EXHIBIT 10.64

 

 

MARKETING ALLOWANCE AGREEMENT

 

THIS MARKETING ALLOWANCE AGREEMENT (the “Agreement”) is entered into effective
as of December 24, 2004, by and between MRS. FIELDS FRANCHISING, LLC, a Delaware
limited liability corporation (“MFF”), and SHADEWELL GROVE IP, LLC
(“Shadewell”).  MFF and Shadewell sometimes are referred to in this Agreement
individually, as a “Party” and collectively, as the “Parties.”

RECITALS

WHEREAS, MFF AND SHADEWELL ARE PARTIES TO SEVERAL TRADEMARK LICENSE AGREEMENTS
INCLUDING THE LICENSE AGREEMENT OF JANUARY 3, 2000 TO DEVELOP, MANUFACTURE AND
SELL SHELF-STABLE COOKIES, THE LICENSE AGREEMENT OF FEBRUARY 21, 2001 TO
DISTRIBUTE AND SELL READY-TO-EAT PRE-BAKED COOKIE PRODUCT THROUGH OTHER
DISTRIBUTION CHANNELS, THE LICENSE AGREEMENT OF MARCH 31, 2003 TO PACKAGE,
DISTRIBUTE, MARKET AND SELL CHOCOLATE CHIPS, AND OTHER SIMILAR LICENSING
AGREEMENT NOW BEING NEGOTIATED OR RECENTLY EXECUTED REGARDING SHELF-STABLE
BROWNIES AND TOPPINGS (SUCH LICENSE AGREEMENT, THE “BROWNIE LICENSE”, AND
COLLECTIVELY WITH THE OTHER LICENSE AGREEMENTS SET FORTH IN THIS PARAGRAPH, THE
“LICENSE AGREEMENTS”) THAT ALLOW SHADEWELL TO DEVELOP, PRODUCE AND SELL VARIOUS
PRODUCTS UNDER THE MARKS AND TRADE NAMES HELD BY MFF OR ITS AFFILIATED ENTITIES
(“LICENSED MARKS”) IN EXCHANGE FOR THE PAYMENT OF ROYALTIES (THESE PRODUCTS ARE
MORE PRECISELY DEFINED UNDER EACH OF THE LICENSE AGREEMENTS AS “ROYALTY BEARING
PRODUCT(S)”);

WHEREAS, MFF DESIRES TO GRANT SHADEWELL CERTAIN ONE-TIME MARKETING ALLOWANCES TO
BE CREDITED AGAINST ROYALTY PAYMENTS THAT WOULD OTHERWISE BE MADE BY SHADEWELL
TO MFF, WHICH ALLOWANCES SHALL BE GIVEN UNDER THE TERMS AND CONDITIONS SET OUT
HEREIN (“MARKETING ALLOWANCE”) TO ASSIST SHADEWELL TO HAVE ADDITIONAL MARKETING
FUNDING TO FURTHER ESTABLISH AND PROMOTE THE ROYALTY BEARING PRODUCTS AND MFF
BRAND IN THE MARKET; AND

WHEREAS, SHADEWELL IS WILLING TO ACCEPT THE MARKETING ALLOWANCES TO PROMOTE THE
ROYALTY BEARING PRODUCTS AND THE MFF BRAND, AND IS WILLING TO AGREE TO THE TERMS
AND CONDITIONS PROPOSED BY MFF TO RECEIVE THOSE MARKETING ALLOWANCES;

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises and covenants set forth herein, the Parties hereby agree as follows:

 

                1.             General Provisions and Terms.  All terms not
otherwise defined in the Agreement shall have the meanings given similar terms
in the License Agreements and Sections 15, 21 and 22 of the Brownie License
shall be incorporated herein.

 

2.             First Marketing Allowance.  MFF hereby grants Shadewell an
initial Marketing Allowance for the 2006 fiscal year of One Hundred Twenty-Five
Thousand U.S. dollars ($125,000.00 USD) to promote the Royalty Bearing Products
and MFF

 

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brand on the terms set forth herein.  This Marketing Allowance will be credited
against the first royalty monies due to MFF from Shadewell during the 2006
fiscal year, beginning with the first quarter, which rebate will continue to be
granted until the time the full amount outlined herein is realized by
Shadewell.  Shadewell hereby agrees to use the Marketing Allowance in the manner
and for the purposes as set out in Section 5 below.

 

3.             Second Marketing Allowance.  MFF hereby grants Shadewell an
additional Marketing Allowance for the 2007 fiscal year of Two Hundred Thousand
U.S. dollars ($200,000.00 USD) to promote the Royalty Bearing Products and MFF
brand on the terms set forth herein.  This Marketing Allowance will be credited
against the first royalty monies due to MFF from Shadewell during the 2007
fiscal year, beginning with the first quarter, which rebate will continue to be
granted until the time the full amount outlined herein is realized by
Shadewell.    Shadewell hereby agrees to use the Marketing Allowance in the
manner and for the purposes as set out in Section 5 below.

 

4.             Royalty Waiver Marketing Allowance.  MFF hereby grants Shadewell
an additional Marketing Allowance, which shall be effective only during the
Royalty Waiver period (as defined in Section 5(b) of the Brownie License), to
promote the Royalty Bearing Products and MFF brand on the terms set forth
herein.  The amount of this additional Marketing Allowance shall be equal to the
amount of the Royalty Waiver.  At the conclusion of the Royalty Waiver Period,
Shadewell must demonstrate and provide evidence that the Marketing Allowance set
forth in this Section 4 has been used in the manner and for the purposes as set
out in Section 5  below during such Royalty Waiver Period.  If MFF’s review
shall indicate that Shadewell has not spent or committed to spend an amount at
least equal to the Marketing Allowance on Promotional Activities, MFF shall send
Shadewell an invoice in the amount of the discrepancy, and Shadewell shall remit
the same to MFF within 30 business days of receipt or, at Shadewell’s option,
shall propose additional Promotional Activities acceptable to MFF and complete
the same within 45 days to expend the remainder of the Marketing Allowance.

 

5.             Approved Marketing Allowance Uses.  Shadewell shall use the
Marketing Allowance for advertising and promotional activities designed by
Shadewell in its reasonable discretion to promote the Licensed Marks and market
the Royalty Bearing Products (the “Promotional Activities”) within any
Designated Distribution Channel during the calendar year the Marketing Allowance
is granted.   The Promotional Activities may include, without limitation,
Shadewell’s slotting fees and similar merchandising expenses related to the
Royalty Bearing Products, discounts and fees arising from sale of the Royalty
Bearing Products to the trade, and production and distribution of marketing,
promotional and point of sale materials.  Shadewell’s use of the Licensed Marks
in any Promotional Activities must comply with provisions in the License
Agreements related to use of such Marks, including any approval or consent
rights that Mrs. Fields may have thereunder.

 

6.             Accounting Issues.  No later than 45 days following the end of
MFF’s fiscal year in which a Marketing Allowance has been granted, Shadewell
shall provide

 

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MFF with an accounting of the Marketing Allowance in form and content reasonably
satisfactory to MFF, including a breakdown indicating a brief description of the
types of Promotional Activities, the payees, and the amounts of Marketing
Allowance expenditures related to each Activity.  If required by MFF auditors or
internal accounting department in connection with any audit of any Mrs. Fields
entity within 45 days following its receipt of the accounting, MFF shall have
the right, upon reasonable notice to Shadewell and during regular business
hours, to review Shadewell’s records concerning the Marketing Allowance and
Promotional Activities.  If in MFF’s review it is determined that Shadewell has
not spent an amount at least equal to the Marketing Allowance on Promotional
Activities during the given year or period, or that Shadewell’s records do not
provide adequate support that Shadewell has met its obligations under this
paragraph, MFF shall send Shadewell an invoice in the amount of the discrepancy,
and Shadewell shall remit the same to MFF within 30 business days of receipt,
or, at Shadewell’s option, shall propose additional Promotional Activities
acceptable to MFF and complete the same within 45 days to expend the remainder
of the Marketing Allowance.

 

7.             COUNTERPARTS.  THIS AGREEMENT MAY BE SIGNED IN COUNTERPARTS,
WHICH SHALL BE CONSIDERED ONE ORIGINAL.

8.             INTEGRATION.  THIS AGREEMENT AND THE TRADEMARK LICENSE AGREEMENTS
REFERRED TO IN THE RECITALS ABOVE SETS FORTH THE ENTIRE AGREEMENT AND
UNDERSTANDING BETWEEN AND AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT
MATTER HEREOF AND SUPERCEDES ALL PRIOR WRITTEN AND ORAL AGREEMENTS, TERM SHEETS,
NEGOTIATIONS AND UNDERSTANDINGS; SHALL BE BINDING UPON THE SUCCESSORS, ASSIGNS,
HEIRS, AND PERSONAL REPRESENTATIVES OF THE PARTIES, AND MAY NOT BE RESCINDED,
CANCELLED, TERMINATED, SUPPLEMENTED, AMENDED, OR MODIFIED IN ANY MANNER
WHATSOEVER WITHOUT THE PRIOR WRITTEN CONSENT OF ALL PARTIES.

Executed as of the date first set forth above.

 

 

MRS. FIELDS FRANCHISING, LLC.

 

 

 

 

 

 

By:

 

/s/ Michael Ward

 

 

Name:

 

Michael Ward

 

 

Its:

 

Executive Vice President, General Counsel

 

 

 

 

 

 

 

SHADEWELL GROVE IP, LLC.

 

 

 

 

 

 

 

By:

 

/s/ Tim Bruer

 

 

Name:

 

Tim Bruer

 

 

Its:

 

President

 

 

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