**Exhibit 10.66**

** **

OPTION AGREEMENT ANDAMENDMENT TO LICENSEAGREEMENT

 

This OPTION AGREEMENT AND AMENDMENT TO LICENSE AGREEMENT (“Agreement”),dated effective as of December 12, 2005 (the “Effective Date”), is entered intoby and between MRS. FIELDS FRANCHISING, LLC, a Delaware limited liabilitycompany (“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 Agreementdated January 3, 2000, as amended by the First Amendment (the “First Amendment”)to Trademark License Agreement dated July 1, 2004 (as so amended, the “LicenseAgreement”). Capitalized terms used but not defined herein shall have themeanings ascribed to them in the License Agreement.

 

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

 

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

 

NOW, THEREFORE, in consideration of the premises and of the respectiverepresentations, warranties, agreements and conditions contained herein, theparties hereby agree as follows:

 

1.             Withdrawalof the Termination; Amendment to the License Agreement.

 

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

 

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

 

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

 

1

----

 

thereof with the following:

 

“(i)          If MCC defaults inthe payment of any Running Royalties, adjustments or other payment provisionsset forth in this Agreement (including the First Amendment or any additionalamendments hereto) and such default continues unremedied for ten (10) daysafter the date on which MCC receives written notice of such payment defaultfrom MFB, then this Agreement and the license granted hereunder may beterminated upon notice by MFB effective thirty (30) days after receipt of suchnotice, without prejudice to any and all other rights and remedies MFB may havehereunder or by law provided.”

 

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

 

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

 

3.             Option Exerciseand Repurchase Price.

 

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

 

2

----

 

(b)           LicenseRepurchase Price.  The amount due toMaxfield upon Mrs. Fields’ exercise of the Option (the “License RepurchasePrice”) 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 inaccordance with Section 3(a) on or prior to the date that is 6 months prior tothe end of the Option Period (the “Option Termination Date”), the Option shallexpire and be of no further force or effect.

 

(c)           The LicenseRepurchase Price shall be paid in three equal annual installments. The firstinstallment shall be paid on the Option Exercise Date, and the second and thirdinstallments shall be paid on the second and third anniversaries of the OptionExercise Date respectively. The Option Credit shall be applied to the LicenseRepurchase Price equally over the three installments.

 

(d)           LicenseTermination; Wind-Down.  If Mrs.Fields exercises the Option, Maxfield shall have a period of 12 months from theOption Exercise Date to wind down its operations under the License Agreement(the “Wind-Down Period”). During the Wind-Down Period, Maxfield and Mrs. Fieldswill continue to fulfill their obligations under the License Agreement,including without limitation, with respect to Maxfield, payment of RunningRoyalties that become due during such period. Following the end of theWind-Down Period, any outstanding Running Royalties or other amounts due toMrs. Fields under the License Agreement shall be paid in accordance withSection 18 of the License Agreement. Maxfield will have the option to end theWind-Down Period at any time prior to its expiration upon 30 days written noticeto Mrs. Fields. At the end of the Wind-Down Period, the License Agreement shallterminate (the “Termination Effective Date”) and be of no further force andeffect, except that parties’ post-termination obligations set forth in Sections16 (c), 16 (d), 16(e), 18 and 21 of the License Agreement shall survive thetermination in accordance with its terms. The Wind-Down Period shall replaceMaxfield’s post-termination right to sell inventory as set forth in Section 17of the License Agreement.

 

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

 

3

----

 

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 offsetagainst the Option Purchase Price.

 

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

 

5.             Mrs. Fields Candy Venture.  From the Effective Date, and notwithstandingthe License Agreement but subject to the following sentence, Mrs. Fields andits subsidiaries shall have the right to begin developing branded candy andconfection products (the “New Candy Products”), or licensing other parties todo so, and marketing and selling such New Candy Products to and through each ofits company-owned and franchised store locations and its gifting, catalog, mailorder and e-tailing operations (such specific locations being referred toherein as the “Permitted New Candy Product Channels”). Notwithstanding theforegoing, no New Candy Products or other Royalty Bearing Products may belicensed, marketed or sold (other than by Maxfield) in such a manner that anysuch New Candy Products or other Royalty Bearing Products would be sold orotherwise offered in any Designated Distribution Channel (other than aPermitted New Candy Product Channel). From and after the Termination EffectiveDate, Mrs. Fields would be free to begin developing, marketing and sellingbranded 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 beimmediately terminated and rescinded.

 

6.             Kookie KakeTrademark.  Maxfield and itsaffiliates and parent entities agree not to contest registration and thecurrent use (or any use permitted pursuant to Section 5 hereof) by Mrs. Fieldsand/or its subsidiaries, affiliates and franchisees, of the trademarks “CookieCake” or “Home

 

4

----

 

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

 

7.             FurtherAssurances.  From time to time, asand when requested by a party hereto, the other party, as requested, shallexecute and deliver, or cause to be executed and delivered, all such documentsand instruments and shall take, or cause to be taken all such further or otheractions, as such other party may reasonably deem necessary or desirable toconsummate the transactions contemplated by this Agreement.

 

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

 

9.             No Third-PartyBeneficiaries.  This Agreement is forthe sole benefit of the parties hereto and their permitted assigns and nothingherein expressed or implied shall give or be construed to give to any person orentity, other than the parties hereto and such assigns, any legal or equitablerights hereunder.

 

10.           Interpretation. The headings contained in thisAgreement, in any exhibit or schedule hereto are for reference purposes onlyand 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 thisAgreement shall not be construed against or to the benefit of either party byvirtue of their drafting or negotiation of this Agreement.

 

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

 

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

 

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

 

5

----

 

14.           Remedies.  Each of the parties acknowledges and agreesthat each other party would be damaged irreparably in the event any of theprovisions of this Agreement are not performed in accordance with theirspecific terms or otherwise are breached. Accordingly, each of the partiesagrees that each other party shall be entitled to an injunction or injunctionsto prevent breaches of the provisions of this Agreement and to enforcespecifically this Agreement and the terms and provisions hereof in any actioninstituted in any court of the United States or any state thereof, havingjurisdiction over the parties and the matter, in addition to any other remedyto which it may be entitled, at law or in equity.

 

15.           Submission toJurisdiction.  Section 23(l) of theLicense Agreement is incorporated herein by this reference thereto.

 

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

 

17.           Entire Agreement. This Agreement and the License Agreementcontains the entire agreement and understanding between the parties hereto withrespect to the subject matter hereof and supersedes all prior agreements andunderstandings 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 DisputedTermination Notice incurred through the date hereof, this Agreement and thetransactions contemplated herein shall be paid by the party incurring suchcosts and expenses.

 

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

 

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

 

Maxfield Candy Co.

c/o AlpineConfections, Inc.

Attn.: TazMurray

119 East 200North

Alpine, UT84004

 

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

 

6

----

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be dulyexecuted 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                                                    |
|                    |                                                               |  |  |  |  |

 

7

----