Exhibit 10.66


 


OPTION AGREEMENT AND

AMENDMENT TO LICENSE
AGREEMENT


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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thereof with the following:


 


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


 


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


 


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


 


3.             Option Exercise
and Repurchase Price.


 


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


 


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


 


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

  	
   

  	
  License Repurchase

  Price

  	
   

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

  	
   

  	
  $

  	
  7.0 million

  	
   

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

  	
   

  	
  $

  	
  6.0 million

  	
   

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

  	
   

  	
  $

  	
  5.0 million

  	
   

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

  	
   

  	
  $

  	
  4.5 million

  	
   

  



 


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


 


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


 


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


 


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


 


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1st OPTION PERIOD


 


	
  Time
  Period

  	
   

  	
  Sales

  	
   

  	
  Minimum Royalties

  	
   

  
	
  Year Six - Ten

  	
   

  	
  $

  	
  7,500,000.00

  	
   

  	
  $

  	
  375,000.00

  	
   

  
								



 


2nd OPTION PERIOD


 


	
  Time
  Period

  	
   

  	
  Sales

  	
   

  	
  Minimum Royalties

  	
   

  
	
  Year 11 (7/1/2010)

  	
   

  	
  $

  	
  7,500,000.00

  	
   

  	
  $

  	
  375,000.00

  	
   

  
	
  Year 12 (7/1/2011)

  	
   

  	
  $

  	
  7,500,000.00

  	
   

  	
  $

  	
  400,000.00

  	
   

  
	
  Year 13 (7/1/2012)

  	
   

  	
  $

  	
  9,000,000.00

  	
   

  	
  $

  	
  475,000.00

  	
   

  
	
  Year 14 (7/1/2013)

  	
   

  	
  $

  	
  12,500,000.00

  	
   

  	
  $

  	
  650,000.00

  	
   

  
	
  Year 15 (7/1/2014)

  	
   

  	
  $

  	
  15,000,000.00

  	
   

  	
  $

  	
  750,000.00

  	
   

  



 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


Maxfield Candy Co.


c/o Alpine
Confections, Inc.


Attn.: Taz
Murray


119 East 200
North


Alpine, UT
84004


 


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


 


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


 


	
  Maxfield:

  	
  Mrs. Fields:

  
	
   

  	
   

  
	
   

  	
   

  
	
  MAXFIELD CANDY CO.

  	
  MRS. FIELDS FRANCHISING, LLC.

  
	
   

  	
  (successor in interest to The Mrs. Fields’

  Brand, Inc.)

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   /s/ Taz Murray

  	
   

  	
  By:

  	
   /s/ Michael Ward

  	
   

  
	
  Its: President

  	
  Its: E.V.P

  
						



 


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