Rocky Mountain Chocolate Factory, Inc. (NASDAQ:RMCF) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01.
Strategic Alliance with Edible Arrangements
As previously disclosed, on December 20, 2019, Rocky Mountain Chocolate Factory, Inc. (the “Company”) entered into a strategic alliance (the “Strategic Alliance”) with Edible Arrangements, LLC (“EA”) and Farids & Co. LLC, to which, among other things, the Company became the exclusive provider of certain branded chocolate products to EA, its affiliates and its franchisees. In connection with the Strategic Alliance, the Company entered into, among other documents, an Exclusive Supplier Operating Agreement (the “Exclusive Supplier Agreement”) with EA, to which the Company became EA’s exclusive supplier for chocolates, candies and/or other confectionery products and the Company granted to EA a non-exclusive, worldwide right to market, offer for sale, sell and distribute such products, including through (i) retail stores and (ii) on-line distribution channels such as Internet websites and applications for personal computing devices, as an authorized and independent distributor of such products.
Ecommerce Licensing Agreement
In furtherance of the Strategic Alliance and the Exclusive Supplier Agreement, on March 17, 2020, the Company entered into an ECommerce Licensing Agreement (the “ECommerce Licensing Agreement”) with EA, to which the Company granted to EA, subject to certain exceptions, the exclusive right to sell all chocolates, candies and other confectionery products produced by Company or its franchisees through EA’s website. Under the ECommerce Licensing Agreement, subject to certain exceptions, the Company’s website will also redirect consumers looking to purchase the products covered by the ECommerce Licensing Agreement to EA’s website, where consumers can then purchase the products. The license granted by the Company to EA does not apply to online sales to certain of the Company’s existing customers.
The ECommerce Licensing Agreement has no fixed term and will continue until it is terminated in accordance with the provisions set forth in the ECommerce Licensing Agreement. Each party may terminate the ECommerce Licensing Agreement, upon written notice to the other party, if (i) the other party materially breaches its obligations under the ECommerce Licensing Agreement and fails to cure such breach within 30 days and (ii) such breach materially and adversely affect the business, operations or financial condition of the non-breaching party. The Company may terminate the ECommerce Licensing Agreement upon written notice to EA, subject to certain exceptions, RMCF Marketplace (as defined in the ECommerce Licensing Agreement) is inoperable or otherwise inaccessible by customers for two days greater than such period for EA’s Edible Arrangement’s marketplace. If the Exclusive Supplier Agreement expires or is terminated in accordance with its terms, the Company may terminate the ECommerce Licensing Agreement effective upon its payment to EA of the Termination Payment (as defined in the ECommerce Licensing Agreement). The Company is also required to provide EA with at least 30 days written notice prior to consummating a Change of Control (as defined in the ECommerce Licensing Agreement) of the Company (a “Change of Control Notice”). The Change of Control Notice will indicate whether the acquiror wishes to terminate the ECommerce Licensing Agreement and, if the acquiror does wish to terminate the ECommerce Licensing Agreement, then the ECommerce Licensing Agreement will terminate upon consummation of such Change of Control, effective upon its payment to EA of the Termination Payment.
The Exclusive Supplier Agreement also contains customary representations, warranties and covenants, and the parties have also agreed to indemnify and hold each other harmless from claims and losses arising directly or indirectly from the ECommerce Licensing Agreement under certain circumstances.
Indemnification Letter Agreement
As an inducement to enter into the ECommerce Licensing Agreement, on March 17, 2020, the Company and EA entered into an Indemnification Letter Agreement (the “Letter Agreement”), to which the Company agreed to indemnify EA for liability arising from all chocolates, candies and other confectionery products produced by the Company in a Company factory that bear the Rocky Mountain Chocolate Factory brand, but excludes all chocolates, candies and other confectionery products produced by a Company franchisee whether or not such products bear the Rocky Mountain Chocolate Factory brand.
The foregoing descriptions of the ECommerce Licensing Agreement and the Letter Agreement do not purport to be complete and are subject to, and are qualified in their entirety by reference to, the full text of such agreements, which are attached hereto as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K, each of which is incorporated by reference herein.
(d) Exhibits
Rocky Mountain Chocolate Factory, Inc. Exhibit
EX-10.1 2 ex_178506.htm EXHIBIT 10.1 ex_178506.htm EXECUTION EXHIBIT 10.1 ROCKY MOUNTAIN CHOCOLATE FACTORY ECOMMERCE LICENSING AGREEMENT This ECOMMERCE LICENSING AGREEMENT (this “Agreement”) is made and entered into on this 16th day of March 2020 (the “Effective Date”) by and between Rocky Mountain Chocolate Factory,…
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About Rocky Mountain Chocolate Factory, Inc. (NASDAQ:RMCF)
Rocky Mountain Chocolate Factory, Inc. is an international franchisor, confectionery manufacturer and retail operator. The Company’s subsidiary, U-Swirl International, Inc. (U-Swirl), franchises and operates soft-serve frozen yogurt stores. The Company operates through five segments: Franchising, Manufacturing, Retail Stores, U-Swirl operations and Other. The Company manufactures a range of chocolate candies and other confectionery products. The Company’s franchised/license system of retail stores features chocolate, frozen yogurt and other confectionary products. The Company also sells its candy in selected locations outside of its system of retail stores and licenses the use of its brand with certain consumer products. The Company’s products include a range of clusters, caramels, creams, mints and truffles. Its individual stores also offer over 15 fudges and other products prepared in the store. The Company uses chocolate, nut meats and other ingredients in its candies.
