Exhibit 10.66

 

OPTION AGREEMENT AND
AMENDMENT TO LICENSE AGREEMENT

 

This OPTION AGREEMENT AND AMENDMENT TO LICENSE AGREEMENT (“Agreement”), dated
effective as of December 12, 2005 (the “Effective Date”), is entered into by and
between MRS. FIELDS FRANCHISING, LLC, a Delaware limited liability company
(“Mrs. Fields”) and MAXFIELD CANDY CO., a Utah corporation (“Maxfield”). Mrs.
Fields and Maxfield are sometimes referred to collectively herein as the
“parties.”

 

A.            Maxfield and Mrs. Fields’ predecessor-in-interest entered into a
Trademark License Agreement dated January 3, 2000, as amended by the First
Amendment (the “First Amendment”) to Trademark License Agreement dated July 1,
2004 (as so amended, the “License Agreement”). Capitalized terms used but not
defined herein shall have the meanings ascribed to them in the License
Agreement.

 

B.            Effective August 13, 2005, Mrs. Fields delivered a Notice of
Default and Termination (the “2005 Disputed Termination Notice”) to Maxfield for
an alleged failure to pay timely certain royalties for guaranteed minimum sales.
Maxfield disputes Mrs. Fields’ allegations and claims set forth in the 2005
Disputed Termination Notice.

 

C.            The parties now wish to come to an understanding where Mrs. Fields
would withdraw the 2005 Disputed Termination Notice and Maxfield would grant to
Mrs. Fields an option to repurchase all of Maxfield’s rights and interests under
the License Agreement in exchange for certain payments, all subject and pursuant
to this Agreement.

 

NOW, THEREFORE, in consideration of the premises and of the respective
representations, warranties, agreements and conditions contained herein, the
parties hereby agree as follows:

 

1.             Withdrawal of the Termination; Amendment to the License
Agreement.

 

(a)           As of the Effective Date, Mrs. Fields withdraws the 2005 Disputed
Termination Notice and acknowledges the continued effectiveness of the License
Agreement.

 

(b)           The License Agreement is hereby amended to delete any and all
references and requirements therein, to any Volume Commitments, minimum
requirements for Royalty Bearing Products, minimum Running Royalties, any
Guaranteed Amounts and/or Maxfield’s obligations to make any royalty payments to
Mrs. Fields, to retain the license or to exercise any Option Periods in
connection with such minimum requirements, including, without limitation, those
contained in Sections 6(a), 6(b) and 7. This amendment shall not affect
Maxfield’s obligations to pay timely the other Running Royalties and amounts due
to Mrs. Fields under the License Agreement in accordance with the terms thereof,
as amended by this Agreement.

 

(c)           The License Agreement is further amended by replacing Section
16(b)(i)

 

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thereof with the following:

 

“(i)          If MCC defaults in the payment of any Running Royalties,
adjustments or other payment provisions set forth in this Agreement (including
the First Amendment or any additional amendments hereto) and such default
continues unremedied for ten (10) days after the date on which MCC receives
written notice of such payment default from MFB, then this Agreement and the
license granted hereunder may be terminated upon notice by MFB effective thirty
(30) days after receipt of such notice, without prejudice to any and all other
rights and remedies MFB may have hereunder or by law provided.”

 

Except as otherwise amended or modified by this Agreement, the License Agreement
shall remain in full force and effect in accordance with the terms thereof.

 

2.             The Option; Option Purchase Price.  Maxfield hereby grants to
Mrs. Fields an option (the “Option”) to repurchase the license and to terminate
the License Agreement prior to the expiration of the term (and any exercised
Option Periods) thereof. The purchase price for the Option (the “Option Purchase
Price”) is $1,000,000, payable by Mrs. Fields to Maxfield in immediately
available funds as follows:  (a) $500,000 on the Effective Date, and (b)
$500,000 on the first anniversary of the Effective Date. One-half of the Option
Purchase Price ($500,000) (the “Option Credit”) shall be credited and applied to
the License Repurchase Price (defined below) if  Mrs. Fields exercises the
Option as provided herein. Any portion of the License Repurchase Price paid to
Maxfield shall become non-refundable upon Maxfield’s receipt thereof. $500,000
of the Option Purchase Price shall become non-refundable upon the date hereof
and the remaining $500,000 (the “Remaining Amount”) shall become non-refundable
upon the earlier to occur of (x) the Option Exercise Date and (y) an additional
$100,000 of the Remaining Amount shall become non-refundable on each anniversary
of this Agreement.

 

3.             Option Exercise and Repurchase Price.

 

(a)           Option Exercise.  Mrs. Fields may exercise the Option following
the second anniversary, but prior to the fifth anniversary, of the Effective
Date (the “Option Period”) by delivering written notice of its election to
exercise the Option (the “Option Exercise Notice”), at least 6 months prior to
the expiration of each anniversary of the Effective Date (but no sooner than 12
months prior to such anniversary). Mrs. Fields shall set forth its intended
“Option Exercise Date” in the Option Exercise Notice. The Option Exercise Date
(i) may not be any date prior to the commencement of the Option Period, (ii) may
not be sooner than 6 months after the date Mrs. Fields delivers the Option
Exercise Notice, and (iii) may not be later than 190 days after the date Mrs.
Fields delivers the Option Exercise Notice; provided, however, Mrs. Fields shall
be permitted to deliver the Option Exercise Notice within 6 months prior to the
commencement of the Option Period in accordance with the first sentence of this
Section 3(a) hereof. Once Mrs. Fields has delivered the Option Exercise Notice,
the exercise of the Option may not be rescinded, cancelled or otherwise
terminated. The License Repurchase Price shall be paid to Maxfield in accordance
with Section 3(c).

 

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(b)           License Repurchase Price.  The amount due to Maxfield upon Mrs.
Fields’ exercise of the Option (the “License Repurchase Price”) during the
Option Period shall be calculated and paid as follows:

 

If the Option Exercise Notice is delivered in accordance with Section 3(a):

 

License Repurchase
Price

 

Prior to the end of the Second Anniversary (i.e., December 12, 2007)

 

$

7.0 million

 

Prior to the end of the Third Anniversary (i.e., December 12, 2008)

 

$

6.0 million

 

Prior to the end of the Fourth Anniversary (i.e., December 12, 2009)

 

$

5.0 million

 

Prior to the end of the Fifth Anniversary (i.e., December 12, 2010)

 

$

4.5 million

 

 

In the event that the Option Exercise Notice is not delivered in accordance with
Section 3(a) on or prior to the date that is 6 months prior to the end of the
Option Period (the “Option Termination Date”), the Option shall expire and be of
no further force or effect.

 

(c)           The License Repurchase Price shall be paid in three equal annual
installments. The first installment shall be paid on the Option Exercise Date,
and the second and third installments shall be paid on the second and third
anniversaries of the Option Exercise Date respectively. The Option Credit shall
be applied to the License Repurchase Price equally over the three installments.

 

(d)           License Termination; Wind-Down.  If Mrs. Fields exercises the
Option, Maxfield shall have a period of 12 months from the Option Exercise Date
to wind down its operations under the License Agreement (the “Wind-Down
Period”). During the Wind-Down Period, Maxfield and Mrs. Fields will continue to
fulfill their obligations under the License Agreement, including without
limitation, with respect to Maxfield, payment of Running Royalties that become
due during such period. Following the end of the Wind-Down Period, any
outstanding Running Royalties or other amounts due to Mrs. Fields under the
License Agreement shall be paid in accordance with Section 18 of the License
Agreement. Maxfield will have the option to end the Wind-Down Period at any time
prior to its expiration upon 30 days written notice to Mrs. Fields. At the end
of the Wind-Down Period, the License Agreement shall terminate (the “Termination
Effective Date”) and be of no further force and effect, except that parties’
post-termination obligations set forth in Sections 16 (c), 16 (d), 16(e), 18 and
21 of the License Agreement shall survive the termination in accordance with its
terms. The Wind-Down Period shall replace Maxfield’s post-termination right to
sell inventory as set forth in Section 17 of the License Agreement.

 

(e)           Option Termination.  The Option shall terminate on the Option
Termination Date if Mrs. Fields has not properly exercised it. Upon any
termination of the Option, without exercise, (i) the amendment to the License
Agreement set forth in Section 1(b) above shall be rescinded and the Volume
Commitment and minimum Running Royalties for the Option Periods set forth in
Section 6(a) of the License Agreement shall be amended to read as follows:

 

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1st OPTION PERIOD

 

Time Period

 

Sales

 

Minimum Royalties

 

Year Six - Ten

 

$

7,500,000.00

 

$

375,000.00

 

 

2nd OPTION PERIOD

 

Time Period

 

Sales

 

Minimum Royalties

 

Year 11 (7/1/2010)

 

$

7,500,000.00

 

$

375,000.00

 

Year 12 (7/1/2011)

 

$

7,500,000.00

 

$

400,000.00

 

Year 13 (7/1/2012)

 

$

9,000,000.00

 

$

475,000.00

 

Year 14 (7/1/2013)

 

$

12,500,000.00

 

$

650,000.00

 

Year 15 (7/1/2014)

 

$

15,000,000.00

 

$

750,000.00

 

 

; and (ii) the Option Purchase Price shall be fully earned and Mrs. Fields shall
have no rights to the Option Credit or any refund or offset against the Option
Purchase Price.

 

4.             Effect of Performance under the License Agreement upon this
Agreement.  Any default committed by a party under the License Agreement shall
constitute a default by such party hereunder, and if such default is not cured
within any cure periods provided in the License Agreement, as amended herein,
the non-defaulting party shall have the right to terminate this Agreement in the
same manner such party has the right to terminate the License Agreement. If Mrs.
Fields properly terminates the License Agreement in accordance with this section
before the Option Exercise Date, Maxfield will return to Mrs. Fields any portion
of the Option Purchase Price that it has already received that has not become
non-refundable in accordance with Section 2 hereof.

 

5.             Mrs. Fields Candy Venture.  From the Effective Date, and
notwithstanding the License Agreement but subject to the following sentence,
Mrs. Fields and its subsidiaries shall have the right to begin developing
branded candy and confection products (the “New Candy Products”), or licensing
other parties to do so, and marketing and selling such New Candy Products to and
through each of its company-owned and franchised store locations and its
gifting, catalog, mail order and e-tailing operations (such specific locations
being referred to herein as the “Permitted New Candy Product Channels”).
Notwithstanding the foregoing, no New Candy Products or other Royalty Bearing
Products may be licensed, marketed or sold (other than by Maxfield) in such a
manner that any such New Candy Products or other Royalty Bearing Products would
be sold or otherwise offered in any Designated Distribution Channel (other than
a Permitted New Candy Product Channel). From and after the Termination Effective
Date, Mrs. Fields would be free to begin developing, marketing and selling
branded candy and confection products, or licensing other parties to do so,
through any and all distribution channels, including the channels listed above.
Upon any termination of the Option, without exercise, this Section 5 shall be
immediately terminated and rescinded.

 

6.             Kookie Kake Trademark.  Maxfield and its affiliates and parent
entities agree not to contest registration and the current use (or any use
permitted pursuant to Section 5 hereof) by Mrs. Fields and/or its subsidiaries,
affiliates and franchisees, of the trademarks “Cookie Cake” or “Home

 

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of the Original Cookie Cake,” or any other mark that includes such marks, in any
and all domestic and international jurisdictions, and further will not impede or
limit, or assign any rights it may have to impede or limit such registration or
use. Mrs. Fields and its affiliates and assigns agree not to contest
registration and the current use by Maxfield and/or its subsidiaries, affiliates
and franchisees, of the trademarks “Kookie Kake” or any related usage thereof
,or any other mark that includes such marks, in any and all domestic and
international jurisdictions, and further will not impede or limit, or assign any
rights it may have to impede or limit such registration or use.

 

7.             Further Assurances.  From time to time, as and when requested by
a party hereto, the other party, as requested, shall execute and deliver, or
cause to be executed and delivered, all such documents and instruments and shall
take, or cause to be taken all such further or other actions, as such other
party may reasonably deem necessary or desirable to consummate the transactions
contemplated by this Agreement.

 

8.             Assignment.  This Agreement may be assigned together with the
License Agreement in accordance with the provisions of Section 4 of the License
Agreement.

 

9.             No Third-Party Beneficiaries.  This Agreement is for the sole
benefit of the parties hereto and their permitted assigns and nothing herein
expressed or implied shall give or be construed to give to any person or entity,
other than the parties hereto and such assigns, any legal or equitable rights
hereunder.

 

10.           Interpretation.  The headings contained in this Agreement, in any
exhibit or schedule hereto are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Both parties have
been represented by counsel and shall the terms of this Agreement shall not be
construed against or to the benefit of either party by virtue of their drafting
or negotiation of this Agreement.

 

11.           Severability.  Section 23(c) of the License Agreement is
incorporated herein by this reference thereto.

 

12.           Attorney’s Fees.  Section 23(j) of the License Agreement is
incorporated herein by this reference thereto.

 

13.           Governing Law. Section 23(k) of the License Agreement is
incorporated herein by this reference thereto.

 

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14.           Remedies.  Each of the parties acknowledges and agrees that each
other party would be damaged irreparably in the event any of the provisions of
this Agreement are not performed in accordance with their specific terms or
otherwise are breached. Accordingly, each of the parties agrees that each other
party shall be entitled to an injunction or injunctions to prevent breaches of
the provisions of this Agreement and to enforce specifically this Agreement and
the terms and provisions hereof in any action instituted in any court of the
United States or any state thereof, having jurisdiction over the parties and the
matter, in addition to any other remedy to which it may be entitled, at law or
in equity.

 

15.           Submission to Jurisdiction.  Section 23(l) of the License
Agreement is incorporated herein by this reference thereto.

 

16.           Waiver of Trial by Jury; Limitations of Claims.  The parties agree
that neither shall be entitled to nor shall demand a jury trial in the event of
litigation. Furthermore, Section 23(m) of the License Agreement is incorporated
herein by this reference thereto.

 

17.           Entire Agreement. This Agreement and the License Agreement
contains the entire agreement and understanding between the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements and
understandings relating to such subject matter.

 

18.           Expenses.  Whether or not the Option is exercised by Mrs. Fields,
all costs and expenses incurred in connection with the Disputed Termination
Notice incurred through the date hereof, this Agreement and the transactions
contemplated herein shall be paid by the party incurring such costs and
expenses.

 

19.           Amendments.  No amendment to this Agreement shall be effective
unless it shall be in writing and signed by all parties hereto.

 

20.           Notices.  All notices or other communications required or
permitted to be given hereunder shall be given in accordance with Section 22 of
the License Agreement; provided that Maxfield hereby gives formal notice that
its current address for such notice is as follows:

 

Maxfield Candy Co.

c/o Alpine Confections, Inc.

Attn.: Taz Murray

119 East 200 North

Alpine, UT 84004

 

21.           Counterparts.  This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement.

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the date first written above.

 

Maxfield:

Mrs. Fields:

 

 

 

 

MAXFIELD CANDY CO.

MRS. FIELDS FRANCHISING, LLC.

 

(successor in interest to The Mrs. Fields’
Brand, Inc.)

 

 

 

 

By:

 /s/ Taz Murray

 

By:

 /s/ Michael Ward

 

Its: President

Its: E.V.P

 

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