Exhibit 10.1

 

Execution copy

 

ASSET PURCHASE AGREEMENT

 

BY AND AMONG

 

NEXCEN ASSET ACQUISITION, LLC,

 

GREAT AMERICAN COOKIE COMPANY FRANCHISING, LLC,

 

GREAT AMERICAN MANUFACTURING, LLC,

 

NEXCEN BRANDS, INC.

 

AND

 

MRS. FIELDS FAMOUS BRANDS, LLC

 

 

DATED AS OF JANUARY 29, 2008

 

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TABLE OF CONTENTS

 

 

 

 

Page

 

 

 

 

ARTICLE I Definitions and Usage

 

2

1.1

Definitions

 

2

1.2

Usage

 

28

ARTICLE II Purchase and Sale of Businesses and Assets

 

30

2.1

Purchase and Sale of Assets

 

30

2.2

Excluded Assets

 

30

2.3

Assumed Liabilities

 

32

2.4

Excluded Liabilities

 

33

ARTICLE III Purchase Price; Payment; Assumption of Obligations

 

36

3.1

The Closing

 

36

3.2

Purchase Price

 

37

3.3

Payment

 

40

3.4

Allocation

 

41

3.5

Nonassignable Contracts

 

42

3.6

Escrow

 

43

3.7

Accounts Receivable

 

45

ARTICLE IV Representations and Warranties of the Sellers and MFFB

 

47

4.1

Organization and Good Standing

 

48

4.2

Enforceability; Authority

 

49

4.3

Consents; Approvals

 

50

4.4

Financial Statements

 

51

4.5

Real Property

 

52

4.6

Title to Assets

 

59

4.7

Sufficiency of Assets

 

59

4.8

Accounts Receivable

 

59

4.9

Insolvency Proceedings

 

60

4.10

Taxes

 

60

4.11

Labor Relations; Compliance

 

62

4.12

Employee Benefits

 

63

4.13

Litigation; Orders

 

67

4.14

Compliance With Laws; Permits

 

68

4.15

Operations of the Sellers

 

69

4.16

Material Contracts

 

71

4.17

Insurance

 

74

4.18

Environmental and Safety Matters

 

74

4.19

Intellectual Property

 

76

4.20

Affiliate Transactions

 

82

4.21

Brokers’ or Finders’ Fees

 

82

4.22

Suppliers

 

82

4.23

Franchise Matters

 

83

4.24

Powers of Attorney

 

96

4.25

Investment

 

96

4.26

Deferred Revenue Liability

 

96

4.27

Indenture Payment

 

96

4.28

Settlement Agreement

 

97

4.29

Other Contracts

 

97

ARTICLE V Representations and Warranties of Buyer and Parent

 

97

 

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5.1

Existence and Good Standing; Authorization

 

98

5.2

Consents and Approvals; No Violations

 

99

5.3

SEC Documents and Other Reports

 

100

5.4

Litigation

 

101

5.5

Brokers’ or Finders’ Fees

 

101

5.6

Parent Shares

 

101

ARTICLE VI Pre-Closing Covenants

 

102

6.1

Efforts to Closing

 

102

6.2

Conduct of the Businesses

 

103

6.3

Access and Investigation

 

105

6.4

Business Plan

 

105

6.5

Exclusivity

 

106

6.6

Change of Name

 

107

6.7

Notice of Developments

 

107

6.8

Continuation of Businesses

 

108

6.9

Regulatory Filings

 

109

6.10

Maintenance of Real Property

 

110

6.11

Leases

 

110

6.12

Title Insurance

 

111

6.13

Financing

 

111

6.14

Employees

 

111

ARTICLE VII Post-Closing Covenants

 

112

7.1

Employees

 

112

7.2

Taxes Related to Purchase of Assets; Tax Cooperation

 

113

7.3

Nonsolicitation

 

116

7.4

Further Assurances

 

118

7.5

Audit

 

118

7.6

Confidentiality

 

119

7.7

Solvency

 

120

7.8

Restrictions on Sale of Parent Shares

 

120

7.9

Registration

 

122

7.10

Agreement to Vote

 

122

7.11

Access to Records

 

123

7.12

Product Formulation Royalties

 

123

7.13

Lease Obligations

 

124

7.14

Intellectual Property

 

127

7.15

Franchise Business

 

128

7.16

New Settlement Agreement

 

128

7.17

Waste Water Filter

 

128

ARTICLE VIII Conditions Precedent to Parent’s and Buyer’s Obligation to Close

 

129

8.1

Truth of Representations and Warranties

 

130

8.2

Performance of Agreements

 

130

8.3

Certificate

 

130

8.4

No Injunction

 

130

8.5

Governmental and Other Approvals

 

131

8.6

Indenture Lien Release

 

131

8.7

Transition Services

 

131

8.8

Escrow Agreement

 

131

8.9

Registration Rights Agreement

 

131

8.10

Voting Agreement

 

132

 

ii

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8.11

Deed

 

132

8.12

No Material Adverse Effect

 

132

8.13

Financing

 

132

8.14

Real Property

 

132

8.15

Title Insurance

 

132

8.16

Closing Deliverables

 

133

ARTICLE IX Conditions Precedent to the Sellers’ Obligation to Close

 

134

9.1

Truth of Representations and Warranties

 

134

9.2

Performance of Agreements

 

135

9.3

Certificate

 

135

9.4

No Injunction

 

135

9.5

Governmental and Other Approvals

 

135

9.6

Escrow Agreement

 

136

9.7

Registration Rights Agreement

 

136

9.8

Closing Deliverables

 

136

ARTICLE X Termination

 

137

10.1

Right to Terminate

 

137

10.2

Effect of Termination

 

138

ARTICLE XI Indemnification; Remedies

 

139

11.1

Survival

 

139

11.2

Indemnification by the Sellers and MFFB

 

140

11.3

Indemnification by Buyer

 

141

11.4

Limitation on Liability

 

142

11.5

Other Indemnification Provisions

 

143

11.6

Procedure for Indemnification

 

144

11.7

Non-Third Party Claims

 

147

11.8

Indemnification Payments

 

147

ARTICLE XII Miscellaneous

 

148

12.1

Public Disclosure or Communications

 

148

12.2

Notices

 

149

12.3

Entire Agreement; Nonassignability; Parties in Interest

 

150

12.4

Bulk Sales Law

 

151

12.5

Expenses

 

151

12.6

Waiver and Amendment

 

152

12.7

Severability

 

152

12.8

Remedies Cumulative

 

152

12.9

Counterparts

 

153

12.10

Governing Law; Jurisdiction

 

153

12.11

Specific Performance

 

154

 

iii

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Annexes, Exhibits and Schedules

 

Annexes

 

 

Financial Results of GAC Related Businesses as of November 24, 2007

Annex A

 

Purchase Price Allocation

 

Annex B

Exhibits

 

 

 

GACCF and GAM Logos

 

Exhibit A

 

Form of Transition Services Agreement

 

Exhibit B

 

Form of Escrow Agreement

 

Exhibit C

 

Form of Registration Rights Agreement

 

Exhibit D

 

Form of Voting Agreement

 

Exhibit E

 

Form of Deed

 

Exhibit F

Schedules

 

 

Assumed Contracts

 

1.1A

 

Deferred Revenue Liability

 

1.1B

 

Vendor Agreements

 

1.1D

 

Excluded Contracts

 

2.2(g)

 

Assumed Liabilities

 

2.3

 

Allocation Schedule

 

3.4

 

Seller Accounts Receivable

 

3.7

 

Consents and Approvals

 

4.3

 

Sellers’ Material Liabilities and Obligations

 

4.4(b)

 

Owned Real Property

 

4.5(a)

 

Leased Real Property

 

4.5(b)

 

Real Property Permits

 

4.5(g)(1)

 

Consents and Real Property Permits

 

4.5(g)(2)

 

Sufficiency of Assets

 

4.7

 

Accounts Receivable and Encumbrances

 

4.8

 

Sellers’ Tax Returns Subject to Audit

 

4.10

 

Labor Relations; Compliance

 

4.11

 

Employee Benefit Plans

 

4.12

 

Litigation Proceedings

 

4.13(a)

 

Orders

 

4.13(b)

 

Compliance With Laws; Permits

 

4.14

 

Operation of Sellers; Material Adverse Effect

 

4.15

 

Material Contracts

 

4.16(a)

 

Breach or Default of Material Contracts

 

4.16(b)

 

Affiliated Contracts

 

4.16(c)

 

Insurance

 

4.17

 

Environmental and Safety Matters

 

4.18

 

Intellectual Property

 

4.19(a)

 

IT Software and Other Licensed Intellectual Property

 

4.19(b)

 

Sellers’ Intellectual Property Rights

 

4.19(c)

 

Sellers’ Intellectual Property Infringements

 

4.19(d)

 

Validity of Intellectual Property Rights

 

4.19(e)

 

Third Party Intellectual Property Infringements

 

4.19(f)

 

Intellectual Property Development and Acquisition

 

4.19(g)

 

Intellectual Property Restrictions

 

4.19(h)

 

Affiliate Transactions

 

4.20

 

Suppliers

 

4.22

 

Franchise Matters

 

4.23(a)-(z)

 

iv

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Powers of Attorney

4.24

 

Settlement Franchisees

4.28

 

Transferred Employees

6.14

 

Vendor Allocation Schedule

7.12

 

Lease Locations

7.13(a)

 

Foreign Trademarks

7.14

 

Governmental and Other Approvals

8.5

 

v

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ASSET PURCHASE AGREEMENT

 

This Asset Purchase Agreement (“Agreement”) is entered into as of January 29,
2008, by and among NexCen Asset Acquisition, LLC, a Delaware limited liability
company (“Buyer”), NexCen Brands, Inc., a Delaware corporation (“Parent”), Great
American Cookie Company Franchising, LLC, a Delaware limited liability company
(“GACCF”), Great American Manufacturing, LLC, a Delaware limited liability
company (“GAM,” and with GACCF, each individually, a “Seller,” and collectively,
the “Sellers”), and Mrs. Fields Famous Brands, LLC, a Delaware limited liability
company (“MFFB”).

 

RECITALS

 

WHEREAS, the Sellers are directly engaged in the Businesses;

 

WHEREAS, the Sellers desire to sell to Buyer, and Buyer desires to purchase from
the Sellers, certain of the assets of the Businesses, and to assume certain
liabilities associated therewith, on the terms and subject to the conditions set
forth in this Agreement so as to permit Buyer to operate the Businesses.

 

NOW, THEREFORE, in consideration of the representations, warranties, covenants
and agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:

 

ARTICLE I

DEFINITIONS AND USAGE

 

1.1           Definitions.  For purposes of this Agreement, the following terms
and variations thereof have the meanings specified or referred to in this
Section 1.1:

 

“Accountant Statement” is defined in Section 3.2(c).

 

“Accredited Investor” has the meaning set forth in Regulation D promulgated
under the Securities Act.

 

“Actual Financials” is defined in Section 3.2(b).

 

“Acquisition Proposal” is defined in Section 6.5.

 

“Acquired Franchise Assets” means those Purchased Assets owned or used by MFFB
or GACCF in the operation of the GAC Franchise Business.

 

“Acquired Manufacturing Assets” means those Purchased Assets owned or used by
MFFB or GAM in the operation of the GAC Manufacturing Business.

 

“Adjusted Closing Date Reference Price” is defined in Section 3.6(b).

 

“Adjustment” is defined in Section 7.8.

 

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“Affiliate” of any Person means any Person which, directly or indirectly
controls or is controlled by that Person, or is under common control with that
Person; provided, that, for purposes of Section 7.3(a) only, Affiliates shall be
deemed to include only Persons controlled by MFC and not Persons controlling
MFC.  For the purposes of this definition, “control” (including, with
correlative meaning, the terms “controlled by” and “under common control with”),
as used with respect to any Person, shall mean the possession, directly or
indirectly of the power to direct or cause the direction of the management and
policies of such Person, whether through ownership of voting securities or by
contract or otherwise.

 

“Allocation Schedule” is defined in Section 3.4.

 

“Assumed Contracts” means all Franchise Agreements (including, without
limitation, the right to collect any and all amounts due and payable thereunder
that are unpaid to either Seller as of the Closing Date, other than the Seller
Accounts Receivable) and, subject to Section 3.5, all other Contracts to which
either Seller is a party that relate to the operation of the Businesses and all
security deposits relating thereto, all of which are listed on Schedule 1.1A.

 

“Assumed Liabilities” is defined in Section 2.3.

 

“Balance Sheet” is defined in Section 4.4(a).

 

“Books and Records” means all books and records of the Sellers or their
Affiliates relating exclusively to and necessary for the operation of the
Businesses as they are currently operated, including files, documents,
correspondence, cost and pricing information, accounting records, supplier lists
and records, operating manuals, operating procedures, marketing research,
training materials, training records, maintenance and inspection reports,
equipment lists, repair notes and archives, sales and marketing materials, and
personnel files and records for the Transferred Employees; provided, that “Books
and Records” will not include any corporate records of the Sellers or their
Affiliates.

 

“Brands” means the “Great American Cookies” and “Great American Chocolate Chip
Cookie Company,” and all other brands owned or in use by GACCF, together with
the logos shown on Exhibit A, each of which are the subject of certain trademark
and service mark registrations with the United States Patent and Trademark
Office, or any other similar Government Authority responsible for trademark or
service mark registration.

 

“Business Day” means any day other than (a) Saturday or Sunday or (b) any other
day on which banks in New York, New York are permitted or required to be closed.

 

“Businesses” means the businesses that relate to the operation of the GAC
Franchise Business and the GAC Manufacturing Business, including the use of any
of the Purchased Assets in connection with the operation thereof.

 

“Business Plan” is defined in Section 6.4.

 

“Buyer Accounts Receivable” is defined in Section 3.7(a).

 

“Buyer’s Closing Documents” is defined in Section 9.8.

 

2

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“Buyer Indemnified Parties” is defined in Section 11.2.

 

“CERCLA” means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended (42 U.S.C. § 9601, et seq.).

 

“Claim Notice” is defined in Section 11.7.

 

“Closing” is defined in Section 3.1.

 

“Closing Date” means the date on which the Closing actually takes place.

 

“Closing Date Reference Price” means $4.23.

 

“Closing Statement” is defined in Section 3.2(b).

 

“COBRA” means Part 6 of Subtitle B of Title I of ERISA, Section 4980B of the
Code, and any similar applicable Legal Requirement.

 

“Code” means the Internal Revenue Code of 1986.

 

“Contingent Initial Franchise Fees” means, in the aggregate, the Initial
Franchise Fees that have been paid pursuant to Section 6.1 of those Franchise
Agreements executed by GACCF prior to or on the Closing Date for stores not
opened for business on or prior to the Closing Date.

 

“Contingent Initial Franchise Fee Refunds” means, in the aggregate any portion
of the Contingent Initial Franchise Fees that become due and payable to any
Franchisee upon the termination of any Franchise Agreement pursuant to the terms
of such Franchise Agreement.

 

“Contract” means any contract, license, sublicense, franchise, permit,
mortgage,  purchase orders, indenture, loan agreement, note, lease, sublease,
agreement, obligation, commitment, understanding, instrument or other
arrangement or any commitment to enter into any of the foregoing (in each case,
whether written or oral).

 

“Core Representations” is defined in Section 11.1.

 

“Damages” means any loss, liability, claim, damage, expense (including
reasonable attorneys’ fees and costs), whether or not involving a third party
claim, provided, however, that other than with respect to Damages payable to a
Third Party pursuant to a third party claim, Damages shall not include any
special, consequential, punitive or treble damages.

 

“Deed” means the Limited Warranty Deed transferring fee title to the Owned Real
Property to GAC Manufacturing, LLC, to be dated as of the Closing Date and
substantially in the form attached hereto as Exhibit F.

 

“Deferred Revenue Cash” means cash in an amount equal to the Deferred Revenue
Liability.

 

3

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“Deferred Revenue Liability” means, in the aggregate, the amount of deferred
revenue allocated to Franchise Agreements on an itemized basis, that would be
required under GAAP to be shown on a balance sheet of each Seller as of the
Closing Date, as set forth on Schedule 1.1B.

 

“Disclosure Schedule” is defined in the first paragraph of Article IV.

 

“Domestic UFOC” means the Uniform Franchise Offering Circular of GACCF, as
applicable, prepared in accordance with the UFOC Guidelines.

 

“Employee Benefit Plan” means any “employee benefit plan” as defined in
Section 3(3) of ERISA and any other compensation or benefit plan, program,
agreement or arrangement of any kind (whether written or oral) including any
employment, severance, change of control or other similar agreement or
arrangement.

 

“Encumbrance Documents” is defined in Section 4.5(i).

 

“Encumbrances” means any liens, pledges, claims, encumbrances, mortgages,
charges, options, preemptive rights, rights of first refusal or similar rights,
title retention agreements, easements, encroachments, leases, subleases,
covenants, security interests and restrictions and encumbrances of any kind or
nature whatsoever.

 

“Environmental and Safety Requirements” means, whenever in effect, all federal,
state, local and foreign statutes, regulations, ordinances, codes and other
provisions having the force or effect of law, all judicial and administrative
orders and determinations, all contractual obligations and all common law
concerning public health and safety, worker health and safety, or pollution or
protection of the environment, including, without limitation, all those relating
to the presence, use, production, generation, handling, transportation,
treatment, storage, disposal, distribution, labeling, testing, processing,
discharge, release, threatened release, control or cleanup of, or exposure to,
any Hazardous Substances.

 

“ERISA” means the Employee Retirement Income Security Act of 1974.

 

“ERISA Affiliate” means, with respect to any Person, any other Person that at
any relevant time is or was treated as a single employer with such Person under
Sections 414(b), (c), (m) or (o) of the Code.

 

“Escrow Agent” means Wilmington Trust Company, in its capacity as the escrow
agent under the Escrow Agreement.

 

“Escrow Agreement” means the Escrow Agreement, to be dated as of the Closing
Date and substantially in the form attached hereto as Exhibit C.

 

“Executive Knowledge” means, with respect to the Sellers and/or MFFB, as the
case may be, the actual knowledge, after reasonable due inquiry, of Stephen
Russo and Michael Ward.

 

4

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“Exchange Act” means the Securities Exchange Act of 1934, as amended, together
with the rules and regulations promulgated thereunder.

 

“Excluded Assets” is defined in Section 2.2.

 

“Excluded Liabilities” is defined in Section 2.4.

 

“Filter Contract” means the contract to be entered into by GAM to replace the
waste water filter at its manufacturing facility.

 

“Final Purchase Price” means the Initial Purchase Price minus the Purchase Price
Deficit Amount, if any.

 

“Financial Statements” is defined in Section 4.4(a).

 

“Franchise Agreements” means any Contract (and any written or oral amendment or
modification thereto) between GACCF or any of its predecessors and a Franchisee
pertaining to and evidencing the grant of a Franchise.

 

“Franchisee” means a Person who has entered into and as of the Closing Date is a
party to a Franchise Agreement with GACCF or any of its predecessors.

 

“Franchise” means the grant by GACCF to a Franchisee of the rights to establish
and operate a location using the Brands or outlet thereof including subfranchise
agreements, master development agreements, area representative agreements, area
development agreements, master franchise agreements, development agreements,
license agreements, and any other similar agreements, together with all
ancillary agreements related thereto.

 

“Franchise Purchase Price” means $45,000,000, which is the initial purchase
price for the Acquired Franchise Assets.

 

“Franchise Revenue Difference” means the difference between the total revenues
in the Actual Financials minus the “Total Revenues” as set forth under the
column entitled “GAC Franchise Business” on Annex A, each calculated in
accordance with GAAP.

 

“GAAP” means generally accepted accounting principles for financial reporting in
the United States.

 

“GAC” means Great American Cookie.

 

“GAC Franchise Business” means the licensing of the right to conduct the
business of a retail snack, dessert and beverage outlet selling any GACCF
Products and other products for off-premises consumption and services specified
by GACCF at or from the premises of such outlet (including carts and kiosks).

 

“GAC Manufacturing Business” means the GAC dough manufacturing and supply
businesses, and any ancillary product supply business.

 

5

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“GACCF Accounts Receivable” means (a) all trade accounts receivable, franchise
royalty accounts receivable and other rights to payment from franchisees and
customers of GACCF, (b) all advertising accounts receivable of GACCF related to
advertising or marketing funds, (c) all other accounts or notes receivable of
GACCF and the full benefit of all security for such accounts or notes, and
(d) any claim, remedy or other right related to any of the foregoing.

 

“GACCF Products” means products approved or required by GACCF from time to time
for sale in the GAC Franchise Business, including, without limitation, specialty
snacks and other bakery items, desserts and beverages (such as cookies,
brownies, coffee cakes and coffee) and other products approved by GACCF from
time to time.

 

“GACCI” means Great American Cookie Company, Inc., a Delaware Corporation.

 

“GAM Accounts Receivable” means (a) all trade accounts receivable, franchise
royalty accounts receivable and other rights to payment from franchisees and
customers of GAM, (b) all advertising accounts receivable of GAM related to
advertising or marketing funds, (c) all other accounts or notes receivable of
GAM and the full benefit of all security for such accounts or notes, and (d) any
claim, remedy or other right related to any of the foregoing.

 

“Government Authority” means any domestic or foreign national, state,
multi-state or municipal or other local government, any subdivision, agency,
commission or authority thereof, including any quasi-governmental or private
body exercising any regulatory or taxing authority thereunder or any judicial
authority (or any department, bureau or division thereof).

 

“Government Authorization” means any approval, consent, license, permit, waiver,
or other authorization issued, granted, given or otherwise made available by or
under the authority of any Government Authority or pursuant to any Legal
Requirement.

 

“Hazardous Substance” means any hazardous materials, substances or wastes,
chemical substances or mixtures, pesticides, pollutants, contaminants, toxic
chemicals, petroleum products or byproducts, asbestos, polychlorinated
biphenyls, noise, odor or radiation, or any other material, substance or waste
as to which liability or standards of conduct may be imposed pursuant to
Environmental and Safety Requirements.

 

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.

 

“Improvements” is defined in Section 4.5(d).

 

“Indemnification Objection” is defined in Section 11.7.

 

“Indemnified Party” is defined in Section 11.3.

 

“Indemnifying Party” is defined in Section 11.6(a).

 

“Indemnity Escrow Amount” means, for each Seller, the number of Parent Shares
set forth next to each Seller’s name in Column II of Annex B.

 

6

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“Indemnity Escrow Release Date” is defined in Section 3.6(a).

 

“Indebtedness” means (a) indebtedness of either Seller for borrowed money or
with respect to deposits or advances of any kind (other than advances due from
customers incurred in the ordinary course of business and consistent with past
practice), (b) all obligations of either Seller evidenced by bonds, debentures,
notes or similar instruments, (c) all obligations of either Seller upon which
interest charges are paid, (d) all obligations of either Seller in respect of
capitalized leases that, individually, involve an aggregate future liability in
excess of $5,000 and obligations of either Seller for the deferred purchase
price of goods or services (other than trade payables or accruals incurred in
the ordinary course of business and consistent with past practice), (e) all
obligations in respect of banker’s acceptances or letters of credit issued or
created for the account of either Seller, (f) all indebtedness or obligations of
the types referred to in the preceding clauses (a) through (e) of any other
Person secured by any Encumbrance on any assets of either Seller, even though
such Seller has not assumed or otherwise become liable for the payment thereof,
(g) all guarantees by either Seller of obligations of the type described in
clauses (a) through (f) above of any other Person, and (h) payment obligations
in respect of interest under any interest rate swap or other hedge agreement or
arrangement entered into by either Seller with respect to any Indebtedness
described in clauses (a) through (g) above.

 

“Indenture” means that certain Indenture, dated as of March 16, 2004, among
inter alia, MFFB, Mrs. Fields Financing Company, Inc. and The Bank of New York.

 

“Initial Franchise Fees” means, in the aggregate, the nonrecurring initial
franchise fees payable pursuant to Section 6.1 of the Franchise Agreements.

 

“Initial Period” is defined in Section 7.8.

 

“Initial Purchase Price” means the sum of (i) the Franchise Purchase Price plus
(ii) the Manufacturing Purchase Price.

 

“Insurance Policies” is defined in Section 4.17.

 

“Intellectual Property Rights” means all of the following in any jurisdiction
throughout the world: (i) patents, patent applications and patent disclosures;
(ii) trademarks, service marks, recipes and proprietary food processes
(including, without limitation, the Seller Recipes and Processes), trade dress,
trade names, product configuration, corporate names, logos and slogans (and all
translations, adaptations, derivations and combinations of the foregoing) and
Internet domain names, Internet websites, and URLs; (iii) copyrights and
copyrightable works; (iv) registrations and applications for any of the
foregoing; (v) trade secrets and confidential information (including inventions,
ideas, formulae, compositions, know-how, manufacturing and production processes
and techniques, research and development information, drawings, specifications,
designs, plans, proposals, technical data, financial, business and marketing
plans, and customer and supplier lists and related information); (vi) all other
intellectual property; and (vii) any goodwill associated with each of the
foregoing.

 

“Interim Reports” is defined in Section 4.4(a).

 

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“Inventory” means the inventory of GAM, wherever located, including, without
limitation, all finished goods, work in process, raw materials, spare parts and
all other materials and supplies to be used or intended for use by the GAC
Manufacturing Business.

 

“IRS” means the United States Internal Revenue Service and, to the extent
relevant, the United States Department of the Treasury.

 

“IT Software” is defined in Section 4.19(b).

 

“Knowledge” means, with respect to the Sellers and/or MFFB, as the case may be,
the actual knowledge, after reasonable due inquiry, of Stephen Russo, Michael
Ward, Dale Thompson, Michael Curtis, Steve Passey and Justin Nalder.  The terms
“know” and “knows” and like terms will have correlative meanings.

 

“Leases” is defined in Section 4.5(b).

 

“Lease Locations” is defined in Section 7.13(a).

 

“Lease Obligation Date” is defined in Section 7.13(d).

 

“Leased Real Property” is defined in Section 4.5(b).

 

“Legal Requirement” means any federal, state, local, municipal, foreign,
international, multinational or other administrative order, constitution, law,
ordinance, principle of common law, regulation, rule, statute or treaty.

 

“Manufacturing Contribution” means manufacturing revenues less direct
manufacturing expenses, each as calculated in accordance with GAAP.

 

“Manufacturing Contribution Difference” means the Manufacturing Contribution in
the Actual Financials minus the “Manufacturing Contribution” as set forth under
the column entitled “GAC Manufacturing Business” on Annex A, each as calculated
in accordance with GAAP.

 

“Manufacturing Purchase Price” means $48,650,000, which is the initial purchase
price for the Acquired Manufacturing Assets.

 

“Marketing Fees” means, in the aggregate, the amount of marketing fees collected
by GACCF under the Franchise Agreements.

 

“Marketing Fees Balance” is defined in Section 4.23(w).

 

“Marketing Fees Cash” means cash in an amount equal to the Marketing Fees
Balance.

 

“Marketing Fees Reconciliation” is defined in Section 4.23(w).

 

“Material Adverse Effect” means any change, effect, event, occurrence, state of
facts or development that is, or would reasonably be expected to be, materially
adverse to the

 

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assets, business, liabilities, prospects, results of operations or condition
(financial or otherwise) of the Sellers taken as a whole or that prevents or
materially impedes, or would reasonably be expected to prevent or materially
impede, the consummation by the Sellers of the transactions contemplated by this
Agreement.

 

“Material Contracts” is defined in Section 4.16(a).

 

“MFC” means Mrs. Fields’ Companies, Inc.

 

“MFFB Other Franchise Brands” means any of the following brands owned by MFFB or
any of its Affiliates as of the date of this Agreement: “Mrs. Fields Cookies,”
“Yovana” and “TCBY,” or any other brand (other than the Brands) under which MFFB
or any of its Affiliates conducts a franchise business.

 

“Minimum Loss” is defined in Section 11.4(a).

 

“Multiemployer Plan” has the meaning set forth in Section 3(37) of ERISA.

 

“NASAA” means the North American Securities Administrators Association.

 

“New Settlement Agreement” means that certain Settlement and Release Agreement
dated as of January 29, 2008, by and among Parent, GACCF, MFFB, Mrs. Fields’
Original Cookies, Inc. and certain franchisees of GACCI that are signatories
thereto.

 

“Notice of Default” means a formal, written notice of default under a Franchise
Agreement issued with the approval of the senior management of either Seller. A
“Notice of Default” does not include a notice of operating deficiencies issued
by the staff personnel of either Seller contained in a field inspection report
or other similar writing.

 

“Order” means any award, decision, injunction, judgment, order, ruling, subpoena
or verdict entered, issued, made or rendered by any court, administrative agency
or other Government Authority or by any arbitrator.

 

“Organizational Documents” means with respect to any entity, the certificate of
incorporation, bylaws, certificate of formation, operating agreement or other
governing documents of such entity.

 

“Original Settlement Agreement” means collectively those certain Settlement
Agreement and Releases dated June 1998, by and among Mrs. Fields’ Original
Cookies, Inc., Capricorn Investors II, L.P., GACCI, Cookies USA, Inc., The
Jordan Company and certain franchisees of GACCI.

 

“Other Interim Report” is defined in Section 6.3.

 

“Owned Real Property” is defined in Section 4.5(a).

 

“Parent SEC Documents” is defined in Section 5.3.

 

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“Parent Shares” means the shares of common stock, par value $0.01 per share, of
Parent.

 

“Permitted Encumbrances” means (i) any liens for current Taxes, assessments or
governmental charges which are not yet due and payable or (ii) with respect to
each Owned Real Property and Improvements on the Leased Real Property (as the
case may be): (a) real estate taxes, assessments and other governmental levies,
fees or charges imposed with respect to such Real Property which are not due and
payable as of Closing, (b) mechanics liens and similar liens for labor,
materials or supplies provided with respect to such Real Property incurred in
the ordinary course of business for amounts which are not due and payable and
which shall be paid in full and released at Closing, (c) zoning, building codes
and other land use laws regulating the use or occupancy of such Real Property or
the activities conducted thereon which are imposed by any Governmental Authority
having jurisdiction over such Real Property which are not violated by the
current use or occupancy of such Real Property or the operation of the
Businesses thereon, and (d) easements, covenants, conditions, restrictions and
other similar matters of record affecting title to such Real Property which do
not or would not materially impair the use or occupancy of such Real Property in
the operation of the Businesses conducted thereon.

 

“Person” means an individual, partnership, corporation, business trust, limited
liability company, limited liability partnership, joint stock company, trust,
unincorporated association, joint venture or other entity or a Government
Authority.

 

“Personal Property” means the equipment, furniture, machinery, computer
hardware, motor vehicles and other tangible personal property owned by either
Seller and used or intended for use in the Businesses as currently operated.

 

“Prepaid Expenses” as of any date means payments made by either Seller or any of
their Affiliates with respect to the Businesses or the Purchased Assets, which
constitute prepaid expenses in accordance with GAAP.

 

“Proceeding” means any action, charge, complaint, material grievance,
arbitration, audit, hearing, investigation, litigation or suit (whether civil,
criminal, administrative, judicial or investigative, whether formal or informal,
whether public or private) commenced, brought, conducted or heard by or before
(or that could come before), or otherwise involving, any Government Authority or
arbitrator.

 

“Product Formulation Royalties” means in the aggregate, all of the payments to
be paid by the counterparty to any Assumed Contract to either Seller or to MFFB
or one of its Affiliates and allocated to either Seller by MFFB or such
Affiliate pursuant to any Vendor Agreement.

 

“Purchase Price Deficit Amount” is defined in Section 3.2(f).

 

“Purchase Price Deficit Statement” is defined in Section 3.2(f).

 

“Purchased Assets” means all right, title, and interest in and to all of the
assets that are used exclusively or primarily in the Businesses, whether
tangible or intangible, real or personal and wherever located and by whomever
possessed (other than the Excluded Assets),

 

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including, without limitation, (i) Personal Property, (ii) Real Property,
(iii) Assumed Contracts, (iv) the Marketing Fees Balance (if a positive amount),
(v) Government Authorizations, (vi) Intellectual Property Rights,
(vii) Inventory, maintenance and operating supplies, (viii) Prepaid Expenses,
(ix) Books and Records, (x) the assets of any advertising fund, gift card
program, and any brand building fund associated with the Businesses, (xi) all
claims, causes of action, choses in action, rights of recovery and rights of
set-off of any kind against the Franchisees, (xii) all proceeds actually
recovered under insurance policies and, to the extent transferable, all rights
of recovery under such insurance policies, (xiii) the Deferred Revenue Cash,
(xiv) all of the files of Sellers’ counsel (in-house and outside counsel)
relating to the Franchise Agreements, the Seller UFOCs, the registration,
exemption and notice filings made by each Seller and the Intellectual Property
Rights of each Seller, (xv) all other properties, assets and rights owned by
either Seller as of the Closing Date, or in which either Seller has an interest,
and which are not otherwise Excluded Assets, (xvi) an assignment of the license
rights of each Seller with respect to the property owned by third parties and
used by either Seller under license, (xvii) the rights to obtain and have
installed the waste water filter under the Filter Contract, but not the payment
obligations thereunder, and (xviii) the Seller Recipes and Processes.

 

“Qualified Plan” is defined in Section 4.12(b).

 

“Real Estate Impositions” is defined in Section 4.5(k).

 

“Real Property” is defined in Section 4.5(c).

 

“Real Property Laws” is defined in Section 4.5(f).

 

“Real Property Lease” means all leases, subleases, licenses, concessions and
other agreements (written or oral) pursuant to which a Person holds a leasehold
or subleasehold estate in, or is granted the right to use or occupy any land,
buildings, structures, improvements, fixtures or other interest in real
property.

 

“Real Property Permits” is defined in Section 4.5(g).

 

“Registration Laws” is defined in Section 4.23(i).

 

“Registration Rights Agreement” is defined in Section 7.9.

 

“Registration Statement” is defined in Section 7.9.

 

“Release Consideration” has the meaning set forth in the New Settlement
Agreement.

 

“Representative” means, with respect to a particular Person, any director,
officer, manager, employee, agent, consultant, advisor, accountant, financial
advisor, legal counsel or other representative of that Person.

 

“Reviewing Accountant” is defined in Section 3.2(c).

 

“SEC Financial Statements” is defined in Section 7.5.

 

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“Securities” is defined in Section 7.8.

 

“Securities Act” means the Securities Act of 1933, as amended, together with the
rules and regulations promulgated thereunder.

 

“Seller Accounts Receivable” is defined in Section 3.7(c).

 

“Seller Benefit Plan” is defined in Section 4.12(a).

 

“Seller Indemnified Parties” is defined in Section 11.3.

 

“Seller Information” means any data and information relating to the Businesses,
customers, financial statements, conditions or operations of the Businesses, in
each case which is confidential in nature and not generally known to the public.

 

“Seller Recipes and Processes” is defined in Section 4.19(l).

 

“Sellers” is defined in the first paragraph of this Agreement.

 

“Seller UFOC” means the Domestic UFOC(s) and all other forms of disclosure
documents used by GACCF to offer and sell Franchises in the United States and
throughout the world.

 

“Settlement Franchisees” means those persons or entities who are franchisee
parties to the Original Settlement Agreement.

 

“Statement of Objection” is defined in Section 3.2(b).

 

“Straddle Period” is defined in Section 7.2(b).

 

“Subsidiary” means, with respect to any Person, any corporation or other Person
of which securities or other interests having the power to elect a majority of
that corporation’s or other Person’s board of directors or similar governing
body, or otherwise having the power to direct the business and policies of that
corporation or other Person (other than securities or other interests having
such power only upon the happening of a contingency that has not occurred), are
held by such Person or one or more of its Subsidiaries.

 

“Survey” means that certain ALTA/ACSM Land Title Survey for the Owned Real
Property, Job No. 20070272-001, prepared by Abb W. Preston of Preston Land
Surveyors dated as of November 9, 2007.

 

“Survival Date” is defined in Section 11.1.

 

“Tax” means (i) any tax (including, without limitation, any income tax,
franchise tax, margin tax, branch profits tax, capital gains tax, alternative or
add-on minimum tax, estimated tax, value-added tax, sales tax, use tax, property
tax, transfer tax, payroll tax, social security tax or withholding tax, escheat
or abandoned property liability), and any related fine, penalty, interest or
addition to tax with respect thereto, imposed, assessed or collected by or

 

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under the authority of any Government Authority or payable pursuant to any
tax-sharing agreement relating to the sharing or payment of any such tax and
(ii) any transferee, successor or other liability in respect of the taxes of
another Person (whether by contract or otherwise).

 

“Tax Return” means any return (including any information return), report,
statement, schedule, notice, form or other document or information filed with or
submitted to, or required to be filed with or submitted to, any Government
Authority in connection with the determination, assessment, collection or
payment of any Tax.

 

“Termination Date” is defined in Section 10.1(b).

 

“Territorial Rights” means a protected territory, exclusive territory, covenant
not to compete, right of first refusal, option or other similar arrangement
granted by either Seller to any Franchisee.

 

“Third Party” means a Person that is not a party to this Agreement.

 

“Third Party Claim” is defined in Section 11.6(b).

 

“Title Commitment” means that certain ALTA Commitment, File No. 10012007, for
the Owned Real Property issued by the Title Company dated as of October 23, 2007
or such later date as in effect from time to time.

 

“Title Company” means Stewart Title Guaranty Company.

 

“Title Policy” is defined in Section 8.15.

 

“Transfer” is defined in Section 7.8.

 

“Transfer Taxes” is defined in Section 7.2(a).

 

“Transferred Employees” is defined in Section 6.14.

 

“Transition Services Agreement” means the Transition Services Agreement, to be
dated as of the Closing Date and substantially in the form attached hereto as
Exhibit B.

 

“TTM Period” means the period consisting of the trailing twelve (12) months
ended November 24, 2007.

 

“UFOC Guidelines” means the Uniform Franchise Offering Circular Guidelines
published by NASAA as in effect from time to time.

 

“UFOCs” means all of the uniform franchise offering circulars used by GACCF
since March 16, 2004, in its efforts to comply with the laws pertaining to the
offer and sale of the Franchises.

 

“Undertakings” has the meaning set forth in the New Settlement Agreement.

 

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“Vendor Agreements” means those agreements listed on Schedule 1.1D pursuant to
which MFFB or one of its Affiliates (other than Sellers) collects royalties.

 

“Vendor Allocation Schedule” is defined in Section 7.12.

 

“Voting Agreement” is defined in Section 7.10.

 

“WARN Act” means the Worker Adjustment and Retraining Notification Act, and any
similar foreign, state or local law, regulation or ordinance.

 

1.2   USAGE

 

(A)   INTERPRETATION.  IN THIS AGREEMENT, UNLESS A CLEAR CONTRARY INTENTION
APPEARS:  (I) THE SINGULAR NUMBER INCLUDES THE PLURAL NUMBER AND VICE VERSA; 
(II) REFERENCE TO ANY PERSON INCLUDES SUCH PERSON’S SUCCESSORS AND ASSIGNS BUT,
IF APPLICABLE, ONLY IF SUCH SUCCESSORS AND ASSIGNS ARE NOT PROHIBITED BY THIS
AGREEMENT, AND REFERENCE TO A PERSON IN A PARTICULAR CAPACITY EXCLUDES SUCH
PERSON IN ANY OTHER CAPACITY OR INDIVIDUALLY; (III) REFERENCE TO ANY GENDER
INCLUDES EACH OTHER GENDER; (IV) REFERENCE TO ANY AGREEMENT, DOCUMENT OR
INSTRUMENT MEANS SUCH AGREEMENT, DOCUMENT OR INSTRUMENT AS AMENDED OR MODIFIED
AND IN EFFECT FROM TIME TO TIME IN ACCORDANCE WITH THE TERMS THEREOF;
(V) REFERENCE TO ANY LEGAL REQUIREMENT MEANS SUCH LEGAL REQUIREMENT AS AMENDED,
MODIFIED, CODIFIED, REPLACED OR REENACTED, IN WHOLE OR IN PART, AND IN EFFECT
FROM TIME TO TIME, INCLUDING RULES AND REGULATIONS PROMULGATED THEREUNDER, AND
REFERENCE TO ANY SECTION OR OTHER PROVISION OF ANY LEGAL REQUIREMENT MEANS THAT
PROVISION OF SUCH LEGAL REQUIREMENT FROM TIME TO TIME IN EFFECT AND CONSTITUTING
THE SUBSTANTIVE AMENDMENT, MODIFICATION, CODIFICATION, REPLACEMENT OR
REENACTMENT OF SUCH SECTION OR OTHER PROVISION; (VI) “HEREUNDER,” “HEREOF,”
“HERETO,”  AND WORDS OF SIMILAR IMPORT SHALL BE DEEMED REFERENCES TO THIS
AGREEMENT AS A WHOLE AND NOT TO ANY PARTICULAR ARTICLE, SECTION OR OTHER
PROVISION HEREOF; (VII) “INCLUDING” (AND WITH CORRELATIVE MEANING “INCLUDE”)
MEANS INCLUDING WITHOUT LIMITING THE GENERALITY OF ANY DESCRIPTION PRECEDING
SUCH TERM; (VIII) “OR” IS USED IN THE INCLUSIVE SENSE OF “AND/OR”; (IX) WITH
RESPECT TO THE DETERMINATION OF ANY PERIOD OF TIME, “FROM” MEANS “FROM AND
INCLUDING” AND “TO” MEANS “TO BUT EXCLUDING”; AND (X) REFERENCES TO DOCUMENTS,
INSTRUMENTS OR AGREEMENTS SHALL BE DEEMED TO REFER AS WELL TO ALL ADDENDA,
EXHIBITS, SCHEDULES OR AMENDMENTS THERETO.

 

(B)   LEGAL REPRESENTATION OF THE PARTIES.  THIS AGREEMENT WAS NEGOTIATED BY THE
PARTIES WITH THE BENEFIT OF LEGAL REPRESENTATION, AND ANY RULE OF CONSTRUCTION
OR INTERPRETATION OTHERWISE REQUIRING THIS AGREEMENT TO BE CONSTRUED OR
INTERPRETED AGAINST ANY PARTY SHALL NOT APPLY TO ANY CONSTRUCTION OR
INTERPRETATION HEREOF.

 

ARTICLE II
Purchase and Sale of Businesses and Assets

 

2.1   Purchase and Sale of Assets.  Subject to the terms and conditions of this
Agreement, each Seller agrees to sell, assign, convey, transfer and deliver to
Buyer (as directed by Buyer) as of the Closing Date, and Buyer agrees to
purchase and to take (or to cause its designated Affiliate to take) assignment
and delivery from the Sellers as of the Closing Date, all of such Seller’s
right, title and interest in and to the Purchased Assets (other than the
Marketing

 

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Fees Balance, which shall be delivered by the Sellers to the Buyer within five
(5) Business Days after the Closing Date), free and clear of all Encumbrances
other than the Permitted Encumbrances.

 

2.2   EXCLUDED ASSETS.  PURSUANT TO THIS AGREEMENT, BUYER IS NOT ACQUIRING, AND
THE SELLERS SHALL RETAIN, THE FOLLOWING ASSETS, RIGHTS AND PROPERTIES
(COLLECTIVELY, THE “EXCLUDED ASSETS”) AND, AS SUCH, THEY ARE NOT INCLUDED IN THE
PURCHASED ASSETS:

 

(A)   ALL CASH AND CASH EQUIVALENTS OF THE SELLERS ON HAND IN THE SELLERS’
ACCOUNTS IMMEDIATELY PRIOR TO CLOSING, OTHER THAN SECURITY DEPOSITS RELATED TO
THE ASSUMED CONTRACTS, AND DEFERRED REVENUE CASH.

 

(B)   ALL SELLER ACCOUNTS RECEIVABLE.

 

(C)   ALL CONTRACTS THAT HAVE TERMINATED OR EXPIRED PRIOR TO THE CLOSING DATE IN
THE ORDINARY COURSE OF BUSINESS CONSISTENT WITH THE PAST PRACTICES OF THE
SELLERS, EXCEPT ANY FRANCHISE AGREEMENTS FOR ACTIVE FRANCHISED LOCATIONS THAT
ARE OPERATING UNDER FORMAL OR INFORMAL, WRITTEN OR VERBAL, SHORT TERM EXTENSIONS
PENDING COMPLETION OF THE RENEWAL PROCESS AND EXECUTION OF RENEWAL FRANCHISE
AGREEMENTS.

 

(D)   ALL BOOKS AND RECORDS AS PERTAIN TO THE ORGANIZATION, EXISTENCE OR
CAPITALIZATION OF THE SELLERS AND ANY OTHER RECORDS OR MATERIALS RELATING TO THE
SELLERS GENERALLY AND NOT INVOLVING OR RELATING TO THE PURCHASED ASSETS, OTHER
THAN THE BOOKS AND RECORDS.

 

(E)   ALL ASSETS AND RIGHTS ASSOCIATED WITH ANY SELLER BENEFIT PLAN, COLLECTIVE
BARGAINING AGREEMENTS OR ARRANGEMENTS, OR ANY EMPLOYEE BENEFIT PLAN MAINTAINED,
SPONSORED, CONTRIBUTED TO OR REQUIRED TO BE CONTRIBUTED TO BY ANY SELLER OR ANY
ERISA AFFILIATE OF ANY SELLER OR WITH RESPECT TO WHICH ANY SELLER OR ANY ERISA
AFFILIATE OF ANY SELLER HAS ANY ACTUAL OR POTENTIAL LIABILITY.

 

(F)    ALL RIGHTS OF THE SELLERS UNDER THIS AGREEMENT, ANY AGREEMENT,
CERTIFICATE, INSTRUMENT OR OTHER DOCUMENT EXECUTED AND DELIVERED BY EITHER
SELLER OR BUYER IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY, OR ANY
SIDE AGREEMENT BETWEEN EITHER SELLER AND BUYER ENTERED INTO ON OR AFTER THE DATE
OF THIS AGREEMENT.

 

(G)   THOSE CONTRACTS SET FORTH ON SCHEDULE 2.2(G).

 

2.3   Assumed Liabilities.  On the terms and subject to the conditions set forth
in this Agreement, at the Closing, Buyer shall assume and agree to pay,
discharge and perform when due, the Sellers’ liabilities and obligations
(a) arising under the Assumed Contracts, including the Franchise Agreements, to
the extent such liabilities or obligations are incurred after the Closing Date
(but specifically excluding any liability or obligation relating to or arising
out of such Assumed Contract that exists as a result of (i) any breach of such
Assumed Contract occurring on or prior to the Closing Date, (ii) any obligation
of the Sellers or MFFB to pay any Taxes allocated to the Sellers or MFFB
pursuant to Section 7.2(b), (iii) any violation of law, breach of warranty, tort
or infringement occurring on or prior to the Closing Date or (iv) any charge,
complaint, action, suit, proceeding, hearing, investigation, claim or demand
arising on or prior to the Closing Date), (b) arising out of the operation of
the Businesses to the extent that

 

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such liabilities or obligations accrue on or after the Closing Date and are
based on conditions resulting from the operation of the Businesses by Buyer
following the Closing, (c) with respect to any Contingent Initial Franchise Fee
Refunds that become due and payable after the Closing Date, (d) arising from the
Deferred Revenue Liability, and (e) other liabilities of a type and amount
expressly identified on Schedule 2.3 (collectively, the “Assumed Liabilities”).

 

2.4   Excluded Liabilities.  Except as and to the extent expressly provided in
Section 2.3, Buyer is not agreeing to, and shall not, assume any other
liability, obligation, undertaking, expense or agreement of either Seller (or
relating to either Seller, either Business or any of the Purchased Assets) of
any kind, character or description, whether absolute, known, unknown, accrued,
liquidated, unliquidated, contingent, executory or otherwise, and whether
arising prior to or following the Closing, and the execution and performance of
this Agreement shall not render Buyer liable for any such liability, obligation,
undertaking, expense or agreement (all of such liabilities and obligations shall
be referred to herein as the “Excluded Liabilities”).  Without limiting the
generality of the foregoing, the Excluded Liabilities shall include, and Buyer
will not assume or be liable for:

 

(A)   ANY LIABILITY OR OBLIGATION WITH RESPECT TO ANY EXCLUDED ASSET, WHETHER
ARISING PRIOR TO OR AFTER THE CLOSING.

 

(B)   EXCEPT AS EXPRESSLY ASSUMED PURSUANT TO SECTION 2.3(C), ANY LIABILITY,
CLAIM OR OBLIGATION, CONTINGENT OR OTHERWISE, ARISING OUT OF THE OPERATION OF
THE BUSINESSES OR ANY PURCHASED ASSET PRIOR TO THE CLOSING DATE, INCLUDING,
WITHOUT LIMITATION, ANY CONTINGENT INITIAL FRANCHISE FEE REFUNDS THAT BECAME DUE
AND PAYABLE ON OR BEFORE THE CLOSING DATE AND THE MARKETING FEE BALANCE (IF A
NEGATIVE AMOUNT).

 

(C)   ANY LIABILITY OR OBLIGATION ARISING OUT OF OR RELATED TO ANY CONTRACT THAT
IS NOT AN ASSUMED CONTRACT.

 

(D)   EXCEPT AS PROVIDED IN SECTION 7.13, ANY LIABILITY OR OBLIGATION ARISING
OUT OF, OR RELATED TO, ANY LEASE LOCATION, WHETHER ARISING PRIOR TO OR AFTER THE
CLOSING.

 

(E)   ANY LIABILITIES OR OBLIGATIONS OF THE SELLERS FOR EXPENSES OR FEES
INCIDENT TO OR ARISING OUT OF THE NEGOTIATION, PREPARATION, APPROVAL OR
AUTHORIZATION OF THIS AGREEMENT OR THE CONSUMMATION (OR PREPARATION FOR THE
CONSUMMATION) OF THE TRANSACTIONS CONTEMPLATED HEREBY (INCLUDING ALL ATTORNEYS’
AND ACCOUNTANTS’ FEES, AND BROKERAGE FEES).

 

(F)    ANY LIABILITY OR OBLIGATION FOR ANY TAXES OTHER THAN (I) TAXES ON THE
PURCHASED ASSETS PAYABLE WITH RESPECT TO TAXABLE PERIODS BEGINNING ON OR AFTER
THE CLOSING DATE, (II) TRANSFER TAXES FOR WHICH BUYER IS LIABLE PURSUANT TO
SECTION 7.2(A) OF THIS AGREEMENT, AND (III) THE PORTION OF THE TAXES ON THE
PURCHASED ASSETS PAYABLE FOR A STRADDLE PERIOD FOR WHICH BUYER IS LIABLE
PURSUANT TO SECTIONS 7.2(B) AND (C) OF THIS AGREEMENT.

 

(G)   ANY LIABILITY OR OBLIGATION TO ANY CURRENT OR FORMER EMPLOYEE, OFFICER,
DIRECTOR OR CONTRACTOR OF EITHER SELLER, OR ANY AFFILIATE OF ANY SELLER WHO
PROVIDES OR PROVIDED SERVICES TO EITHER SELLER OR ANY AFFILIATE THEREOF (OTHER
THAN ANY LIABILITY OR OBLIGATION ARISING AFTER THE CLOSING TO ANY EMPLOYEE HIRED
BY BUYER AND RELATED SOLELY TO THE BUYER’S EMPLOYMENT OF SUCH EMPLOYEE),
INCLUDING ANY LIABILITY OR OBLIGATION ARISING OUT OF, RELATING TO OR INCURRED IN

 

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CONNECTION WITH THE EMPLOYMENT OR SERVICE BY, OR TERMINATION FROM EMPLOYMENT OR
SERVICE WITH, EITHER SELLER OR ANY AFFILIATE OF ANY SELLER, INCLUDING ANY
LIABILITIES OR OBLIGATIONS PERTAINING TO ANY SALARY OR WAGES, VACATION PAY,
BONUSES OR ANY OTHER TYPE OF COMPENSATION OR BENEFITS.

 

(H)   ANY DUTY, OBLIGATION OR LIABILITY ARISING AT ANY TIME UNDER OR RELATING TO
ANY SELLER BENEFIT PLAN OR ANY OTHER EMPLOYEE BENEFIT PLAN AT ANY TIME
MAINTAINED, SPONSORED OR CONTRIBUTED OR REQUIRED TO BE CONTRIBUTED TO BY EITHER
SELLER OR ANY AFFILIATE OR ERISA AFFILIATE OF EITHER SELLER OR WITH RESPECT TO
WHICH EITHER SELLER OR ANY AFFILIATE OR ERISA AFFILIATE OF EITHER SELLER HAS ANY
CURRENT OR POTENTIAL LIABILITY OR OBLIGATION.

 

(I)    ANY LIABILITY OR OBLIGATION (CONTINGENT OR OTHERWISE) ARISING OUT OF OR
RELATING TO ANY ENVIRONMENTAL AND SAFETY REQUIREMENTS, EXCEPT TO THE EXTENT
BASED ON CONDITIONS RESULTING FROM BUYER’S OPERATION OF THE BUSINESSES FOLLOWING
THE CLOSING.

 

(J)    ANY LIABILITY OR OBLIGATION ARISING OUT OF ANY VIOLATION BY GACCF OF ANY
LEGAL REQUIREMENT APPLICABLE TO THE OFFER AND SALE OF THE FRANCHISES.

 

(K)   ANY LIABILITY OR OBLIGATION ARISING OUT OF ANY VIOLATION BY GACCF OF ANY
LEGAL REQUIREMENT APPLICABLE TO THE RELATIONSHIP BETWEEN GACCF AND THE
FRANCHISEES UNDER THE FRANCHISE AGREEMENTS.

 

(L)    ANY LIABILITY OR OBLIGATION ARISING OUT OF ANY VIOLATION BY EITHER SELLER
OR ITS AFFILIATES OF ANY LEGAL REQUIREMENT APPLICABLE TO THE RELATIONSHIP
BETWEEN SUCH SELLER AND ANY VENDORS WHO PROVIDE GOODS OR SERVICES TO THE
FRANCHISEES.

 

(M)  ANY LIABILITY OR OBLIGATION ARISING OUT OF ANY INFRINGEMENT OR OTHER
UNLAWFUL USE BY EITHER SELLER OR ANY PERSON ACTING UNDER A SELLER’S DIRECTION OR
CONTROL OF ANY INTELLECTUAL PROPERTY RIGHTS OWNED OR HELD BY ANY PERSON.

 

(N)   ANY LIABILITY OR OBLIGATION OF EITHER SELLER ARISING OUT OF ANY
LITIGATION, PROCEEDING, OR CLAIM BY ANY PERSON RELATING TO THE BUSINESSES AS
CONDUCTED PRIOR TO THE CLOSING DATE, WHETHER OR NOT SUCH LITIGATION, PROCEEDING,
OR CLAIM IS PENDING, THREATENED, OR ASSERTED BEFORE, ON, OR AFTER THE CLOSING
DATE OR HAS BEEN DISCLOSED BY EITHER SELLER TO BUYER.

 

(O)   ALL OBLIGATIONS TO MAKE PAYMENTS TO THE VENDOR UNDER THE FILTER CONTRACT.

 

ARTICLE III
PURCHASE PRICE; PAYMENT; ASSUMPTION OF OBLIGATIONS

 

3.1   The Closing.  The closing of the transactions contemplated hereby (the
“Closing”) will take place at a location, date and time mutually agreed upon by
the parties.  The effective time of the Closing shall be deemed to be 12:01AM on
the Closing Date.

 

3.2   PURCHASE PRICE.

 

(A)   SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT, IN RELIANCE ON THE
REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS OF THE SELLERS CONTAINED
HEREIN, AND IN

 

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PAYMENT AND CONSIDERATION FOR THE SALE, CONVEYANCE, ASSIGNMENT, TRANSFER AND
DELIVERY OF THE PURCHASED ASSETS BY THE SELLERS TO BUYER, BUYER OR PARENT SHALL
PAY THE INITIAL PURCHASE PRICE AS HEREINAFTER PROVIDED.  ANNEX A HAS BEEN
PREPARED IN GOOD FAITH BY MFFB MANAGEMENT; PROVIDED, HOWEVER, THAT BUYER’S
BELIEF THAT ANNEX A IS REASONABLE WHEN GIVEN (AND BUYER’S PAYMENT OF THE INITIAL
PURCHASE PRICE) SHALL NOT FORECLOSE, PREVENT, LIMIT OR PRECLUDE ANY RIGHTS OR
REMEDY OF BUYER SET FORTH HEREIN.

 

(B)   ON OR BEFORE SIXTY (60) DAYS FOLLOWING THE CLOSING DATE, THE SELLERS SHALL
PREPARE AND DELIVER TO BUYER A STATEMENT (THE “CLOSING STATEMENT”) SETTING FORTH
THE AUDITED REVENUES AND EXPENSES RELATED TO THE GAC FRANCHISE BUSINESS AND
AUDITED REVENUES AND EXPENSES RELATED TO THE GAC MANUFACTURING BUSINESS FOR THE
TTM PERIOD, IN EACH CASE REFLECTED IN THE SELLERS’ AUDITED FINANCIAL STATEMENTS
(THE “ACTUAL FINANCIALS”), TOGETHER WITH A LETTER FROM THE CHIEF ACCOUNTING
OFFICER OF MFFB CERTIFYING THAT THE AMOUNTS SET FORTH IN THE CLOSING STATEMENT
ARE ACCURATE.  THE ACTUAL FINANCIALS, AS CALCULATED BY THE SELLERS, SHALL BE
FINAL AND BINDING ON THE PARTIES HERETO UNLESS BUYER DELIVERS TO THE SELLERS A
REASONABLY DETAILED STATEMENT DESCRIBING ITS OBJECTIONS TO THE CALCULATION OF
THE ACTUAL FINANCIALS (A “STATEMENT OF OBJECTION”) WITHIN THIRTY (30) DAYS OF
ITS RECEIPT OF THE CLOSING STATEMENT.

 

(C)   IF BUYER DELIVERS TO THE SELLERS A TIMELY STATEMENT OF OBJECTION, BUYER
AND THE SELLERS AND THEIR RESPECTIVE INDEPENDENT ACCOUNTANTS SHALL NEGOTIATE IN
GOOD FAITH AND USE REASONABLE BEST EFFORTS TO RESOLVE ANY DISPUTE.  IF A FINAL
RESOLUTION IS NOT REACHED WITHIN THIRTY (30) DAYS AFTER BUYER HAS SUBMITTED A
TIMELY STATEMENT OF OBJECTION, ANY REMAINING DISPUTES SHALL BE RESOLVED BY AN
INDEPENDENT ACCOUNTING FIRM SELECTED JOINTLY BY THE PARTIES (THE “REVIEWING
ACCOUNTANT”).  THE REVIEWING ACCOUNTANT SHALL BE INSTRUCTED TO LIMIT ITS REVIEW
TO MATTERS SPECIFICALLY SET FORTH IN THE STATEMENT OF OBJECTION AND TO RESOLVE
ANY MATTERS IN DISPUTE AS PROMPTLY AS PRACTICABLE, BUT IN NO EVENT MORE THAN
THIRTY (30) DAYS AFTER SUCH MATTERS HAVE BEEN SUBMITTED TO THEM, AND TO SET
FORTH THEIR RESOLUTION IN A STATEMENT (THE “ACCOUNTANT STATEMENT”) SETTING FORTH
THE ACTUAL FINANCIALS. WITH RESPECT TO ANY DISPUTED MATTER, THE REVIEWING
ACCOUNTANT MAY SELECT BUYER’S FIGURE, THE SELLERS’ FIGURE OR ANY FIGURE BETWEEN
THE TWO.  THE REVIEWING ACCOUNTANT SHALL ACT AS AN ARBITRATOR TO DETERMINE ONLY
THOSE ISSUES IN DISPUTE, BASED SOLELY ON THE TERMS OF THIS AGREEMENT AND THE
PRESENTATIONS BY THE PARTIES AND NOT BY INDEPENDENT REVIEW OF LEGAL, ACCOUNTING
OR FACTUAL MATTERS.  THE REVIEWING ACCOUNTANT SHALL ONLY CONSIDER ISSUES,
AMOUNTS OR MATTERS DISPUTED IN A STATEMENT OF OBJECTION DELIVERED WITHIN THE
APPLICABLE THIRTY (30) DAY PERIOD.  THE DETERMINATION OF THE REVIEWING
ACCOUNTANT SHALL BE FINAL AND BINDING ON THE PARTIES HERETO.

 

(D)   THE FEES AND EXPENSES OF THE REVIEWING ACCOUNTANT SHALL BE BORNE BY BUYER
AND THE SELLERS IN INVERSE PROPORTION AS THEY MAY PREVAIL ON MATTERS RESOLVED BY
THE REVIEWING ACCOUNTANT, AND SUCH PROPORTIONATE ALLOCATION SHALL ALSO BE
DETERMINED BY THE REVIEWING ACCOUNTANT WHEN THEIR DETERMINATION IS RENDERED ON
THE MERITS OF THE MATTER SUBMITTED.  FOR ILLUSTRATION PURPOSES ONLY: (I) IF THE
TOTAL AMOUNT OF DISPUTED ITEMS BY THE SELLERS IS $100,000 AND THE REVIEWING
ACCOUNTANT AWARDS THE SELLERS $50,000, THEN THE SELLERS AND BUYER SHALL BEAR THE
REVIEWING ACCOUNTANT’S FEES AND EXPENSES EQUALLY; OR (II) IF THE TOTAL AMOUNT OF
THE SELLERS’ DISPUTED ITEMS IS $100,000 AND THE REVIEWING ACCOUNTANT AWARDS THE
SELLERS $75,000, THEN THE SELLERS SHALL BEAR 25% AND BUYER SHALL BEAR 75% OF THE
REVIEWING ACCOUNTANT’S FEES AND EXPENSES.

 

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(E)   THE SELLERS AND BUYER SHALL COOPERATE WITH EACH OTHER AND THE REVIEWING
ACCOUNTANT IN CONNECTION WITH THE MATTERS CONTEMPLATED BY THIS SECTION 3.2,
INCLUDING THE SELLERS’ PREPARATION OF AND BUYER’S REVIEW OF THE CLOSING
STATEMENT, IN EACH CASE INCLUDING BY FURNISHING SUCH INFORMATION AND ACCESS TO
BOOKS, RECORDS (INCLUDING ACCOUNTANTS’ WORK PAPERS), PERSONNEL AND PROPERTIES AS
MAY BE REASONABLY REQUESTED.

 

(F)    WITHIN THREE (3) BUSINESS DAYS AFTER THE FINAL DETERMINATION OF THE
ACTUAL FINANCIALS IN ACCORDANCE WITH THIS SECTION 3.2, IF THE ACTUAL FINANCIALS
DIFFER FROM THE FINANCIALS ON ANNEX A, THEN BUYER SHALL CALCULATE (I) THE
FRANCHISE REVENUE DIFFERENCE AND (II) THE MANUFACTURING CONTRIBUTION
DIFFERENCE.  IF THE SUM OF THE FRANCHISE REVENUE DIFFERENCE AND THE
MANUFACTURING CONTRIBUTION DIFFERENCE (THE “CUMULATIVE DIFFERENCE”) IS A
NEGATIVE AMOUNT OF $100,000 OR GREATER, THEN BUYER SHALL DELIVER A STATEMENT TO
THE SELLERS (THE “PURCHASE PRICE DEFICIT STATEMENT”) SETTING FORTH THE
CUMULATIVE DIFFERENCE.  IF THE CUMULATIVE DIFFERENCE IS A NEGATIVE AMOUNT OF
$100,000 OR GREATER, THEN UPON RECEIPT OF THE PURCHASE PRICE DEFICIT STATEMENT,
THE SELLERS SHALL OWE TO BUYER AN AMOUNT EQUAL TO THE CUMULATIVE DIFFERENCE,
MULTIPLIED BY 8.4 (THE “PURCHASE PRICE DEFICIT AMOUNT”).  NOTWITHSTANDING THE
FORGOING, IF THE CUMULATIVE DIFFERENCE IS A POSITIVE AMOUNT (E.G. THE ACTUAL
FINANCIALS ARE CUMULATIVELY GREATER THAN THE FINANCIALS ON ANNEX A), THEN BUYER
SHALL NOT OWE ANY ADDITIONAL AMOUNTS TO THE SELLERS UNDER THIS AGREEMENT.

 

(G)   ANY PURCHASE PRICE DEFICIT AMOUNT OWED BY THE SELLERS TO BUYER, SHALL BE
PAID, WITHIN THREE (3) BUSINESS DAYS AFTER THE SELLERS’ RECEIPT OF THE PURCHASE
PRICE DEFICIT STATEMENT, BY WIRE TRANSFER OF IMMEDIATELY AVAILABLE FUNDS BY THE
SELLERS TO AN ACCOUNT DESIGNATED IN WRITING BY BUYER; PROVIDED, THAT, IF THE
SELLERS DO NOT MAKE SUCH PAYMENT TO BUYER WITHIN THREE (3) BUSINESS DAYS AFTER
THE SELLERS’ RECEIPT OF THE PURCHASE PRICE DEFICIT STATEMENT, BUYER MAY DRAW
FROM THE INDEMNITY ESCROW AMOUNT THE NUMBER OF PARENT SHARES EQUAL TO (X) THE
PURCHASE PRICE DEFICIT AMOUNT DIVIDED BY (Y) THE CLOSING DATE REFERENCE PRICE TO
SATISFY THE SELLERS’ PAYMENT OBLIGATIONS UNDER THIS SECTION 3.2(G).

 

3.3   Payment.  At Closing:

 

(A)   BUYER SHALL (I) PAY TO EACH SELLER THE AMOUNT IN CASH SET FORTH OPPOSITE
SUCH SELLER’S NAME IN COLUMN I ON ANNEX B, BY WIRE TRANSFER OF IMMEDIATELY
AVAILABLE FUNDS AND (II) CAUSE TO BE DELIVERED TO THE ESCROW AGENT THE NUMBER OF
PARENT SHARES EQUAL TO THE INDEMNITY ESCROW AMOUNT, PURSUANT TO THE ESCROW
AGREEMENT.

 

(B)   GACCF SHALL DELIVER TO BUYER A MARKETING FEES RECONCILIATION CALCULATED AS
OF THE CLOSING DATE AND GACCF SHALL PAY TO BUYER THE AMOUNT OF THE MARKETING
FEES CASH (IF A POSITIVE AMOUNT) SHOWN IN SUCH MARKETING FEES RECONCILIATION.

 

3.4   Allocation.  The Sellers and Buyer agree to allocate the Final Purchase
Price among the Purchased Assets in accordance with the pro forma allocation
schedule attached hereto as Schedule 3.4 and the principles of Code Section 1060
and the regulations thereunder which final allocation schedule will be
determined after the date hereof, but by a date no later than ninety (90) days
after the Closing Date (the “Allocation Schedule”).  The Sellers and Buyer agree
that the Sellers’ amount realized for income tax purposes shall not include any
Royalty Advances as defined in and paid under the New Settlement Agreement.  If
the parties are unable

 

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to agree on the final Allocation Schedule within ninety (90) days after the
Closing Date, a third-party appraiser selected by Buyer, and reasonably
acceptable to the Sellers, the fees of which shall be borne equally by Buyer and
the Sellers, shall resolve the allocation of the consideration to any items with
respect to which there is a dispute between the parties.  In the absence of
manifest error, the determination of the Allocation Schedule by the third-party
appraiser shall be final and binding on all parties and shall not be subject to
contest.  Each of the parties hereto agree that: (i) none of the parties shall
take a position on any Tax Return (including IRS Form 8594) that is in any way
inconsistent with the Allocation Schedule without the written consent of the
other parties or unless specifically required by an applicable Government
Authority; and (ii) they shall promptly advise each other regarding the
existence of any Tax audit, controversy or litigation related to the Allocation
Schedule.  Notwithstanding the foregoing, nothing contained herein shall prevent
Buyer or the Sellers from settling any proposed deficiency or adjustment
assessed against it by any Government Authority based upon or arising out of the
Allocation Schedule, and neither Buyer nor the Sellers shall be required to
litigate before any court any such proposed deficiency or adjustment by any
Government Authority challenging the Allocation Schedule.

 

3.5   Nonassignable Contracts.  Notwithstanding anything to the contrary herein,
to the extent that the assignment hereunder by either Seller to Buyer of any
Assumed Contract is not permitted or is not permitted without the consent of any
other party to such Assumed Contract, this Agreement shall not be deemed to
constitute an assignment of any such Assumed Contract if such consent is not
given or if such assignment otherwise would constitute a breach of, or cause a
loss of contractual benefits under, any such Assumed Contract, and Buyer shall
assume no obligations or liabilities under any such Assumed Contract.  The
Sellers shall advise Buyer in writing on the date hereof with respect to any
Assumed Contract which either Seller knows or has substantial reason to believe
will or may not be subject to assignment to Buyer hereunder at the Closing.
Without in any way limiting the Sellers’ obligation to obtain all consents and
waivers necessary for the sale, transfer, assignment and delivery of the Assumed
Contracts and the Purchased Assets to Buyer hereunder, if any such consent is
not obtained or if such assignment is not permitted irrespective of consent and
if the Closing shall occur, the Sellers shall cooperate with Buyer following the
Closing Date in any reasonable arrangement designed to provide Buyer with the
rights and benefits (subject to the obligations) under any such Assumed
Contract, including enforcement for the benefit of Buyer (at the Buyer’s cost)
of any and all rights of the Sellers against any other party arising out of any
breach or cancellation of any such Assumed Contract by such other party and, if
requested by Buyer, acting as an agent on behalf of Buyer or as Buyer shall
otherwise reasonably require.

 

3.6   Escrow.

 

(A)   INDEMNITY ESCROW AMOUNT.  THE INDEMNITY ESCROW AMOUNT SHALL BE USED TO
SATISFY DAMAGES, IF ANY, FOR WHICH BUYER INDEMNIFIED PARTIES ARE ENTITLED TO
INDEMNIFICATION OR REIMBURSEMENT IN ACCORDANCE WITH ARTICLE XI HEREOF.  FOR
PURPOSES OF SATISFYING ANY CLAIM UNDER THIS AGREEMENT, THE VALUE OF EACH PARENT
SHARE INCLUDED IN THE INDEMNITY ESCROW AMOUNT SHALL BE EQUAL TO THE CLOSING DATE
REFERENCE PRICE.  THE ESCROW AGENT SHALL RELEASE THE BALANCE OF THE INDEMNITY
ESCROW AMOUNT TO THE SELLERS, AS APPLICABLE, ON THE FIRST BUSINESS DAY WHICH IS
NINE (9) MONTHS AFTER THE CLOSING DATE (THE “INDEMNITY ESCROW RELEASE DATE”),
PROVIDED THAT IF ON THE INDEMNITY ESCROW RELEASE DATE ANY CLAIM BY A BUYER
INDEMNIFIED PARTY HAS BEEN MADE THAT

 

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COULD RESULT IN DAMAGES AND BUYER HAS NOTIFIED THE ESCROW AGENT AND THE SELLERS
OF SUCH IN WRITING, THEN EITHER (I) THERE SHALL BE WITHHELD FROM THE
DISTRIBUTION TO THE SELLERS SUCH PORTION OF THE INDEMNITY ESCROW AMOUNT AS IS
NECESSARY TO COVER ALL DAMAGES POTENTIALLY RESULTING FROM ALL SUCH PENDING
CLAIMS IN ACCORDANCE WITH THE TERMS OF THE ESCROW AGREEMENT (AND THE ESCROW
ACCOUNT SHALL CONTINUE WITH RESPECT TO SUCH WITHHELD AMOUNT) AND SUCH WITHHELD
AMOUNT (OR THE APPLICABLE PORTION THEREOF) SHALL EITHER BE (A) PAID TO BUYER OR
(B) PAID TO THE SELLERS, AS DETERMINED UPON FINAL RESOLUTION OF EACH SUCH CLAIM
IN ACCORDANCE WITH THE TERMS OF THE ESCROW AGREEMENT AND ARTICLE XI HEREOF OR
(II) THE SELLERS SHALL POST A BOND IN AN AMOUNT REASONABLY ACCEPTABLE TO BUYER
FOR SUCH AMOUNT NECESSARY TO COVER ALL DAMAGES POTENTIALLY RESULTING FROM ALL
SUCH PENDING CLAIMS IN ACCORDANCE WITH THE TERMS OF THE ESCROW AGREEMENT, AND
UPON POSTING OF SUCH BOND ALL OF THE REMAINING BALANCE OF THE INDEMNITY ESCROW
AMOUNT SHALL BE RELEASED TO THE SELLERS IN ACCORDANCE WITH THE TERMS OF THE
ESCROW AGREEMENT AND ARTICLE XI HEREOF.  NOTWITHSTANDING THE FORGOING, THE
INDEMNITY ESCROW AMOUNT SHALL BE AVAILABLE TO SATISFY ANY CLAIMS MADE BY BUYER
PURSUANT TO SECTION 3.2(G).

 

(B)   CONVERSION OF PARENT SHARES HELD IN ESCROW.  IF THE PARENT SHARES HELD AS
ANY PART OF THE INDEMNITY ESCROW AMOUNT ARE CONVERTED BY THE PARENT THROUGH A
STOCK SPLIT OR A REVERSE STOCK SPLIT, THEN THE CLOSING DATE REFERENCE PRICE
SHALL BE ADJUSTED IN DIRECT BUT INVERSE RELATION TO THE STOCK SPLIT (THE
“ADJUSTED CLOSING DATE REFERENCE PRICE”).  FOR EXAMPLE, FOR ILLUSTRATION
PURPOSES ONLY: (A)  IF THE PARENT SHARES ARE SPLIT 2 TO 1, THEN THE ADJUSTED
CLOSING DATE REFERENCE PRICE SHALL BE THE CLOSING DATE REFERENCE PRICE DIVIDED
BY 2; OR (B) IF THE PARENT SHARES UNDERGO A REVERSE SPLIT OF 1 TO 2, THEN THE
ADJUSTED CLOSING DATE REFERENCE PRICE SHALL BE THE CLOSING DATE REFERENCE PRICE
MULTIPLIED BY 2.

 

3.7   Accounts Receivable.

 

(A)   EACH SELLER SHALL HOLD IN TRUST FOR, AND, WITHIN FIVE (5) BUSINESS DAYS OF
SUCH SELLER’S RECEIPT, PAY TO, BUYER ANY AND ALL PROCEEDS FROM:

 

(I)            GACCF ACCOUNTS RECEIVABLE RELATING TO THE GAC FRANCHISE BUSINESS
THAT ARE RECEIVED BY GACCF FOLLOWING THE CLOSING DATE TO THE EXTENT SUCH
PROCEEDS RELATE TO A PERIOD ENDING ON OR AFTER THE CLOSING DATE;

 

(II)           GAM ACCOUNTS RECEIVABLE RELATING TO THE GAC MANUFACTURING
BUSINESS THAT ARE RECEIVED BY GAM FOLLOWING THE CLOSING DATE TO THE EXTENT SUCH
PROCEEDS RELATE TO A PERIOD ENDING ON OR AFTER THE CLOSING DATE (SECTIONS
3.7(A)(I) AND (II) COLLECTIVELY, THE “BUYER ACCOUNTS RECEIVABLE”);

 

(B)   THE PARTIES AGREE THAT EACH SELLER, AS APPLICABLE, WILL CONTINUE TO
COLLECT THE BUYER ACCOUNTS RECEIVABLE THROUGH THE APPLICABLE SELLER’S CURRENT
EFT SYSTEM PURSUANT TO AND UNTIL SUCH TIME AS STIPULATED IN THE TRANSITION
SERVICES AGREEMENT AND FORWARD SUCH AMOUNTS TO BUYER.

 

(C)   BUYER ACKNOWLEDGES THAT ALL GACCF ACCOUNTS RECEIVABLE AND GAM ACCOUNTS
RECEIVABLE IN RESPECT OF AMOUNTS DUE FROM FRANCHISEES OR ANY PERSONS PRIOR TO
THE CLOSING DATE SHALL REMAIN THE PROPERTY OF EACH SELLER, AS APPLICABLE, (THE
“SELLER ACCOUNTS RECEIVABLE”) AND THAT BUYER SHALL NOT ACQUIRE ANY BENEFICIAL
RIGHT OR INTEREST THEREIN.  AN

 

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ESTIMATE OF THE SELLER ACCOUNTS RECEIVABLE CALCULATED AS OF SEPTEMBER 29, 2007
IS SET FORTH ON SCHEDULE 3.7.  A REVISED ESTIMATE OF THE SELLER ACCOUNTS
RECEIVABLE AS OF THE CLOSING DATE SHALL BE CALCULATED WITHIN TEN (10) DAYS OF
THE CLOSING DATE, WITH THE SELLER ACCOUNTS RECEIVABLE TO BE FINALIZED AND
UPDATED IN CONNECTION WITH THE PREPARATION OF THE CLOSING STATEMENT.

 

(D)   NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN SECTION  3.7(B), THE
SELLERS SHALL BE ENTITLED TO RETAIN FROM THE AMOUNTS COLLECTED PURSUANT TO
SECTION 3.7(B) ANY SELLER ACCOUNTS RECEIVABLE ACTUALLY RECEIVED BY THE SELLERS
FROM A FRANCHISEE.

 

(E)   WITHIN 10 DAYS FOLLOWING THE END OF EACH CALENDAR MONTH FOLLOWING THE
CLOSING DATE, BUYER SHALL FORWARD TO THE SELLERS ANY AMOUNTS ACTUALLY RECEIVED
BY BUYER FOLLOWING THE CLOSING DATE THAT ARE DESIGNATED BY A FRANCHISEE AS
SELLER ACCOUNTS RECEIVABLE.  FOR PURPOSES OF DETERMINING THE AMOUNT OF SELLER
ACCOUNTS RECEIVABLE PAYABLE TO THE SELLERS FOR PURPOSES OF THIS SECTION 3.7,
(X) IN THE CASE OF SELLER ACCOUNTS RECEIVABLE RECEIVED IN RESPECT OF A PERIOD
(SUCH AS A FISCAL QUARTER OR OTHER SIMILAR PERIOD FOR WHICH SUCH AMOUNTS ARE
PAID) THAT WAS COMPLETED PRIOR TO THE CLOSING DATE, THE ENTIRE AMOUNT OF SUCH
SELLER ACCOUNTS RECEIVABLE SHALL BE PAID TO THE SELLERS AND (Y) IN THE CASE OF
ANY SELLER ACCOUNTS RECEIVABLE THAT ARE PAID ON A PERIODIC BASIS AND ARE PAYABLE
FOR A PERIOD (SUCH AS A FISCAL QUARTER) THAT INCLUDES, BUT DOES NOT END PRIOR
TO, THE CLOSING DATE, THE SELLERS SHALL BE PAID A PORTION OF SUCH SELLER
ACCOUNTS RECEIVABLE EQUAL TO THE SELLER ACCOUNTS RECEIVABLE FOR THE ENTIRE
APPLICABLE PERIOD MULTIPLIED BY A FRACTION THE NUMERATOR OF WHICH IS THE NUMBER
OF DAYS IN SUCH PERIOD ENDING ON THE CLOSING DATE AND THE DENOMINATOR OF WHICH
IS THE NUMBER OF DAYS IN THE ENTIRE PERIOD FOR WHICH SUCH SELLER ACCOUNTS
RECEIVABLE ARE PAID.

 

(F)    NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS SECTION 3.7, NEITHER
SELLER, MFFB NOR ANY OF THEIR AFFILIATES SHALL BE ENTITLED TO CONTACT ANY
FRANCHISEE REGARDING ANY PAST DUE SELLER ACCOUNTS RECEIVABLE WITHOUT BUYER’S
PRIOR APPROVAL, WHICH APPROVAL SHALL NOT BE UNREASONABLY WITHHELD.

 

(G)   BUYER AND THE SELLERS SHALL PROVIDE TO EACH OTHER REASONABLE ACCESS TO
FILES, RECORDS AND BOOKS OF ACCOUNT FOR THE PURPOSE OF VERIFYING ANY FUNDS THAT
HAVE BEEN REMITTED TO EACH TO VERIFY COLLECTION OF THE ACCOUNTS RECEIVABLE.

 

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLERS AND MFFB

 

Each Seller, and MFFB, as applicable, hereby represents and warrants to Buyer
with respect to itself that the statements contained in this Article IV are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this Article IV
except to the extent any representation or warranty expressly speaks only as of
a different date), except as set forth in the disclosure schedules attached
hereto (the “Disclosure Schedules”), which Disclosure Schedules set forth
individually each Seller’s, or MFFB’s if applicable, disclosures identified by
each Seller or MFFB, as applicable.

 

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4.1   Organization and Good Standing.

 

(A)   MFFB IS A SINGLE MEMBER LIMITED LIABILITY COMPANY AND IS DULY FORMED,
VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS OF THE STATE OF DELAWARE.

 

(B)   EACH SELLER IS A SINGLE MEMBER LIMITED LIABILITY COMPANY AND IS DULY
FORMED, VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS OF THE STATE OF
DELAWARE.  EACH SELLER HAS ALL REQUISITE POWER AND AUTHORITY TO OWN, LEASE AND
OPERATE ITS ASSETS AND PROPERTIES AND TO CARRY ON THE BUSINESSES AS CURRENTLY
CONDUCTED.  EACH SELLER IS DULY QUALIFIED OR LICENSED TO CONDUCT ITS PORTION OF
THE BUSINESSES AS CURRENTLY CONDUCTED AND, TO THE EXTENT APPLICABLE, IS IN GOOD
STANDING, IN EACH JURISDICTION IN WHICH THE CHARACTER OR LOCATION OF THE
PROPERTY OWNED, LEASED OR OPERATED BY SUCH SELLER OR THE NATURE OF ITS PORTION
OF THE BUSINESSES CONDUCTED BY SUCH SELLER MAKES SUCH QUALIFICATION NECESSARY
AND HAS OBTAINED ALL GOVERNMENT AUTHORIZATIONS NECESSARY TO THE OWNERSHIP OR
OPERATION OF ITS PROPERTIES OR THE CONDUCT OF ITS PORTION OF THE BUSINESSES,
EXCEPT WHERE THE FAILURE TO BE SO QUALIFIED OR LICENSED WOULD NOT, INDIVIDUALLY
OR IN THE AGGREGATE, REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT. 
THE SELLERS DO NOT HAVE ANY SUBSIDIARIES.  NEITHER SELLER OWNS OR HOLDS THE
RIGHT TO ACQUIRE ANY SHARES OF STOCK OR ANY OTHER SECURITY OR INTEREST IN ANY
OTHER PERSON OR HAS ANY OBLIGATION TO MAKE ANY INVESTMENT IN ANY PERSON.

 

4.2   Enforceability; Authority.

 

(A)   MFFB HAS ALL REQUISITE LIMITED LIABILITY COMPANY POWER AND AUTHORITY TO
EXECUTE AND DELIVER THIS AGREEMENT, TO PERFORM ITS OBLIGATIONS HEREUNDER AND TO
CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY.  THE EXECUTION, DELIVERY AND
PERFORMANCE OF THIS AGREEMENT, AND THE CONSUMMATION BY IT OF THE TRANSACTIONS
CONTEMPLATED HEREBY, HAVE BEEN DULY AUTHORIZED AND APPROVED BY ITS SOLE MEMBER,
AND NO OTHER ACTION ON THE PART OF MFFB IS NECESSARY TO AUTHORIZE THE EXECUTION,
DELIVERY AND PERFORMANCE OF THIS AGREEMENT OR THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.  THIS AGREEMENT HAS BEEN DULY
EXECUTED AND DELIVERED BY MFFB AND, ASSUMING THE DUE EXECUTION OF THIS AGREEMENT
BY THE SELLERS, BUYER AND PARENT, CONSTITUTES A VALID AND BINDING OBLIGATION OF
MFFB ENFORCEABLE AGAINST IT IN ACCORDANCE WITH ITS TERMS, SUBJECT TO APPLICABLE
BANKRUPTCY, INSOLVENCY, REORGANIZATION, MORATORIUM, RECEIVERSHIP AND SIMILAR
LAWS AFFECTING THE ENFORCEMENT OF CREDITORS’ RIGHTS GENERALLY, AND GENERAL
EQUITABLE PRINCIPLES.

 

(B)   EACH SELLER HAS ALL REQUISITE LIMITED LIABILITY COMPANY POWER AND
AUTHORITY TO EXECUTE AND DELIVER THIS AGREEMENT, TO PERFORM ITS OBLIGATIONS
HEREUNDER AND TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY.  THE
EXECUTION, DELIVERY AND PERFORMANCE OF THIS AGREEMENT, AND THE CONSUMMATION BY
IT OF THE TRANSACTIONS CONTEMPLATED HEREBY, HAVE BEEN DULY AUTHORIZED AND
APPROVED BY EACH SELLER’S SOLE MEMBER, AND NO OTHER ACTION ON BEHALF OF SUCH
SELLER IS NECESSARY TO AUTHORIZE THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS
AGREEMENT OR THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT.  THIS AGREEMENT HAS BEEN DULY EXECUTED AND DELIVERED BY EACH SELLER
AND, ASSUMING THE DUE EXECUTION OF THIS AGREEMENT BY MFFB, BUYER AND PARENT,
CONSTITUTES A VALID AND BINDING OBLIGATION OF EACH SELLER ENFORCEABLE AGAINST IT
IN ACCORDANCE WITH ITS TERMS, SUBJECT TO APPLICABLE BANKRUPTCY, INSOLVENCY,
REORGANIZATION, MORATORIUM, RECEIVERSHIP AND SIMILAR LAWS AFFECTING THE
ENFORCEMENT OF CREDITORS’ RIGHTS GENERALLY, AND GENERAL EQUITABLE PRINCIPLES.

 

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4.3   Consents; Approvals.  Except as set forth in Schedule 4.3 and except for
the applicable requirements of the HSR Act, the execution and delivery of this
Agreement by each Seller and MFFB and the consummation of the transactions
contemplated hereby do not and will not:

 

(A)   VIOLATE OR CONFLICT WITH THE PROVISIONS OF THE ORGANIZATIONAL DOCUMENTS OF
EITHER SELLER OR MFFB;

 

(B)   VIOLATE ANY LEGAL REQUIREMENT OR ORDER TO WHICH EITHER SELLER OR MFFB IS
SUBJECT OR BY WHICH ANY OF ITS MATERIAL PROPERTIES OR ASSETS ARE BOUND;

 

(C)   REQUIRE ANY PERMIT, CONSENT OR APPROVAL OF, OR THE GIVING OF ANY NOTICE
TO, OR FILING WITH ANY GOVERNMENT AUTHORITY; OR

 

(D)   RESULT IN A VIOLATION OR BREACH OF, CONFLICT WITH, CONSTITUTE (WITH OR
WITHOUT DUE NOTICE OR LAPSE OF TIME OR BOTH) A DEFAULT (OR GIVE RISE TO ANY
RIGHT OF TERMINATION, CANCELLATION, PAYMENT OR ACCELERATION) UNDER, OR RESULT IN
THE CREATION OF ANY ENCUMBRANCE (OTHER THAN A PERMITTED ENCUMBRANCE) UPON ANY OF
THE PROPERTIES OR ASSETS OF EITHER SELLER OR MFFB UNDER ANY OF THE TERMS,
CONDITIONS OR PROVISIONS OF ANY CONTRACT OR ANY OTHER INSTRUMENT OR OBLIGATION
TO WHICH EITHER SELLER OR MFFB IS A PARTY, OR BY WHICH IT OR ANY OF THEIR
RESPECTIVE PROPERTIES OR ASSETS MAY BE BOUND; EXCLUDING FROM THE FOREGOING
CLAUSES (B), (C) AND (D) PERMITS, CONSENTS, APPROVALS, NOTICES AND FILINGS THE
ABSENCE OF WHICH, AND VIOLATIONS, BREACHES, DEFAULTS AND ENCUMBRANCES THE
EXISTENCE OF WHICH, HAVE NOT HAD, AND WOULD NOT REASONABLY BE EXPECTED,
INDIVIDUALLY OR IN THE AGGREGATE, TO HAVE A MATERIAL ADVERSE EFFECT.

 

4.4   Financial Statements.

 

(A)   MFFB HAS DELIVERED TO BUYER (I) AN AUDITED CONSOLIDATED BALANCE SHEET OF
MFFB AS OF DECEMBER 31, 2005 AND 2006, AND THE RELATED CONSOLIDATED STATEMENTS
OF OPERATIONS, MEMBERS’ EQUITY AND CASH FLOWS FOR THE FISCAL YEARS THEN ENDED,
TOGETHER WITH THE REPORT THEREON OF KPMG LLP, ITS INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS (INCLUDING THE NOTES THERETO, “FINANCIAL STATEMENTS”), AND (II) AN
UNAUDITED CONSOLIDATED BALANCE SHEET OF MFFB AS OF SEPTEMBER 29, 2007 (THE
“BALANCE SHEET”) AND THE RELATED UNAUDITED CONSOLIDATED STATEMENTS OF
OPERATIONS, MEMBERS’ EQUITY AND CASH FLOWS (TOGETHER WITH THE BALANCE SHEET, THE
“INTERIM REPORTS”) AS AT AND FOR THE TRAILING THIRTY-NINE (39) WEEK PERIOD ENDED
SEPTEMBER 29, 2007.

 

(B)   EXCEPT AS DISCLOSED ON SCHEDULE 4.4(B), THERE ARE NO MATERIAL LIABILITIES
OR OBLIGATIONS OF EITHER SELLER (WHETHER ABSOLUTE, ACCRUED, CONTINGENT OR
OTHERWISE AND WHETHER DUE OR TO BECOME DUE), EXCEPT FOR (I) THOSE LIABILITIES
AND OBLIGATIONS ACCRUED OR DISCLOSED ON THE BALANCE SHEET AND (II) LIABILITIES
AND OBLIGATIONS INCURRED SINCE THE DATE OF THE BALANCE SHEET IN THE ORDINARY
COURSE OF BUSINESS CONSISTENT WITH PAST PRACTICE (NONE OF WHICH ARISE OUT OF A
BREACH OF ANY CONTRACT, TORT, INFRINGEMENT, CLAIM, LAWSUIT OR BREACH OF
WARRANTY).

 

4.5   Real Property.

 

(A)   OWNED REAL PROPERTY.  SCHEDULE 4.5(A) SETS FORTH A TRUE AND CORRECT LIST
OF EACH PARCEL OF REAL PROPERTY OWNED BY EITHER SELLER AND IDENTIFIED BY OWNER
(THE “OWNED REAL PROPERTY”), INCLUDING THE ADDRESS AND A DESCRIPTION OF EACH
SUCH PARCEL.  EXCEPT AS SET FORTH ON

 

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SCHEDULE 4.5(A): (I) THE APPLICABLE SELLER HAS GOOD, VALID AND MARKETABLE FEE
SIMPLE TITLE TO SUCH OWNED REAL PROPERTY, FREE AND CLEAR OF ALL LIENS AND
ENCUMBRANCES AS OF THE DATE HEREOF AND AS OF THE CLOSING DATE, EXCEPT FOR
PERMITTED ENCUMBRANCES; (II) SUCH SELLER IS IN ACTUAL POSSESSION OF EACH SUCH
PARCEL; (III) NEITHER SELLERS NOR MFFB HAVE LEASED OR OTHERWISE GRANTED TO ANY
PERSON THE RIGHT TO USE OR OCCUPY SUCH OWNED REAL PROPERTY OR ANY PORTION
THEREOF; AND (IV) THERE ARE NO OUTSTANDING OPTIONS, RIGHTS OF FIRST OFFER OR
RIGHTS OF FIRST REFUSAL GRANTED BY THE SELLERS, OR, TO THE SELLERS’ KNOWLEDGE,
BY ANY OTHER PARTY, TO PURCHASE SUCH OWNED REAL PROPERTY OR ANY PORTION THEREOF
OR INTEREST THEREIN.  NEITHER SELLER IS A PARTY TO ANY AGREEMENT OR OPTION TO
PURCHASE ANY REAL PROPERTY OR INTEREST THEREIN RELATING TO, OR INTENDED TO BE
USED IN THE OPERATION OF THE BUSINESSES.

 

(B)   LEASED REAL PROPERTY.  SCHEDULE 4.5(B) SETS FORTH A TRUE AND CORRECT LIST
OF EACH PARCEL OF REAL PROPERTY IN WHICH EACH SELLER HOLDS A LEASEHOLD ESTATE
AND IDENTIFIED BY SUCH SELLER (THE “LEASED REAL PROPERTY”), INCLUDING THE
ADDRESS OF EACH SUCH LEASED PROPERTY.  ACCURATE AND CURRENT COPIES OF ALL REAL
PROPERTY LEASES, SUBLEASES, LICENSES OR OTHER OCCUPANCY AGREEMENTS (AND ALL
AMENDMENTS THERETO) SET FORTH ON SCHEDULE 4.5(B) (THE “LEASES”) HAVE BEEN
DELIVERED TO PARENT AND BUYER.  EXCEPT AS SET FORTH ON SCHEDULE 4.5(B), WITH
RESPECT TO EACH OF THE LEASES: (I) SUCH LEASE IS VALID, BINDING, ENFORCEABLE AND
IN FULL FORCE AND EFFECT AGAINST SELLER; (II) THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT DO NOT REQUIRE THE CONSENT OF ANY OTHER PARTY TO SUCH LEASE
(EXCEPT FOR THOSE LEASES FOR WHICH LEASE CONSENTS ARE OBTAINED), WILL NOT RESULT
IN A BREACH OF OR DEFAULT UNDER SUCH LEASE, AND WILL NOT OTHERWISE CAUSE SUCH
LEASE TO CEASE TO BE VALID, BINDING, ENFORCEABLE AND IN FULL FORCE AND EFFECT ON
MATERIALLY IDENTICAL TERMS FOLLOWING THE CLOSING; (III) NEITHER SELLERS’
POSSESSION OR QUIET ENJOYMENT OF THE LEASED REAL PROPERTY UNDER SUCH LEASE HAS
BEEN DISTURBED AND THERE ARE NO DISPUTES WITH RESPECT TO SUCH LEASE;
(IV) NEITHER SELLER NOR, TO THE SELLERS’ KNOWLEDGE, ANY OTHER PARTY TO THE LEASE
IS IN BREACH OF OR DEFAULT UNDER SUCH LEASE, AND NO EVENT HAS OCCURRED OR
CIRCUMSTANCE EXISTS THAT, WITH THE DELIVERY OF NOTICE, THE PASSAGE OF TIME OR
BOTH, WOULD CONSTITUTE SUCH A BREACH OR DEFAULT, OR PERMIT THE TERMINATION,
MODIFICATION OR ACCELERATION OF RENT UNDER SUCH LEASE; (V) TO THE SELLERS’
KNOWLEDGE, NO SECURITY DEPOSIT OR PORTION THEREOF DEPOSITED WITH RESPECT TO SUCH
LEASE HAS BEEN APPLIED IN RESPECT OF A BREACH OF OR DEFAULT UNDER SUCH LEASE
THAT HAS NOT BEEN REDEPOSITED IN FULL; (VI) NEITHER SELLER NOR MFFB OWES, OR
WILL OWE IN THE FUTURE, ANY BROKERAGE COMMISSIONS OR FINDER’S FEES WITH RESPECT
TO SUCH LEASE; (VII) THE OTHER PARTY TO SUCH LEASE IS NOT AN AFFILIATE OF, AND
OTHERWISE DOES NOT HAVE ANY ECONOMIC INTEREST IN THE SELLERS OR MFFB;
(VIII) NEITHER SELLER HAS SUBLEASED, LICENSED OR OTHERWISE GRANTED ANY PERSON
THE RIGHT TO USE OR OCCUPY THE LEASED REAL PROPERTY OR ANY PORTION THEREOF;
(IX) NEITHER SELLER HAS COLLATERALLY ASSIGNED OR GRANTED ANY OTHER LIEN OR
ENCUMBRANCE WITH REGARD TO SUCH LEASE OR ANY INTEREST THEREIN THAT WOULD HAVE A
MATERIAL ADVERSE EFFECT ON THE USE OF THE LEASED REAL PROPERTY; AND (X) THERE
ARE NO LIENS OR ENCUMBRANCES ON THE ESTATE OR INTEREST CREATED BY SUCH LEASE
EXCEPT AS WOULD BE DISCLOSED ON A TITLE REPORT OR COMMITMENT.

 

(C)   THE OWNED REAL PROPERTY IDENTIFIED IN SCHEDULE 4.5(A) AND THE LEASED REAL
PROPERTY IDENTIFIED ON SCHEDULE 4.5(B) (COLLECTIVELY, THE “REAL PROPERTY”)
COMPRISES ALL OF THE REAL PROPERTY USED EXCLUSIVELY OR PRIMARILY IN THE SELLERS’
BUSINESSES; AND NEITHER SELLER IS A PARTY TO ANY AGREEMENT OR OPTION TO PURCHASE
ANY REAL PROPERTY OR INTEREST THEREIN.

 

(D)   TO THE SELLERS’ KNOWLEDGE, ALL BUILDINGS, STRUCTURES, FIXTURES, BUILDING
SYSTEMS AND EQUIPMENT, AND ALL COMPONENTS THEREOF, INCLUDING THE ROOF,
FOUNDATION, LOAD-BEARING WALLS,

 

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AND OTHER STRUCTURAL ELEMENTS THEREOF, HEATING, VENTILATION, AIR CONDITIONING,
MECHANICAL, ELECTRICAL, PLUMBING AND OTHER BUILDING SYSTEMS, ENVIRONMENTAL
CONTROL, REMEDIATION AND ABATEMENT SYSTEMS, SEWER, STORM, AND WASTE WATER
SYSTEMS, IRRIGATION AND OTHER WATER DISTRIBUTION SYSTEMS, PARKING FACILITIES,
FIRE PROTECTION, SECURITY AND SURVEILLANCE SYSTEMS, AND TELECOMMUNICATIONS,
COMPUTER, WIRING, AND CABLE INSTALLATIONS, INCLUDED IN THE REAL PROPERTY (THE
“IMPROVEMENTS”) ARE IN GOOD CONDITION AND REPAIR AND SUFFICIENT FOR THE
OPERATION OF THE SELLERS’ BUSINESSES.  TO THE SELLERS’ KNOWLEDGE, THERE ARE NO
STRUCTURAL DEFICIENCIES OF LATENT DEFECTS AFFECTING ANY OF THE IMPROVEMENTS AND
THERE ARE NO FACTS OR CONDITIONS AFFECTING ANY OF THE IMPROVEMENTS WHICH WOULD,
INDIVIDUALLY OR IN THE AGGREGATE, INTERFERE IN ANY RESPECT WITH THE USE OR
OCCUPANCY OF THE IMPROVEMENTS OR ANY PORTION THEREOF IN THE OPERATION OF THE
SELLERS’ BUSINESSES AS CURRENTLY CONDUCTED THEREON.  THE SELLERS HAVE GOOD AND
MARKETABLE TITLE TO THE IMPROVEMENTS ON THE LEASED REAL PROPERTY, FREE AND CLEAR
OF ALL LIENS AND ENCUMBRANCES, EXCEPT PERMITTED ENCUMBRANCES, AND OTHER THAN THE
RIGHT OF BUYER PURSUANT TO THIS AGREEMENT, THERE ARE NO OUTSTANDING OPTIONS,
RIGHTS OF FIRST OFFER OR RIGHTS OF FIRST REFUSAL TO PURCHASE ANY SUCH
IMPROVEMENTS OR ANY PORTION THEREOF OR INTEREST THEREIN.

 

(E)   TO THE SELLERS’ KNOWLEDGE, THERE IS NO CONDEMNATION, EXPROPRIATION OR
OTHER PROCEEDING IN EMINENT DOMAIN, PENDING OR THREATENED, AFFECTING ANY PARCEL
OF REAL PROPERTY OR ANY PORTION THEREOF OR INTEREST THEREIN.  THERE IS NO
INJUNCTION, DECREE ORDER, WRIT OR JUDGMENT OUTSTANDING, OR ANY CLAIM,
LITIGATION, ADMINISTRATIVE ACTION OR SIMILAR PROCEEDING, PENDING OR THREATENED,
RELATING TO THE OWNERSHIP, LEASE, USE OR OCCUPANCY OF THE REAL PROPERTY OR ANY
PORTION THEREOF, OR THE OPERATION OF THE SELLERS’ BUSINESSES AS CURRENTLY
CONDUCTED THEREON.

 

(F)    THE REAL PROPERTY IS IN COMPLIANCE IN ALL MATERIAL RESPECTS WITH ALL
APPLICABLE BUILDING, ZONING, SUBDIVISION, HEALTH AND SAFETY AND OTHER LAND USE
LAWS, INCLUDING THE AMERICANS WITH DISABILITIES ACT OF 1990, AS AMENDED, AND ALL
INSURANCE REQUIREMENTS AFFECTING THE REAL PROPERTY (COLLECTIVELY, THE “REAL
PROPERTY LAWS”), AND THE CURRENT USE AND OCCUPANCY OF THE REAL PROPERTY AND
OPERATION OF THE SELLERS’ BUSINESSES THEREON DO NOT VIOLATE ANY REAL PROPERTY
LAWS IN ANY MATERIAL RESPECTS.  NEITHER SELLER HAS RECEIVED ANY NOTICE OF
VIOLATION OF ANY REAL PROPERTY LAW AND, TO THE SELLERS’ KNOWLEDGE, THERE IS NO
BASIS FOR THE ISSUANCE OF ANY SUCH NOTICE OR THE TAKING OF ANY ACTION FOR SUCH
VIOLATION.  TO THE SELLERS’ KNOWLEDGE, THERE IS NO PENDING OR ANTICIPATED CHANGE
IN ANY REAL PROPERTY LAW THAT WILL MATERIALLY IMPAIR THE OWNERSHIP, LEASE, USE
OR OCCUPANCY OF ANY REAL PROPERTY OR ANY PORTION THEREOF IN THE CONTINUED
OPERATION OF THE SELLERS’ BUSINESSES AS CURRENTLY CONDUCTED THEREON.

 

(G)   ALL CERTIFICATES OF OCCUPANCY, PERMITS, LICENSES, FRANCHISES, APPROVALS
AND AUTHORIZATIONS (COLLECTIVELY, THE “REAL PROPERTY PERMITS”) OF ALL
GOVERNMENTAL AUTHORITIES, BOARD OF FIRE UNDERWRITERS, ASSOCIATION OR ANY OTHER
ENTITY HAVING JURISDICTION OVER THE REAL PROPERTY THAT ARE REQUIRED OR
APPROPRIATE TO USE OR OCCUPY THE REAL PROPERTY OR OPERATE THE SELLERS’
BUSINESSES AS CURRENTLY CONDUCTED THEREON HAVE BEEN ISSUED AND ARE IN FULL FORCE
AND EFFECT.  SCHEDULE 4.5(G)(1) LISTS ALL MATERIAL REAL PROPERTY PERMITS HELD BY
THE SELLERS WITH RESPECT TO EACH PARCEL OF REAL PROPERTY.  NEITHER SELLER HAS
RECEIVED ANY NOTICE FROM ANY GOVERNMENTAL AUTHORITY OR OTHER ENTITY HAVING
JURISDICTION OVER THE REAL PROPERTY THREATENING A SUSPENSION, REVOCATION,
MODIFICATION OR CANCELLATION OF ANY REAL PROPERTY PERMIT AND THERE IS NO BASIS
FOR THE ISSUANCE OF ANY SUCH NOTICE OR THE TAKING OF ANY SUCH ACTION.  EXCEPT AS
SET FORTH ON SCHEDULE 4.5(G)(2), THE REAL PROPERTY PERMITS ARE TRANSFERABLE TO
BUYER WITHOUT THE CONSENT OR APPROVAL OF THE ISSUING GOVERNMENTAL AUTHORITY OR
ENTITY; NO DISCLOSURE, FILING OR OTHER ACTION BY

 

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THE SELLERS IS REQUIRED IN CONNECTION WITH SUCH TRANSFER; AND BUYER SHALL NOT BE
REQUIRED TO ASSUME ANY ADDITIONAL LIABILITIES OR OBLIGATIONS UNDER THE REAL
PROPERTY PERMITS AS A RESULT OF SUCH TRANSFER.

 

(H)   THE CLASSIFICATION OF EACH PARCEL OF REAL PROPERTY UNDER APPLICABLE ZONING
LAWS, ORDINANCES AND REGULATIONS PERMITS THE USE AND OCCUPANCY OF SUCH PARCEL
AND THE OPERATION OF THE SELLERS’ BUSINESSES AS CURRENTLY CONDUCTED THEREON, AND
PERMITS THE IMPROVEMENTS LOCATED THEREON AS CURRENTLY CONSTRUCTED, USED AND
OCCUPIED.  THERE ARE SUFFICIENT PARKING SPACES, LOADING DOCKS AND OTHER
FACILITIES AT SUCH PARCEL TO COMPLY WITH SUCH ZONING LAWS, ORDINANCES AND
REGULATIONS.  THE SELLERS’ USE OR OCCUPANCY OF THE REAL PROPERTY OR ANY PORTION
THEREOF OR THE OPERATION OF THE SELLERS’ BUSINESSES AS CURRENTLY CONDUCTED
THEREON IS NOT DEPENDENT ON A “PERMITTED NON-CONFORMING USE” OR “PERMITTED
NON-CONFORMING STRUCTURE” OR SIMILAR VARIANCE, EXEMPTION OR APPROVAL FROM ANY
GOVERNMENTAL AUTHORITY.

 

(I)    THE CURRENT USE AND OCCUPANCY OF THE REAL PROPERTY AND THE OPERATION OF
THE SELLERS’ BUSINESSES AS CURRENTLY CONDUCTED THEREON DO NOT VIOLATE ANY
EASEMENT, COVENANT, CONDITION, RESTRICTION OR SIMILAR PROVISION IN ANY
INSTRUMENT OF RECORD OR, TO THE SELLERS’ KNOWLEDGE, OTHER UNRECORDED AGREEMENT
AFFECTING SUCH REAL PROPERTY (THE “ENCUMBRANCE DOCUMENTS”).  NEITHER SELLER HAS
RECEIVED ANY NOTICE OF VIOLATION OF ANY ENCUMBRANCE DOCUMENTS, AND THERE IS NO
BASIS FOR THE ISSUANCE OF ANY SUCH NOTICE OR THE TAKING OF ANY ACTION FOR SUCH
VIOLATION.

 

(J)    NONE OF THE IMPROVEMENTS ENCROACHES ON ANY LAND THAT IS NOT INCLUDED IN
THE REAL PROPERTY OR ON ANY EASEMENT AFFECTING SUCH REAL PROPERTY, OR VIOLATES
ANY BUILDING LINES OR SET-BACK LINES, AND THERE ARE NO ENCROACHMENTS ONTO THE
REAL PROPERTY, OR ANY PORTION OR THE CONTINUED OPERATION OF THE SELLERS’
BUSINESSES AS CURRENTLY CONDUCTED THEREON.

 

(K)   EACH PARCEL OF REAL PROPERTY IS A SEPARATE LOT FOR REAL ESTATE TAX AND
ASSESSMENT PURPOSES, AND NO OTHER REAL PROPERTY IS INCLUDED IN SUCH TAX PARCEL. 
THERE ARE NO TAXES, ASSESSMENTS, FEES, CHARGES OR SIMILAR COSTS OR EXPENSES
IMPOSED BY ANY GOVERNMENTAL AUTHORITY, ASSOCIATION OR OTHER ENTITY HAVING
JURISDICTION OVER THE REAL PROPERTY (COLLECTIVELY, THE “REAL ESTATE
IMPOSITIONS”) WITH RESPECT TO ANY REAL PROPERTY OR PORTION THEREOF THAT HAVE
BECOME PAST DUE.  TO THE SELLERS’ KNOWLEDGE, THERE IS NO PENDING OR THREATENED
INCREASE OR SPECIAL ASSESSMENT OR REASSESSMENT OF ANY REAL ESTATE IMPOSITIONS
FOR SUCH PARCEL.

 

(L)    EACH PARCEL OF REAL PROPERTY HAS DIRECT ACCESS TO A PUBLIC STREET
ADJOINING THE REAL PROPERTY, AND SUCH ACCESS IS NOT DEPENDENT ON ANY LAND OR
OTHER REAL PROPERTY INTEREST WHICH IS NOT INCLUDED IN THE REAL PROPERTY.  NONE
OF THE IMPROVEMENTS OR ANY PORTION THEREOF IS DEPENDENT FOR ITS ACCESS, USE OR
OPERATION ON ANY LAND, BUILDING, IMPROVEMENT OR OTHER REAL PROPERTY INTEREST
WHICH IS NOT INCLUDED IN THE REAL PROPERTY.

 

4.6   Title to Assets.  Except for Excluded Assets and properties and assets
reflected on the Balance Sheet that have been sold or otherwise disposed of by
the Sellers in the ordinary course of business, each Seller has good and
marketable title to, or a valid leasehold interest in, all properties and assets
used by such Seller, including, without limitation, all the properties and
assets reflected on the Balance Sheet as being owned by such Seller, free and
clear of all Encumbrances other than Permitted Encumbrances.  All of the
Personal Property is in

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good operating condition and repair (with the exception of normal wear and tear)
and is free from defects other than minor defects that do not interfere with the
present use thereof in the conduct of normal operations.

 

4.7   Sufficiency of Assets.  Except as set forth on Schedule 4.7, the Purchased
Assets include all of the assets, properties and rights of every type and
description, real, personal, mixed, tangible and intangible that are used in the
conduct of the Businesses in substantially the same manner as currently
conducted by each Seller as of the Closing Date, subject only to the exclusion
of the Excluded Assets.

 

4.8   Accounts Receivable.  Except as set forth on Schedule 4.8, all GACCF
Accounts Receivable and GAM Accounts Receivable reflected on the Balance Sheet
(net of allowances for doubtful accounts as reflected thereon and as determined
in accordance with GAAP consistently applied) are or shall be valid receivables
arising in the ordinary course of business and, to each Seller’s Knowledge, are
or shall be current and collectible at the aggregate recorded amount therefore
as shown on the Balance Sheet (net of allowances for doubtful accounts as
reflected thereon and as determined in accordance with GAAP consistently
applied).  Except as set forth on Schedule 4.8, no Person has any Encumbrances
on such receivables or any part thereof, and no agreement for deduction, free
goods, discount or other deferred price or quantity adjustment has been made
with respect to any such receivables.  Schedule 3.7 sets forth a complete and
accurate statement of Seller Accounts Receivable due and owing to the Sellers,
as applicable, as of September 29, 2007.

 

4.9   Insolvency Proceedings.  No insolvency proceedings of any kind, including,
without limitation, bankruptcy, receivership, reorganization, composition or
arrangement with creditors, voluntary or involuntary, affecting either Seller,
MFFB or the Purchased Assets are pending or, to each Seller’s Knowledge or
MFFB’s Knowledge, threatened.  Neither Seller nor MFFB has made an assignment
for the benefit of creditors or taken any action with a view to, or that would
constitute a valid basis for, the institution of any such insolvency
proceedings.

 

4.10         Taxes.

 

(A)   ALL TAX RETURNS REQUIRED TO BE FILED BY OR ON BEHALF OF EITHER OF THE
SELLERS HAVE BEEN TIMELY FILED AND ALL SUCH TAX RETURNS ARE CORRECT AND COMPLETE
IN ALL MATERIAL RESPECTS. ALL MATERIAL TAXES OWED BY OR ON BEHALF OF EITHER
SELLER (WHETHER OR NOT SHOWN ON ANY TAX RETURN) HAVE BEEN TIMELY PAID.  NEITHER
SELLER IS THE BENEFICIARY OF ANY EXTENSION OF TIME WITHIN WHICH TO FILE ANY
INCOME TAX RETURN.  EACH SELLER HAS WITHHELD AND PAID ALL TAXES REQUIRED TO HAVE
BEEN WITHHELD AND PAID IN CONNECTION WITH AMOUNTS PAID OR OWING TO ANY EMPLOYEE,
INDEPENDENT CONTRACTOR, CREDITOR, STOCKHOLDER, OR OTHER THIRD PARTY, AND ALL
FORMS W-2 AND 1099 REQUIRED WITH RESPECT THERETO HAVE BEEN PROPERLY COMPLETED
AND TIMELY FILED. THERE ARE NO ENCUMBRANCES (OTHER THAN PERMITTED ENCUMBRANCES)
ON ANY OF THE ASSETS OF EITHER SELLER THAT AROSE IN CONNECTION WITH THE FAILURE
(OR ALLEGED FAILURE) TO PAY ANY TAX.

 

(B)   THERE IS NO MATERIAL DISPUTE OR CLAIM CONCERNING ANY TAX LIABILITY OF
EITHER SELLER EITHER (I) CLAIMED OR RAISED BY ANY AUTHORITY IN WRITING OR
(II) AS TO WHICH ANY OF THE OFFICERS OR MANAGERS OF SUCH SELLER HAS KNOWLEDGE
BASED UPON PERSONAL CONTACT WITH ANY AGENT OF SUCH AUTHORITY.

 

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(C)   SCHEDULE 4.10 LISTS ALL FEDERAL, STATE, LOCAL, AND FOREIGN TAX RETURNS
FILED BY OR ON BEHALF OF EACH SELLER FOR TAXABLE PERIODS ENDED ON OR AFTER
DECEMBER 31, 2003, INDICATES THOSE TAX RETURNS THAT HAVE BEEN AUDITED, AND
INDICATES THOSE TAX RETURNS THAT CURRENTLY ARE THE SUBJECT OF AUDIT.  NEITHER
SELLER HAS WAIVED ANY STATUTE OF LIMITATIONS IN RESPECT OF TAXES OR AGREED TO
ANY EXTENSION OF TIME WITH RESPECT TO A TAX ASSESSMENT OR DEFICIENCY.

 

(D)   THE ASSUMED LIABILITIES DO NOT INCLUDE ANY OBLIGATIONS THAT WILL NOT BE
DEDUCTIBLE UNDER CODE §280G.  NEITHER SELLER  HAS ANY LIABILITY FOR THE TAXES OF
ANY OTHER PERSON AS A TRANSFEREE OR SUCCESSOR, BY CONTRACT, OR OTHERWISE.

 

4.11         Labor Relations; Compliance.

 

(A)   THE SELLERS HAVE COMPLIED AND ARE IN COMPLIANCE IN ALL MATERIAL RESPECTS
WITH ALL APPLICABLE LAWS RELATING TO THE EMPLOYMENT OF LABOR.  EXCEPT AS SET
FORTH ON SCHEDULE 4.11, THERE ARE NO PROCEEDINGS PENDING OR, TO EACH SELLER’S
KNOWLEDGE, THREATENED AGAINST EITHER SELLER WITH RESPECT TO OR BY ANY EMPLOYEE
OR FORMER EMPLOYEE (OR REPRESENTATIVES THEREOF) OF THE BUSINESSES AND, TO EACH
SELLER’S KNOWLEDGE, THERE ARE NO PROCEEDINGS PENDING OR THREATENED AGAINST ANY
EMPLOYEES OR FORMER EMPLOYEE OF THE BUSINESSES.  NEITHER SELLER HAS ENGAGED IN
ANY UNFAIR LABOR PRACTICES.

 

(B)   NEITHER SELLER IS A PARTY TO ANY COLLECTIVE BARGAINING AGREEMENT OR
RELATIONSHIP WITH ANY LABOR ORGANIZATION, AND, TO EACH SELLER’S KNOWLEDGE, THERE
ARE NO ORGANIZATIONAL EFFORTS PRESENTLY MADE OR THREATENED BY OR ON BEHALF OF
ANY LABOR UNION WITH RESPECT TO THE EMPLOYEES OF THE BUSINESSES.  WITHIN THE
LAST THREE (3) YEARS, NEITHER SELLER HAS EXPERIENCED ANY UNION ORGANIZATION
ATTEMPTS, STRIKES, WORK STOPPAGES, SLOWDOWNS, GRIEVANCES, CLAIMS OF UNFAIR LABOR
PRACTICES OR OTHER COLLECTIVE BARGAINING DISPUTES, AND NONE ARE UNDERWAY OR, TO
EACH SELLER’S KNOWLEDGE, THREATENED.

 

(C)   WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY, ANY NOTICE REQUIRED
UNDER ANY LAW OR COLLECTIVE BARGAINING AGREEMENT HAS BEEN OR PRIOR TO CLOSING
WILL BE GIVEN, AND ALL BARGAINING OBLIGATIONS WITH ANY EMPLOYEE REPRESENTATIVE
HAVE BEEN OR PRIOR TO CLOSING WILL BE SATISFIED.  NEITHER SELLER HAS IMPLEMENTED
ANY PLANT CLOSING OR LAYOFF OF EMPLOYEES THAT COULD IMPLICATE THE WARN ACT, AND
NO SUCH ACTION WILL BE IMPLEMENTED WITHOUT ADVANCE NOTIFICATION TO BUYER.

 

(D)   TO EACH SELLER’S KNOWLEDGE NO EXECUTIVE OR MANAGER OF SUCH SELLER (I) HAS
ANY PRESENT INTENTION TO TERMINATE HIS OR HER EMPLOYMENT, OR (II) IS A PARTY TO
ANY CONFIDENTIALITY, NON-COMPETITION, PROPRIETARY RIGHTS OR OTHER SUCH AGREEMENT
BETWEEN SUCH EMPLOYEE AND ANY PERSON BESIDES THE SELLERS THAT WOULD BE MATERIAL
TO THE PERFORMANCE OF SUCH EMPLOYEE’S EMPLOYMENT DUTIES, OR THE ABILITY OF BUYER
TO CONDUCT THE BUSINESSES.

 

4.12         Employee Benefits.

 

(A)   SCHEDULE 4.12 LISTS EACH EMPLOYEE BENEFIT PLAN MAINTAINED, SPONSORED, OR
CONTRIBUTED TO OR REQUIRED TO BE CONTRIBUTED TO BY EITHER SELLER OR BY MFFB ON
BEHALF OF ANY EMPLOYEE OF THE BUSINESSES OR UNDER WHICH EITHER SELLER HAS OR MAY
HAVE A DIRECT OR INDIRECT LIABILITY OR OBLIGATION (EACH A “SELLER BENEFIT
PLAN”).

 

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(B)   EACH SELLER HAS DELIVERED TO BUYER TRUE AND COMPLETE COPIES OF EACH SELLER
BENEFIT PLAN DOCUMENT, AND, AS APPLICABLE, WITH RESPECT TO EACH SELLER BENEFIT
PLAN, TRUE AND COMPLETE COPIES OF (1) ANY RELATED TRUST AGREEMENTS, INSURANCE
CONTRACTS OR OTHER FUNDING AGREEMENTS OR ARRANGEMENTS, (2) THE MOST RECENT
SUMMARY PLAN DESCRIPTION AND ANY SUMMARY OF MATERIAL MODIFICATIONS, IF THE
SELLER BENEFIT PLAN IS SUBJECT TO ERISA, (3) THE MOST RECENT DETERMINATION
LETTER OR OPINION LETTER ISSUED BY THE IRS AND ANY PENDING APPLICATION FOR A
DETERMINATION LETTER OR OPINION LETTER WITH RESPECT TO ANY SELLER BENEFIT PLAN
INTENDED TO QUALIFY UNDER SECTION 401(A) OF THE CODE (“QUALIFIED PLAN”), AND
(4) THE LAST TWO FORM 5500 FILINGS IF SUCH FILINGS ARE REQUIRED BY ERISA OR THE
CODE.

 

(C)   EACH SELLER BENEFIT PLAN HAS BEEN MAINTAINED, FUNDED AND ADMINISTERED IN
ALL MATERIAL RESPECTS IN ACCORDANCE WITH ITS TERMS AND THE PROVISIONS OF
APPLICABLE LEGAL REQUIREMENTS, INCLUDING ERISA AND THE CODE.  NO COMPENSATION
PAID OR REQUIRED TO BE PAID UNDER ANY SELLER BENEFIT PLAN IS OR WILL BE SUBJECT
TO ADDITIONAL TAX UNDER SECTION 409A(A)(1)(B) OF THE CODE.

 

(D)   ALL CONTRIBUTIONS, PREMIUM AND BENEFIT PAYMENTS REQUIRED TO BE MADE UNDER
OR IN CONNECTION WITH EACH SELLER BENEFIT PLAN THROUGH THE CLOSING DATE HAVE
BEEN MADE OR PROPERLY ACCRUED, AND ALL CONTRIBUTIONS, PREMIUM AND BENEFIT
PAYMENTS NOT YET REQUIRED TO BE MADE UNDER OR IN CONNECTION WITH EACH SELLER
BENEFIT PLAN THROUGH THE CLOSING DATE WILL HAVE BEEN MADE OR PROPERLY ACCRUED.

 

(E)   EACH SELLER BENEFIT PLAN WHICH IS A QUALIFIED PLAN IS A PROTOTYPE OR
VOLUME SUBMITTER PLAN WITH RESPECT TO WHICH THE SPONSOR HAS RECEIVED A FAVORABLE
DETERMINATION AS TO ITS QUALIFICATION UNDER THE CODE THAT HAS NOT BEEN
SUBSEQUENTLY AMENDED OR MODIFIED OR IS AN INDIVIDUALLY DESIGNED PLAN THAT,
TOGETHER WITH THE TRUST (IF ANY) FORMING A PART THEREOF, HAS RECEIVED FROM THE
IRS A FAVORABLE DETERMINATION LETTER AS TO ITS QUALIFICATION UNDER THE CODE AND,
AND IN EITHER CASE, NO EVENT HAS OCCURRED THAT WILL OR WOULD REASONABLY BE
EXPECTED TO GIVE RISE TO DISQUALIFICATION OR LOSS OF TAX-EXEMPT STATUS OF ANY
SELLER BENEFIT PLAN OR ITS RELATED TRUST.

 

(F)    WITH RESPECT TO EACH SELLER BENEFIT PLAN, NO PROCEEDING OR OTHER ACTION,
SUIT, AUDIT, CLAIM OR INVESTIGATION (OTHER THAN ROUTINE CLAIMS FOR BENEFITS) IS
PENDING OR, TO THE SELLERS’ KNOWLEDGE, THREATENED, AND THERE IS NO BASIS FOR ANY
SUCH PROCEEDING OR OTHER ACTION, SUIT, AUDIT, CLAIM OR INVESTIGATION.

 

(G)   EXCEPT AS SET FORTH IN SCHEDULE 4.12:

 

(I)            NEITHER ANY SELLER NOR ANY ERISA AFFILIATE THEREOF CONTRIBUTES
TO, EVER HAS CONTRIBUTED TO, OR EVER HAS BEEN REQUIRED TO CONTRIBUTE TO ANY
MULTIEMPLOYER PLAN OR EMPLOYEE PENSION PLAN SUBJECT TO TITLE IV OF ERISA OR CODE
SECTION 412 OR HAS ANY LIABILITY, OR INDIRECT LIABILITY, INCLUDING ANY LIABILITY
ON ACCOUNT OF A “PARTIAL WITHDRAWAL” OR COMPLETE WITHDRAWAL (AS DEFINED IN ERISA
SECTIONS 4203 AND 4201 RESPECTIVELY), UNDER ANY MULTIEMPLOYER PLAN OR UNDER
TITLE IV OF ERISA OR SECTION 412 OF THE CODE.  NEITHER ANY SELLER NOR ANY ERISA
AFFILIATE THEREOF IS BOUND BY ANY CONTRACT THAT WOULD RESULT IN ANY DIRECT OR
INDIRECT LIABILITY DESCRIBED IN ERISA SECTION 4204.  NO SELLER BENEFIT PLAN IS A
MULTIPLE EMPLOYER PLAN FOR PURPOSES OF SECTIONS 4063 OR 4064 OF ERISA OR SUBJECT
TO SECTION 413(C) OF THE CODE OR A MULTIPLE EMPLOYER WELFARE ARRANGEMENT AS
DEFINED IN SECTION 3(40) OF ERISA.

 

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(II)           NEITHER ANY SELLER NOR ANY SELLER BENEFIT PLAN HAS ANY OBLIGATION
TO PROVIDE POST-EMPLOYMENT MEDICAL, HEALTH OR LIFE INSURANCE OR OTHER
WELFARE-TYPE BENEFITS FOR CURRENT OR FUTURE RETIRED OR TERMINATED EMPLOYEES,
DIRECTORS, OFFICERS, OR INDEPENDENT CONTRACTORS OR SUCH PERSONS’ SPOUSES,
DEPENDENTS OR OTHER BENEFICIARIES (OTHER THAN IN ACCORDANCE WITH COBRA); EACH
SELLER BENEFIT PLAN WHICH IS A GROUP HEALTH PLAN HAS AT ALL TIMES BEEN
MAINTAINED IN MATERIAL COMPLIANCE WITH COBRA, AND EACH GROUP HEALTH PLAN
MAINTAINED BY ANY ERISA AFFILIATE OF EITHER SELLER HAS BEEN MAINTAINED IN
MATERIAL COMPLIANCE WITH COBRA.

 

(III)          NEITHER ANY SELLER NOR THEIR RESPECTIVE EMPLOYEES, OR ANY OTHER
PERSON HAS ENGAGED IN A NON-EXEMPT PROHIBITED TRANSACTION (AS DEFINED IN
SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE) WITH RESPECT TO ANY SELLER
BENEFIT PLAN THAT HAS RESULTED OR MAY RESULT IN ANY MATERIAL LIABILITY TO THE
SELLERS; NEITHER SELLER HAS INCURRED ANY MATERIAL LIABILITY FOR ANY PENALTY OR
TAX, NOR DOES ANY FACT EXIST WHICH WOULD SUBJECT THE SELLERS TO ANY MATERIAL
PENALTY OR TAX, UNDER CHAPTER 43 OF SUBTITLE D OF THE CODE OR SECTION 502 OF
ERISA; AND NO FIDUCIARY OF ANY SELLER BENEFIT PLAN (AS DEFINED IN SECTION 3(21)
OF ERISA) (WHERE SUCH FIDUCIARY IS AN EMPLOYEE OF THE SELLERS, OR ANY OTHER
PERSON WHO IS A FIDUCIARY) HAS ENGAGED IN ANY MATERIAL BREACH OF FIDUCIARY DUTY
(AS DETERMINED UNDER ERISA) WITH RESPECT TO ANY SELLER BENEFIT PLAN.

 

(H)   NO EVENT HAS OCCURRED OR CIRCUMSTANCE EXISTS WITH RESPECT TO THE SELLERS,
OR THE PARTICIPANTS AND BENEFICIARIES OF ANY SELLER BENEFIT PLAN, THAT WOULD
REASONABLY BE EXPECTED TO RESULT IN A MATERIAL INCREASE IN EXPENSES (INCLUDING
PREMIUMS, NOTWITHSTANDING ORDINARY COURSE PREMIUM INCREASES, CONTRIBUTIONS
AND/OR BENEFIT PAYMENTS) TO THE BUSINESSES.

 

(I)    THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT WILL
NOT, EITHER ALONE OR IN COMBINATION WITH ANY OTHER EVENT, RESULT IN (1) THE
PAYMENT TO ANY PERSON OF MONEY OR OTHER PROPERTY (INCLUDING SEVERANCE PAYMENTS,
BONUS OR OTHER COMPENSATION), (2) ACCELERATE THE TIME OF PAYMENT OR VESTING, OR
INCREASE THE AMOUNT OF COMPENSATION DUE ANY PERSON, OR (3) REQUIRE EITHER SELLER
TO PLACE IN TRUST OR OTHERWISE SET ASIDE ANY AMOUNTS IN RESPECT OF SEVERANCE PAY
OR ANY OTHER PAYMENT OR BENEFIT.  THERE ARE NO AGREEMENTS OR ARRANGEMENTS
PURSUANT TO WHICH THE SELLERS OR BUYER WOULD BE REQUIRED TO MAKE A “PARACHUTE
PAYMENT” (WITHIN THE MEANING OF SECTION 280G(B)(2) OF THE CODE) AS A RESULT OF
THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT (WHETHER
ALONE OR IN COMBINATION WITH A TERMINATION OF EMPLOYMENT OR OTHER EVENT).

 

4.13         Litigation; Orders.

 

(A)   EXCEPT AS SET FORTH ON SCHEDULE 4.13(A), THERE IS NO MATERIAL PROCEEDING
PENDING OR, TO EACH SELLER’S KNOWLEDGE, THREATENED, AGAINST EITHER OF THE
SELLERS OR RELATING TO ANY OF THE PURCHASED ASSETS.

 

(B)   EXCEPT AS SET FORTH ON SCHEDULE 4.13(B), (I) THERE IS NO ORDER TO WHICH
EITHER OF THE SELLERS OR ANY OF THE PURCHASED ASSETS IS SUBJECT, AND (II) EACH
SELLER IS IN COMPLIANCE WITH EACH ORDER TO WHICH IT OR ITS PROPERTIES OR ASSETS
ARE SUBJECT.

 

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4.14         Compliance With Laws; Permits.

 

(A)   EXCEPT AS SET FORTH ON SCHEDULE 4.14, EACH SELLER IS IN FULL COMPLIANCE
WITH EACH LEGAL REQUIREMENT THAT IS APPLICABLE TO IT OR TO THE CONDUCT OR
OPERATION OF THE BUSINESSES OR THE OWNERSHIP OF THE PURCHASED ASSETS, EXCEPT FOR
SUCH NON-COMPLIANCE, INDIVIDUALLY OR IN THE AGGREGATE, AS WOULD NOT REASONABLY
BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.  NEITHER SELLER HAS RECEIVED ANY
WRITTEN NOTICE OR OTHER COMMUNICATION (WHETHER ORAL OR WRITTEN) FROM ANY
GOVERNMENT AUTHORITY OR ANY OTHER PERSON REGARDING ANY ACTUAL, ALLEGED, POSSIBLE
OR POTENTIAL VIOLATION OF, OR FAILURE TO COMPLY WITH, ANY MATERIAL LEGAL
REQUIREMENT APPLICABLE TO THE BUSINESSES.  WITHOUT LIMITING THE GENERALITY OF
THE FOREGOING OR ANY OTHER REPRESENTATION AND WARRANTY SET FORTH IN THIS
AGREEMENT, GAM HAS PRODUCED AND DISTRIBUTED DURING THE LAST THREE (3) YEARS AND
IS PRODUCING AND DISTRIBUTING FOOD PRODUCTS THAT ARE IN COMPLIANCE WITH THE
FEDERAL FOOD, DRUG AND COSMETIC ACT, AND ALL OTHER APPLICABLE LAWS GOVERNING THE
PRODUCTION OF FOOD.

 

(B)   EACH SELLER POSSESSES ALL GOVERNMENT AUTHORIZATIONS NECESSARY FOR THE
OWNERSHIP OF ITS PROPERTIES AND THE CONDUCT OF THE BUSINESSES AS CURRENTLY
CONDUCTED, EXCEPT FOR SUCH EXCEPTIONS AS, INDIVIDUALLY OR IN THE AGGREGATE, HAVE
NOT HAD AND WOULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT. 
FURTHER, (I) TO EACH SELLER’S KNOWLEDGE, ALL SUCH GOVERNMENT AUTHORIZATIONS ARE
IN FULL FORCE AND EFFECT AND (II) NEITHER SELLER HAS RECEIVED ANY WRITTEN NOTICE
OF ANY EVENT, INQUIRY, INVESTIGATION OR PROCEEDING THREATENING THE VALIDITY OF
SUCH GOVERNMENT AUTHORIZATIONS.

 

4.15         Operations of the Sellers.  Except as set forth on Schedule 4.15,
since December 31, 2006, through the date of this Agreement, there has not been
any change, event or condition of any character that has had or would reasonably
be expected to have a Material Adverse Effect.  Without limiting the generality
of the foregoing, except as set forth on Schedule 4.15, since December 31, 2006,
each Seller has operated its portion of the Businesses in the ordinary course of
business consistent with past practice, and during such time period, neither
Seller has:

 

(A)   SOLD, LEASED, TRANSFERRED, OR ASSIGNED ANY OF ITS MATERIAL ASSETS, OTHER
THAN FOR A FAIR CONSIDERATION IN THE ORDINARY COURSE OF BUSINESS;

 

(B)   ENTERED INTO ANY MATERIAL CONTRACT OUTSIDE THE ORDINARY COURSE OF
BUSINESS;

 

(C)   ACCELERATED, TERMINATED, MADE MATERIAL MODIFICATIONS TO, OR CANCELLED ANY
MATERIAL CONTRACT IN ANY MATERIAL RESPECT;

 

(D)   TRANSFERRED, ASSIGNED, OR GRANTED ANY LICENSE OR SUBLICENSE OF ANY RIGHTS
UNDER OR WITH RESPECT TO ANY INTELLECTUAL PROPERTY RIGHT, OTHER THAN TO A
FRANCHISEE PURSUANT TO A FRANCHISE AGREEMENT ENTERED INTO IN THE ORDINARY COURSE
OF BUSINESS;

 

(E)   MADE ANY CAPITAL EXPENDITURE (OR SERIES OF RELATED CAPITAL EXPENDITURES)
EITHER INVOLVING MORE THAN $5,000, INDIVIDUALLY, OR $15,000, IN THE AGGREGATE,
OR OUTSIDE THE ORDINARY COURSE OF BUSINESS;

 

(F)    ENGAGED IN ANY SALES OR PROMOTIONAL DISCOUNT OR OTHER SIMILAR ACTIVITIES
WITH CUSTOMERS (INCLUDING, WITHOUT LIMITATION, MATERIALLY ALTERING CREDIT TERMS)
OTHER THAN ANY SUCH ACTIVITIES UNDERTAKEN IN ACCORDANCE WITH THE TERMS OF ITS
CURRENT FRANCHISE AGREEMENTS;

 

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(G)   DELAYED OR POSTPONED THE PAYMENT OF ANY ACCOUNTS PAYABLE, OTHER PAYABLES,
EXPENSES OR OTHER LIABILITIES (INCLUDING MARKETING OR PROMOTIONAL EXPENSES), OR
ACCELERATED THE COLLECTION OF OR DISCOUNT ANY GACCF ACCOUNTS RECEIVABLE OR GAM
ACCOUNTS RECEIVABLE OR OTHERWISE ACCELERATED CASH COLLECTIONS OF ANY TYPE OTHER
THAN IN THE ORDINARY COURSE OF BUSINESS AND IN AN AMOUNT NOT GREATER THAN $5,000
IN THE AGGREGATE;

 

(H)   INCURRED ANY INDEBTEDNESS OR INCURRED OR BECOME SUBJECT TO ANY MATERIAL
LIABILITY, EXCEPT CURRENT LIABILITIES INCURRED IN THE ORDINARY COURSE OF
BUSINESS AND LIABILITIES UNDER CONTRACTS (OTHER THAN LIABILITIES FOR BREACH)
ENTERED INTO IN THE ORDINARY COURSE OF BUSINESS;

 

(I)    SUFFERED ANY EXTRAORDINARY LOSSES OR WAIVED ANY RIGHTS OF MATERIAL VALUE,
WHETHER OR NOT IN THE ORDINARY COURSE OF BUSINESS;

 

(J)    EXPERIENCED ANY MATERIAL DAMAGE, DESTRUCTION, OR LOSS (WHETHER OR NOT
COVERED BY INSURANCE) TO ITS PROPERTY;

 

(K)   BECOME LIABLE FOR ANY DAMAGES IN CONNECTION WITH, OR BECOME OBLIGATED TO
RESCIND OR OTHERWISE MATERIALLY MODIFY, ANY FRANCHISE AGREEMENT; OR

 

(L)    COMMITTED TO DO ANY OF THE FOREGOING ACTIONS.

 

4.16         Material Contracts.

 

(A)   SCHEDULE 4.16(A) CONTAINS A COMPLETE AND CORRECT LIST IDENTIFIED BY THE
SELLERS, AS OF THE DATE OF THIS AGREEMENT, OF THE FOLLOWING CONTRACTS TO WHICH
EITHER SELLER IS A PARTY OR BY WHICH EITHER SELLER IS BOUND (COLLECTIVELY, THE
“MATERIAL CONTRACTS”):

 

(I)            ANY AGREEMENT (OR GROUP OF RELATED AGREEMENTS) FOR THE LEASE OF
PERSONAL PROPERTY TO OR FROM A PERSON PROVIDING FOR LEASE PAYMENT IN EXCESS OF
$5,000 PER ANNUM;

 

(II)           ANY AGREEMENT (OR GROUP OF RELATED AGREEMENTS) FOR THE PURCHASE
OR SALE OF RAW MATERIALS, COMMODITIES, SUPPLIES, PRODUCTS, OR OTHER PERSONAL
PROPERTY, OR FOR THE FURNISHING OR RECEIPT OF SERVICES, THE PERFORMANCE OF WHICH
WILL EXTEND OVER A PERIOD OF MORE THAN ONE YEAR, OR INVOLVE CONSIDERATION IN
EXCESS OF $5,000;

 

(III)          EACH FRANCHISE AGREEMENT SUBMITTED TO A PERSON FOR EXECUTION BUT
NOT YET EXECUTED AND DELIVERED TO EITHER SELLER BY SUCH PERSON;

 

(IV)          ANY AGREEMENTS RELATING TO INTELLECTUAL PROPERTY RIGHTS EXCEPT AS
SET FORTH IN SCHEDULE 4.19(B);

 

(V)           ANY AGREEMENT IMPOSING CONTINUING CONFIDENTIALITY OBLIGATIONS ON
THE SELLERS;

 

(VI)          ALL EXECUTORY CONTRACTS FOR CAPITAL EXPENDITURES WITH REMAINING
OBLIGATIONS IN EXCESS OF $5,000 EACH;

 

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(VII)         ALL CONTRACTS CONTAINING COVENANTS THAT IN ANY WAY PURPORT TO
LIMIT THE FREEDOM TO ENGAGE IN ANY LINE OF BUSINESS OR TO COMPETE WITH ANY
PERSON OR IN ANY GEOGRAPHICAL AREA;

 

(VIII)        ALL COLLECTIVE BARGAINING AGREEMENTS;

 

(IX)           ALL SEVERANCE, CHANGE OF CONTROL OR SIMILAR AGREEMENTS OR
CONTRACTS WITH ANY EMPLOYEES, AND ANY EMPLOYMENT AGREEMENTS REQUIRING PAYMENT OF
ANNUAL COMPENSATION IN EXCESS OF $100,000;

 

(X)            ALL SETTLEMENT, CONCILIATION OR SIMILAR AGREEMENTS WITH ANY
GOVERNMENT AUTHORITY OR PURSUANT TO WHICH ANY SELLER IS REQUIRED AFTER THE
EXECUTION DATE OF THIS AGREEMENT TO PAY CONSIDERATION IN EXCESS OF $25,000; AND

 

(XI)           ANY OTHER AGREEMENT THE PERFORMANCE OF WHICH INVOLVES
CONSIDERATION IN EXCESS OF $5,000.

 

(B)   ALL MATERIAL CONTRACTS ARE IN FULL FORCE AND EFFECT AND IN WRITTEN FORM
AND TRUE, CORRECT AND COMPLETE COPIES OF ALL MATERIAL CONTRACTS, INCLUDING ANY
AMENDMENTS, WAIVERS, SUPPLEMENTS OR OTHER MODIFICATIONS THERETO, HAVE BEEN MADE
AVAILABLE TO BUYER.  EXCEPT AS DISCLOSED IN SCHEDULE 4.16(B), NEITHER SELLER IS
IN VIOLATION OR BREACH OF OR IN DEFAULT UNDER ANY MATERIAL CONTRACT THE EFFECT
OF WHICH, INDIVIDUALLY OR IN THE AGGREGATE, DOES HAVE OR WOULD REASONABLY BE
EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.  NO PROCEEDING OR EVENT OR CONDITION
HAS OCCURRED OR EXISTS OR IS ALLEGED BY ANY PARTY TO HAVE OCCURRED OR EXIST
WHICH, WITH NOTICE OR LAPSE OF TIME OR BOTH, WOULD CONSTITUTE A DEFAULT BY ANY
OF THE PARTIES THERETO OF THEIR RESPECTIVE OBLIGATIONS UNDER A MATERIAL CONTRACT
(OR WOULD GIVE RISE TO ANY RIGHT OF TERMINATION OR CANCELLATION), EXCEPT AS DOES
NOT HAVE AND WOULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE
EFFECT.  NEITHER SELLER HAS, NOR TO EACH SELLER’S KNOWLEDGE, HAS ANY OTHER PARTY
TO ANY MATERIAL CONTRACT, BREACHED OR PROVIDED ANY WRITTEN NOTICE OF AN INTENT
TO BREACH, ANY PROVISION THEREOF, EXCEPT SUCH A BREACH AS DOES NOT HAVE AND
WOULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

 

(C)   SCHEDULE 4.16(C) CONTAINS A COMPLETE AND CORRECT LIST OF ALL WRITTEN
AGREEMENTS, CONTRACTS OR INSTRUMENTS TO WHICH AN AFFILIATE OF EITHER SELLER IS A
PARTY AND PURSUANT TO WHICH EITHER SELLER IS A BENEFICIARY OF ANY GOODS,
SERVICES OR OTHER BENEFITS RELATED TO THE PURCHASED ASSETS.

 

4.17         Insurance.  Schedule 4.17 sets forth an accurate and complete
summary of (a) each insurance policy providing for liability exposure (including
policies providing property, casualty, liability and workers’ compensation
coverage and bond and surety arrangements) to which either Seller is currently a
party, a named insured or otherwise the beneficiary of coverage (“Insurance
Policies”) and (b) all insurance loss runs or workers’ compensation claims
received for the past three (3) policy years.  All such Insurance Policies are
in full force and effect.  Since January 1, 2004, each Seller has paid all
premiums due thereunder and, except as set forth in Schedule 4.17, no notice
(whether oral or written) of cancellation of any such coverage or increase in
premiums thereof has been received by either Seller.

 

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4.18         Environmental and Safety Matters.  Except as set forth on Schedule
4.18, with respect to the Businesses (including, without limitation, the
ownership and operation of the Purchased Assets): (i) each Seller has at all
times complied and is in compliance in all material respects with all
Environmental and Safety Requirements; (ii) without limiting the foregoing, all
Government Authorizations required under Environmental and Safety Requirements
to be obtained by the Sellers are valid and in full force and effect, each
Seller has at all times complied and is in compliance in all material respects
with the terms and conditions of such Government Authorizations; (iii) neither
Seller is subject to any suit, investigation, inquiry or Proceeding by or before
any court or Government Authority relating to Environmental and Safety
Requirements, including, without limitation, with respect to any of its current
or former operations, properties or facilities; (iv) neither Seller, nor any of
its predecessors or Affiliates, has caused a release of Hazardous Substances,
and no condition of contamination by Hazardous Substances is present, at any of
the Sellers’ Owned Real Properties, and, to the Sellers’ Knowledge, there are no
facts, events, circumstances or conditions relating to any current or former
facilities, properties or operations of the Sellers or of their predecessors or
Affiliates that have given or would give rise to any current or future
investigatory, remedial, or corrective obligations or other liabilities
(contingent or otherwise) under CERCLA or any other Environmental and Safety
Requirements; (v) neither this Agreement nor the consummation of the
transactions contemplated hereby will result in any obligations for site
investigation or cleanup, or notification to or consent of any Government
Authority or other Person pursuant to any of the so-called
“transaction-triggered” or “responsible property transfer” Environmental and
Safety Requirements; (vi) each Seller has furnished to Buyer copies of all
audits, assessments, reports and other documents within its possession or under
its reasonable control (including all Phase I and Phase II reports) bearing on
environmental, health or safety liabilities or concerning compliance with
Environmental and Safety Requirements with respect to any current or former
operations, properties or facilities of either Seller or its predecessors or
Affiliates; (vii) neither Seller has received any written or oral notice, report
or other information regarding any actual or alleged violation of, or actual or
potential liability or obligation (contingent or otherwise) under, any
Environmental and Safety Requirement or that any existing Government
Authorization that was obtained pursuant to any Environmental and Safety
Requirement is to be revoked or suspended by any Government Authority or that
any Seller is not currently operating or required to be operating under, or
subject to any outstanding compliance order, decree or agreement, any consent
decree, order or agreement, or any corrective action decree, order or agreement
issued or entered into under, or pertaining to matters regulated by, any
Environmental and Safety Requirement; (viii) neither Seller owns or operates any
underground storage tanks, and no such underground storage tanks are in
violation of any Environmental and Safety Requirement; and (ix) neither Seller,
nor any of its predecessors or Affiliates, has treated, stored, disposed of,
arranged for or permitted the disposal of, transported, handled, released, or
exposed any Person to, any Hazardous Substances, or owned or operated either
Business or any property or facility relating to the Businesses (and no such
property or facility is or was contaminated by any such Hazardous Substances) in
a manner that has given or would give rise to any current or future liabilities
or investigative, corrective or remedial obligations (contingent or otherwise)
pursuant to CERCLA or any other Environmental and Safety Requirement.

 

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4.19                           Intellectual Property.

 

(A)          SCHEDULE 4.19(A)  ATTACHED HERETO SETS FORTH A COMPLETE AND CORRECT
LIST OF THE FOLLOWING ITEMS THAT ARE OWNED BY EITHER SELLER OR ANY OF THEIR
AFFILIATES AND USED IN THE BUSINESSES:  (I) ALL PATENTED OR REGISTERED
INTELLECTUAL PROPERTY RIGHTS; (II) ALL PENDING PATENT APPLICATIONS OR OTHER
APPLICATIONS FOR REGISTRATION OF INTELLECTUAL PROPERTY RIGHTS; (III) ALL TRADE
NAMES, TRADEMARKS AND UNREGISTERED MARKS; (IV) ALL MATERIAL UNREGISTERED
COPYRIGHTS, MASK WORKS AND COMPUTER SOFTWARE (E.G., INTERNALLY DEVELOPED BACK
OFFICE SOFTWARE, ETC.); AND (V) ALL INTERNET DOMAIN NAMES AND URLS REGISTERED OR
FOR WHICH AN APPLICATION HAS BEEN FILED.  NEITHER SELLER NOR ANY OF THEIR
AFFILIATES OWN ANY UNREGISTERED COMMON LAW OR UNREGISTERED INTELLECTUAL PROPERTY
RIGHTS THAT ARE USED IN AND ARE MATERIAL TO THE BUSINESSES.

 

(B)         SCHEDULE 4.19(B)  ATTACHED HERETO SETS FORTH A COMPLETE AND CORRECT
LIST OF:  (I) ALL COMPUTER SOFTWARE LICENSES OR SIMILAR AGREEMENTS OR
ARRANGEMENTS RELATING TO INFORMATION TECHNOLOGY USED EXCLUSIVELY IN THE
OPERATION OF THE BUSINESSES (“IT SOFTWARE”) FOR WHICH EITHER SELLER OR ITS
AFFILIATES PAID MORE THAN $10,000 IN THE AGGREGATE IN LICENSE FEES OR PAYS MORE
THAN $5,000 IN ANNUAL SUPPORT FEES; (II) ALL OTHER LICENSES OR SIMILAR
AGREEMENTS OR ARRANGEMENTS, IN EFFECT AS OF THE DATE HEREOF, IN WHICH EITHER
SELLER OR ITS AFFILIATES ARE A LICENSEE OF INTELLECTUAL PROPERTY RIGHTS THAT ARE
RELATED TO OR USED IN CONNECTION WITH THE BUSINESSES; (III) ALL LICENSES OR
SIMILAR AGREEMENTS OR ARRANGEMENTS IN WHICH EITHER SELLER OR ITS AFFILIATES ARE
A LICENSOR OF INTELLECTUAL PROPERTY RIGHTS THAT ARE RELATED TO OR USED IN
CONNECTION WITH THE BUSINESSES, INCLUDING FRANCHISE AGREEMENTS; AND (IV) ALL
OTHER AGREEMENTS OR SIMILAR ARRANGEMENTS, IN EFFECT AS OF THE DATE HEREOF,
RELATING TO THE USE OF INTELLECTUAL PROPERTY RIGHTS BY EITHER SELLER, INCLUDING
SETTLEMENT AGREEMENTS, CONSENT-TO-USE OR STANDSTILL AGREEMENTS AND STANDALONE
INDEMNIFICATION AGREEMENTS.

 

(C)          EXCEPT AS SET FORTH ON SCHEDULE 4.19(C), (I) EACH SELLER OWNS AND
POSSESSES ALL RIGHT, TITLE AND INTEREST IN AND TO, OR HAS AN ENFORCEABLE RIGHT
TO USE, THE INTELLECTUAL PROPERTY RIGHTS, IDENTIFIED WITH SUCH SELLER AND SET
FORTH IN SCHEDULE 4.19(A), HAS A VALID AND ENFORCEABLE RIGHT TO USE PURSUANT TO
THE AGREEMENTS SET FORTH IN SCHEDULE 4.19(B), AND OTHERWISE OWN AND POSSESS ALL
RIGHT, TITLE AND INTEREST IN AND TO ALL OTHER INTELLECTUAL PROPERTY RIGHTS
NECESSARY FOR THE OPERATION OF THE BUSINESSES AS CURRENTLY CONDUCTED, FREE AND
CLEAR OF ALL ENCUMBRANCES, OTHER THAN PERMITTED ENCUMBRANCES (COLLECTIVELY, THE
“SELLERS’ INTELLECTUAL PROPERTY RIGHTS”) AND (II) NEITHER SELLER HAS LICENSED
ANY OF THE SELLERS’ INTELLECTUAL PROPERTY RIGHTS TO ANY THIRD PARTY ON AN
EXCLUSIVE BASIS.

 

(D)         EXCEPT AS SET FORTH ON SCHEDULE 4.19(D), (I) NEITHER SELLER HAS
INFRINGED, DILUTED, MISAPPROPRIATED OR OTHERWISE CONFLICTED WITH, AND THE
OPERATION OF THE BUSINESSES AS CURRENTLY CONDUCTED DOES NOT INFRINGE,
MISAPPROPRIATE OR OTHERWISE CONFLICT WITH, ANY INTELLECTUAL PROPERTY RIGHTS OF
ANY PERSON; (II) NEITHER SELLER IS AWARE OF ANY FACTS WHICH INDICATE A
LIKELIHOOD OF ANY OF THE FOREGOING; (III) NEITHER SELLER HAS RECEIVED ANY
NOTICES REGARDING ANY OF THE FOREGOING (INCLUDING ANY DEMANDS OR OFFERS TO
LICENSE ANY INTELLECTUAL PROPERTY RIGHTS FROM ANY PERSON OR ANY REQUESTS FOR
INDEMNIFICATION FROM CUSTOMERS) AND (IV) NEITHER SELLER HAS REQUESTED NOR
RECEIVED ANY OPINIONS OF COUNSEL RELATED TO THE FOREGOING.

 

(E)          EXCEPT AS SET FORTH ON SCHEDULE 4.19(E), (I) NO LOSS OR EXPIRATION
OF ANY OF THE SELLERS’ INTELLECTUAL PROPERTY RIGHTS IS THREATENED, PENDING OR
REASONABLY FORESEEABLE, EXCEPT FOR

 

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PATENTS EXPIRING AT THE END OF THEIR MAXIMUM STATUTORY TERMS (AND NOT AS A
RESULT OF ANY ACT OR OMISSION BY EITHER SELLER, INCLUDING A FAILURE BY SUCH
SELLER TO PAY ANY REQUIRED MAINTENANCE FEES); (II) ALL OF THE SELLERS’
INTELLECTUAL PROPERTY RIGHTS ARE VALID AND ENFORCEABLE AND NONE OF THE SELLERS’
INTELLECTUAL PROPERTY RIGHTS HAS BEEN MISUSED; (III) NO CLAIM BY ANY THIRD PARTY
CONTESTING THE VALIDITY, ENFORCEABILITY, USE OR OWNERSHIP OF ANY OF THE SELLERS’
INTELLECTUAL PROPERTY RIGHTS HAS BEEN MADE, IS CURRENTLY OUTSTANDING OR IS
THREATENED, AND THERE ARE NO GROUNDS FOR THE SAME; (IV) EACH SELLER HAS TAKEN
ALL NECESSARY AND DESIRABLE ACTION TO MAINTAIN AND PROTECT ALL OF THE SELLERS’
INTELLECTUAL PROPERTY RIGHTS AND WILL CONTINUE TO MAINTAIN AND PROTECT ALL OF
THE SELLERS’ INTELLECTUAL PROPERTY RIGHTS PRIOR TO THE CLOSING SO AS NOT TO
ADVERSELY AFFECT THE VALIDITY OR ENFORCEABILITY THEREOF; AND (V) NEITHER SELLER
HAS DISCLOSED OR ALLOWED TO BE DISCLOSED ANY OF ITS TRADE SECRETS OR
CONFIDENTIAL INFORMATION TO ANY THIRD PARTY OTHER THAN PURSUANT TO A WRITTEN
CONFIDENTIALITY AGREEMENT AND EACH SELLER HAS ENTERED INTO WRITTEN
CONFIDENTIALITY AGREEMENTS WITH ALL OF ITS EMPLOYEES AND INDEPENDENT CONTRACTORS
ACKNOWLEDGING THE CONFIDENTIALITY OF THE SELLERS’ INTELLECTUAL PROPERTY RIGHTS.

 

(F)            EXCEPT AS SET FORTH ON SCHEDULE 4.19(F), TO EACH SELLER’S
KNOWLEDGE, NO PERSON HAS INFRINGED, DILUTED, MISAPPROPRIATED OR OTHERWISE
CONFLICTED WITH ANY OF THE SELLERS’ INTELLECTUAL PROPERTY RIGHTS AND NEITHER
SELLER IS AWARE OF ANY FACTS THAT INDICATE A LIKELIHOOD OF ANY OF THE SAME.

 

(G)         EXCEPT AS SET FORTH ON SCHEDULE 4.19(G), ALL INTELLECTUAL PROPERTY
RIGHTS OWNED BY EACH SELLER WAS: (I) DEVELOPED BY EMPLOYEES OF SUCH SELLER
WORKING WITHIN THE SCOPE OF THEIR EMPLOYMENT; (II) DEVELOPED BY OFFICERS,
DIRECTORS, AGENTS, CONSULTANTS, CONTRACTORS, SUBCONTRACTORS OR OTHERS WHO HAVE
EXECUTED APPROPRIATE INSTRUMENTS OF ASSIGNMENT IN FAVOR OF SUCH SELLER AS
ASSIGNEE THAT HAVE CONVEYED TO SUCH SELLER OWNERSHIP OF ALL OF SUCH PERSON’S
RIGHTS IN THE INTELLECTUAL PROPERTY RIGHTS RELATING TO SUCH DEVELOPMENTS; OR
(III) ACQUIRED IN CONNECTION WITH ACQUISITIONS IN WHICH SUCH SELLER OBTAINED
APPROPRIATE REPRESENTATIONS, WARRANTIES AND INDEMNITIES FROM THE TRANSFERRING
PARTY RELATING TO THE TITLE TO SUCH INTELLECTUAL PROPERTY RIGHTS.

 

(H)         EXCEPT AS SET FORTH IN SCHEDULE 4.19(H), NONE OF THE SELLERS’
INTELLECTUAL PROPERTY RIGHTS IS SUBJECT TO ANY PROCEEDING OR OUTSTANDING DECREE,
ORDER, JUDGMENT, AGREEMENT OR STIPULATION RESTRICTING IN ANY MANNER THE USE,
TRANSFER OR LICENSING THEREOF BY EITHER SELLER, OR WHICH MAY AFFECT THE
VALIDITY, USE OR ENFORCEABILITY OF THE SELLERS’ INTELLECTUAL PROPERTY RIGHTS.

 

(I)             THE COMPUTER SOFTWARE, COMPUTER FIRMWARE, COMPUTER HARDWARE
(WHETHER GENERAL PURPOSE OR SPECIAL PURPOSE), AND OTHER SIMILAR OR RELATED ITEMS
OF AUTOMATED, COMPUTERIZED AND/OR SOFTWARE SYSTEM(S) THAT ARE USED OR RELIED ON
BY EITHER SELLER IN THE CONDUCT OF THE BUSINESSES IS, IN THE OPINION OF THE
SELLERS, SUFFICIENT IN ALL MATERIAL RESPECTS FOR THE CURRENT NEEDS OF SUCH
BUSINESSES AND DOES NOT INFRINGE, MISAPPROPRIATE OR OTHERWISE CONFLICT WITH ANY
INTELLECTUAL PROPERTY RIGHTS OF ANY PERSON.

 

(J)             EACH SELLER HAS COLLECTED, USED, IMPORTED, EXPORTED AND
PROTECTED ALL PERSONALLY IDENTIFIABLE INFORMATION, AND OTHER INFORMATION
RELATING TO INDIVIDUALS PROTECTED BY LAW, IN ACCORDANCE WITH THE PRIVACY
POLICIES OF EACH SELLER AND IN ACCORDANCE WITH APPLICABLE LAW, INCLUDING BY
ENTERING INTO AGREEMENTS, WHERE APPLICABLE, GOVERNING THE FLOW OF SUCH
INFORMATION ACROSS NATIONAL BORDERS.

 

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(K)          EACH ITEM OF THE SELLERS’ INTELLECTUAL PROPERTY RIGHTS IS VALID,
ENFORCEABLE AND SUBSISTING. ALL NECESSARY REGISTRATION, MAINTENANCE AND RENEWAL
FEES CURRENTLY DUE IN CONNECTION WITH THE SELLERS’ INTELLECTUAL PROPERTY RIGHTS
HAVE BEEN MADE AND ALL NECESSARY DOCUMENTS, RECORDATIONS AND CERTIFICATIONS IN
CONNECTION WITH THE SELLERS’ INTELLECTUAL PROPERTY HAVE BEEN FILED WITH THE
RELEVANT PATENT, COPYRIGHT, TRADEMARK OR OTHER AUTHORITIES IN THE UNITED STATES
OR FOREIGN JURISDICTIONS, AS THE CASE MAY BE, FOR THE PURPOSE OF MAINTAINING THE
SELLERS’ INTELLECTUAL PROPERTY RIGHTS.  PRIOR TO THE CLOSING, EACH SELLER WILL
DELIVER TO BUYER ALL FILES, DOCUMENTS, OR INSTRUMENTS NECESSARY TO THE
PRESERVATION AND MAINTENANCE OF THE SELLERS’ INTELLECTUAL PROPERTY RIGHTS.

 

(L)             EACH MATERIAL RECIPE AND PROPRIETARY FOOD PROCESS USED IN THE
BUSINESSES DURING THE LAST FIVE (5) YEARS ARE AND WERE OWNED BY THE SELLERS AND
ARE NOT SUBJECT TO ANY LICENSE OR SIMILAR USE AGREEMENT WITH ANY THIRD PARTY
(INCLUDING MFFB) AND HAVE NOT BEEN SOLD OR OTHERWISE TRANSFERRED TO ANY THIRD
PARTY (INCLUDING MFFB).  ALL MATERIAL RECIPES AND PROPRIETARY FOOD PROCESSES
USED IN THE BUSINESSES AS OF THE DATE OF THIS AGREEMENT (THE “SELLER RECIPES AND
PROCESSES”) ARE EITHER LOCATED AT THE GAM MANUFACTURING FACILITY OR WILL BE
DELIVERED TO BUYER AT CLOSING.

 

4.20                           Affiliate Transactions.  Except as set forth on
Schedule 4.20, (a) there are no Assumed Contracts between either Seller, on the
one hand, and any member, interest or right holder or any family member or
affiliate of any such member, interest or right holder, on the other hand;
(b) there are no Assumed Contracts between either Seller, on the one hand, and
any employee or director or any family member or affiliate of any such person,
on the other hand, other than employment agreements entered into in the ordinary
course of business consistent with past practice; and (c) there are no loans or
other indebtedness owing by any employee of either Seller or any family member
or affiliate of any such person to the Sellers.

 

4.21                           Brokers’ or Finders’ Fees.  No agent, broker,
firm or other Person acting on behalf of either Seller or, to such Sellers’
Knowledge, any of their Affiliates is, or will be, entitled to any investment
banking, commission, broker’s or finder’s fees from any of the parties hereto,
or from any Affiliate of any of the parties hereto, in connection with any of
the transactions contemplated by this Agreement.

 

4.22                           Suppliers.  Except for the suppliers named in
Schedule 4.22, neither Seller has purchased, from any single supplier, goods or
services for which the aggregate purchase price exceeds 5% of the total amount
of goods and services purchased by such Seller during the fiscal year ended
December 31, 2006.  Since December 31, 2006, there has not been any termination,
cancellation or material curtailment of the Business relationship of either
Seller with any supplier named in Schedule 4.22 or any material and adverse (to
either of the Sellers) change in any material term (including credit terms) of
the supply agreements or related arrangements with any such supplier.  No
supplier named in Schedule 4.22 has advised either Seller that it intends, or
has threatened, to cancel or otherwise terminate the business relationship of
such supplier with either Seller or any Franchisee or that it intends to modify
materially and adversely (to such Seller) its business relationship with such
Seller or any Franchisee or to decrease materially or limit materially its
supply to such Seller or any Franchisee.

 

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4.23                           Franchise Matters.

 

(A)          GAM HAS NEVER OFFERED OR SOLD FRANCHISES.  EXCEPT AS SET FORTH ON
SCHEDULE 4.23(A), SINCE JANUARY 1, 2004, GACCF HAS BEEN THE ONLY PERSON OFFERING
AND SELLING FRANCHISES AND NO SUBSIDIARY OR AFFILIATE HAS EVER OFFERED OR SOLD
FRANCHISES DOMESTICALLY OR INTERNATIONALLY.  GACCF AND ITS AFFILIATES ARE THE
ONLY PERSONS THAT HAVE OFFERED OR SOLD FRANCHISES FOR THEIR RESPECTIVE BRANDS
SINCE JANUARY 1, 2000.

 

(B)         SCHEDULE 4.23(B)  SETS FORTH A LISTING OF, AND GACCF HAS PROVIDED
BUYER WITH A TRUE AND COMPLETE COPY OF, ITS’ CURRENTLY EFFECTIVE SELLER UFOC(S),
TOGETHER WITH TRUE AND COMPLETE COPIES OF ALL SELLER UFOCS USED BY SUCH SELLER
SINCE JANUARY 1, 2004 IN CONNECTION WITH THE OFFER AND SALE OF FRANCHISES.

 

(C)          SCHEDULE 4.23(C)  SETS FORTH A TRUE AND COMPLETE LIST OF ALL
FRANCHISE AGREEMENTS TO WHICH GACCF IS A PARTY, INCLUDING FOR EACH FRANCHISE
AGREEMENT (I) THE NAME, ADDRESS AND TELEPHONE NUMBER OF EACH AND EVERY
FRANCHISEE; (II) THE EFFECTIVE DATES AND EXPIRATION DATES; AND (III) A
DESCRIPTION OF ANY PROTECTED OR EXCLUSIVE TERRITORY.  THERE ARE NO OTHER
CURRENTLY EFFECTIVE FRANCHISE AGREEMENTS RELATING TO THE BRANDS.  EXCEPT AS
NOTED IN SCHEDULE 4.23(C), EACH FRANCHISE AGREEMENT ENTERED IS SUBSTANTIALLY
SIMILAR TO THE FORM OF FRANCHISE AGREEMENT INCORPORATED INTO THE SELLER UFOC
THAT WAS ISSUED TO THE FRANCHISEE CONTEMPORANEOUSLY WITH THE SALE OF SUCH
FRANCHISE BY GACCF TO THE FRANCHISEE.  GACCF HAS AND HAS HAD MADE AVAILABLE TO
BUYER TRUE, COMPLETE AND CORRECT COPIES OF ALL FRANCHISE AGREEMENTS LISTED OR
REQUIRED TO BE LISTED ON SCHEDULE 4.23(C), INCLUDING ALL AMENDMENTS AND ADDENDA
THERETO, EXCEPT THOSE IN RESPECT OF WHICH SELLERS HAVE INDICATED ON SCHEDULE
4.23(C) THAT THE FRANCHISE AGREEMENT ON FILE IS MISSING.

 

(D)         FROM AND AFTER THE DATE OF ITS FORMATION, GACCF HAS AND HAS HAD AT
ALL RELEVANT TIMES, THE LIMITED LIABILITY COMPANY POWER AND AUTHORITY AND LEGAL
RIGHT TO ENTER INTO AND CARRY OUT THE TERMS OF EACH FRANCHISE AGREEMENT.  ALL OF
THE FRANCHISE AGREEMENTS ARE VALID, BINDING AND ENFORCEABLE AGAINST THE
FRANCHISEE THEREUNDER IN ACCORDANCE WITH ITS TERMS, SUBJECT TO ANY SUCH
FRANCHISEE’S BANKRUPTCY, INSOLVENCY, RECEIVERSHIP OR SIMILAR PROCEEDING UNDER
STATE OR FEDERAL LAW AND SUBJECT TO ANY EQUITABLE DOCTRINES AND LEGAL
REQUIREMENTS WHICH MAY AFFECT THE ENFORCEABILITY OF THE FRANCHISE AGREEMENTS
AGAINST FRANCHISEES.  GACCF HAS MAINTAINED A STANDARD PRACTICE OF REFRAINING
FROM THE NEGOTIATION OF THE FRANCHISE AGREEMENTS ON A FRANCHISEE BY FRANCHISEE
BASIS.

 

(E)          SCHEDULE 4.23(E) IDENTIFIES EACH EXISTING FRANCHISEE THAT (I) IS,
TO THE SELLER’S KNOWLEDGE, CURRENTLY IN MATERIAL DEFAULT UNDER ANY FRANCHISE
AGREEMENT, WHETHER OR NOT GACCF HAS NOTIFIED THE FRANCHISEE ABOUT THE DEFAULT;
(II) HAS RECEIVED WITHIN THE TWELVE (12) MONTH PERIOD PRIOR TO THE DATE OF THIS
AGREEMENT A NOTICE OF DEFAULT FROM GACCF THAT SUCH FRANCHISEE HAS INCURRED A
DEFAULT UNDER SUCH FRANCHISE AGREEMENT; (III) HAS ON THREE OR MORE OCCASIONS
WITHIN ANY TWELVE (12) MONTH PERIOD RECEIVED NOTICES OF DEFAULT UNDER A
FRANCHISE AGREEMENT; OR (IV) IS A PARTY TO A FRANCHISE AGREEMENT UNDER WHICH THE
FRANCHISE UNIT IS NOT YET OPEN AND OPERATING.

 

(F)            SCHEDULE 4.23(F) SETS FORTH A TRUE AND COMPLETE LIST OF ALL
WRITTEN OR ORAL AGREEMENTS OR ARRANGEMENTS (AND WITH RESPECT TO ORAL AGREEMENTS
A DESCRIPTION THEREOF) WITH

 

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INDEPENDENT SALES REPRESENTATIVES, CONTRACTORS, BROKERS OR CONSULTANTS UNDER
WHICH GACCF HAS AUTHORIZED ANY PERSON TO SELL OR PROMOTE FRANCHISES ON BEHALF OF
GACCF OR HAS AGREED TO REBATE OR SHARE AMOUNTS RECEIVABLE UNDER ANY FRANCHISE
AGREEMENT IN CONNECTION WITH THE OFFER AND SALE OF ANY SUCH FRANCHISE AGREEMENT
AND INDICATING WHICH OF SUCH AGREEMENTS ARE IN DEFAULT AND MAY BE TERMINATED BY
GACCF BY NOTICE TO THE OTHER PARTY.  GACCF HAS DELIVERED TO BUYER TRUE, CORRECT
AND COMPLETE COPIES OF ALL WRITTEN AGREEMENTS DESCRIBED IN SCHEDULE 4.23(F). 
GACCF HAS DELIVERED TO BUYER TRUE, CORRECT AND COMPLETE COPIES OF ALL WRITTEN
CORRESPONDENCE AND MEMORANDA EVIDENCING SUCH ORAL AGREEMENTS DESCRIBED IN
SCHEDULE 4.23(F).

 

(G)         TO THE SELLER’S KNOWLEDGE, EXCEPT AS SET FORTH ON SCHEDULE 4.23(G),
GACCF HAS NOT (I) OFFERED NOR SOLD, NOR OTHERWISE GRANTED RIGHTS, TO ANY PERSON
CONFERRING UPON THAT PERSON AREA DEVELOPMENT, AREA REPRESENTATIVE, MASTER
FRANCHISE, SUB-FRANCHISE, OR OTHER MULTI-UNIT OR MULTI-LEVEL RIGHTS WITH RESPECT
TO THE BRANDS WITHIN THE UNITED STATES OR (II) USED OR USES INDEPENDENT SALES
REPRESENTATIVES, AREA DIRECTORS, CONTRACTORS, SALES AND SERVICE PROVIDERS OR
BROKERS TO SELL OR PROMOTE THE SALE OF ITS FRANCHISES.

 

(H)         TO THE SELLER’S KNOWLEDGE, EXCEPT AS SET FORTH ON SCHEDULE 4.23(H),
AND EXCEPT AS MAY BE GRANTED BY OPERATION OF LAW, (I) NO FRANCHISEE HAS BEEN
GRANTED ANY TERRITORIAL RIGHTS BY GACCF PURSUANT TO WHICH (A) GACCF IS
RESTRICTED IN ANY WAY IN THEIR RIGHT TO OWN OR OPERATE, OR LICENSE OTHERS TO OWN
OR OPERATE, ANY BUSINESS OR LINE OF BUSINESS OR (B) THE FRANCHISEE IS GRANTED
RIGHTS FOR THE ACQUISITION OF ADDITIONAL FRANCHISES OR EXPANSION OF THE
FRANCHISEE’S TERRITORY, (II) NO FRANCHISEE’S TERRITORIAL RIGHTS CONFLICT WITH
THE TERRITORIAL RIGHTS OF ANY OTHER FRANCHISEE, AND (III) TO THE EXTENT GACCF
HAS  GRANTED ANY SUCH TERRITORIAL RIGHTS (WHETHER OR NOT DISCLOSED OR REQUIRED
TO BE DISCLOSED HEREIN), GACCF HAS COMPLIED WITH SUCH TERRITORIAL RIGHTS AND IN
THE COURSE OF OFFERING OR SELLING FRANCHISES HAS NOT VIOLATED THE TERRITORIAL
RIGHTS OF ANY FRANCHISEE.

 

(I)             SINCE JANUARY 1, 2004, AND EXCEPT AS SET FORTH ON SCHEDULE
4.23(I), EACH SELLER  HAS:  (I) PREPARED AND MAINTAINED EACH SELLER UFOC IN
ACCORDANCE WITH APPLICABLE LAW; (II) FILED AND OBTAINED REGISTRATION OF THE
OFFER AND SALE OF THE FRANCHISES IN ALL JURISDICTIONS REQUIRING SUCH
REGISTRATION PRIOR TO ANY OFFERS OR SALES OF FRANCHISES IN SUCH JURISDICTIONS
(THE “REGISTRATION LAWS”) AND HAS FILED ALL MATERIAL CHANGES, AMENDMENTS AND
RENEWALS THERETO ON A TIMELY BASIS AS REQUIRED BY LEGAL REQUIREMENTS IN SUCH
JURISDICTIONS; (III) FILED ALL NOTICE FILINGS (INCLUDING THE FILING OF SELLER
UFOC, AS APPLICABLE) IN ALL JURISDICTIONS IN WHICH A NOTICE FILING IS REQUIRED
TO BE FILED PRIOR TO THE OFFER AND SALE OF FRANCHISES IN SUCH JURISDICTIONS;
(IV) FILED ALL NOTICES OF EXEMPTION IN ALL JURISDICTIONS IN WHICH A NOTICE
FILING IS REQUIRED IN ORDER TO OBTAIN AN EXEMPTION FROM REGULATION AS A
“BUSINESS OPPORTUNITY” OR TO OTHERWISE BE SUBJECT TO REGULATION UNDER LEGAL
REQUIREMENTS IN SUCH JURISDICTIONS ABSENT SUCH NOTICE FILING; AND (V) SOLD NO
FRANCHISES DURING PERIODS AFTER THE NEED FOR AMENDMENT AROSE AND BEFORE THE
PROSPECTIVE FRANCHISEE HAD BEEN IN RECEIPT OF AN AMENDED SELLER UFOC FOR THE
REQUIRED PERIOD FOR REDISCLOSURE IN THE JURISDICTION.  SELLER UFOCS WERE
PREPARED IN ALL MATERIAL RESPECTS IN COMPLIANCE WITH THE UFOC GUIDELINES AND/OR
OTHER LEGAL REQUIREMENTS AND THERE WERE NO MATERIAL MISREPRESENTATIONS OR
MISSTATEMENTS OF FACT OR OMISSIONS TO STATE MATERIAL INFORMATION IN ANY SELLER
UFOC NECESSARY TO MAKE THE STATEMENTS MADE THEREIN NOT MISLEADING UNDER THE
CIRCUMSTANCES AT THE TIME SUCH SELLER WAS USING SUCH SELLER UFOC.  SINCE
JANUARY 1, 2004, GACCF HAS NEVER WITHDRAWN ANY OF ITS APPLICATIONS OR
REGISTRATIONS TO OFFER AND SELL FRANCHISES FROM ANY JURISDICTION EXCEPT AS SET
FORTH ON SCHEDULE 4.23(I).

 

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(J)             TO THE SELLER’S KNOWLEDGE, EXCEPT AS SET FORTH ON SCHEDULE
4.23(J), GACCF HAS NOT (I) OFFERED OR SOLD FRANCHISES OR ANY FORM OF AGREEMENT
FOR OPERATIONS UNDER THE BRANDS OUTSIDE OF THE UNITED STATES OR (II) FILED ANY
APPLICATION SEEKING REGISTRATION, EXEMPTION, AND/OR APPROVAL TO DO SO.

 

(K)          GACCF HAS HERETOFORE MADE AVAILABLE TO BUYER CORRECT AND COMPLETE
COPIES OF ALL CORRESPONDENCE WITH GOVERNMENT AUTHORITIES CONCERNING COMPLIANCE
WITH REGISTRATION LAWS (INCLUDING FRANCHISE REGISTRATION ORDERS), FRANCHISE
ADVERTISING OR PROMOTIONAL MATERIALS, UFOCS, AND FRANCHISE AGREEMENTS WITH
CURRENT AND PAST FRANCHISEES.  GACCF HAS MADE AVAILABLE OR DELIVERED TO BUYER
TRUE AND COMPLETE COPIES OF THE FRANCHISEE FILES AND OTHER MATERIALS ASSOCIATED
WITH EACH AND EVERY FRANCHISEE.  SINCE JANUARY 1, 2005, GACCF HAS NOT, IN ANY OF
THE AFOREMENTIONED DOCUMENTS OR FILINGS UNDER ANY REGISTRATION LAWS, MADE ANY
UNTRUE STATEMENT OF A MATERIAL FACT, OR OMITTED TO STATE ANY FACT NECESSARY TO
MAKE THE STATEMENTS MADE BY GACCF, NOT MISLEADING, IN CONNECTION WITH THE OFFER
OR SALE OF ANY FRANCHISE OR BUSINESS OPPORTUNITY.

 

(L)             EXCEPT AS DISCLOSED IN SCHEDULE 4.23(L), EACH FRANCHISE
AGREEMENT COMPLIES, AND THE OFFER, SALE, ADMINISTRATION AND RELATIONSHIP OF SUCH
FRANCHISE COMPLIED AT THE TIME SUCH OFFER AND SALE WAS MADE AND AT ALL TIMES
SINCE SUCH FRANCHISE AGREEMENT BECAME EFFECTIVE, WITH ALL LEGAL REQUIREMENTS.

 

(M)       EXCEPT AS LISTED OR DESCRIBED IN SCHEDULE 4.23(M), THE RIGHTS OF GACCF
UNDER ANY AND ALL OF THE FRANCHISE AGREEMENTS HAVE NOT BEEN SUBORDINATED TO THE
RIGHTS OF ANY OTHER PERSON AND NO PROVISION REGARDING THE CALCULATION AND
PAYMENT OF ROYALTY FEES IN ANY FRANCHISE AGREEMENT HAS BEEN WAIVED, ALTERED OR
MODIFIED IN ANY MATERIAL RESPECT ADVERSE TO GACCF.

 

(N)         SET FORTH IN SCHEDULE 4.23(N) IS A DESCRIPTION OF ANY FRANCHISEE
ORGANIZATION WHICH HOLDS ITSELF OUT AS A REPRESENTATIVE OF ANY GROUP OF TWO OR
MORE FRANCHISEES, INDICATING THEREON WHETHER SUCH FRANCHISEE ORGANIZATION IS
SPONSORED BY GACCF OR IS INDEPENDENTLY MAINTAINED.  THERE ARE NO AGREEMENTS OF
ANY KIND IN EFFECT BETWEEN ANY SUCH FRANCHISEE ORGANIZATION AND GACCF.

 

(O)         EXCEPT AS SET FORTH ON SCHEDULE 4.23(O), NO ORDERS, CONSENTS OR
DECREES (OTHER THAN ROUTINE COMMENT LETTERS FROM REGULATORS, ORDERS APPROVING
REGISTRATIONS, RENEWALS OF REGISTRATIONS OR REGISTRATION EXEMPTIONS) HAVE BEEN
ISSUED BY ANY FOREIGN OR DOMESTIC (FEDERAL OR STATE) ADMINISTRATIVE OR
REGULATORY AGENCY TO GACCF NOR HAVE LETTERS OF INQUIRY, INVESTIGATION OR THE
LIKE BEEN ISSUED TO GACCF BY SUCH FOREIGN OR DOMESTIC ADMINISTRATIVE OR
REGULATORY AGENCIES RELATING, DIRECTLY OR INDIRECTLY, TO GACCF’S OFFER AND SALE
OF FRANCHISES.

 

(P)         GACCF HAS NOT OFFERED OR SOLD FRANCHISES IN ANY JURISDICTION WHERE
THE SALE OF ANY SUCH FRANCHISE VIOLATED ANY LEGAL REQUIREMENTS OF SUCH
JURISDICTION.  GACCF HAS NOT OFFERED RESCISSION AS WOULD BE REQUIRED UNDER ANY
LEGAL REQUIREMENTS ARISING FROM A POSSIBLE VIOLATION OF ANY LEGAL REQUIREMENTS. 
NO FRANCHISEE: (I) PAID ANY CONSIDERATION OR SIGNED ANY FRANCHISE AGREEMENT
BEFORE THE EXPIRATION OF ALL APPLICABLE WAITING PERIODS; (II) HAS ASSERTED OR
EXERCISED ANY STATUTORY RIGHT OF RESCISSION ARISING FROM A VIOLATION OF THE
LEGAL REQUIREMENTS; (III) HAS AN IMMEDIATE OR INCHOATE RIGHT TO EXERCISE ANY
STATUTORY RIGHT OF RESCISSION ARISING FROM THE VIOLATION OF ANY LEGAL
REQUIREMENTS RELATING TO THE OFFER AND SALE OF FRANCHISES.  WITH THE

 

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EXCEPTION OF ROUTINE COMMENT LETTERS FROM REGULATORS, GACCF HAS NEVER RECEIVED:
(A) A STOP ORDER, REVOCATION OR WITHDRAWAL OF APPROVAL OR A LICENSE OR EXEMPTION
TO OFFER AND SELL FRANCHISES IN ANY JURISDICTION; OR (B) AN OFFICIAL NOTICE,
COMPLAINT, SUBPOENA, REQUEST FOR INFORMATION, OR ANY FORM OF FORMAL OR INFORMAL
INQUIRY FROM ANY GOVERNMENT AUTHORITY REGARDING THE OFFER OR SALE OF
FRANCHISES.  GACCF HAS NOT PARTICIPATED IN ANY REMEDIAL PROGRAM DIRECTED TOWARDS
ITS FRANCHISE SELLING PRACTICES ADMINISTERED BY THE NATIONAL FRANCHISE COUNCIL,
THE INTERNATIONAL FRANCHISE ASSOCIATION, THE FEDERAL TRADE COMMISSION, ANY STATE
OR PROVINCIAL AUTHORITY, OR ANY OTHER PUBLIC OR PRIVATE ORGANIZATION.

 

(Q)         THE BOOKS AND RECORDS OF GACCF AND THE FILES OF ITS FRANCHISE
COUNSEL INCLUDE ALL WRITTEN COMMUNICATIONS AND WRITTEN MEMORIALIZATION OF ALL
MATERIAL ORAL COMMUNICATIONS WITH FRANCHISE REGULATORY AUTHORITIES REGARDING THE
FRANCHISES, INCLUDING WITHOUT LIMITATION ALL APPLICATIONS FOR INITIAL
REGISTRATION, RENEWAL APPLICATIONS, AMENDMENTS, COMMENT LETTERS, APPROVALS,
LICENSES, CONSENTS, EXEMPTION FILINGS, WITHDRAWALS, AND UNDERTAKINGS REGARDING
FUTURE CHANGES IN SUCH SELLER’S OFFERING MATERIALS.

 

(R)            EXCEPT AS SET FORTH IN SCHEDULE 4.23(R), GACCF HAS COMPLIED WITH
ALL LEGAL REQUIREMENTS APPLICABLE TO THE ADMINISTRATION OF THE RELATIONSHIPS
WITH THE FRANCHISEES UNDER THE FRANCHISE AGREEMENTS.

 

(S)          GACCF HAS DELIVERED OR MADE AVAILABLE TO BUYER CORRECT AND COMPLETE
COPIES OF ALL REGISTRATIONS, MATERIAL ADVERTISING OR PROMOTIONAL MATERIALS (USED
BY GACCF SUBSEQUENT TO JANUARY 1, 2005), SELLER UFOCS OR AGREEMENTS USED BY
GACCF OR FILED WITH ANY FOREIGN OR DOMESTIC ADMINISTRATIVE OR REGULATORY AGENCY
OR OTHERWISE USED BY GACCF IN CONNECTION WITH THE OFFER, SALE AND OPERATION OF
FRANCHISES IN ANY JURISDICTION (DOMESTIC OR INTERNATIONAL) SINCE JANUARY 1,
2005.  GACCF HAS NOT PUBLISHED ANY FRANCHISE RECRUITMENT ADVERTISING IN
VIOLATION OF THE LEGAL REQUIREMENTS OF ANY JURISDICTION.  GACCF HAS EFFECTED
TIMELY FILING OF FRANCHISE RECRUITMENT ADVERTISING WITH THE APPLICABLE
GOVERNMENT AUTHORITY BEFORE PUBLICATION AND OBTAINED ANY APPROVALS OR
CLEARANCES, OR RECEIVED NO COMMENTS REQUIRING CHANGES TO THE ADVERTISING
MATERIALS THAT WERE NOT INCORPORATED IN THE FINAL COPY.

 

(T)            SCHEDULE 4.23(T) INCLUDES A TRUE AND COMPLETE LIST OF ALL WRITTEN
OR ORAL AGREEMENTS OR ARRANGEMENTS (AND WITH RESPECT TO ORAL AGREEMENTS OR
ARRANGEMENTS, A DESCRIPTION THEREOF) WITH THIRD PARTY VENDORS OR SUPPLIERS WHO
CURRENTLY APPROVED BY GACCF TO ACT AS PROVIDERS OF GOODS OR SERVICES TO THE
FRANCHISEES.  EXCEPT AS SET FORTH IN SCHEDULE 4.23(T), AND EXCLUDING
ENTERTAINMENT BY VENDORS/SUPPLIERS OR REIMBURSEMENT FOR FRANCHISEE CONVENTIONS
OR MEETINGS IN THE ORDINARY COURSE OF BUSINESS, GACCF DOES NOT RECEIVE REBATES,
COMMISSIONS, DISCOUNTS OR OTHER PAYMENTS OR REMUNERATION OF ANY KIND FROM SUCH
VENDORS OR SUPPLIERS OF SUCH GOODS OR SERVICES.

 

(U)         TO THE SELLER’S KNOWLEDGE, GACCF IS NOT IN VIOLATION OR DEFAULT OF
ANY FRANCHISE AGREEMENT, NOR HAS THERE OCCURRED ANY EVENT OR CONDITION WHICH
WITH THE PASSAGE OF TIME OR GIVING OF NOTICE (OR BOTH) WOULD CONSTITUTE A
MATERIAL DEFAULT BY GACCF OF ANY FRANCHISE AGREEMENT UNDER, OR PERMIT
TERMINATION OR RESCISSION OF, ANY SUCH FRANCHISE AGREEMENT.  NEITHER THE
EXECUTION OF THIS AGREEMENT NOR THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED HEREIN WOULD RESULT IN A VIOLATION OF OR A DEFAULT UNDER, OR GIVE
RISE TO A RIGHT OF TERMINATION, MODIFICATION, CANCELLATION, RESCISSION OR
ACCELERATION OF ANY OBLIGATION OR LOSS OF

 

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MATERIAL BENEFITS UNDER, ANY FRANCHISE AGREEMENT.  NO CONSENT OR APPROVAL OF ANY
FRANCHISEE IS REQUIRED IN CONNECTION WITH THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED BY THE AGREEMENT.

 

(V)         ALL FRANCHISE AGREEMENTS AND RELATED DOCUMENTS PROVIDED TO BUYER ARE
TRUE, CORRECT AND COMPLETE AND THEY CONSTITUTE ALL OF THE AGREEMENTS BETWEEN
GACCF AND ITS FRANCHISEES AND THERE EXISTS NO OTHER AGREEMENTS, ORAL OR WRITTEN,
BETWEEN GACCF AND ANY FRANCHISEE. THERE ARE NO MATERIAL AGREEMENTS OR SPECIAL
ARRANGEMENTS WITH ANY FRANCHISEE OTHER THAN AS SET FORTH IN THE SELLER UFOCS AND
FRANCHISE AGREEMENTS.

 

(W)       GACCF’S USE AND ADMINISTRATION OF ADVERTISING CONTRIBUTIONS AND FEES
MADE UNDER THE FRANCHISE AGREEMENTS HAS AT ALL TIMES COMPLIED WITH THE
PROVISIONS OF ALL FRANCHISE AGREEMENTS OR OTHER AGREEMENTS MADE BY GACCF WITH
RESPECT TO THEIR USE OF THE ADVERTISING CONTRIBUTIONS AND FEES, CONFORMS WITH
ANY DESCRIPTIONS OF SUCH ACTIVITIES CONTAINED IN APPLICABLE SELLER UFOCS AND
DOES NOT VIOLATE ANY LEGAL REQUIREMENTS.

 

(I)                                     SCHEDULE 4.23(W) SETS FORTH, AS TO
GACCF:  (A) A STATEMENT OF THE AMOUNT OF MARKETING FEES IN RESPECT OF THE TTM
PERIOD; (B) THE AMOUNT OF MARKETING FEES ACTUALLY SPENT BY EACH SELLER DURING
THE TTM PERIOD; AND (C) THE AMOUNT OF ANY RESIDUAL MARKETING FEES BEING HELD BY
EITHER SELLER OR THE DEFICIT IN MARKETING FEES FOR WHICH EITHER SELLER IS TO BE
REIMBURSED FROM FUTURE MARKETING FEES AS OF THE END OF THE TTM PERIOD, AS THE
CASE MAY BE (THE “MARKETING FEES BALANCE”). THE FOREGOING RECONCILIATION OF
MARKETING FEES IS REFERRED TO HEREIN AS THE “MARKETING FEES RECONCILIATION.”

 

(II)                                  SCHEDULE 4.23(W) SETS FORTH A LISTING OF
EACH CONTRACT ENTERED INTO BY GACCF THAT IS NOT FULLY PERFORMED BY BOTH PARTIES
AS OF THE DATE OF THIS AGREEMENT PURSUANT TO WHICH GACCF HAS OBLIGATED ITSELF TO
THE EXPENDITURE OF MARKETING FEES, ALONG WITH A STATEMENT OF ANY PAYMENTS MADE,
AND REMAINING TO BE MADE, BY GACCF IN ORDER TO COMPLETE ITS PERFORMANCE UNDER
EACH SUCH CONTRACT.

 

(X)           EXCEPT AS SPECIFIED ON SCHEDULE 4.23(X), THERE IS NO ACTION,
PROCEEDING, OR INVESTIGATION PENDING OR, TO THE KNOWLEDGE OF GACCF, THREATENED
AGAINST OR INVOLVING GACCF WITH RESPECT TO ANY OF ITS DOMESTIC OR INTERNATIONAL
FRANCHISES, AND TO THE KNOWLEDGE OF GACCF, THERE IS NO BASIS FOR ANY SUCH
ACTION, PROCEEDING OR INVESTIGATION EXCEPT FOR ACTIONS, PROCEEDINGS OR
INVESTIGATIONS THAT COULD NOT, IN ANY INDIVIDUAL CASE OR IN THE AGGREGATE,
REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT ON GACCF.  GACCF IS NOT
SUBJECT TO ANY JUDGMENT, ORDER OR DECREE ENTERED IN ANY LAWSUIT OR PROCEEDING
WHICH HAS OR MAY HAVE A MATERIAL ADVERSE EFFECT ON ITS RIGHTS AND INTERESTS IN
ANY FRANCHISE AGREEMENT.  TO THE KNOWLEDGE OF GACCF, THERE ARE NOT CURRENTLY,
NOR HAVE THERE EVER BEEN ANY ADMINISTRATIVE ACTIONS, CEASE AND DESIST ORDERS OR
OTHER ADMINISTRATIVE ACTIONS BY ANY FEDERAL OR STATE AGENCY WHICH REGULATES
FRANCHISES.

 

(Y)         SINCE JANUARY 1, 2004, EXCEPT AS SPECIFIED ON SCHEDULE 4.23(Y),
GACCF HAS NOT WAIVED ENFORCEMENT OF, OR FAILED TO ENFORCE, ANY NONCOMPETE OR
SIMILAR RESTRICTION UNDER A FRANCHISE AGREEMENT, AND TO THE KNOWLEDGE OF GACCF,
NO CURRENT OR FORMER FRANCHISEE IS CURRENTLY IN VIOLATION OF ANY APPLICABLE
NONCOMPETE COVENANT.

 

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(Z)           EXCEPT AS SET FORTH ON SCHEDULE 4.23(Z), NEITHER GACCF NOR ANY OF
ITS AFFILIATES HAVE ENTERED INTO ANY GUARANTEES IN RESPECT OF LEASES HELD BY
FRANCHISEES OF THE BUSINESSES.

 

(AA)                            ALL PERSONS ACTING AS FRANCHISE SALESPERSONS AND
FRANCHISE SALES BROKERS AUTHORIZED TO ACT ON BEHALF OF GACCF HAS BEEN DULY AND
TIMELY REGISTERED AND QUALIFIED IN ALL JURISDICTIONS WHERE SUCH REGISTRATION OR
QUALIFICATION IS NECESSARY.  ALL INFORMATION FILED BY GACCF WITH SUCH
REGISTRATIONS ABOUT ALL SUCH PERSONS IS ACCURATE, TRUE AND COMPLETE IN ALL
RESPECTS.  ALL OF THE DOMESTIC UFOCS ACCURATELY DISCLOSE ANY RELEVANT
INFORMATION ABOUT FRANCHISE BROKERS REQUIRED IN ITEMS, 2, 3 AND 4.

 

(BB)                          SINCE JANUARY 1, 2004, GACCF HAS CONDUCTED
REASONABLE TRAINING PROGRAMS FOR ALL OFFICERS, AGENTS, EMPLOYEES, BROKERS,
SALESPERSONS, CONTRACTORS AND OTHER REPRESENTATIVES ENGAGED IN THE OFFER AND
SALE OF FRANCHISES ON BEHALF OF GACCF IN THE REQUIREMENTS OF APPLICABLE LAW
BEFORE PERMITTING SUCH PERSONS TO ENGAGE WITH PROSPECTIVE FRANCHISEES AND HAS A
STANDARD PRACTICE OF RETRAINING SUCH PERSONS AT LEAST ANNUALLY REGARDING THE
REQUIREMENTS OF APPLICABLE LAW.

 

(CC)                            GACCF HAS NO PUBLISHED POLICIES GOVERNING ITS
FRANCHISE SALES EFFORTS AND PERSONNEL THAT MANDATE CONFORMANCE WITH APPLICABLE
LAW AND THAT NOTIFY SALES PERSONNEL THAT VIOLATION OF ANY LEGAL REQUIREMENTS
WILL RESULT IN DISCIPLINARY ACTION OR TERMINATION.  GACCF HAS INSTITUTED AND
MAINTAINED INTERNAL CONTROLS ADEQUATE TO ASSURE THAT MATERIAL VIOLATIONS OF
LEGAL REQUIREMENTS GOVERNING FRANCHISE SALES ARE DISCOVERED AND REMEDIED AND
THAT THEIR RECORDS DEMONSTRATE COMPLIANCE WITH LEGAL REQUIREMENTS OR THAT
APPROPRIATE STEPS ARE TAKEN TO REMEDY NON-COMPLIANCE WHEN DISCOVERED.

 

(DD)                          GACCF HAS OBTAINED, HAS FILED WITH THE APPLICABLE
JURISDICTIONS AND HAS RETAINED IN ITS RECORDS THE CONSENT OF THEIR ACCOUNTANTS
TO PUBLICATION OF THE FINANCIAL STATEMENTS SET FORTH IN THE SELLER UFOCS, AND
MODIFIED SELLER UFOCS TO CONFORM TO ANY COMMENTS OFFERED BY THE ACCOUNTANTS
PRIOR TO DISTRIBUTION TO PROSPECTIVE FRANCHISEES.

 

4.24                           Powers of Attorney.  Except as set forth on
Schedule 4.24, there are no outstanding powers of attorney executed by or on
behalf of either Seller.

 

4.25                           Investment.  Each Seller (a) understands that the
Parent Shares have not been, and will not be, registered under the Securities
Act, or under any state securities laws, and are being offered and sold in
reliance upon federal and state exemptions for transactions not involving any
public offering, (b) is acquiring the Parent Shares solely for its own account
for investment purposes, and not with a view to the distribution thereof, (c) is
a sophisticated investor with knowledge and experience in business and financial
matters, (d) has received certain information concerning Parent and has had the
opportunity to obtain additional information as desired in order to evaluate the
merits and the risks inherent in holding the Parent Shares, (e) is able to bear
the economic risk and lack of liquidity inherent in holding the Parent Shares,
and (f) is an Accredited Investor.

 

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4.26                           Deferred Revenue Liability.  As of the date of
this Agreement and the Closing Date, the Deferred Revenue Liability amount
reflects the full amount of all deferred revenues allocated to each Seller’s
Franchise Agreements.

 

4.27                           Indenture Payment.  To MFFB’s Executive
Knowledge, without giving effect to the transactions contemplated hereunder,
MFFB will have adequate cash and cash equivalents on hand to make its payment
due on March 15, 2008, under and in accordance with the Indenture.

 

4.28                           Settlement Agreement.  GACCF is the
successor-in-interest to GACCI and is bound by all of the obligations of GACCI
under the Original Settlement Agreement.  All of the Settlement Franchisees are
listed on Schedule 4.28, along with the identification of the franchised stores
(by brand name and location) owned by the Settlement Franchisees that are
eligible for payment rights under Section 2(b) or the settlement tag-along
rights under Section 2(c) of the Original Settlement Agreement as of November 1,
2007.  The notice to the Settlement Franchisees provided for in Section 2 of the
Original Settlement Agreement was duly given by MFFB on September 21, 2007, and
the thirty-day and sixty-day notice periods provided for in such Section 2
expired on October 20, 2007, and November 19, 2007, respectively.  As of the
date of this Agreement, MFFB has received from the Settlement Franchisees
notices of the exercise of tag-along rights as listed on Schedule 4.28.

 

4.29                           Other Contracts.  Neither MFFB nor either of the
Sellers has entered into any Contract with any of the parties identified in the
third disclosure on Schedule 4.13 that is not otherwise required to be set forth
on the Disclosure Schedules.

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF BUYER AND PARENT

 

Parent and Buyer, jointly and severally, hereby represent and warrant to the
Sellers, subject to the limitations set forth in Article XI of this Agreement,
that the statements contained in this Article V are correct and complete as of
the date of this Agreement and will be correct and complete as of the Closing
Date (as though made then and as though the Closing Date were substituted for
the date of this Agreement throughout this Article V except to the extent any
representation or warranty expressly speaks only as of a different date), except
as set forth in the Disclosure Schedules attached hereto.

 

5.1         Existence and Good Standing; Authorization.

 

(A)          EACH OF BUYER AND PARENT IS ORGANIZED, VALIDLY EXISTING AND IN GOOD
STANDING UNDER THE LAWS OF ITS INCORPORATION, ORGANIZATION OR FORMATION.

 

(B)         EACH OF BUYER AND PARENT HAS ALL REQUISITE CORPORATE OR
ORGANIZATIONAL POWER AND AUTHORITY TO EXECUTE AND DELIVER THIS AGREEMENT, TO
PERFORM ITS OBLIGATIONS HEREUNDER AND TO CONSUMMATE THE SALE AND THE OTHER
TRANSACTIONS CONTEMPLATED HEREBY.  THE EXECUTION, DELIVERY AND PERFORMANCE OF
THIS AGREEMENT BY EACH OF BUYER AND PARENT, AND THE CONSUMMATION BY IT OF THE
TRANSACTIONS CONTEMPLATED HEREBY, HAVE BEEN DULY AUTHORIZED AND APPROVED BY ITS
RESPECTIVE BOARD OF DIRECTORS OR MEMBERS, AND NO OTHER CORPORATE, STOCKHOLDER,
ORGANIZATIONAL, MEMBER OR MANAGER ACTION ON THE PART OF BUYER OR PARENT IS
NECESSARY TO AUTHORIZE THE EXECUTION, DELIVERY

 

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AND PERFORMANCE OF THIS AGREEMENT BY BUYER OR PARENT AND THE CONSUMMATION
THEREBY OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.  THIS AGREEMENT HAS
BEEN DULY EXECUTED AND DELIVERED BY BUYER AND PARENT AND, ASSUMING THE DUE
EXECUTION OF THIS AGREEMENT BY MFFB AND THE SELLERS, THIS AGREEMENT CONSTITUTES
A VALID AND BINDING OBLIGATION OF EACH OF BUYER AND PARENT ENFORCEABLE AGAINST
BUYER AND PARENT IN ACCORDANCE WITH ITS TERMS, SUBJECT TO APPLICABLE BANKRUPTCY,
INSOLVENCY, REORGANIZATION, MORATORIUM, RECEIVERSHIP AND SIMILAR LAWS AFFECTING
THE ENFORCEMENT OF CREDITORS’ RIGHTS GENERALLY, AND GENERAL EQUITABLE
PRINCIPLES.

 

5.2         Consents and Approvals; No Violations.  Except for the applicable
requirements of the HSR Act, the execution and delivery of this Agreement by
Buyer and Parent and the consummation of the transactions contemplated hereby do
not and will not:

 

(A)          VIOLATE OR CONFLICT WITH ANY PROVISIONS OF THE ORGANIZATIONAL
DOCUMENTS OF BUYER OR PARENT;

 

(B)         VIOLATE ANY LEGAL REQUIREMENT OR ORDER TO WHICH BUYER OR PARENT IS
SUBJECT OR BY WHICH ANY OF THEIR RESPECTIVE MATERIAL PROPERTIES OR ASSETS ARE
BOUND;

 

(C)          REQUIRE ANY PERMIT, CONSENT OR APPROVAL OF, OR THE GIVING OF ANY
NOTICE TO, OR FILING WITH ANY GOVERNMENT AUTHORITY ON OR PRIOR TO THE CLOSING
DATE; AND

 

(D)         RESULT IN A MATERIAL VIOLATION OR BREACH OF, CONFLICT WITH,
CONSTITUTE (WITH OR WITHOUT DUE NOTICE OR LAPSE OF TIME OR BOTH) A DEFAULT (OR
GIVE RISE TO ANY RIGHT OF TERMINATION, CANCELLATION, PAYMENT OR ACCELERATION)
UNDER, OR RESULT IN THE CREATION OF ANY ENCUMBRANCE UPON ANY OF THE MATERIAL
PROPERTIES OR ASSETS OF BUYER OR PARENT UNDER ANY OF THE MATERIAL TERMS,
CONDITIONS OR PROVISIONS OF ANY MATERIAL CONTRACT OR ANY OTHER INSTRUMENT OR
OBLIGATION TO WHICH BUYER OR PARENT IS A PARTY, OR BY WHICH IT OR ANY OF THEIR
RESPECTIVE MATERIAL PROPERTIES OR ASSETS MAY BE BOUND; EXCLUDING FROM THE
FOREGOING CLAUSES (B), (C) AND (D) PERMITS, CONSENTS, APPROVALS, NOTICES AND
FILINGS THE ABSENCE OF WHICH, AND VIOLATIONS, BREACHES, DEFAULTS AND
ENCUMBRANCES THE EXISTENCE OF WHICH, WOULD NOT, INDIVIDUALLY OR IN THE
AGGREGATE, REASONABLY BE EXPECTED TO PREVENT BUYER OR PARENT FROM PERFORMING ITS
OBLIGATIONS UNDER THIS AGREEMENT.

 

5.3         SEC Documents and Other Reports.  Parent has timely filed with the
SEC all documents required to be filed by it since December 31, 2006 under the
Securities Act or the Exchange Act (the “Parent SEC Documents”).  As of their
respective filing dates, the Parent SEC Documents complied in all material
respects with the requirements of the Securities Act or the Exchange Act, as the
case may be, each as in effect on the date so filed, and at the time filed with
the SEC none of the Parent SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.  The financial statements of Parent
included in the Parent SEC Documents complied as of their respective dates in
all material respects with the then applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, were prepared
in accordance with GAAP (except in the case of the unaudited statements, as
permitted by Form 10-Q under the Exchange Act) applied on a consistent basis
during the periods involved (except as may be indicated therein or in the notes
thereto) and fairly present in all material respects the condensed consolidated
financial position of Parent and its subsidiaries as at the dates thereof and
the

 

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condensed consolidated results of their operations and their condensed
consolidated cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments and to any other
adjustments described therein).

 

5.4   Litigation.  There are no Proceedings pending, or, to the knowledge of
Buyer or Parent, threatened which would prevent, enjoin, alter or materially
delay any of the transactions contemplated by this Agreement.

 

5.5   Brokers’ or Finders’ Fees.  No agent, broker, firm or other Person acting
on behalf of Buyer or Parent is, or will be, entitled to any investment banking,
commission, broker’s or finder’s fees from any of the parties hereto, or from
any Person controlling, controlled by or under common control with any of the
parties hereto, in connection with any of the transactions contemplated by this
Agreement.

 

5.6   Parent Shares.  All of the Parent Shares issuable in accordance with this
Agreement will be, when so issued, duly authorized, validly issued, fully paid
and non-assessable and free and clear of any liens (other than those created
under federal and state securities laws or the Voting Agreement) and not subject
to preemptive or other similar rights of the stockholders of Parent.

 

ARTICLE VI

PRE-CLOSING COVENANTS

 

6.1   Efforts to Closing.  On the terms and subject to the conditions in this
Agreement, the Sellers agree to use their reasonable best efforts to take, or
cause to be taken, all actions as may reasonably be necessary to consummate the
transactions contemplated hereby and to cause the conditions set forth in
Article VIII to be satisfied, and Buyer agrees to use its reasonable best
efforts to take, or cause to be taken, all actions as may reasonably be
necessary to consummate the transactions contemplated hereby and to cause the
conditions set forth in Article IX to be satisfied as soon as practicable after
the date hereof but not later than the Termination Date.  Without limiting the
generality of the foregoing, the Sellers shall give or cause to be given any
notices to third parties required to be given pursuant to any Assumed Contract
to which they are a party as a result of this Agreement or any of the
transactions contemplated hereby.  The Sellers shall use their commercially
reasonable efforts to obtain prior to the Closing, and deliver to Buyer at or
prior to the Closing, all consents, waivers and approvals required to be
obtained under each Assumed Contract to which they are a party or by which they
are bound, in form and substance reasonably acceptable to Buyer.  Buyer shall
use commercially reasonable efforts to cooperate with the Sellers in the
Sellers’ efforts to obtain the aforementioned consents, including by providing
such information as the other contracting parties may reasonably request.

 

6.2   Conduct of the Businesses.  From the date of this Agreement until the
Closing Date, the Sellers shall conduct the Businesses in the ordinary and
normal course of business, consistent with past practice; make ordinary
marketing, advertising, promotional and other budgeted expenditures and
implement ordinary pricing and promotional strategies in amounts generally
comparable with the level of such strategies for the 12-month period ended
December 31, 2006; and use commercially reasonable efforts to preserve and
maintain the ongoing operations, organization and assets of the Business and
maintain the goodwill of the Businesses’

 

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franchisees, customers and others having business relations with the Sellers. 
Further, and without limiting the generality of the foregoing, during the period
from the date hereof to the Closing Date, except as may be first approved by
Buyer in writing, or as is otherwise expressly permitted or required by this
Agreement, neither Seller shall:

 

(A)          CANCEL, ENCUMBER, OR IN ANY WAY DISCHARGE, TERMINATE, ADVERSELY
MODIFY OR AMEND OR IMPAIR ANY ASSUMED CONTRACT OR ENTER INTO, MODIFY, AMEND OR
TERMINATE ANY MATERIAL CONTRACT, OTHER THAN IN THE ORDINARY COURSE OF BUSINESS
CONSISTENT WITH PAST PRACTICE, OR COMMIT ANY ACT OR FAIL TO TAKE ANY ACTION THAT
WOULD CAUSE A MATERIAL BREACH OF ANY SUCH ASSUMED CONTRACT.

 

(B)         WAIVE, MODIFY, ALTER, REDUCE OR COMPROMISE ANY AMOUNTS PAYABLE BY
ANY FRANCHISEE, EXCEPT FOR AMOUNTS DUE AND OWING TO EITHER SELLER PRIOR TO THE
CLOSING; PROVIDED, THAT SUCH ACTION WILL NOT WAIVE, MODIFY, ALTER, REDUCE OR
COMPROMISE ANY AMOUNT PAYABLE BY THE FRANCHISEE TO BUYER ON OR AFTER THE CLOSING
DATE.

 

(C)          SELL OR DISPOSE OF ANY OF THE PURCHASED ASSETS, EXCEPT FOR SALES OF
INVENTORY, IMMATERIAL SALES OR OTHER DISPOSITIONS, EACH IN THE ORDINARY COURSE
OF BUSINESS CONSISTENT WITH PAST PRACTICE.

 

(D)         CREATE OR SUFFER OR PERMIT THE CREATION OF ANY ENCUMBRANCE (OTHER
THAN PERMITTED ENCUMBRANCES) ON ANY OF THE PURCHASED ASSETS OR WITH RESPECT
THERETO, UNLESS SUCH ENCUMBRANCE WILL BE DISCHARGED PRIOR TO THE CLOSING.

 

(E)          IMPLEMENT ANY LAYOFFS THAT COULD IMPLICATE THE WARN ACT.

 

(F)            TAKE ANY ACTION THAT WOULD PREVENT EITHER SELLER FROM
CONSUMMATING THE TRANSACTIONS CONTEMPLATED IN THIS AGREEMENT.

 

(G)         KNOWINGLY VIOLATE ANY APPLICABLE LEGAL REQUIREMENT.

 

(H)         MAKE ANY CAPITAL COMMITMENT, INDIVIDUALLY OR IN THE AGGREGATE, IN
EXCESS OF $25,000, OTHER THAN THOSE TO BE PAID FOR IN FULL PRIOR TO THE CLOSING
AND ENTERING INTO AND MAKING PAYMENTS UNDER THE FILTER CONTRACT.

 

(I)             TAKE, OR FAIL TO TAKE, ANY OTHER ACTION WHICH WOULD REASONABLY
BE EXPECTED TO RESULT IN A MATERIAL BREACH OR INACCURACY IN ANY OF THE
REPRESENTATIONS OR WARRANTIES OF THE SELLERS CONTAINED IN THIS AGREEMENT.

 

(J)             ENTER INTO ANY TRANSACTION WHEREBY EITHER SELLER RECEIVES AN
ADVANCE OR LUMP SUM PAYMENT THAT PROVIDES VALUE OR A DISCOUNT TO FUTURE VALUE
FOR A PERIOD IN EXCESS OF SIX (6) MONTHS.

 

(K)          ENTER INTO ANY REAL PROPERTY LEASE.

 

(L)             AGREE OR COMMIT, WHETHER IN WRITING OR OTHERWISE, TO TAKE ANY OF
THE ACTIONS SPECIFIED IN THE FOREGOING CLAUSES.

 

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6.3   Access and Investigation.  The Sellers will permit Parent, Buyer and their
respective Representatives to have reasonable access, prior to the Closing Date,
to the properties and to the books and records of the Sellers during normal
working hours and upon reasonable advance notice, to familiarize itself with,
access and investigate the Sellers’ properties, Businesses and operating and
financial conditions.  As promptly as practicable after the end of each month
ended after the date of this Agreement and prior to the Closing Date, the
Sellers shall deliver to Parent unaudited consolidated financial statements of
MFFB as at and for the year through the end of the most recently completed
fiscal month (each such report, an “Other Interim Report”).

 

6.4   Business Plan.  Prior to the Closing Date, Buyer and the Sellers will
cooperate in good faith to develop a plan to address co-branding of the GAC and
Parent’s Affiliates’ existing franchise systems (the “Business Plan”).  Buyer
and the Sellers will cooperate in good faith to fully implement the Business
Plan, including executing additional documents or taking any other actions
contemplated by, or reasonably necessary to implement, the Business Plan.  Each
Seller shall provide Buyer with all records and information reasonably necessary
and appropriate to carry out this Section 6.4.

 

6.5   Exclusivity.  The Sellers agree that neither of them nor any of their
members or officers shall, and that they shall each use their respective
reasonable best efforts to cause their Affiliates, employees, agents and
representatives (including any investment banker, attorney or accountant
retained by them) not to (and shall not authorize any of them to) directly or
indirectly: (i) solicit, initiate, knowingly encourage or knowingly facilitate
any inquiries with respect to, or the making, submission or announcement of, any
offer or proposal from any Person (other than Buyer or Parent) concerning any
proposal for a merger, sale of substantial assets (including the license of any
assets), sale of shares of stock or securities of either Seller, business
combination involving either of the Sellers, or other takeover or business
combination transaction involving either of the Sellers (an “Acquisition
Proposal”); (ii) participate in any discussions or negotiations regarding, or
furnish to any Person any nonpublic information with respect to, or otherwise
cooperate in any respect with, any Acquisition Proposal; (iii) engage in
discussions with any Person with respect to any Acquisition Proposal (except to
inform such Person that these restrictions exist); (iv) approve, endorse or
recommend any Acquisition Proposal; or (v) enter into any letter of intent or
similar document or any contract, agreement, arrangement, understanding or
commitment contemplating any Acquisition Proposal or transaction contemplated
thereby or requiring opposition to or seeking to prevent or undermine the
transactions contemplated by this Agreement.  The Sellers will immediately cease
any and all existing activities, discussions or negotiations with any Third
Parties conducted heretofore with respect to any Acquisition Proposal.

 

6.6   Change of Name.  Within ten (10) Business Days after the Closing Date,
(a) GACCF shall amend its Organizational Documents and take all other actions
necessary to change its name to a name that does not include “GACCF,” “Great
American Cookies” or anything similar to “GACCF” or “Great American Cookies”
(b) GAM shall amend its Organizational Documents and take all other actions
necessary to change its name to a name that does not include “GAM” or anything
similar to “GAM,” (c) each Seller shall take all actions requested by Buyer to
allow Buyer to change or incorporate “GACCF,” “GAM” or “Great American Cookies”
into Buyer’s name (or the names of any of its Affiliates), and (d) MFFB

 

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shall cause each of its Affiliates to amend their Organizational Documents, if
necessary, and take all other actions necessary to change their names, if
applicable, to names that do not include “GACCF,” “GAM,” “Great American
Cookies,” or anything similar to “GACCF,” “GAM” or “Great American Cookies.”

 

6.7   Notice of Developments.  The Sellers shall promptly advise Buyer, and
Buyer or Parent, as the case may be, shall promptly advise the Sellers, in
writing of any (a) event, circumstance or development that results (or would
reasonably be expected to result on the Closing Date) in a breach of any
representation or warranty made by it in this Agreement and (b) any material
failure of the Sellers, Parent or Buyer, as the case may be, to comply with or
satisfy any condition or agreement to be complied with or satisfied by it
hereunder; provided that no disclosure pursuant to this Section 6.7 shall be
deemed to amend or supplement any provision of this Agreement or any disclosure
schedule hereto, or to prevent or cure any misrepresentation, breach of warranty
or breach of covenant.

 

6.8   Continuation of Businesses.

 

(A)                                  BUYER SHALL, WITH SELLERS’ COOPERATION,
(I) REVISE THE DOMESTIC UFOC TO INCLUDE INFORMATION REQUIRED UNDER THE UFOC
GUIDELINES CONCERNING BUYER, PARENT AND ANY CHANGES IN THE DOMESTIC FRANCHISE
PROGRAM BUYER INTENDS TO MAKE, (II) REQUEST INFORMAL ADVISORY OPINIONS FROM
STATE FRANCHISE ADMINISTRATORS IN ORDER TO DETERMINE WHICH STATES, IF ANY, WILL
PERMIT BUYER TO “TACK” THE REGISTRATION OF ITS FRANCHISE PROGRAM ONTO THE
EXISTING REGISTRATIONS OF GACCF, AND (III) PREPARE AND FILE THE INITIAL
REGISTRATION OF BUYER’S UNIFORM FRANCHISE OFFERING CIRCULAR WITH APPROPRIATE
STATE FRANCHISE ADMINISTRATORS.

 

(B)                                 BUYER SHALL, WITH SELLERS’ COOPERATION,
AMEND ANY DISCLOSURE DOCUMENT RELATING TO ANY PENDING INTERNATIONAL FRANCHISE
TRANSACTION THAT DOES NOT CLOSE PRIOR TO THE CLOSING DATE TO INCLUDE REQUIRED
INFORMATION ABOUT BUYER, PARENT AND ANY CHANGES BUYER INTENDS TO MAKE IN THE
DOCUMENTATION FOR INTERNATIONAL FRANCHISES.

 

(C)                                  THE SELLERS SHALL COOPERATE WITH BUYER TO
MINIMIZE THE POSSIBILITY THAT ANY PROSPECTIVE FRANCHISEE WILL DECIDE NOT TO
CONSUMMATE A PENDING DOMESTIC OR INTERNATIONAL TRANSACTION ON ACCOUNT OF
SELLERS’ SALE OR BUYER’S ACQUISITION OF THE “GREAT AMERICAN COOKIES” FRANCHISE
SYSTEM.

 

6.9   Regulatory Filings.  Each of Parent and MFFB shall supply as promptly as
practicable any additional information and documentary material that may be
requested pursuant to the HSR Act in respect of the transactions contemplated by
this Agreement, and shall use their respective commercially reasonable efforts
to cause the expiration or termination of the applicable waiting periods under
the HSR Act as soon as practicable.  Each of Parent and MFFB, acting solely
through counsel, will (i) promptly notify the other of any written communication
to that party from any Governmental Authority and, subject to the HSR Act, if
practicable, permit the other party to review in advance any proposed written
communication to any such Governmental Authority and incorporate such other
party’s reasonable comments thereto, (ii) not agree to participate in any
substantive meeting or discussion with any such Governmental Authority in
respect of any filing, investigation or inquiry concerning this Agreement or the
transactions contemplated hereby unless it consults with the other party in
advance and, to the extent permitted by such Governmental

 

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Authority, gives the other party the opportunity to attend and (iii) furnish the
other party with copies of all correspondence, filings and written
communications between it and its Affiliates and their respective
representatives on one hand, and any such Governmental Authority and its
respective staff on the other hand, with respect to this Agreement and the
transactions contemplated hereby.  If any administrative or judicial action or
proceeding is instituted (or threatened to be instituted) challenging any
transaction contemplated by this Agreement as violative of the HSR Act or any
other law, or if any statute, rule, regulation, executive order, decree,
injunction or administrative order is enacted, entered, promulgated or enforced
by a Governmental Authority that would make the transactions contemplated by
this Agreement illegal or would otherwise prohibit or materially impair or delay
the consummation thereof, each of Parent and MFFB shall cooperate in all
respects with the other and use its commercially reasonable efforts to resolve
any and all objections as may be asserted with respect to this Agreement under
the HSR Act.  Notwithstanding the foregoing, Parent and MFFB shall not be
required to take any commercially unreasonable action that substantially impairs
the overall benefits expected to be realized from the consummation of the
transactions set forth herein.

 

6.10                           Maintenance of Real Property.  The Sellers shall
maintain the Real Property, including all of the Improvements, in substantially
the same condition as existed on the date of this Agreement, ordinary wear and
tear excepted, and shall not demolish or remove any of the existing
Improvements, or erect new improvements on the Real Property or any portion
thereof, without the prior written consent of Buyer.

 

6.11                           Leases.  Neither Seller shall amend, modify,
extend, renew or terminate any Lease, nor shall Sellers enter into any new lease
sublease, license or other agreement for the use or occupancy of any Real
Property, without the prior written consent of Buyer or Parent.

 

6.12                           Title Insurance.  The Sellers shall use
commercially reasonable efforts to assist Buyer in obtaining the Title Policy in
form and substance as set forth in Article VIII, within the time periods set
forth therein, including removing from title any liens that are not Permitted
Encumbrances.  The Sellers shall provide the Title Company with any affidavits,
releases, indemnities, memoranda or other assurances reasonably requested by the
Title Company to issue the Title Policy.  All fees, costs and expenses with
respect to the Title Commitment, the Title Policy and the Survey shall be paid
one-half by Buyer and one-half by the Sellers.

 

6.13                           Financing.  The Sellers shall cooperate and take
all actions reasonably requested by Parent in connection with Parent obtaining
the financing it needs in order to consummate the transactions contemplated
hereby, provided that the foregoing does not require the Sellers to execute any
agreements, certificates or other documents not expressly provided for in this
Agreement.

 

6.14                           Employees.  Prior to the Closing Date, Buyer
shall cause Parent to offer jobs to the employees of the Sellers set forth on
the attached Schedule 6.14.  These job offers (a) shall become effective only
upon the occurrence of the Closing, (b) shall reflect terms and conditions of
employment that are substantially similar in the aggregate to those terms and
conditions under which such employees are employed by the Sellers as of the
Closing Date, and (c) shall further be conditioned upon such employees being
available to begin work for Buyer as

 

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of the Closing Date, subject to any reinstatement or leave rights they may have
under the applicable leave policies of the Sellers or applicable law.  Employees
of the Sellers who accept such offers of employment shall be referred to herein
as “Transferred Employees.”

 

ARTICLE VII

POST-CLOSING COVENANTS

 

7.1   Employees.

 

(A)                                  FOLLOWING THE CLOSING DATE, IF REQUESTED BY
BUYER AND PERMITTED UNDER PARENT’S 401(K) PLAN, THE SELLERS SHALL TAKE ALL
ACTIONS NECESSARY TO PERMIT THE ROLLOVER IN CASH (BUT NOT OUTSTANDING LOAN
PROMISSORY NOTES FOR PARTICIPANT LOANS) OF ACCOUNT BALANCES (BUT NOT OUTSTANDING
LOANS) OF ALL TRANSFERRED EMPLOYEES FROM THE SELLER 401(K) PLAN IN WHICH SUCH
EMPLOYEES PARTICIPATED AS OF THE CLOSING DATE TO A 401(K) PLAN MAINTAINED BY
BUYER OR AN AFFILIATE OF BUYER.

 

(B)                                 THE SELLERS HEREBY AGREE THAT ANY CURRENT OR
FORMER EMPLOYEE OF THE BUSINESSES WHO (I) AS OF THE CLOSING DATE IS SHORT-TERM
DISABLED OR RECEIVING OR ENTITLED TO RECEIVE SHORT-TERM DISABILITY BENEFITS AND
WHO SUBSEQUENTLY BECOMES ELIGIBLE TO RECEIVE LONG-TERM DISABILITY BENEFITS, OR
(II) AS OF THE CLOSING DATE IS RECEIVING OR ENTITLED TO RECEIVE LONG-TERM
DISABILITY BENEFITS, SHALL BECOME ELIGIBLE OR CONTINUE TO BE ELIGIBLE, AS
APPLICABLE, TO RECEIVE LONG-TERM DISABILITY BENEFITS UNDER A SELLER’S OR ITS
AFFILIATE’S LONG-TERM DISABILITY PLAN UNLESS AND UNTIL SUCH INDIVIDUAL IS NO
LONGER DISABLED.

 

(C)                                  NO PROVISION OF THIS AGREEMENT, EXPRESS OR
IMPLIED: (I) SHALL BE CONSTRUED TO ESTABLISH, AMEND, OR MODIFY ANY BENEFIT PLAN,
PROGRAM, AGREEMENT, OR ARRANGEMENT; (II) SHALL LIMIT THE ABILITY OF BUYER OR ANY
OF ITS AFFILIATES TO AMEND, MODIFY OR TERMINATE ANY BENEFIT PLAN, PROGRAM,
AGREEMENT OR ARRANGEMENT AT ANY TIME ASSUMED, ESTABLISHED, SPONSORED OR
MAINTAINED BY ANY OF THEM; (III) IS INTENDED TO CONFER UPON ANY CURRENT OR
FORMER EMPLOYEE (INCLUDING ANY TRANSFERRED EMPLOYEE) OR ANY OTHER PERSON ANY
RIGHT TO EMPLOYMENT OR CONTINUED EMPLOYMENT FOR ANY PERIOD OF TIME BY REASON OF
THIS AGREEMENT, OR ANY RIGHT TO A PARTICULAR TERM OR CONDITION OF EMPLOYMENT; OR
(IV) IS INTENDED TO CONFER UPON ANY PERSON (INCLUDING ANY TRANSFERRED EMPLOYEE)
ANY RIGHTS AS A THIRD PARTY BENEFICIARY.

 

7.2   Taxes Related to Purchase of Assets; Tax Cooperation.

 

(A)          TRANSFER TAXES.

 

(I)                                     ALL DEED, STAMP, TRANSFER, DOCUMENTARY,
SALES AND USE, AND REGISTRATION TAXES, AND CONVEYANCE FEES, RECORDING CHARGES
AND OTHER SIMILAR TAXES AND FEES (INCLUDING ANY PENALTIES AND INTEREST) INCURRED
IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY
(COLLECTIVELY, THE “TRANSFER TAXES”) SHALL BE PAID ONE HALF BY BUYER AND ONE
HALF BY THE SELLERS (SUCH OBLIGATION TO BE JOINT AND SEVERAL AS BETWEEN BUYER,
ON THE ONE HAND, AND THE SELLERS, ON THE OTHER HAND).  THE PROVISIONS OF THIS
SECTION 7.2 AND NO OTHER PROVISION, SHALL GOVERN THE ECONOMIC BURDEN OF TRANSFER
TAXES.

 

(II)                                  EXCEPT TO THE EXTENT REQUIRED TO BE FILED
BY THE SELLERS, BUYER SHALL PROPERLY FILE ON A TIMELY BASIS ALL NECESSARY TAX
RETURNS AND OTHER DOCUMENTATION WITH RESPECT TO

 

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ALL TRANSFER TAXES AND BUYER AND THE SELLERS SHALL COOPERATE IN GOOD FAITH TO
MINIMIZE, TO THE FULLEST EXTENT POSSIBLE UNDER APPLICABLE LAWS, THE AMOUNT OF
ANY SUCH TRANSFER TAXES PAYABLE IN CONNECTION THEREWITH.  FOR TAX RETURNS
REQUIRED TO BE PREPARED BY BUYER PURSUANT TO THIS SECTION 7.2(A)(II), BUYER
SHALL COLLECT THE PROPER AMOUNT FROM THE SELLERS AND PAY THE TRANSFER TAXES
SHOWN ON SUCH TAX RETURN.  BUYER SHALL USE REASONABLE BEST EFFORTS TO PROVIDE TO
THE SELLERS ANY TAX RETURNS WHICH BUYER IS REQUIRED TO PREPARE AND FILE AT LEAST
TEN (10) DAYS BEFORE SUCH TAX RETURNS ARE DUE TO BE FILED.  FOR TAX RETURNS
REQUIRED TO BE PREPARED BY THE SELLERS PURSUANT TO THIS SECTION 7.2(A)(II), THE
SELLERS SHALL COLLECT THE PROPER AMOUNT FROM BUYER AND PAY THE TRANSFER TAXES
SHOWN ON SUCH TAX RETURN.  THE SELLERS SHALL USE REASONABLE BEST EFFORTS TO
PROVIDE BUYER ANY TAX RETURNS WHICH THEY ARE REQUIRED TO PREPARE AND FILE AT
LEAST TEN (10) DAYS BEFORE SUCH TAX RETURNS ARE DUE TO BE FILED.

 

(B)   STRADDLE PERIOD TAXES.  BUYER SHALL PREPARE OR CAUSE TO BE PREPARED AND
FILE OR CAUSE TO BE FILED ANY TAX RETURNS OTHER THAN ANY TAX RETURN BASED UPON
OR RELATED TO INCOME OR RECEIPTS WITH RESPECT TO THE PURCHASED ASSETS FOR
TAXABLE PERIODS WHICH BEGIN BEFORE THE CLOSING DATE AND END AFTER THE CLOSING
DATE (A “STRADDLE PERIOD”).  SUCH TAX RETURNS SHALL BE PREPARED OR CAUSED TO BE
PREPARED BY BUYER.  BUYER SHALL SUBMIT DRAFTS OF SUCH TAX RETURNS TO THE SELLERS
FOR APPROVAL BY THE SELLERS (WHICH APPROVAL SHALL NOT BE UNREASONABLY WITHHELD
OR DELAYED) NO LATER THAN TWENTY (20) DAYS PRIOR TO THE DATE THAT SUCH TAX
RETURNS ARE REQUIRED TO BE FILED WITH THE APPROPRIATE GOVERNMENTAL AUTHORITY,
INCLUDING EXTENSIONS.  IN THE EVENT THAT THE SELLERS AND BUYER CANNOT REACH
AGREEMENT WITH RESPECT TO ANY ITEMS SHOWN ON SUCH TAX RETURNS, A NATIONALLY
RECOGNIZED ACCOUNTING FIRM MUTUALLY ACCEPTABLE TO THE SELLERS AND BUYER SHALL
PREPARE THE TAX RETURNS.  THE COSTS RELATED TO HAVING THE ACCOUNTING FIRM
PREPARE THE TAX RETURNS SHALL BE BORNE EQUALLY BY THE SELLERS AND BUYER.  THE
SELLERS SHALL PAY TO BUYER AN AMOUNT EQUAL TO THE PORTION OF THE TAXES SHOWN ON
A TAX RETURN APPROVED BY THE SELLERS WHICH RELATES TO THE PORTION OF SUCH
STRADDLE PERIOD ENDING ON THE CLOSING DATE PROMPTLY UPON RECEIVING NOTICE FROM
BUYER THAT THE SELLERS ARE LIABLE UNDER THIS SECTION 7.2(B) FOR SUCH TAXES BUT
IN NO EVENT LATER THAN FIVE (5) BUSINESS DAYS BEFORE THE TAX RETURN REFLECTING
SUCH LIABILITY IS REQUIRED TO BE FILED.  FOR PURPOSES OF THIS SECTION 7.2(B), IN
THE CASE OF SALES, USE AND OTHER SIMILAR TAXES THAT ARE PAYABLE FOR A STRADDLE
PERIOD, THE PORTION OF SUCH TAX THAT RELATES TO THE PORTION OF SUCH TAXABLE
PERIOD ENDING ON THE CLOSING DATE SHALL BE DEEMED EQUAL TO THE AMOUNT THAT WOULD
BE PAYABLE IF THE RELEVANT TAXABLE PERIOD ENDED ON AND INCLUDED THE CLOSING
DATE.

 

(C)   PROPERTY TAXES.  THE SELLERS AND BUYER SHALL ALLOCATE PAYMENT OF PROPERTY
TAXES PAYABLE IN CONNECTION WITH THE PURCHASED ASSETS AS OF THE CLOSING DATE. 
THE PORTION OF SUCH PROPERTY TAXES THAT RELATES TO THE PORTION OF SUCH TAXABLE
PERIOD ENDING ON AND INCLUDING THE CLOSING DATE SHALL BE DEEMED TO BE THE AMOUNT
OF SUCH TAXES FOR THE ENTIRE TAXABLE PERIOD MULTIPLIED BY A FACTION THE
NUMERATOR OF WHICH IS THE NUMBER OF DAYS IN THE TAXABLE PERIOD ENDING ON THE
CLOSING DATE AND THE DENOMINATOR OF WHICH IS THE NUMBER OF DAYS IN THE ENTIRE
TAXABLE PERIOD.  BUYER AND THE SELLERS SHALL ALSO COOPERATE WITH RESPECT TO THE
PREPARATION AND FILING OF ANY PROPERTY TAX RETURNS (AND PAYMENT OF ANY PROPERTY
TAXES) IN A MANNER SIMILAR TO THE PROCEDURE FOR THE PREPARATION AND FILING OF
TAX RETURNS (AND PAYMENT OF TAXES) FOR A STRADDLE PERIOD.

 

(D)   COOPERATION.  THE SELLERS AND BUYER SHALL (AND SHALL CAUSE THEIR
RESPECTIVE AFFILIATES TO) COOPERATE FULLY WITH EACH OTHER AND MAKE AVAILABLE OR
CAUSE TO BE MADE AVAILABLE TO EACH OTHER FOR CONSULTATION, INSPECTION AND
COPYING (AT SUCH OTHER PARTY’S EXPENSE) IN A TIMELY

 

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FASHION SUCH PERSONNEL, TAX DATA, RELEVANT TAX RETURNS OR PORTIONS THEREOF AND
FILINGS, FILES, BOOKS, RECORDS, DOCUMENTS, FINANCIAL, TECHNICAL AND OPERATING
DATA, COMPUTER RECORDS AND OTHER INFORMATION AS MAY BE REASONABLY REQUESTED,
INCLUDING, WITHOUT LIMITATION, (A) FOR THE PREPARATION BY SUCH OTHER PARTY OF
ANY TAX RETURNS OR (B) IN CONNECTION WITH ANY TAX AUDIT OR PROCEEDING INCLUDING
ONE PARTY (OR AN AFFILIATE THEREOF) TO THE EXTENT SUCH TAX AUDIT OR PROCEEDING
RELATES TO OR ARISES FROM THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

 

7.3   Nonsolicitation.

 

(A)          FOR A PERIOD OF FIVE (5) YEARS FROM THE DATE OF THIS AGREEMENT,
NEITHER SELLER NOR MFFB SHALL, AND MFFB SHALL CAUSE EACH OF ITS AFFILIATES NOT
TO, DIRECTLY OR INDIRECTLY, ON ITS OWN BEHALF, AS AN AGENT OF, ON BEHALF OF OR
IN CONJUNCTION WITH, OR AS A MEMBER, PARTNER OR SHAREHOLDER OF, ANY OTHER FIRM,
CORPORATION OR OTHER ENTITY OR PERSON INDUCE ANY FORMER EMPLOYEE, LICENSEE,
INDEPENDENT CONTRACTOR, MANUFACTURER, SUPPLIER OR FRANCHISEE OF EITHER SELLER
WITH RESPECT TO THE BUSINESSES, TO TERMINATE HIS OR HER EMPLOYMENT OR
RELATIONSHIP, AS APPLICABLE, WITH BUYER OR ITS AFFILIATES.

 

(B)   BUYER AND PARENT ARE ENTITLED (WITHOUT LIMITATION OF ANY OTHER REMEDY) TO
SPECIFIC PERFORMANCE AND/OR INJUNCTIVE RELIEF WITH RESPECT TO ANY BREACH OR
THREATENED BREACH OF THE COVENANTS IN THIS SECTION 7.3, WITHOUT THE NEED TO POST
ANY BOND.  IF ANY COURT OF COMPETENT JURISDICTION AT ANY TIME DEEMS THE TIME
PERIODS FOR THE FOREGOING COVENANTS TOO LENGTHY OR THE SCOPE OF THE COVENANTS
TOO BROAD, THE RESTRICTIVE TIME PERIODS WILL BE DEEMED TO BE THE LONGEST PERIOD
PERMISSIBLE BY LAW, AND THE SCOPE WILL BE DEEMED TO COMPRISE THE BROADEST SCOPE
PERMISSIBLE BY LAW UNDER THE CIRCUMSTANCES.  IT IS THE INTENT OF THE PARTIES TO
PROTECT AND PRESERVE THE BUSINESSES AND THE PURCHASED ASSETS AND THEREFORE THE
PARTIES AGREE AND DIRECT THAT THE TIME PERIOD AND SCOPE OF THE FOREGOING
COVENANTS WILL BE THE MAXIMUM PERMISSIBLE DURATION (NOT TO EXCEED FIVE
(5) YEARS) AND SIZE.

 

7.4   Further Assurances.  From time to time following the Closing, each party
shall execute and deliver, or cause to be executed and delivered, such
instruments and documents as a party may reasonably request or as may be
otherwise necessary to more effectively consummate the transactions contemplated
hereby.  Following the Closing, the Sellers agree to forward to Buyer any
correspondence or other communications addressed to the Sellers received by them
that relates to the Purchased Assets or Assumed Liabilities.

 

7.5   Audit.  The Sellers shall use commercially reasonable efforts to cause
KPMG LLP, within seventy (70) days of the Closing Date, to (x) audit the
financial statements of each Seller for 2005, 2006 and 2007 in a manner meeting
the requirements of Regulation S-X under the Securities Act (the “SEC Financial
Statements”); (y) review the proposed pro forma adjustments specific to the
Sellers’ financial information to be included in the pro forma financial
statements that Parent intends to file in reports filed pursuant to the Exchange
Act; and (z) take such other similar actions reasonably requested by Buyer,
including (i) consenting to the proper use of its report(s) on the audited
financial statements included in the SEC Financial Statements; and
(ii) performing a SAS 100 review of any unaudited financial statements of the
Sellers included in the SEC Financial Statements.  In connection with the
foregoing, the Sellers shall use their reasonable efforts to assist Buyer in the
preparation of such SEC Financial Statements, at Buyer’s expense, including
without limitation providing Buyer’s Representatives

 

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with full access during normal business hours, and in a manner so as not to
interfere with the normal business operations of the Sellers, to all relevant
books, records, work papers, information and employees and auditors of such
Persons, to the extent necessary in connection with the preparation of any such
SEC Financial Statements.  Buyer shall reimburse the Sellers for costs incurred
by the Sellers in connection with the preparation of the SEC Financial
Statements and their compliance with the Sellers’ obligations under this
Section 7.5, including expenses incurred with the Sellers’ engagement of KPMG
LLP.  The Sellers shall advise Buyer should the Sellers become aware that KPMG
LLP’s charges in respect of the Sellers’ obligations under this Section 7.5 will
exceed $110,000.  The Sellers shall act in good faith and use their reasonable
best efforts to ensure that the cost of their compliance obligations under this
Section 7.5 are minimized to the extent possible.

 

7.6   Confidentiality.  Except as otherwise stated herein, from and after the
date hereof, for a period of three (3) years, the Sellers shall, and shall cause
each of their Affiliates to, treat as confidential and use commercially
reasonable efforts to safeguard and not to use, except as expressly agreed in
writing by Buyer, any and all the Seller Information included within the
Purchased Assets, including the Intellectual Property, in each case using the
standard of care necessary to prevent the unauthorized use, dissemination or
disclosure of such Seller Information.  Such three (3) year limitation shall not
apply to the Seller Recipes and Processes, and the Sellers shall, and shall
cause each of their respective Affiliates to, treat the Seller Recipes and
Processes as confidential and use commercially reasonable efforts to safeguard
the secrecy of, and refrain from using, any of the Seller Recipes and Processes
following the Closing Date.  After the Closing Date, the Sellers and their
respective Affiliates shall not make any representations to the public that any
recipes or processes used by the Sellers or their respective Affiliates are
identical or substantially similar to the Seller Recipes and Processes.  For
purposes of this Section 7.6, from and after the date hereof, confidential
information included within the Purchased Assets shall be deemed to be “Seller
Information” notwithstanding the fact that such information was available to or
in the possession of the Sellers or any of their Affiliates prior to the
Closing.  Notwithstanding the generality of the foregoing, nothing in this
Section 7.6 shall prohibit either Seller or its Affiliates from making public
disclosures required by applicable Legal Requirements, according to
Section 12.1.

 

7.7   Solvency.  From the time of execution of this Agreement through July 31,
2008, each of the Sellers and MFFB shall continue to pay their debts as they
mature or become due, including the March 15, 2008 payment due under the
Indenture.

 

7.8   Restrictions on Sale of Parent Shares.  During the six (6) month period
following the Closing Date (such period herein referred to as the “Initial
Period”), neither Seller shall, directly or indirectly, through an “affiliate”
or “associate” (as such terms are defined in the General Rules and Regulations
under the Securities Act), or otherwise, offer, sell, pledge, hypothecate, grant
an option for sale, or otherwise dispose of, or transfer or grant any rights
with respect thereto in any manner either privately or publicly (each, a
“Transfer”) any of the Parent Shares or Shares of the Parent acquired by the
Sellers pursuant to a stock split, stock dividend, reverse stock split,
subdivision, combination, reclassification or similar change in the capital
structure of Parent (each an “Adjustment”) affecting Parent Shares (together
with the Parent Shares, “Securities”), or enter into any agreement or any
transaction that has the effect of transferring, in whole or in part, directly
or indirectly, the economic consequence of ownership

 

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of the Securities, whether any such agreement or transaction is to be settled by
delivery of the Securities; provided, however, that the Sellers may pledge their
rights in the Parent Shares in accordance with the Indenture.  Following the
Initial Period, the restrictions on Transfer provided for in this Section 7.8
shall lapse with respect to 25% of the number of Parent Shares owned by the
Sellers in the aggregate (taking into account and proportionally adjusting for
any Adjustments occurring during such period) and the Sellers may Transfer such
Parent Shares, in open market transactions without restriction.  On the first
day of each of the first three consecutive three month periods following the six
month anniversary of the Closing Date, the restrictions on Transfer provided for
in this Section 7.8 shall lapse with respect to 25% of the aggregate number of
Parent Shares paid to the Sellers at Closing, (taking into account and
proportionally adjusting for any Adjustments occurring during such period) and
the Sellers may Transfer such Parent Shares, in open market transactions without
restriction, subject to an effective Registration Statement (as defined in
Section 7.9) covering such Parent Shares or an available exemption from
registration.

 

7.9   Registration.  The Sellers shall have registration rights in accordance
with the terms of a registration rights agreement, dated as of the Closing Date
and substantially in the form attached hereto as Exhibit D (the “Registration
Rights Agreement”), pursuant to which, among other things, Parent shall agree to
use its commercially reasonable efforts to (a) file a registration statement on
Form S-3, if eligible, or other appropriate form (the “Registration Statement”)
covering the Parent Shares issued pursuant to this Agreement, with the SEC
within 180 days following the Closing Date and (b) cause such Registration
Statement to become effective as soon as reasonably possible after such filing.

 

7.10                           Agreement to Vote.  At all times prior to a
Transfer (as defined above) of Parent Shares, at every meeting of the
stockholders of Parent called with respect to any of the following, and at every
adjournment thereof, and on every action or approval by written consent of the
stockholders of Parent, the Sellers shall appear at such meeting (in person or
by proxy) and shall vote or consent the Parent Shares (i) in favor of adoption
of each proposal recommended by the Board of Directors of Parent for adoption by
the stockholders and (ii) against any proposal for which the Board of Directors
of Parent does not support.  Prior to the termination of this Agreement, each
Seller covenants and agrees not to enter into any agreement or understanding
with any person to vote or give instructions in any manner inconsistent with the
terms of this Agreement.  Each Seller agrees to enter into a Voting Agreement,
dated as of the Closing Date and substantially in the form attached hereto as
Exhibit E (the “Voting Agreement”), that appoints a designee of Parent its
proxies and attorneys-in-fact, with full power of substitution and
resubstitution, to vote or act by written consent with respect to the Parent
Shares held by the Seller.

 

7.11                           Access to Records.  For two (2) years after the
Closing, each party will permit the other parties and their Affiliates
reasonable access on not less than five (5) business days prior written notice,
during normal business hours, at the sole cost and expense of the requesting
party and in a manner that will not unreasonably interfere with the normal
operations of the providing party, to and the right to make copies of the books
and records of such party relating to either Seller and/or the Purchased Assets
existing prior to Closing and in such providing party’s possession or control;
provided, however, that the requesting party shall only use such information
(a) to protect or enforce its rights or perform its obligations under this

 

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Agreement and any agreements entered into among the parties in connection
herewith or (b) in connection with tax or other regulatory filings, litigation
or financial reporting.  In addition, the providing party will make available to
the requesting party or its Affiliate, upon reasonable request and to the extent
still employed by the providing party, personnel who are familiar with any such
matter requested.

 

7.12                           Product Formulation Royalties.  From and after
the Closing Date, MFFB or its Affiliates, as applicable, shall (i) ,within five
(5) Business Days of its receipt of any Product Formulation Royalties that are
to be paid to Buyer hereunder, pay Buyer such Product Formulation Royalties and
provide Buyer with a notice detailing such amounts, which notice shall include
sufficient detail setting forth the calculation of such amounts and (ii) until
payment of such Product Formulation Royalties to Buyer, hold such amounts in
trust for Buyer.  Within fifteen (15) days of the collection or receipt by MFFB
or its Affiliates, as applicable, of any Product Formulation Royalties, MFFB or
its Affiliates shall pay to, or as directed by, Buyer such amounts owing Buyer
in immediately available funds by wire transfer.  All payments pursuant to this
Section 7.12 shall be made in accordance with the allocation schedule for the
applicable Vendor Agreements attached hereto as Schedule 7.12 (the “Vendor
Allocation Schedule”).  Notwithstanding the foregoing, MFFB shall use, and shall
cause its Affiliates to use, good faith efforts to have the counterparty to each
Vendor Agreement pay Buyer the Product Formulation Royalties directly, based
upon the Vendor Allocation Schedule.  In addition, MFFB shall use its good faith
efforts, or cause its Affiliates to use good faith efforts, to assist Buyer in
transitioning any services received pursuant to a Vendor Agreement to Buyer as
Buyer may request.

 

7.13                           Lease Obligations.

 

(A)          GENERAL.  EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION 7.13, MFFB
AND ITS AFFILIATES SHALL RETAIN ALL LIABILITY FOR THOSE GACCF LOCATIONS SET
FORTH ON SCHEDULE 7.13(A) FOR WHICH MFFB OR ONE OF ITS AFFILIATES IS EITHER THE
TENANT UNDER THE LEASE OR GUARANTEES THE OBLIGATIONS UNDER THE LEASE
(COLLECTIVELY, “LEASE LOCATIONS”).  IF BUYER TERMINATES THE FRANCHISE AGREEMENT
FOR ANY FRANCHISEE IN A LEASE LOCATION, BUYER SHALL USE ITS GOOD FAITH EFFORTS
TO PROVIDE MFFB AT LEAST THIRTY (30) DAYS PRIOR WRITTEN NOTICE OF SUCH
TERMINATION.   IF MFFB, OR ANY OF ITS SUCCESSORS AND ASSIGNS OF ANY MFFB OTHER
FRANCHISE BRAND, TERMINATES ANY MFFB OTHER FRANCHISE BRAND AT A LEASE LOCATION,
MFFB SHALL USE ITS GOOD FAITH EFFORTS TO PROVIDE BUYER AT LEAST THIRTY (30) DAYS
PRIOR WRITTEN NOTICE OF SUCH TERMINATION.

 

(B)         NOTWITHSTANDING ANYTHING SET FORTH HEREIN TO THE CONTRARY, IF ANY
FRANCHISE AGREEMENT IN RESPECT OF ANY LEASE LOCATION IS TERMINATED BY BUYER,
WITH OR WITHOUT CAUSE, OR IS TERMINATED BY THE FRANCHISEE OF SUCH LEASE
LOCATION, BUYER AND MFFB SHALL EACH USE THEIR REASONABLE BEST EFFORTS TO
(I) WITHIN THE FIRST NINETY (90) DAYS FOLLOWING THE EFFECTIVE DATE OF SUCH
TERMINATION, LOCATE ANOTHER PERSON TO OPERATE THE FRANCHISE AT SUCH LEASE
LOCATION, (II) BETWEEN NINETY-ONE (91) AND ONE HUNDRED EIGHTY (180) DAYS
FOLLOWING THE EFFECTIVE DATE OF SUCH TERMINATION, FIND A SUITABLE FRANCHISEE
FROM ANY BRAND UNDER WHICH BUYER OR MFFB, OR EITHER OF THEIR AFFILIATES,
CONDUCTS A FRANCHISE BUSINESS, TO OPERATE A FRANCHISE AT SUCH LEASE LOCATION,
AND (III) FROM ONE HUNDRED EIGHTY-ONE (181) DAYS FOLLOWING THE EFFECTIVE DATE OF
SUCH TERMINATION, EITHER FIND ANY PERSON TO OPERATE ANY BUSINESS AT SUCH LEASE
LOCATION OR NEGOTIATE A SETTLEMENT, REASONABLY ACCEPTABLE TO EACH PARTY, WITH
THE LANDLORD TERMINATING THE LEASE FOR SUCH LEASE LOCATION.

 

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(C)          FOR PURPOSES OF THIS SECTION 7.13, “CAUSE” SHALL MEAN A TERMINATION
OF A FRANCHISE AGREEMENT BY BUYER DUE TO A BREACH OF THE FRANCHISE AGREEMENT BY
THE FRANCHISEE, WHICH BREACH IS NOT CURED, OR CAPABLE OF BEING CURED, IN THE
TIME PERMITTED UNDER THE APPLICABLE FRANCHISE AGREEMENT OR A TERMINATION OF THE
FRANCHISE AGREEMENT DUE TO NEGLIGENCE BY THE FRANCHISEE.

 

(D)         BUYER TERMINATIONS.  FROM THE CLOSING DATE UNTIL, BUT EXCLUDING, THE
FIRST DAY FOLLOWING THE ONE (1) YEAR ANNIVERSARY OF THE CLOSING DATE (THE “LEASE
OBLIGATION DATE”), IF BUYER TERMINATES A FRANCHISE AGREEMENT IN RESPECT OF A
LEASE LOCATION (I) WITHOUT CAUSE, BUYER WILL BE RESPONSIBLE FOR ONE HUNDRED
PERCENT (100%) OF THE LIABILITY ASSOCIATED WITH SUCH LEASE LOCATION FOLLOWING
SUCH TERMINATION, (II) WITH CAUSE, MFFB SHALL BE RESPONSIBLE FOR ONE HUNDRED
PERCENT (100%) OF THE LIABILITY ASSOCIATED WITH SUCH LEASE LOCATION.  FROM AND
AFTER THE LEASE OBLIGATION DATE, IF BUYER TERMINATES A FRANCHISE AGREEMENT IN
RESPECT OF A LEASE LOCATION (I) WITHOUT CAUSE, BUYER WILL BE RESPONSIBLE FOR ONE
HUNDRED PERCENT (100%) OF THE LIABILITY ASSOCIATED WITH SUCH LEASE LOCATION
FOLLOWING SUCH TERMINATION, (II) WITH CAUSE, BUYER AND MFFB SHALL EACH BE
RESPONSIBLE FOR FIFTY PERCENT (50%) OF THE LIABILITIES ASSOCIATED WITH SUCH
LEASE LOCATION.

 

(E)          FRANCHISEE TERMINATIONS.  FROM THE CLOSING DATE UNTIL, BUT
EXCLUDING, THE LEASE OBLIGATION DATE, IF A FRANCHISEE TERMINATES ITS FRANCHISE
AGREEMENT IN RESPECT OF A LEASE LOCATION, MFFB SHALL BE RESPONSIBLE FOR ONE
HUNDRED PERCENT (100%) OF THE LIABILITY ASSOCIATED WITH SUCH LEASE LOCATION. 
FROM AND AFTER THE LEASE OBLIGATION DATE, IF A FRANCHISEE TERMINATES ITS
FRANCHISE AGREEMENT IN RESPECT OF A LEASE LOCATION (OTHER THAN AS A RESULT OF
MFFB TERMINATING SUCH FRANCHISEE’S RIGHT TO OPERATE A MFFB OTHER FRANCHISE BRAND
AT SUCH LEASE LOCATION), BUYER AND MFFB SHALL EACH BE RESPONSIBLE FOR FIFTY
PERCENT (50%) OF THE LIABILITIES ASSOCIATED WITH SUCH LEASE LOCATION.

 

(F)            MFFB TERMINATIONS.  FROM THE CLOSING DATE UNTIL, BUT EXCLUDING,
THE LEASE OBLIGATION DATE, IF MFFB TERMINATES A LEASE OR SUBLEASE IN RESPECT OF
A LEASE LOCATION FOR ANY REASON, MFFB SHALL BE RESPONSIBLE FOR ONE HUNDRED
PERCENT (100%) OF THE LIABILITY ASSOCIATED WITH SUCH LEASE LOCATION.  FROM AND
AFTER THE LEASE OBLIGATION DATE, IF MFFB TERMINATES A LEASE OR SUBLEASE IN
RESPECT OF A LEASE LOCATION (OTHER THAN AS A RESULT OF MFFB TERMINATING SUCH
FRANCHISEE’S RIGHT TO OPERATE A MFFB OTHER FRANCHISE BRAND AT SUCH LEASE
LOCATION) FOR A LEASE BREACH, BUYER AND MFFB SHALL EACH BE RESPONSIBLE FOR FIFTY
PERCENT (50%) OF THE LIABILITIES ASSOCIATED WITH SUCH LEASE LOCATION; PROVIDED,
HOWEVER, THAT MFFB PROVIDES BUYER AT LEAST THIRTY (30) DAYS PRIOR WRITTEN NOTICE
OF ITS INTENT TO TERMINATE SUCH LEASE OR SUBLEASE.  FOR PURPOSES OF THIS
SECTION 7.13(F), “LEASE BREACH” SHALL MEAN A BREACH BY A FRANCHISEE OF A LEASE
OR SUBLEASE IN RESPECT OF A LEASE LOCATION, WHICH BREACH IS NOT CURED, OR
CAPABLE OF BEING CURED, IN THE TIME PERMITTED UNDER THE APPLICABLE LEASE OR
SUBLEASE.

 

7.14                           Intellectual Property.  The Sellers agrees to use
commercially reasonably efforts to take, or cause to be taken all actions as
Buyer may reasonably request or as may be otherwise necessary to assist with the
registration and transfer of all foreign trademarks set forth on Schedule 7.14.

 

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7.15                           Franchise Business.

 

(A)          BUYER SHALL, WITH THE SELLERS’ COOPERATION, REVISE THE DOMESTIC
UFOC TO INCLUDE INFORMATION REQUIRED UNDER THE UFOC GUIDELINES CONCERNING BUYER,
PARENT AND ANY CHANGES IN THE DOMESTIC FRANCHISE PROGRAM BUYER INTENDS TO MAKE.

 

(B)         BUYER SHALL, WITH THE SELLERS’ COOPERATION, AMEND ANY DISCLOSURE
DOCUMENT RELATING TO ANY INTERNATIONAL FRANCHISE TRANSACTION PENDING AS OF THE
CLOSING DATE TO INCLUDE REQUIRED INFORMATION ABOUT BUYER, PARENT AND ANY CHANGES
BUYER INTENDS TO MAKE IN THE DOCUMENTATION FOR INTERNATIONAL FRANCHISES.

 

(C)          THE SELLERS SHALL COOPERATE WITH BUYER TO MINIMIZE THE POSSIBILITY
THAT ANY PROSPECTIVE FRANCHISEE WILL DECIDE NOT TO CONSUMMATE A PENDING DOMESTIC
OR INTERNATIONAL TRANSACTION ON ACCOUNT OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT.

 

7.16                           New Settlement Agreement.  Each of Parent and
MFFB agree that they will make all payments of the Release Consideration and
perform all Undertakings, in each case, as contemplated by the New Settlement
Agreement and will indemnify and hold harmless Parent, Buyer, the Sellers, MFFB
and their Affiliates, as applicable, for any and all Damages incurred by them by
reason of any failure by Parent or MFFB, as applicable, to make such payments or
to so perform.

 

7.17                           Waste Water Filter.  MFFB agrees to replace the
waste water filter at the GAM manufacturing facility as contemplated by the
Filter Contract.  Upon completion, the waste water filter will be in good
condition and repair and sufficient for the operation of the GAC Manufacturing
Business.  MFFB shall indemnify and hold harmless Parent and Buyer for any and
all costs and expenses related to the Filter Contract and to any other expenses
paid to repair and replace the waste water filter that is to be replaced
pursuant to the Filter Contract.

 

ARTICLE VIII

CONDITIONS PRECEDENT TO PARENT’S AND BUYER’S OBLIGATION TO CLOSE

 

The Buyer’s obligation to purchase the Assets and Parent’s and the Buyer’s
obligation to take the other actions required to be taken by Buyer or Parent at
the Closing is subject to the satisfaction, at or prior to the Closing, of each
of the following conditions (any of which may be waived by Buyer or Parent, as
appropriate, in whole or in part):

 

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8.1                                 Truth of Representations and Warranties. 
The representations and warranties of the Sellers contained in this Agreement
that are qualified as to materiality shall be true and correct, and those not so
qualified shall be true and correct in all material respects, as of the date of
this Agreement and on and as of the Closing Date, except to the extent that any
such representation or warranty expressly relates to an earlier date, in which
case such representation and warranty qualified as to materiality shall be true
and correct, and such representation and warranty not so qualified shall be true
and correct in all material respects, as of such earlier date.

 

8.2                                 Performance of Agreements.  Each of the
covenants and agreements of the Sellers to be performed or complied with by them
at or prior to the Closing Date pursuant to the terms hereof, shall have been
performed or complied with in all material respects.

 

8.3                                 Certificate.  Each Seller shall have
delivered (and caused to be delivered) to Buyer a certificate, dated the Closing
Date and executed by or on behalf of such Seller, certifying as to the
satisfaction of the conditions set forth in Sections 8.1 and 8.2 of this
Agreement.

 

8.4                                 No Injunction.  No court or other Government
Authority shall have issued an Order, which shall then be in effect, restraining
or prohibiting the completion of the transactions contemplated hereby.

 

8.5                                 Governmental and Other Approvals.  All of
the Government Authorizations and third-party consents and approvals set forth
on Schedule 8.5 shall have been received and shall be in full force and effect. 
Buyer shall have received copies of releases of all Encumbrances (other than
Permitted Encumbrances) against any asset, property or right of the Purchased
Assets.  The applicable waiting periods, if any, and any extensions thereof,
under the HSR Act shall have expired or otherwise been terminated.

 

8.6                                 Indenture Lien Release.  The Sellers shall
have delivered to Buyer evidence satisfactory to Buyer in its sole discretion
that the Trustee (as defined in the Indenture) has taken all action and
delivered all documents necessary to obtain a full and unconditional release of
the Purchased Assets from the security interests created by the Indenture, Notes
and Collateral Agreements (as such terms are defined in the Indenture).

 

8.7                                 Transition Services.  The Sellers shall have
entered into the Transition Services Agreement, and such agreement shall be in
full force and effect.

 

8.8                                 Escrow Agreement.  The Sellers and the
Escrow Agent shall have entered into the Escrow Agreement, and such agreement
shall be in full force and effect.

 

8.9                                 Registration Rights Agreement.  Each Seller
shall have entered into the Registration Rights Agreement, and such agreement
shall be in full force and effect.

 

8.10                           Voting Agreement.  Each Seller shall have entered
into the Voting Agreement, and such agreement shall be in full force and effect.

 

8.11                           Deed.  GAM shall have executed and delivered the
Deed, and such agreement shall be in full force and effect.

 

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8.12                           No Material Adverse Effect.  From the date hereof
to the Closing Date, there shall not have occurred any event, circumstance or
effect that has had or would reasonably be expected to have a Material Adverse
Effect.

 

8.13                           Financing.  The Parent shall have obtained on
terms and conditions satisfactory to it all of the financing it needs in order
to consummate the transactions contemplated hereby.

 

8.14                           Real Property.  No damage or destruction or other
change has occurred with respect to any of the Owned Real Property or any
portion thereof that, individually or in the aggregate, would materially impair
the use or occupancy of the Owned Real Property or the operation of the Sellers’
Businesses as currently conducted thereon.

 

8.15                           Title Insurance.  Buyer has obtained a proforma
for a title insurance policy from the Title Company in accordance with the Title
Commitment, which will insure Buyer’s fee simple title to the Owned Real
Property as of the Closing Date (including all recorded appurtenant easements,
insured as separate legal parcels), with gap coverage from the Sellers through
the date of recording, subject only to Permitted Encumbrances, in an amount
equal to the fair market value of the Owned Real Property insured thereunder and
which includes all endorsements requested by Buyer.  At Closing, the Title
Company shall be irrevocably committed to issue a title insurance policy in
substantially the same form as such proforma (the “Title Policy”).  The Sellers
shall have provided the Title Company with all affidavits, releases,
indemnities, memoranda or other assurances requested by the Title Company to
issue the Title Policy.  All fees, costs and expenses with respect to the Title
Commitment, the Title Policy and the Survey shall be paid one-half by Buyer and
one-half by the Sellers.

 

8.16                           Closing Deliverables.  In addition to any other
documents to be delivered or actions to be taken under other provisions of this
Agreement, at or prior to the Closing, the Sellers shall deliver to Buyer:

 

(A)          ONE OR MORE EXECUTED BILLS OF SALE IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO BUYER TRANSFERRING TO BUYER OR ITS RESPECTIVE DESIGNATED
AFFILIATES ALL TANGIBLE PERSONAL PROPERTY.

 

(B)         ONE OR MORE EXECUTED ASSIGNMENT AND ASSUMPTION AGREEMENT(S) IN FORM
AND SUBSTANCE REASONABLY SATISFACTORY TO BUYER ASSIGNING TO BUYER OR ITS
RESPECTIVE DESIGNATED AFFILIATES THE ASSUMED CONTRACTS, INCLUDING THE LEASES, TO
BE ASSIGNED HEREUNDER.

 

(C)          CERTIFIED COPIES OF THE RESOLUTIONS OF THE SELLERS AUTHORIZING THE
EXECUTION, DELIVERY, AND PERFORMANCE OF THIS AGREEMENT BY THE SELLERS AND THE
CONSUMMATION OF THE TRANSACTIONS PROVIDED FOR HEREIN.

 

(D)         AN EXECUTED ASSIGNMENT AND ASSUMPTION OF THE INTELLECTUAL PROPERTY
RIGHTS, IN FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO BUYER.

 

(E)          A NON-FOREIGN AFFIDAVIT FROM MRS. FIELDS’ ORIGINAL COOKIES, INC.
DATED AS OF THE CLOSING DATE, SWORN UNDER PENALTY OF PERJURY AND IN THE FORM
REQUIRED UNDER TREASURY

 

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REGULATIONS ISSUED PURSUANT TO CODE §1445 STATING THAT MRS. FIELDS’ ORIGINAL
COOKIES, INC. IS NOT A FOREIGN PERSON AS DEFINED IN CODE §1445.

 

(F)            ANY SELLER RECIPES AND PROCESSES NOT LOCATED AT THE GAM
MANUFACTURING FACILITY.

 

ARTICLE IX
CONDITIONS PRECEDENT TO THE SELLERS’ OBLIGATION TO CLOSE

 

All obligations of the Sellers under this Agreement are subject to the
fulfillment of each of the following conditions, any or all of which may be
waived in whole or in part by the Sellers, in their sole discretion:

 

9.1                                 Truth of Representations and Warranties. 
The representations and warranties of Parent and Buyer contained in this
Agreement that are qualified as to materiality shall be true and correct, and
those not so qualified shall be true and correct in all material respects, as of
the date of this Agreement and on and as of the Closing Date, except to the
extent that any such representation or warranty expressly relates to an earlier
date, in which case such representation or warranty that is qualified as to
materiality shall be true and correct, and such representation and warranty not
so qualified shall be true and correct in all material respects, as of such
earlier date.

 

9.2                                 Performance of Agreements.  Each of the
covenants and agreements of Parent and Buyer to be performed or complied with by
Parent or Buyer at or prior to the Closing Date pursuant to the terms hereof,
shall have been duly performed or complied with by each of Parent and Buyer in
all material respects.

 

9.3                                 Certificate.  Parent and Buyer have
delivered to the Sellers a certificate, dated the Closing Date and executed by a
duly authorized officer on behalf of Parent and Buyer, certifying as to the
satisfaction of the conditions set forth in Sections 9.1 and 9.2 of this
Agreement.

 

9.4                                 No Injunction.  No court or other Government
Authority shall have issued an Order, which shall then be in effect, restraining
or prohibiting the completion of the transactions contemplated hereby.

 

9.5   Governmental and Other Approvals.  All Government Authorizations and
third-party consents and approvals set forth on Schedule 8.5 shall have been
received and shall be in full force and effect.  The applicable waiting periods,
if any, and any extensions thereof, under the HSR Act shall have expired or
otherwise been terminated.

 

9.6                                 Escrow Agreement.  Buyer, Parent and the
Escrow Agent shall have entered into the Escrow Agreement, and such agreement
shall be in full force and effect.

 

9.7                                 Registration Rights Agreement.  Parent shall
have entered into the Registration Rights Agreement, and such agreement shall be
in full force and effect.

 

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9.8                                 Closing Deliverables.  In addition to any
other documents to be delivered or actions to be taken under other provisions of
this Agreement, at Closing, Parent or Buyer, as applicable, shall deliver to the
Sellers the following (“Buyer’s Closing Documents”):

 

(A)          THE INITIAL PURCHASE PRICE AS PROVIDED IN SECTIONS 3.2 AND 3.3.

 

(B)         ONE OR MORE ASSIGNMENT AND ASSUMPTION AGREEMENT(S) ASSUMING THE
ASSUMED LIABILITIES EXECUTED BY BUYER, IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE SELLERS.

 

(C)          A CERTIFIED COPY OF THE RESOLUTIONS OF PARENT AND BUYER AUTHORIZING
THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS AGREEMENT AND THE CONSUMMATION
OF THE TRANSACTIONS PROVIDED FOR HEREIN.

 

ARTICLE X
TERMINATION

 

10.1                           Right to Terminate.  This Agreement and the
transactions contemplated hereby may be terminated at any time prior to the
Closing:

 

(A)          BY THE MUTUAL WRITTEN CONSENT OF BUYER AND THE SELLERS;

 

(B)         BY BUYER OR THE SELLERS IF THE CLOSING SHALL NOT HAVE OCCURRED BY
JANUARY 31, 2008 (THE “TERMINATION DATE”);

 

(C)          BY BUYER OR THE SELLERS IF A COURT OF COMPETENT JURISDICTION OR
OTHER GOVERNMENT AUTHORITY SHALL HAVE ISSUED A NONAPPEALABLE FINAL ORDER, DECREE
OR RULING OR TAKEN ANY OTHER ACTION, IN EACH CASE HAVING THE EFFECT OF
PERMANENTLY RESTRAINING, ENJOINING OR OTHERWISE PROHIBITING THE TRANSACTIONS
CONTEMPLATED HEREBY, EXCEPT IF THE PARTY RELYING ON SUCH ORDER, DECREE OR RULING
OR OTHER ACTION HAS NOT COMPLIED WITH ITS OBLIGATIONS UNDER THIS AGREEMENT;

 

(D)         BY THE SELLERS, IF THERE HAS BEEN A BREACH OF ANY REPRESENTATION,
WARRANTY, COVENANT OR AGREEMENT ON THE PART OF PARENT OR BUYER SET FORTH IN THIS
AGREEMENT THAT CAUSES THE CONDITIONS SET FORTH IN ARTICLE IX TO BECOME INCAPABLE
OF FULFILLMENT BY THE TERMINATION DATE, UNLESS WAIVED BY THE SELLERS;

 

(E)          BY PARENT OR BUYER, IF THERE HAS BEEN A BREACH OF ANY
REPRESENTATION, WARRANTY, COVENANT OR AGREEMENT ON THE PART OF THE SELLERS SET
FORTH IN THIS AGREEMENT THAT CAUSES THE CONDITIONS SET FORTH IN ARTICLE VIII TO
BECOME INCAPABLE OF FULFILLMENT BY THE TERMINATION DATE, UNLESS WAIVED BY BUYER
OR PARENT; PROVIDED, HOWEVER, THAT THE PARTY EXERCISING ITS RIGHT TO SO
TERMINATE THIS AGREEMENT PURSUANT TO SECTION 10.1(B), 10.1(D) OR 10.1(E) SHALL
NOT HAVE A RIGHT TO TERMINATE IF, AT THE TIME OF SUCH TERMINATION, THERE EXISTS
A BREACH OF ANY OF ITS REPRESENTATIONS, WARRANTIES, COVENANTS OR AGREEMENTS
CONTAINED IN THIS AGREEMENT THAT RESULTS IN THE CLOSING CONDITIONS SET FORTH IN
ARTICLE VIII OR IX, AS APPLICABLE, NOT BEING SATISFIED.

 

10.2                           Effect of Termination.  In the event of the
termination of this Agreement as provided in this Article X, this Agreement
shall become null and void and of no further force or effect, and there shall be
no liability or obligation hereunder on the part of the Sellers, Parent

 

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or Buyer, or any of their respective directors, officers, employees, members,
partners, Affiliates, agents, representatives, heirs, administrators, executors,
successors or assigns, except (i) the provisions of this Agreement relating to
the Confidentiality Agreement, (ii) the obligations of the parties to this
Agreement under Article XI hereof and this Section 10.2 shall survive any such
termination and (iii) that Parent shall be obligated to pay to MFFB at the time
of such termination a termination fee of $750,000 in the event that all
conditions to Closing under Article VIII have been satisfied on or before
January 31, 2008, other than the financing condition in Section 8.13 and other
than the delivery of documents at Closing.  Notwithstanding the foregoing,
nothing herein shall relieve any party from liability for any breach of any of
its covenants or agreements or breach of its representations or warranties
contained in this Agreement prior to termination of this Agreement.

 

ARTICLE XI
INDEMNIFICATION; REMEDIES

 

11.1                           Survival.  All representations and warranties
made by the Sellers, MFFB, Parent or Buyer, herein, or in any certificate,
schedule or exhibit delivered pursuant hereto, shall survive the Closing and
continue in full force and effect until the 9-month anniversary of the Closing
Date (the “Survival Date”), other than in the case of fraud and except as to any
matters with respect to which a bona fide written claim shall have been made or
action at law or in equity shall have been commenced before such date, in which
event survival shall continue (but only with respect to, and to the extent of,
such claim or action); provided, however, that the representations and
warranties (i) in Section 4.18 shall survive and remain in full force and effect
for a period of five (5) years after Closing, (ii) in Section 4.10 shall survive
and remain in full force and effect until 30 days after the expiration of the
applicable statute of limitations for the assessment of Taxes (including all
periods of extension, whether automatic or permissive), and (iii) in Sections
4.1, 4.2, 4.6, 4.7, 4.21, 5.1, 5.5 and 5.6 (the “Core Representations”) shall
survive and remain in full force and effect indefinitely.  Each covenant and
agreement of the Sellers and Buyer contained in this Agreement, which by its
terms is required to be performed after the Closing Date, shall survive the
Closing and remain in full force and effect until such covenant or agreement is
performed.

 

11.2                           Indemnification by the Sellers and MFFB.  Subject
to the limitations set forth in this Article XI, the Sellers, severally but not
jointly, and MFFB jointly and severally with each Seller, shall indemnify,
defend and hold harmless Buyer and Parent and their managers, members, officers,
directors, agents, attorneys and employees, (hereinafter “Buyer Indemnified
Parties”) from and against any and all Damages incurred or sustained by Buyer
Indemnified Parties as a result of:

 

(A)          THE BREACH OF ANY REPRESENTATION OR WARRANTY OF THE SELLERS OR
MFFB, AS THE CASE MAY BE, CONTAINED IN THIS AGREEMENT OR IN ANY CERTIFICATE OR
OTHER INSTRUMENT FURNISHED TO BUYER OR PARENT BY EITHER SELLER PURSUANT TO THIS
AGREEMENT;

 

(B)         THE BREACH OF, DEFAULT UNDER OR NONFULFILLMENT OF ANY COVENANT,
OBLIGATION OR AGREEMENT OF EITHER SELLER OR MFFB, AS THE CASE MAY BE, UNDER THIS
AGREEMENT OR THE AGREEMENTS AND INSTRUMENTS CONTEMPLATED HEREIN;

 

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(C)          THE EXCLUDED ASSETS;

 

(D)         ANY EXCLUDED LIABILITY, INCLUDING, WITHOUT LIMITATION, ANY LIABILITY
THAT IS BASED UPON THE OCCURRENCE OF EVENTS, OR ACTIONS TAKEN BY EITHER SELLER,
PRIOR TO THE CLOSING DATE AND IS NOT AN ASSUMED LIABILITY; OR

 

(E)          ANY LITIGATION, PROCEEDING OR CLAIM BY ANY PERSON RELATING TO THE
BUSINESSES AS CONDUCTED PRIOR TO CLOSING WHETHER OR NOT SUCH LITIGATION,
PROCEEDING OR CLAIM IS SET FORTH ON SCHEDULE 4.13(A) OR SCHEDULE 4.13(B); OR

 

(F)            ANY AND ALL ACTIONS, SUITS, OR PROCEEDINGS, INCIDENT TO ANY OF
THE FOREGOING.

 

11.3                           Indemnification by Buyer.  Subject to the
limitations set forth in this Article XI, Buyer and Parent will each indemnify,
defend and hold harmless the Sellers and their respective stockholders,
managers, officers, directors, agents, attorneys and employees (hereinafter
“Seller Indemnified Parties” and, together with the Buyer Indemnified Parties,
the “Indemnified Party”) from and against any and all Damages incurred or
sustained by the Sellers Indemnified Parties as a result of:

 

(A)          THE BREACH OF ANY REPRESENTATION OR WARRANTY OF BUYER OR PARENT
CONTAINED UNDER THIS AGREEMENT OR ANY CERTIFICATE OR OTHER INSTRUMENT FURNISHED
BY BUYER OR PARENT TO THE SELLERS PURSUANT TO THIS AGREEMENT;

 

(B)         THE BREACH OF, DEFAULT UNDER OF NONFULFILLMENT OF ANY COVENANT,
OBLIGATION OR AGREEMENT BY BUYER OR PARENT UNDER THIS AGREEMENT OR IN THE
AGREEMENTS AND INSTRUMENTS CONTEMPLATED HEREIN;

 

(C)          THE OPERATION OF THE BUSINESSES AND THE OWNERSHIP OF THE PURCHASED
ASSETS BY BUYER FOLLOWING THE CLOSING, EXCEPT WITH RESPECT TO ANY EXCLUDED
LIABILITY;

 

(D)         ANY ASSUMED LIABILITY; AND

 

(E)          ANY AND ALL ACTIONS, SUITS, OR PROCEEDINGS INCIDENT TO ANY OF THE
FOREGOING.

 

11.4                           Limitation on Liability.

 

(A)          NONE OF THE SELLERS, MFFB OR PARENT NOR BUYER SHALL HAVE ANY
LIABILITY FOR DAMAGES UNDER, RESPECTIVELY, SECTION 11.2(A) OR SECTION 11.3(A),
AND NEITHER THE SELLER INDEMNIFIED PARTIES NOR THE BUYER INDEMNIFIED PARTIES
SHALL HAVE THE RIGHT TO SEEK INDEMNIFICATION UNDER, RESPECTIVELY,
SECTION 11.2(A) OR SECTION 11.3(A) UNTIL THE AGGREGATE AMOUNT OF THE DAMAGES
INCURRED BY SUCH INDEMNIFIED PARTY EXCEEDS $200,000 (THE “MINIMUM LOSS”),
PROVIDED THAT THE MINIMUM LOSS SHALL NOT APPLY TO ANY DAMAGES (AND THERE SHALL
BE FIRST-DOLLAR LIABILITY) RESULTING FROM (I) ANY BREACH OR MISREPRESENTATION OF
ANY CORE REPRESENTATIONS AND SECTIONS 4.10 AND 4.18 OR (II) ANY PAYMENT
OBLIGATION OF EITHER SELLER UNDER SECTION 3.2(G).  AFTER THE MINIMUM LOSS IS
EXCEEDED, THE INDEMNIFIED PARTY SHALL BE ENTITLED TO INDEMNIFICATION FOR THE
ENTIRE AMOUNT OF ITS DAMAGES IN EXCESS OF THE MINIMUM LOSS, SUBJECT TO THE
LIMITATIONS ON RECOVERY AND RECOURSE SET FORTH IN THIS ARTICLE XI.

 

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(B)         THE AGGREGATE LIABILITY OF THE SELLERS AND MFFB ON THE ONE HAND, AND
BUYER AND PARENT, ON THE OTHER, FOR ALL DAMAGES UNDER SECTION 11.2 OR
SECTION 11.3, AS APPLICABLE, SHALL NOT EXCEED THE FINAL PURCHASE PRICE (THE
“CAP”); PROVIDED, HOWEVER, THAT THE AGGREGATE LIABILITY OF THE SELLERS AND MFFB
FOR ALL DAMAGES UNDER SECTION 11.2(A) RESULTING FROM A BREACH OR
MISREPRESENTATION OF SECTION 4.18 SHALL NOT EXCEED FIVE MILLION DOLLARS
($5,000,000).  THE LIMITATIONS SET FORTH IN THIS SECTION 11.4 OR ELSEWHERE IN
THIS ARTICLE XI SHALL NOT APPLY TO ANY BREACH OF A CORE REPRESENTATION OR IN THE
CASE OF FRAUD.

 

(C)          IN DETERMINING THE AMOUNT OF DAMAGES IN RESPECT OF A CLAIM UNDER
THIS ARTICLE XI, THERE SHALL BE DEDUCTED AN AMOUNT EQUAL TO THE AMOUNT OF ANY
THIRD-PARTY INSURANCE PROCEEDS ACTUALLY RECEIVED BY THE INDEMNIFIED PARTY MAKING
SUCH CLAIM WITH RESPECT TO SUCH DAMAGES, LESS THE COST OF ANY INCREASE IN
INSURANCE PREMIUMS OVER THE PROJECTED PERIOD OF SUCH INCREASE AS A RESULT OF
MAKING A CLAIM FOR SUCH DAMAGES, PROVIDED THAT THERE SHALL BE NO OBLIGATION TO
MAKE A CLAIM, AND NO OFFSET AGAINST DAMAGES SHALL BE MADE IF A PARTY REASONABLY
BELIEVES THAT MAKING A CLAIM FOR SUCH DAMAGES IS REASONABLY LIKELY TO RESULT IN
A NON-RENEWAL OF THE INSURANCE POLICY.

 

11.5                           Other Indemnification Provisions.

 

(A)          TO THE EXTENT THAT ANY REPRESENTATIONS AND WARRANTIES OF THE
SELLERS, PARENT OR BUYER, AS APPLICABLE, HAVE BEEN BREACHED, THEREBY ENTITLING
THE NON-BREACHING PARTY TO INDEMNIFICATION PURSUANT TO SECTION 11.2 AND
SECTION 11.3 HEREOF, IT IS EXPRESSLY AGREED AND ACKNOWLEDGED BY THE PARTIES THAT
SOLELY FOR PURPOSES OF CALCULATION OF DAMAGES IN CONNECTION WITH ANY RIGHT TO
INDEMNIFICATION, THE REPRESENTATIONS AND WARRANTIES OF EITHER OR THE SELLERS OR
PARENT AND BUYER, AS APPLICABLE, THAT HAVE BEEN BREACHED SHALL BE DEEMED NOT
QUALIFIED BY ANY REFERENCES THEREIN TO MATERIALITY GENERALLY, SELLERS’ KNOWLEDGE
OR TO WHETHER OR NOT ANY BREACH OR INACCURACY RESULTS IN A MATERIAL ADVERSE
EFFECT.

 

(B)         FOLLOWING THE CLOSING, THE PARTIES’ RIGHTS TO INDEMNIFICATION
PURSUANT TO THIS ARTICLE XI SHALL, EXCEPT FOR EQUITABLE RELIEF AND SPECIFIC
PERFORMANCE OF COVENANTS THAT SURVIVE CLOSING AND FOR CLAIMS UNDER SECTION 12.4
OF THIS AGREEMENT, BE THE SOLE AND EXCLUSIVE REMEDY AVAILABLE TO THE PARTIES
WITH RESPECT TO ANY MATTER ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY, OTHER THAN FOR CLAIMS OF FRAUD.

 

11.6                           Procedure for Indemnification.  The procedure to
be followed in connection with any claim for indemnification by Buyer
Indemnified Parties under Section 11.2 or Seller Indemnified Parties under
Section 11.3 or any claims by one party against the other is set forth below:

 

(A)          NOTICE.  WHENEVER ANY INDEMNIFIED PARTY SHALL HAVE RECEIVED NOTICE
THAT A CLAIM HAS BEEN ASSERTED OR THREATENED AGAINST SUCH INDEMNIFIED PARTY,
WHICH, IF VALID, WOULD SUBJECT THE INDEMNIFYING PARTY (THE “INDEMNIFYING PARTY”)
TO AN INDEMNITY OBLIGATION UNDER THIS AGREEMENT, THE INDEMNIFIED PARTY SHALL
PROMPTLY NOTIFY THE INDEMNIFYING PARTY OF SUCH CLAIM; PROVIDED, HOWEVER, THAT
FAILURE TO SO NOTIFY THE INDEMNIFYING PARTY SHALL NOT RELIEVE THE INDEMNIFYING
PARTY OF ITS INDEMNIFICATION OBLIGATIONS HEREUNDER, EXCEPT TO THE EXTENT THE
INDEMNIFYING PARTY IS ACTUALLY PREJUDICED THEREBY.  ANY SUCH NOTICE MUST BE MADE
TO THE INDEMNIFYING PARTY NOT LATER THAN THE EXPIRATION OF THE APPLICABLE
SURVIVAL PERIOD SPECIFIED IN SECTION 11.1 ABOVE.

 

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(B)         DEFENSE OF A THIRD PARTY CLAIM.  IF ANY THIRD PARTY SHALL NOTIFY ANY
PARTY WITH RESPECT TO ANY MATTER (A “THIRD PARTY CLAIM”) THAT MAY GIVE RISE TO A
CLAIM FOR INDEMNIFICATION AGAINST ANY OTHER PARTY UNDER THIS ARTICLE XI, THE
INDEMNIFYING PARTY WILL HAVE THE RIGHT, BUT NOT THE OBLIGATION, TO ASSUME THE
DEFENSE OF THE THIRD PARTY CLAIM SO LONG AS (I) THE INDEMNIFYING PARTY PROVIDES
THE INDEMNIFIED PARTY WITH EVIDENCE REASONABLY ACCEPTABLE TO THE INDEMNIFIED
PARTY THAT THE INDEMNIFYING PARTY WILL HAVE THE FINANCIAL RESOURCES TO DEFEND
AGAINST THE THIRD PARTY CLAIM AND FULFILL ITS INDEMNIFICATION OBLIGATIONS
HEREUNDER, (II) USES COUNSEL REASONABLY SATISFACTORY TO THE INDEMNIFIED PARTY,
(III) THE INDEMNIFYING PARTY ACKNOWLEDGES ITS OBLIGATION TO INDEMNIFY THE
INDEMNIFIED PARTY HEREAFTER IN RESPECT OF SUCH MATTERS AND (IV) THE RELIEF
SOUGHT IS MONETARY DAMAGES.

 

(C)          AFTER NOTICE FROM THE INDEMNIFYING PARTY TO THE INDEMNIFIED PARTY
OF ITS ELECTION TO ASSUME THE DEFENSE OF THE THIRD PARTY CLAIM, THE INDEMNIFYING
PARTY SHALL NOT, AS LONG AS THE INDEMNIFYING PARTY DILIGENTLY CONDUCTS SUCH
DEFENSE, BE LIABLE TO THE INDEMNIFIED PARTY FOR ANY LEGAL OR OTHER EXPENSE
SUBSEQUENTLY INCURRED BY THE INDEMNIFIED PARTY IN CONNECTION WITH THE DEFENSE
THEREOF, OTHER THAN REASONABLE COSTS OF INVESTIGATION; PROVIDED, HOWEVER, THAT
IF COUNSEL DEFENDING SUCH THIRD PARTY CLAIM SHALL ADVISE THE PARTIES OF A
POTENTIAL CONFLICT OF INTEREST ARISING FROM THE EXISTENCE OF ONE OR MORE LEGAL
DEFENSES AVAILABLE TO THE INDEMNIFIED PARTY WHICH ARE DIFFERENT FROM OR
ADDITIONAL TO THOSE AVAILABLE TO THE INDEMNIFYING PARTY OR ITS AFFILIATES, THEN
THE INDEMNIFIED PARTY MAY RETAIN SEPARATE COUNSEL TO DEFEND IT AND IN THAT EVENT
THE REASONABLE FEES AND EXPENSES OF SUCH SEPARATE COUNSEL SHALL BE PAID BY THE
INDEMNIFYING PARTY IF APPLICABLE UNDER THIS ARTICLE XI.  SUBJECT TO THE PROVISO
TO THE FOREGOING SENTENCE, IF THE INDEMNIFYING PARTY ASSUMES SUCH DEFENSE, THE
INDEMNIFIED PARTY SHALL HAVE THE RIGHT TO PARTICIPATE IN THE DEFENSE THEREOF AND
TO EMPLOY COUNSEL, AT ITS OWN EXPENSE, SEPARATE FROM THE COUNSEL EMPLOYED BY THE
INDEMNIFYING PARTY.  THE INDEMNIFYING PARTIES SHALL BE LIABLE FOR THE REASONABLE
FEES AND EXPENSES OF COUNSEL EMPLOYED BY THE INDEMNIFIED PARTY FOR ANY PERIOD
DURING WHICH THE INDEMNIFYING PARTY HAVE NOT ASSUMED THE DEFENSE THEREOF IF THEY
ULTIMATELY ARE FOUND TO BE LIABLE TO INDEMNIFY THE INDEMNIFIED PARTY.  IF THE
INDEMNIFYING PARTY CHOOSE TO DEFEND OR PROSECUTE ANY THIRD PARTY CLAIM, ALL OF
THE PARTIES HERETO SHALL COOPERATE IN THE DEFENSE OR PROSECUTION THEREOF.

 

(D)         IF AN INDEMNIFYING PARTY ASSUMES THE DEFENSE OF AN ACTION OR
PROCEEDING, THEN WITHOUT THE INDEMNIFIED PARTY’S WRITTEN CONSENT, THE
INDEMNIFYING PARTY SHALL NOT SETTLE OR COMPROMISE ANY THIRD PARTY CLAIM OR
CONSENT TO THE ENTRY OF ANY JUDGMENT WHICH DOES NOT INCLUDE AS AN UNCONDITIONAL
TERM THEREOF THE DELIVERY BY THE CLAIMANT OR OTHER PLAINTIFF TO THE INDEMNIFIED
PARTY OF A WRITTEN RELEASE FROM ALL LIABILITY IN RESPECT OF SUCH THIRD PARTY
CLAIM OR IF SUCH SETTLEMENT SHALL INCLUDE INJUNCTIVE OR OTHER RELIEF THAT
AFFECTS OR RELATES TO THE RIGHT OR OBLIGATIONS OF SUCH INDEMNIFIED PARTY, OTHER
THAN THE OBLIGATION TO PAY MONETARY DAMAGES WHERE SUCH DAMAGES HAVE BEEN
SATISFIED IN FULL BY THE INDEMNIFYING PARTY OR THEIR RESPECTIVE AFFILIATES.

 

11.7                           Non-Third Party Claims.  Within thirty (30)
Business Days after a party obtains knowledge that it has sustained any Damages
not involving a Third Party Claim or action which such party reasonably believes
may give rise to a claim for indemnification from another party hereunder, such
Indemnified Party shall deliver notice of such claim to the Indemnifying Party,
together with a brief description of the facts and data which support the claim
for indemnification (a “Claim Notice”); provided, however, that failure to so
notify the Indemnifying Party shall not relieve the Indemnifying Party of its
indemnification obligations hereunder,

 

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except to the extent that the Indemnifying Party is actually prejudiced
thereby.  Any Claim Notice must be made to the Indemnifying Party not later than
the expiration of the applicable survival period specified in Section 11.1
above.  If the Indemnifying Party does not deliver notice to the Indemnified
Party within thirty (30) Business Days following its receipt of a Claim Notice
that the Indemnifying Party disputes its liability to the Indemnified Party
under this Article XI (an “Indemnification Objection”) the Indemnifying Party
will be deemed to have rejected such claim, in which event the other party will
be free to pursue such remedies as may be available to them.

 

11.8                           Indemnification Payments.  In the event any Buyer
Indemnified Party is entitled to indemnification pursuant to this Article XI for
Damages described in such Claim Notice, such Buyer Indemnified Party shall be
entitled to obtain such indemnification first out of the then remaining balance
of the Indemnity Escrow Amount, and then, if the Indemnity Escrow Amount is
insufficient to satisfy such indemnification claim, such Buyer Indemnified Party
may seek indemnification from the Sellers or MFFB for the unreimbursed portion
of such claim.  Notwithstanding the foregoing, in the event any Buyer
Indemnified Party is entitled to indemnification pursuant to this Article XI for
Damages described in such Claim Notice, the Sellers and MFFB shall satisfy their
obligation to indemnify for such Damages by payment by wire transfer of
immediately available funds to an account designated in writing by such Buyer
Indemnified Party.

 

ARTICLE XII
MISCELLANEOUS

 

12.1                           Public Disclosure or Communications.  Except to
the extent required by applicable Legal Requirements (including, without
limitation, the UFOC Guidelines, securities laws applicable to MFFB, and the
rules of the Nasdaq Global Market and securities laws applicable to Parent),
none of the Parent, Buyer, MFFB, the Sellers or any of their Affiliates shall
issue any press release or public announcement of any kind concerning the
transactions contemplated by this Agreement without the prior written consent of
the other parties; and, in the event that any such public announcement, release
or disclosure is required by applicable Legal Requirements (including, without
limitation, the rules of the Nasdaq Global Market and securities laws), the
disclosing party will provide the other parties, to the extent practicable and
permissible under the circumstances, reasonable opportunity to comment on any
such announcement, release or disclosure prior to the making thereof. Each of
the parties hereto acknowledges that each of Parent and MFFB shall be required
to file a Current Report on Form 8-K disclosing the transactions contemplated by
this Agreement and attaching as an exhibit thereto a copy of this Agreement.

 

12.2                           Notices.  All notices, consents, waivers, and
other communications under this Agreement must be in writing and will be deemed
to have been duly given when (a) delivered by hand (with written confirmation of
receipt), (b) sent by telecopier (with written confirmation of receipt);
provided that a copy is mailed by registered mail, return receipt requested, or
(c) received by the addressee, if sent by a nationally recognized overnight
delivery service (receipt requested), in each case to the appropriate addresses
and telecopier numbers set forth below (or to such other addresses and
telecopier numbers as a party may designate by notice to the other parties):

 

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If to the Sellers or MFFB:

 

Mrs. Fields Famous Brands, LLC

2855 East Cottonwood Parkway, Suite 400

Salt Lake City, UT 84121

Attention:  Michael Ward, EVP and General Counsel

Facsimile:  (801) 736-5944

 

If to Buyer or Parent:

 

NexCen Brands, Inc.

1330 Avenue of the Americas
34th Floor
New York, NY  10019
Attention:  Sue Nam, General Counsel

Facsimile: (212) 277-1160

 

With a copy to (which shall not constitute notice):

 

Kirkland & Ellis LLP
655 15th Street, N.W.
Washington, DC  20005
Attention:  Mark D. Director, Esq.
Facsimile: (202) 879-5200

 

12.3                           Entire Agreement; Nonassignability; Parties in
Interest.  This Agreement and the certificates, exhibits, schedules, documents,
instruments and other agreements specifically referred to herein or therein or
delivered pursuant hereto or thereto:  (a) constitute the entire agreement among
the parties with respect to the subject matter hereof and supersede all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof, including without limitation the letter of
intent dated as of December 7, 2007, (b) are not intended to confer upon any
other Person, either explicitly or implicitly, any equitable or legal rights or
remedies of any nature whatsoever hereunder, and (c) shall not be assigned by
operation of law or otherwise without the written consent of the other party;
provided, however, that Buyer may, without the consent of the Sellers,
(i) assign any or all of their rights and interests hereunder to one or more of
its Affiliates, (ii) designate one or more of its Affiliates to perform its
obligations hereunder, (iii) direct the Sellers, at the Closing and on behalf of
Buyer, to transfer title to all or some of the Purchased Assets directly to one
of more of its Affiliates, and (iv) assign its rights to indemnification under
this Agreement upon a sale or transfer of all or substantially all of the assets
of Buyer; provided, however, that Buyer shall remain obligated to perform all
their obligations under this Agreement if not performed by such Affiliates.

 

12.4                           Bulk Sales Law.  Buyer hereby waive compliance by
the Sellers with the provisions of any so-called bulk transfer laws of any
jurisdiction in connection with the sale of the Purchased Assets. 
Notwithstanding any such waiver, each of the Sellers, severally, and

 

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MFFB jointly and severally with each Seller, agrees to indemnify Buyer against
all liability, damage or expense which Buyer may suffer due to the failure to so
comply or to provide notice required by any such law.

 

12.5                           Expenses.  Except as otherwise specifically
provided in this Agreement, whether or not the transactions contemplated by this
Agreement are consummated, each party hereto shall bear its own costs, expenses
and fees incurred in connection with this Agreement and the other transactions
contemplated by this Agreement.

 

12.6                           Waiver and Amendment.  Any representation,
warranty, covenant, term or condition of this Agreement which may legally be
waived, may be waived, or the time of performance thereof extended, at any time
by the party hereto entitled to the benefit thereof and any term, condition or
covenant hereof may be amended by the parties hereto at any time.  Any such
waiver, extension or amendment shall be evidenced by an instrument in writing
executed on behalf of the appropriate party by a person who has been authorized
by such party to execute waivers, extensions or amendments on its behalf.  No
waiver by any party hereto, whether express or implied, of its rights under any
provision of this Agreement shall constitute a waiver of such party’s rights
under such provisions at any other time or a waiver of such party’s rights under
any other provision of this Agreement.  No failure by any party hereto to take
any action against any breach of this Agreement or default by another party
shall constitute a waiver of the former party’s right to enforce any provision
of this Agreement or to take action against such breach or default or any
subsequent breach or default by such other party.

 

12.7                           Severability.  Any term or provision of this
Agreement which is invalid or unenforceable will be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining rights of the person intended to be benefited by such provision or
any other provisions of this Agreement.

 

12.8                           Remedies Cumulative.  Except as otherwise
provided herein, any and all remedies herein expressly conferred upon a party
will be deemed cumulative with and not exclusive of any other remedy conferred
hereby, or by law or equity upon such party, and the exercise by a party of any
one remedy will not preclude the exercise of any other remedy.

 

12.9                           Counterparts.  This Agreement may be executed in
two or more counterparts, each of which shall constitute an original, and all of
which taken together shall constitute one instrument.  Any signature
page delivered by a facsimile machine, or in portable document format (“PDF”)
file format shall be binding to the same extent as an original signature
page with regard to any agreement subject to the terms hereof or any amendment
thereto.

 

12.10                     Governing Law; Jurisdiction.

 

(A)          THE INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT, AND ALL
MATTERS RELATING HERETO, SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK,
INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

 

(B)         EACH OF THE PARTIES AGREES THAT ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
OR THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND,
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY HERETO HEREBY
IRREVOCABLY SUBMITS ITSELF IN RESPECT OF ITS PROPERTY,

 

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GENERALLY AND UNCONDITIONALLY, TO THE NON-EXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS IN ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF THIS
AGREEMENT.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE
AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT BROUGHT IN THE COURTS REFERRED TO IN THE PRECEDING SENTENCE.  EACH
PARTY HERETO HEREBY CONSENTS TO PROCESS BEING SERVED IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF A COPY THEREOF TO THE ADDRESS SET FORTH IN
SECTION 12.2 HEREOF BELOW ITS NAME AND AGREES THAT SUCH SERVICE UPON RECEIPT
SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS OR NOTICE THEREOF. 
NOTHING IN THIS PARAGRAPH SHALL AFFECT OR ELIMINATE ANY RIGHT TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY APPLICABLE LEGAL REQUIREMENTS.

 

12.11                     Specific Performance.  The Sellers agree that the
Purchased Assets include unique property that cannot be readily obtained on the
open market and that Buyer will be irreparably injured if this Agreement is not
specifically enforced.  Therefore, Buyer shall have the right specifically to
enforce the Sellers’ performance under this Agreement, and the Sellers agree to
waive the defense in any such suit that Buyer have an adequate remedy at law and
to interpose no opposition, legal or otherwise, as to the propriety of specific
performance as a remedy.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE FOLLOWS]

 

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IN WITNESS WHEREOF, the parties hereto have each executed and delivered this
Asset Purchase Agreement as of the day and year first above written.

 

 

NEXCEN ASSET ACQUISITION, LLC

 

 

 

 

 

By:

NexCen Brands, Inc., its Managing Member

 

 

 

 

 

By:

/s/ Robert D’Loren

 

Title:

President and Chief Executive

 

 

Officer

 

 

 

 

 

 

 

NEXCEN BRANDS, INC.

 

 

 

 

 

By:

/s/ Robert D’Loren

 

Title:

President and Chief Executive 

 

 

Officer

 

Signature Page to Asset Purchase Agreement

 

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GREAT AMERICAN COOKIE COMPANY
FRANCHISING, LLC

 

 

 

 

By:

/s/ Michael Ward

 

Title:

Executive Vice President, Chief

 

 

Legal Officer and Secretary

 

 

 

 

 

 

 

 

GREAT AMERICAN MANUFACTURING, LLC

 

 

 

 

 

 

 

By:

/s/ Michael Ward

 

Title:

Executive Vice President, Chief

 

 

Legal Officer and Secretary

 

 

Signature Page to Asset Purchase Agreement

 

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MRS. FIELDS FAMOUS BRANDS, LLC

 

 

 

 

 

By:

/s/ Michael Ward

 

Title:

Executive Vice President, Chief

 

 

Legal Officer and Secretary

 

 

Signature Page to Asset Purchase Agreement

 

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