3 of this Test Agreement; and
	 
	 	13.2.7.	 	To cause its shareholders, directors, officers, employees, agents and
representatives to comply with the foregoing provisions of this Section 13.2.






	 	13.3.	 	Return of Confidential Information. CSC and RMCF each agree, with respect
to Confidential Information with respect to which either of them is the receiving
party, that it shall destroy or return to the disclosing party, at the disclosing
party’s option, all Confidential Information that the receiving party possesses, upon
the earlier of: (a) the termination or expiration of this Test Agreement, unless this
Test Agreement is succeeded by a Co-Branding Agreement between the parties; or (b)
within twenty-four (24) hours after the request of the disclosing party.






	14.	 	TERMINATION/EXPIRATION. This Test Agreement shall be effective on the Effective Date and
continue until terminated or expired in accordance with its terms (the “Term”). The term for
each Test Location shall be addressed in each individual Franchise Agreement executed by the
Test Franchisee and shall not be impacted by the Term of this Test Agreement.






	 	14.1.	 	Termination for Convenience. Either party may terminate this Test Agreement
as a whole at any time upon thirty (30) days advance written notice to the other.
Other than as set forth herein, termination shall not impact Test Locations already
opened or for which a signed franchise agreement is already in place, but termination
of this Test Agreement shall preclude any additional development or the opening of
additional Test Locations not opened as of the date notice of said termination for
convenience was provided to the other party by either CSC or RMCF.
	 
	 	14.2.	 	Termination for Cause. If either party is in material default, the other
shall be entitled to terminate this Test Agreement and/or seek an injunction, monetary
damages and/or other relief, upon the occurrence of any of the following events
(“Events of Default”), each of which, individually or collectively, constitute “good
cause” for termination of this Test Agreement.




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	 	14.2.1.	 	If either party fails to (i) pay any monies owed to the other or any of its
affiliates or (ii) perform any other obligation under this Test Agreement, or
any other agreement between them or its affiliates, and that failure has not
been cured within 30 days after written notice of that default has been
provided. Termination will be effective immediately upon the expiration of
that cure period.
	 
	 	14.2.2.	 	If either party (or their officers, managers or employees) repeatedly
(three or more times) fails to pay any monies owed to the other or any of
their affiliates or perform any obligation, or other repeated Events of
Default occur under this Test Agreement, or any other agreement between the
parties. Termination will be effective immediately upon written notice to the
non-breaching party, without any opportunity to cure.






	 	14.3.	 	Post Termination/Expiration Obligations. Notwithstanding any expiration or
termination of this Test Agreement, both CSC and RMCF shall remain obligated to
perform the store level obligations set forth in each Franchise Agreement.
Specifically, RMCF shall be obligated to supply each Test Franchisee with chocolate
and other products as well as marketing materials necessary for the operation of a
RMCF store as long as such business remains open to the public pursuant to a valid
Franchise Agreement with CSC, its affiliates, successors, parents or assigns, and also
provided that there is an effective Addendum to the CSC Franchise Agreement that
grants Test Franchisee a license to use the RMCF Marks and to offer RMCF products for
sale.
	 
	 	14.4.	 	Primary Contacts. Notwithstanding anything herein to the contrary, the
parties hereto agree not to issue any notice of default without first attempting to
contact by telephone each party’s Primary Contact as identified in Section 17.1 below.






	15.	 	TRANSFERABILITY OF INTEREST.






	 	15.1.	 	By RMCF. RMCF may not sell, assign or transfer its interest in this Test
Agreement without CSC’s prior written approval, which CSC may withhold in its sole
discretion and any attempt or purported assignment or transfer shall constitute a
breach of this Test Agreement and be void. Notwithstanding the foregoing, RMCF may
transfer or assign this Test Agreement to any parent, subsidiary, affiliate or any
entity which acquires a majority ownership interest in RMCF during the Term of this
Test Agreement or any of its subsidiaries or affiliates, provided such assignee
assumes the obligations of RMCF under this Test Agreement and provided further that no
such assignment shall relieve RMCF of its obligations hereunder.
	 
	 	15.2.	 	By CSC. This Test Agreement may not be assigned or transferred in whole or
in part by CSC; provided, however, notwithstanding the foregoing, CSC may transfer or
assign this Test Agreement to any parent, subsidiary, affiliate or any entity which
acquires a majority ownership interest in CSC or any of its subsidiaries or
affiliates, provided such assignee assumes the obligations of CSC under this Test
Agreement and provided further that no such assignment shall relieve CSC of its
obligations hereunder.




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	16.	 	INDEMNIFICATION.






	 	16.1.	 	By CSC. CSC shall defend, indemnify and hold RMCF and its affiliates,
directors, officers, employees, and agents (the “RMCF Parties”) harmless from and
against any liabilities, losses, claims, suits, demands, damages, costs and expenses
(including without limitation, reasonable attorneys’ fees and expenses), (i) arising
out of or otherwise relating to any claims of third parties, including Test
Franchisees, against any of the RMCF Parties relating to a breach by CSC of any
warranty, representation, term or condition made or agreed to by CSC hereunder or
alleging intellectual property infringement, unfair competition or infringement of
other similar proprietary rights, or (ii) arising out of the use by RMCF or Test
Franchisees of the CSC Marks or the CSC System in accordance with the terms of this
Test Agreement.
	 
	 	16.2.	 	By RMCF. RMCF shall defend, indemnify and hold CSC and its affiliates,
directors, officers, employees, and agents (the “CSC Parties”) harmless from and
against any liabilities, losses, claims, suits, demands, damages, costs and expenses
(including without limitation, reasonable attorneys’ fees and expenses), (i) arising
out of or otherwise relating to any claims of third parties against any of the CSC
Parties relating to a breach by RMCF of any warranty, representation, term or
condition made or agreed to by RMCF hereunder or (ii) arising out of the use by CSC or
Test Franchisees of the RMCF Marks or the RMCF System in accordance with the terms of
this Test Agreement.
	 
	 	16.3.	 	Indemnification Requirements. In order to be entitled to indemnification
pursuant to the terms of this Section 16, the Indemnitee shall: (i) give the
Indemnitor prompt written notice of any claim with respect to which the Indemnitee
seeks or will seek indemnity; and (ii) cooperate reasonably with Indemnitor in the
defense of such claim by providing information to the Indemnitor. The Indemnitor
shall have the option to exclusively undertake and conduct the defense any such claims
or suits. Neither party shall make any settlement involving the other party without
the other party’s prior written consent.






	17.	 	GENERAL PROVISIONS.






	 	17.1.	 	Notices. All notices and other communications required or permitted to be
given under this Test Agreement shall be in writing and shall be delivered either by
personal service or prepaid overnight courier service addressed to the attention of
the “Primary Contact” for the party as follows:





	 	 	 	 	 
	 

	 	If to CSC:
	 	Cold Stone Creamery, Inc.
	 

	 	 	 	Attn: Assistant General Counsel
	 

	 	 	 	9311 East Via de Ventura
	 

	 	 	 	Scottsdale, Arizona 85258
	 

	 	 	 	Phone: (480) 362-4355
	 

	 	 	 	Fax: (480) 362-4797






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	 	With a copy to:
	 	Cold Stone Creamery, Inc.
	 

	 	 	 	Attn: Brand President
	 

	 	 	 	9311 E. Via de Ventura
	 

	 	 	 	Scottsdale, Arizona 85258
	 

	 	 	 	Phone: (480) 362-4681
	 

	 	 	 	Fax: (480) 362-4798
	 	 	 	 	 
	 

	 	If to RMCF:
	 	Rocky Mountain Chocolate Factory
	 

	 	 	 	Attn: Chief Operating Officer
	 

	 	 	 	265 Turner Dr.
	 

	 	 	 	Durango, CO 81303
	 

	 	 	 	Phone: (970) 259-0554
	 

	 	 	 	Fax: (970) 259-5895
	 	 	 	 	 
	 

	 	With a copy to:
	 	Lynne M. Hanson
	 

	 	 	 	Ballard Spahr Andrews & Ingersoll, LLP
	 

	 	 	 	1225 17th Street, Suite 2300
	 

	 	 	 	Denver, CO 80202
	 

	 	 	 	Phone: (303) 292-2400
	 

	 	 	 	Fax: (303) 296-3956







	 	 	 	If delivered personally, such notices or other communications shall be deemed
delivered upon delivery. If sent by prepaid overnight courier service, such
notices or other communications shall be deemed delivered upon delivery or refusal
to accept delivery as indicated on the return receipt. Either party may change its
address at any time by written notice to the other party as set forth above.
	 
	 	17.2.	 	Entire Agreement. Except as specifically noted herein, this Test Agreement
sets forth the entire agreement and understanding between the parties with respect to
the subject matter hereof and supersedes any and all prior negotiations, discussions
and agreements relating to the subject matter hereof. This Test Agreement may not be
amended except in a writing executed by both parties and specifically referencing this
Test Agreement.
	 
	 	17.3.	 	Construction. CSC and RMCF each acknowledge that it has had ample
opportunity to review this Test Agreement, that each party had it reviewed by the
counsel of their choosing and waives any right it may have to interpret it against the
drafter thereof. The headings used in this Test Agreement are for reference purposes
only and shall not be deemed a part of this Test Agreement.
	 
	 	17.4.	 	Choice of Law/Venue. This Test Agreement and the rights and obligations of
the parties under this Test Agreement shall be governed by and construed in accordance
with either the laws of the State of Arizona or the laws of the State of Colorado,
without giving effect to the principles thereof relating to the conflicts of laws.
The parties further agree that the state and federal courts located in either Maricopa
County, Arizona or the City and County of Denver, Colorado shall have exclusive
jurisdiction over all disputes arising from this Test Agreement or any other dispute
arising from the relationship between CSC and RMCF. The party filing a complaint
shall file it in the jurisdiction of the other




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	 	 	 	party and the laws of the State where the complaint is filed shall govern the
dispute.
	 
	 	17.5.	 	Severability. If any provision of this Test Agreement is determined to be
invalid or unenforceable, then such determination shall not affect any other provision
of this Test Agreement, all of which such other provisions shall remain in full force
and effect.
	 
	 	17.6.	 	No Waiver. No waiver by any party hereto, whether express or implied, of
any provision of this Test Agreement or of any breach or default of any party, shall
constitute a continuing waiver of such provision or any other provision of this Test
Agreement, and no such waiver by any party shall prevent such party from acting upon
the same or any subsequent breach or default of the other party of the same or any
other provision of this Test Agreement.
	 
	 	17.7.	 	Disclaimer of Agency. Nothing in this Test Agreement shall create a
partnership or joint venture or establish the relationship of principal and agent or
any other relationship of a similar nature between the parties hereto, and neither
RMCF nor CSC shall have the power to obligate or bind the other in any manner
whatsoever.
	 
	 	17.8.	 	Counterparts. This Test Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument.
	 
	 	17.9.	 	Survival. All rights and obligations herein which are by their nature
continuing will survive expiration or termination of this Test Agreement.




IN WITNESS WHEREOF, this Test Agreement is entered into by and between the parties hereto as of the
Effective Date.




	 	 	 	 	 	 	 	 	 	 	 
	ROCKY MOUNTAIN CHOCOLATE
FACTORY, INC.	 	 	 	COLD STONE CREAMERY, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Bryan J. Merryman
	 	 	 	By:
	 	/s/ Walter L. Schultz	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Print Name: Bryan J. Merryman	 	 	 	Print Name: Walter L. Schultz	 	 
	Title: Chief Operating Officer, Chief	 	 	 	 	 	 	 	 
	Financial Officer	 	 	 	Title: Executive VP, CFO	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	ACKNOWLEDGED AND AGREED TO BY:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	KAHALA FRANCHISE CORP.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ Walter L. Schultz	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Print Name: Walter L. Schultz	 	 
	 	 	 	 	 	 	Title: Executive VP, CFO	 	 






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EXHIBIT A—Form of RMCF Addendum