**EXHIBIT 10.65**

 

 

 

 

 

 

 

 

**TRADEMARKLICENSE AGREEMENT**

** **

** **

** **

** **

**between**

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**MRS.FIELDS FRANCHISING, LLC**

**aDelaware limited liability company**

** **

** **

**and**

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# ** **

# **Shadewell Grove IP, LLC**

**aDelaware limited liability company**

 

 

 

 

##  

## DATED:  December 24, 2004

 

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**TABLE OFCONTENTS**

 
| RECITALS

                                         |                                                    |   |
|---------------------------------------------------------|---------------------------------------------------------|--------|
| AGREEMENT

                                        |                                                    |   |
| 1.                                                      | DEFINITIONS

                                      |   |
| 2.                                                      | GRANT  OF LICENSE

                                |   |
| 3.                                                      | RESERVATION OF RIGHTS

                            |   |
| 4.                                                      | LICENSE  TRANSFER

                                |   |
| 5.                                                      | LICENSE FEE AND ROYALTIES

                        |   |
| 6.                                                      | GUARANTEED  ROYALTY

                              |   |
| 7.                                                      | LICENSE  RETENTION

                               |   |
| 8.                                                      | SHADEWELL  REPORTS

                               |   |
| 9.                                                      | DEVELOPMENT  OF ROYALTY BEARING PRODUCTS

         |   |
| 10.                                                     | ADVERTISING  AND PROMOTION REQUIREMENTS

          |   |
| 11.                                                     | LABELING

                                         |   |
| 12.                                                     | USE OF LICENSED  NAMES AND MARKS

                 |   |
| 13.                                                     | INFRINGEMENT

                                     |   |
| 14.                                                     | INSURANCE

                                        |   |
| 15.                                                     | CONFIDENTIALITY

                                  |   |
| 16.                                                     | TERM AND TERMINATION

                             |   |
| 17.                                                     | DISPOSAL OF  INVENTORY UPON EXPIRATION

           |   |
| 18.                                                     | FINAL  STATEMENT UPON TERMINATION OR EXPIRATION

  |   |
| 19.                                                     | REPRESENTATIONS AND  WARRANTIES

                  |   |
| 20.                                                     | INDEMNIFICATION

                                  |   |
| 21.                                                     | NOTICES

                                          |   |
| 22.                                                     | GENERAL PROVISIONS

                               |   |
| EXHIBIT “A”  LICENSED NAMES AND MARKS

  |                                                    |
| EXHIBIT “B” ROYALTY  BEARING PRODUCTS         |                                                    |
|                                                         |                                                         |        |  |

 

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### **TRADEMARK LICENSEAGREEMENT**

 

**THISTRADEMARK LICENSE AGREEMENT** (the “Agreement”) is made and entered into this24th  day of December, 2004 by andbetween MRS. FIELDS FRANCHISING, LLC, a Delaware limited liability company (“**MFF**”), and Shadewell Grove IP, LLC, a Delaware limitedliability company (“**Shadewell**”).MFF and Shadewell are sometimes collectively referred to herein as the“parties.”

 

**RECITALS**

 

**WHEREAS,**MFF is an affiliate and licensee of TheMrs. Fields’ Brand, Inc., the sole owner of certain trademarks, service marks,and trade names, which have become associated with high quality food products,and has the right under its license to sublicense such marks in the manner setforth herein;

 

**WHEREAS**, Shadewell desires to acquire a licensefrom MFF to package, distribute and sell through designated distributionchannels pre-packaged, ready-to-eat shelf stable brownies and ready-to-eatshelf stable dessert toppings and syrups, each utilizing the Mrs. Fieldstrademarks, service marks and trade names, and MFF desires to grant Shadewellsuch license upon and subject to the provisions of this Agreement;

 

**NOW THEREFORE**,in consideration of the covenants and agreements contained herein and othervaluable consideration, the receipt and sufficiency of which is herebyacknowledged, the parties hereto agree as follows:

 

**AGREEMENT**

 

1.                                       **DEFINITIONS**

 

(a)                                  **“Change of Control”** shall mean (i) any merger orconsolidation of Shadewell with or into another corporation or entity, in whichthe members of Shadewell immediately prior to the transaction collectively ownless than 50% of the voting power of the surviving entity immediately after thetransaction or (ii) the sale of all or substantially all of the interests inShadewell to a third party.

 

(b)                                 **“Designated DistributionChannels”** shallmean grocery stores, supermarkets, drug stores, convenience stores, clubstores, mass merchandisers and other similar retail prepackaged, shelf-stablefood and snack retail distribution channels.

 

(c)                                  **“****Initial Term****”**shall have the meaning set forth inSection 16 hereof.

 

(d)                                 **“Licensed Names and Marks”** shall mean those trademarks, trade namesand service marks identified on Exhibit A hereto.

 

(e)                                  **“Minimum Amount”** shall mean (i) prior to a Change ofControl, $50,000 and (ii) after a Change of Control, $125,000, which amountsshall be reduced by the amount of Running Royalties paid to MFF during theapplicable year.

 

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(f)                                    **“Minimum Net Sales”** shall mean (i) prior to a Change ofControl, Net Sales of at least $1,000,000 and (ii) after a Change of Control,Net Sales of at least $2,500,000.

 

(g)                                 **“****Net Sales”** shall mean gross sales minus cashdiscounts for early payments.

 

(h)                                 **“Protected Information”**shall mean Mrs. Fields recipes,formulations, systems, programs, procedures, manuals, confidential reports andcommunications, marketing techniques and arrangements, purchasing information,pricing policies, quoting procedures, financial information, employee,customer, supplier and distributor data, all of the materials or informationrelating to the business or activities of MFF or its affiliates which were nototherwise known to Shadewell prior to the commencement of the negotiationsleading to this Agreement, or generally known to others engaged in similarbusinesses or activities, and all modifications, improvements and enhancementswhich are derived from or relate to Shadewell’s access to or knowledge of anyof the above enumerated materials or information (whether or not any of theabove are reduced to writing or whether or not patentable or protectable bycopyright) which Shadewell receives, receives access to, conceives or developsor has received, received access to, conceived or developed, in whole or inpart, directly or indirectly, in connection with Shadewell’s licensehereunder.  Information which isindependently developed by Shadewell, or which was already in the possession ofShadewell prior to the date of this Agreement and which was not obtained inconnection with the transactions contemplated by this Agreement, or informationwhich is or becomes publicly available without breach of (i) this Agreement,(ii) any other agreement or instrument to which Shadewell is a party or abeneficiary, or (iii) any duty owed to MFF by Shadewell, shall not beconsidered Protected Information hereunder.

 

(i)                                     **“Royalty Bearing Product(s)”** shall mean the food products describedon Exhibit B hereto using the Licensed Names and Marks.

 

(j)                                     **“Royalty Default Rate”** shall mean the interest rate which isthe lesser of (i) the annual rate from time to time publicly announced byCitibank, N.A. at its “base rate” or “prime rate” (or any successor rate) plustwo percent (2%) or (ii) the highest applicable legal rate.

 

(k)                                  “**RoyaltyWaiver”** shall have the meaning set forth in Section 5 hereof.

 

(l)                                     **“Running Royalty”**or**“Running Royalties”** shall mean the royalty or royalties fromtime to time payable pursuant to Section 5.

 

(m)                               **“Territory”** shall mean United States, Mexico andCanada.

 

 

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2.          **GRANT OF LICENSE**

 

(a)           **Grant.** Subject to the terms and conditions of this Agreement, MFF hereby grantsto Shadewell, and Shadewell hereby accepts the grant by MFF of, the exclusiveright and license to use the Licensed Names and Marks to market Royalty BearingProducts through Designated Distribution Channels throughout theTerritory.  Except as stated in Section3, MFF shall not compete with Shadewell in the (i) use of any trademark,service mark or tradename in marketing Royalty Bearing Products in DesignatedDistribution Channels in the Territory or (ii) license any third party to usethe same in marketing any Royalty Bearing Products in Designated DistributionChannels in the Territory.

 

(b)**           First Right of Offer - Products.** If at any time during the Initial Term and Option Periods MFF determinesto offer a license for the sale of a Brownie Product or a Topping Product marketed through the DesignatedDistribution Channels for countries outside the Territory to a third partymanufacturer, licensee or marketing company, prior to offering the applicableproduct marketed through the Designated Distribution Channels to a non-relatedparty by any means, MFF shall notify Shadewell and provide Shadewell a sixty(60) day period of time thereafter during which MFF shall negotiate exclusivelyin good faith with Shadewell for the license to sell the applicable productsthrough the Designated Distribution Channels, for countries outside theTerritory.  The terms and conditions uponwhich MFF grants a license, if any, pursuant to this Section shall be asnegotiated by MFF and Shadewell during such 60 day period; provided, that MFFis only free to reject Shadewell offer if an agreement cannot be reached as tothe Licensing Fee and the Running Royalty and after such rejection, MFF cannegotiate with any third party for the license to sell the applicable productsmarketed through the Designated Distribution Channels for countries outside theTerritory and accept such third party offer only if it exceeds Shadewell’s bestoffer.  Any agreement reached withShadewell during such 60-day period shall be documented in a separate agreementor addendum to this Agreement and shall become effective only when signed by allparties.

 

3.             **RESERVATION OF RIGHTS**

 

                MFF reserves allrights with respect to the Licensed Names and Marks not expressly licensed toShadewell hereunder, and MFF may use or grant licenses to others to use theLicensed Names and Marks in any other manner or in connection with any goods orservices, other than for sale of Royalty Bearing Products in DesignatedDistribution Channels in the Territory. Without limiting the foregoing, the license granted pursuant to this Agreementshall be exclusive to Shadewell except that MFF shall not be precluded from,and hereby expressly retains the right to: (i) own, operate, and grant or license others the right to own andoperate Mrs. Fields Cookies stores which sell cookie, bakery and/or ice creamproducts (whether or not such products are Royalty Bearing Products) under theLicensed Names and Marks at locations within the Territory on such terms andconditions, as MFF, in its sole discretion, deems appropriate, (ii) offer forsale and sell, and license others to offer for sale and sell, any products orservices under the Licensed Names and Marks which are not Royalty BearingProducts, and (iii) offer for sale and sell, and license others to offer forsale and sell, any products or services under the Licensed Names and Marks,whether or not such products are Royalty Bearing

 

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Products, through all channels of distribution other than DesignatedDistribution Channels, including without limitation, all e-commerce-based retailor wholesale, television, mail order and catalog channels.  Notwithstanding the foregoing, in the event that MFF decides to offerTopping Products through television, MFF shall purchase from Shadewell allTopping Products to be sold through television, such Topping Products to bepurchased at a “most favored nations” price. “Most favored nations” price forthe purpose of this agreement will be the lowest net price received byShadewell from any customer for the specific store keeping unit (“sku”) of the applicableTopping Product during the 30 day period immediately preceding the order fromMFF, less an offset for the amount of the running royalty otherwise due fromShadewell to MFF which will instead be credited against the purchase pricecharged by Shadewell to MFF.

 

 

                4.             **LICENSETRANSFER**

 

ThisAgreement shall be binding upon and inure to the benefit of the parties to thisAgreement and their successors or assigns; provided, that the rights of theparties under this Agreement may only be assigned  (i) upon written consent by MFF or (ii)without consent to a parent corporation which owns at least fifty-one percent(51%) of such assigning party, a fifty-one percent (51%) owned subsidiarycorporation of such party, a fifty-one percent (51%) owned subsidiary of aparent of such party if such parent owns at least fifty-one percent (51%) ofsuch party, or to such other business organization which shall acquire  substantially all of the assets and businessof the parties, a parent, or a subsidiary. Shadewell shall not have the rightto grant sublicenses under this Agreement. Any assignment, franchise, sublicense, or transfer, not expresslypermitted by this Section 4, is prohibited and will be deemed to be null andvoid.

 

5.                                       **LICENSE FEE AND****ROYALTIES**

 

(a)                                  **Initial Licensing Fees. **Shadewell shall not berequired to pay an initial license fee in connection with this Agreement.

 

(b)                                 **Running Royalties**. Throughout the term (including Option Periods) of this Agreement, theRunning Royalty shall be 5% of Net Sales of Royalty Bearing Products for theremainder of the term; provided, there shall be no Running Royalty during theperiod commencing on the date of this Agreement and ending one year after thefirst date that any Royalty Bearing Products are shipped by Shadewell tocustomers (the “Royalty Waiver”).

 

(c)                                  **Payments**. Shadewell shall remit Running Royalties to MFF within 60 days followingthe end of each calendar quarter covered by the Agreement.  Absent error in the calculation of any amountsdue hereunder, all Running Royalties shall be non refundable.  All fees, royalties, and amounts payablehereunder shall be paid to MFF in U.S. currency in immediately available fundsat such address or to such account as shall be designated in writing by MFF.

 

(d)                                 **Interest on Late Payments**. Shadewell shall pay interest on all overdue

 

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 amounts hereunder from the due date of suchamounts until paid at the Royalty Default Rate.

 

 

6.                                       **NATIONAL LAUNCH AND SUPPORT**

 

 

(a)                                  Prior to the end of calendar year 2006,Shadewell agrees to launch the marketing and sale of each of the categories ofRoyalty Bearing Products (Brownie Products or Topping Products) in at least oneof the Distribution Channels throughout the United States.

 

(b)                                 During each of the calendar years 2007,2008 and 2009, Shadewell agrees to continue to provide material marketing andsales support for the sale of each of the categories of Royalty BearingProducts throughout the United States consistent with past practices.

 

(c)                                  In the event of a breach of theobligations set forth in 6(a) or 6(b) above, MFF shall have the right, at theirelection, to terminate the license granted herein with respect to that categoryof Royalty Bearing Product that has failed to meet the above requirements.  The remedy set forth in this Section 6(c)shall be the sole and exclusive remedy available to MFF in the event of abreach of Section 6(a) or 6(b) above.

 

 

7.                                       **INTENTIONALLY OMITTED**

 

 

8.                                       **SHADEWELL REPORTS**

 

(a)           **Periodic Reports**.  On or before 60 days following the end ofeach calendar quarter covered by this Agreement, Shadewell shall deliver to MFFa written statement prepared, signed, and certified to be true and correct byShadewell’s senior financial officer, or their designee, setting forth theamount of Royalty Bearing Products sold, including sufficient information anddetail to confirm the calculations, which report shall be accompanied bypayment in full of the amount of Running Royalties then due.

 

(b)           **Annual Reports**.  Within ninety (90) days following the end ofeach calendar year of this Agreement, beginning with the first such year inwhich Shadewell has sales of Royalty Bearing Products, Shadewell shall deliverto MFF a written statement setting forth the amount of Royalty Bearing Productssold and the calculations, including sufficient information and detail toconfirm the calculations, used to determine such amounts, which calculationsshall be signed and certified as true and correct by an independent certifiedpublic accounting firm chosen by Shadewell and acceptable to MFF, whichacceptance shall not be withheld unreasonably. If this statement discloses that the amount of Running Royalties paidduring any period to which the report relates was less

 

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than the amountrequired to be paid or that any other amount is due MFF, Shadewell immediatelyshall pay such amounts, together with accrued interest at the Royalty DefaultRate in cash or other immediately available funds. MFF shall have the right toexamine and audit the books and records of Shadewell to verify the amount ofRoyalty Bearing Products sold.

 

 

9.             **DEVELOPMENT OF ROYALTYBEARING PRODUCTS**

 

                Shadewell hereby covenants,agrees, warrants and represents that:

 

(a)           **Product Marketing**.  All Royalty Bearing Products shall bemarketed and sold as “premium” products consistent with MFF’s then existingimage.  Shadewell accepts fullresponsibility for and agrees to pay all costs it incurs associated with alladvertising and promotion, packaging design, graphics, and packaging materialsfor Royalty Bearing Products.

 

 (b)          **Customer Complaints**. Shadewell shall provide MFF a summary of all written consumer complaintsreceived regarding the quality of the Royalty Bearing Products and shall maintainall written consumer complaints and a telephone log for all consumer complaintsreceived by telephone for a period of one year. Shadewell will send a written report to MFF each month containing thecomments received, names of complaining persons, with addresses and telephonenumbers (if available).  Comments will beorganized and summarized by type of comment or complaint and by thegeographical location of the complaint. Such information will also be available for inspection by MFF duringnormal working hours upon reasonable notice. Shadewell further agrees that it will respond to any written customercomplaint within ten (10) days of receipt of such complaint by written responsewith either a refund of the customer’s money or a coupon for the same type ofRoyalty Bearing Product purchased, depending upon the complaining customer’srequest.  Shadewell further agrees thatany complaints about MFF products which are not Royalty Bearing Products willbe forwarded to MFF within five (5) days of receipt.  MFF agrees that all customer complaints andcomments received by it with respect to Royalty Bearing Products will beforwarded to Shadewell within five (5) days of receipt.  Shadewell shall further provide MFF withcopies of all responses to complaints, upon request.

 

10.           **ADVERTISING AND PROMOTIONREQUIREMENTS**

 

Shadewell shallmarket Royalty Bearing Products as premium products or as is otherwiseconsistent with MFF’s then existing image so that such marketing shall notreflect adversely upon Royalty Bearing Products, the good name of MFF, or theLicensed Names and Marks.  MFF shall havea prior to use reasonable right of approval for all promotional, marketing andadvertising materials and concepts for each promotional campaign Shadewell usesto market Royalty Bearing Products.  Inthat regard, MFF shall have a reasonable right of approval, prior to

 

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 the development of final television, radio orprinted advertisements, the final “story boards” with respect to televisionadvertising, the final “script” with respect to radio spots and the final“layouts” with respect to printed advertisements.  MFF shall also have a reasonable right ofapproval with respect to the actors or actresses used in connection with anysuch advertising campaigns; provided, that Shadewell shall have the right tomake minor variations in promotional, marketing and advertising materials usedin connection with the approved promotional campaigns.  All advertisements and advertising campaignsshall conform in all material respects to the approvals given by MFF.  MFF shall have five (5) business daysfollowing the receipt of the proposed promotional, marketing or advertisingmaterials to send Shadewell written notice of its disapproval which shallinclude an explanation of the basis for disapproval.  If such written disapproval is not receivedby Shadewell within this five (5) business day period, the marketing,promotional or advertising material submitted to MFF shall be deemed approved.  Any material modifications to any suchmaterials previously approved by MFF shall be subject to approval pursuant tothis Section 10.  Once a promotionalcampaign has been approved by MFF, if no material changes are made to it byShadewell, MFF shall not rescind its approval and Shadewell may proceedaccordingly on the basis that it is approved.

 

11.                                 **LABELING**

 

Whenever Shadewelluses the Licensed Names and Marks, Shadewell shall affix the appropriatetrademark notice and agrees to use the registration symbol of “R”  in connection with its use of the LicensedNames and Marks, or “TM” where the mark has not been registered federally, andin each instance where appropriate accompanied by the words “Reg. TM of MFF” ora reasonable facsimile thereof or such other reference as may be designated byMFF from time to time.  Where a LicensedName and Mark is used more than once on packaging, in copy or advertising or onthe Royalty Bearing Products, the “R” or “TM” designation need only be usedonce either on the most prominent use of the Licensed Name and Mark, or if alluses are of equal prominence, then on the first use of the Licensed Name andMark in or on each package, copy, advertisement, or product.  Shadewell shall use the Licensed Names andMarks only as trademarks, service marks, or trade names and shall affix thenotice as specified.  Shadewell shall nothave the right, unless previously agreed in writing by MFF, to use othertrademarks, service marks, or trade names in marketing and promoting RoyaltyBearing Products.  MFF shall have theright to own and register any such other trademark, service mark, or trade namewhich is registerable, including a Licensed Name or Mark or “Fields” in anyformat, and such trademarks, service marks, and trade names owned or registeredby MFF shall be included in the Licensed Names and Marks, and Shadewell shallcooperate with MFF by providing packaging, labeling, and documentation as maybe required to obtain and maintain such registration.

 

12.                                 **USE OF LICENSED NAMES AND MARKS**

 

(a)           **Restrictions On Use**.  Unless MFF consents in writing, which consentshall not be unreasonably withheld, Shadewell shall use the Licensed Names andMarks:

 

(i)            only for the purposes of andpursuant to this Agreement,

 

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(ii)                                  only in a manner consistent with thescope of the relevant registration of the Licensed Names and Marks orapplications therefor in the Territory,

 

(iii)                               only in the manner permitted andprescribed by MFF as set forth herein,

 

(iv)                              only with respect to Royalty BearingProducts, and

 

(v)                                 only to sell Royalty Bearing Productsthrough Designated Distribution Channels.

 

(b)                                 **Recognition of Goodwill**. Shadewell recognizes the value of the goodwill associated with theLicensed Names and Marks and acknowledges that the Licensed Names and Marks andall rights therein and goodwill pertaining thereto belong exclusively to MFF.

 

(c)                                  **Validity of Other Agreements**. Shadewell agrees that it will not, during the term of this Agreement orthereafter, attack the title or any rights of MFF in and to the Licensed Namesand Marks, or any other license agreement or franchise agreement involving theLicensed Names and Marks to which MFF is a party.

 

(d)                                 **Validity of Licensed Names andMarks**.  Shadewell agrees that it will notintentionally destroy, impair or in any way impede the effect and validity ofthe Licensed Names and Marks.

 

(e)                                  **Validity of the OtherRetail Agreements.**  Nothing in this paragraph shall restrictShadewell’s rights under any other license agreements that it may have withMFOC or its affiliates.

 

13.           **INFRINGEMENT**

 

Shadewell agreesto assist MFF, at MFF’s cost and expense, to the extent necessary in theprocurement of any protection or to protect any of MFF’s rights to the LicensedNames and Marks, and MFF, if it so desires, may commence or prosecute anyclaims or suits in its  own name or, withShadewell’s consent, in the name of Shadewell or join Shadewell as a partythereto.  Shadewell shall notify MFF inwriting of any infringements or imitations by others of the Licensed Names andMarks which may come to Shadewell’s attention, and MFF shall have the soleright to determine whether or not any action shall be taken on account of anysuch infringements or imitations at MFF’s cost and expense.  Shadewell shall not institute any suit ortake any action on account of any such infringements or imitations withoutfirst obtaining the written consent of MFF.

 

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14.           **INSURANCE**

 

Shadewell shallobtain and keep in force, at its sole expense, product liability insurance providingadequate insurance for MFF against any claims and suits involving productliability arising out of, or with respect to, the transactions contemplated bythis Agreement and the Retail Agreements, in no less than Ten million dollars($10,000,000.00) combined single limit on bodily injuries and/or propertydamage in the aggregate.  Within thirty(30) days after the date of this Agreement, Shadewell shall submit to MFF acertificate of insurance naming MFF as an additional insured and providing thatany cancellation or material change or alteration which reduces coverage or anybenefits accruing to MFF shall become effective only upon thirty (30) daysprior notice to MFF.  The requirements ofthis Section 14 are acknowledged by Shadewell to be a material term of thisAgreement as defined in paragraph 16(b)(ii).

 

15.           **CONFIDENTIALITY**

 

(a)                                  **Acknowledgment of Confidentiality**. Shadewell understands that any Protected Information disclosed to it byMFF under this Agreement is secret, proprietary and of great value toShadewell, which value may be impaired if the secrecy of the ProtectedInformation is not maintained.

 

(b)                                 **Reasonable Security Measures**. MFF has taken and will continue to take reasonable security measures topreserve and protect the secrecy of the Protected Information and Shadewellagrees to take all measures reasonably necessary to protect the secrecy of suchinformation in order to prevent it from falling into the public domain or intothe possession of persons not bound to maintain the secrecy of suchinformation.

 

(c)                                  **Non-Disclosure Obligation**. Shadewell agrees not to disclose the Protected Information obtainedpursuant to this Agreement, to any person or entity (other than Shadewell’s keyofficers and employees to whom disclosure is necessary and to co-packers whomhave executed a Confidentiality Agreement pursuant to paragraph 4), during theterm of this Agreement or at any time following the expiration or termination ofthis Agreement.

 

(d)                                 **Burden of Proof**. Shadewell hereby acknowledges and agrees that if Shadewell shalldisclose, divulge, reveal, report, publish, transfer or use, for any purposewhatsoever, except as authorized herein, any Protected Information, and Shadewellshall assert as a defense that such information (i) was already known toShadewell or developed prior to the execution of this Agreement, (ii) wasindependently developed by Shadewell, (iii) was disclosed to third partieswithout violation of this Agreement, (iv) was already in the public domainprior to the execution of this Agreement, or (v) entered the public domainwithout violation of this Agreement, then Shadewell shall bear the burden ofproof with respect to the same.

 

(e)                                  **Mutuality of Obligations**. MFF hereby agrees that any information which it receives from Shadewellwhich is within the scope of the definition of Protected

 

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Information, shallbe treated as confidential by MFF, and MFF hereby agrees to be bound by theterms of this Agreement with respect to any such information it receives fromShadewell, to the same extent that Shadewell is bound by the terms of thisAgreement with respect to Protected Information, as set forth above in paragraphs15(a), (b), (c) and (d).

 

 

16.           **TERM AND TERMINATION**

 

(a)           **Term**.  The initial term of this Agreement shallbegin upon the execution hereof and shall continue for a period of sixty months(“**Initial Term**”).  So long as Shadewell is not in material default,this Agreement would then automatically renew for successive five year terms(“Option Periods”) or until such time as either party provides a written noticeof non-renewal to the other party no more than 90 days and no less than twenty(20) days before the conclusion of an Option Period.   Notwithstanding the above, if during thefifth year of the Initial Term Shadewell has achieved Minimum Net Sales ofBrownie Products or paid the Minimum Amount for the Brownie Products, then MFFshall not exercise its non-renewal rights under this paragraph 16(a) withrespect to the Brownie Products. Notwithstanding the above, if during the fifth year of the Initial TermShadewell has achieved Minimum Net Sales of Topping Products or paid theMinimum Amount for the Topping Products, then MFF shall not exercise itsnon-renewal rights under this paragraph 16(a) with respect to the ToppingProducts.  Notwithstanding the above, ifduring the fifth year of an Option Period (after the initial Option Period)Shadewell has achieved or paid a minimum of a 2% growth of Running Royaltiesfor the Brownie Products as compared to the Running Royalties for the BrownieProducts for the fourth year of such Option Period, then MFF shall not exerciseits non-renewal rights under this paragraph 16(a) with respect to the BrownieProducts.    Notwithstanding the above,if during the fifth year of an Option Period (after the initial Option Period)Shadewell has achieved or paid a minimum of a 2% growth of Running Royaltiesfor the Topping Products as compared to the Running Royalties for the ToppingProducts for the fourth year of such Option Period, then MFF shall not exerciseits non-renewal rights under this paragraph 16(a) with respect to the ToppingProducts.  In the event that this Agreementis not renewed with respect to the Brownie Products or the Topping Products, asapplicable, this Agreement shall remain in full force and effect with respectto the other Royalty Bearing Products until terminated in accordance with thisSection 16. MFF’s termination rights under paragraph 16(b) shall **not** be deemed altered or waived by thisparagraph 16(a).

 

(b)           **Termination**.  This Agreement may be terminated as follows:

 

(i)            If Shadewell defaults in the paymentof any Running Royalties then this Agreement and the license granted hereundermay be terminated upon notice by MFF effective thirty (30) days after receiptof such notice, without prejudice to any and all other rights and remedies MFFmay have hereunder or by

 

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law provided, andall rights of Shadewell hereunder shall cease, provided that Shadewell has notcured such default within five (5) days of receipt of such notice.

 

(ii)           If Shadewell fails to perform inaccordance with any material term or condition of this Agreement (other than asdescribed in paragraph 16(b)(i) above) and such default continues unremediedfor thirty (30) days after the date on which Shadewell receives written noticeof default, unless such remedy cannot be accomplished in such time period andShadewell has commenced diligent efforts within such time period and continuessuch effort until the remedy is complete, then this Agreement may be terminatedupon notice by MFF, effective upon receipt of such notice, without prejudice toany and all other rights and remedies MFF may have hereunder or by lawprovided.

 

(iii)          If Shadewell is determined to beinsolvent, or files a petition in bankruptcy or for reorganization, or takesadvantage of any insolvency statute, or makes an assignment for the benefit ofcreditors, or undertakes any similar action, under any federal, state orforeign bankruptcy, insolvency or similar law, unless such is dismissed,removed or otherwise cured within thirty (30) days or unless Shadewell hasfiled for Chapter 11 Reorganization protection under Federal Bankruptcy Laws,then this Agreement and the License granted hereunder may be terminated uponnotice by MFF, effective upon receipt of such notice, without prejudice to anyand all other rights and remedies MFF may have hereunder or by law provided,and the license herein granted shall not constitute an asset in reorganization,bankruptcy, or insolvency which may be assigned or which may accrue to anycourt or creditor appointed referee, receiver, or committee.

 

(iv)          If MFF is determined to be insolvent,or files a petition in bankruptcy or for reorganization, or takes advantage ofany insolvency statute, or makes an assignment for the benefit of creditors, orundertakes any similar action, under any federal, state or foreign bankruptcy,insolvency or similar law, or fails to perform in accordance with any materialterm or condition of this Agreement and such default continues for thirty (30)days after MFF receives written notice of default, then this Agreement and theLicense granted hereunder may be terminated upon notice by Shadewell, effectiveupon receipt of such notice, without prejudice to any and all other rights andremedies Shadewell may have hereunder or by law provided, and the licenseherein granted shall not constitute an asset in reorganization, bankruptcy, orinsolvency which may be assigned or which may accrue to any court or creditorappointed referee, receiver, or committee.

 

(v)           If MFF fails to perform in accordancewith any material term or condition of this Agreement and such defaultcontinues unremedied for thirty (30) days after the date on which MFF receiveswritten notice of default, then this Agreement may be terminated upon notice byShadewell, effective upon receipt

 

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of such notice,without prejudice to any and all other rights and remedies Shadewell may havehereunder or by law provided.

 

(c)           **Rights Upon Termination orCancellation**.  On anycancellation, termination or expiration of this Agreement;

 

(i)            Shadewell agrees to immediately payto MFF all currently owed Running Royalties and any additional royaltiespursuant to Section 17 and to return all Protected Information, confidentialdocuments and other material supplied by MFF to Shadewell and agrees never touse, disclose to others, nor assist others in using the Protected Information.

 

(ii)           Shadewell will be deemed to haveautomatically and irrevocably assigned, transferred, and conveyed to MFF anyrights, equities, good will, titles or other rights in and to the LicensedNames and Marks and Royalty Bearing Products which may have been obtained byShadewell or which may have vested in Shadewell in pursuance of any endeavorscovered hereby, and Shadewell will execute any instruments requested by MFF toaccomplish or confirm the foregoing.  Anysuch assignment, transfer or conveyance shall be without consideration otherthan the mutual covenants and considerations of this Agreement.

 

(iii)          Except as provided in Section 17below, Shadewell further agrees that it shall forthwith discontinue the use ofall Licensed Names and Marks, including packaging and other paper goods andother objects bearing any Licensed Names and Marks.

 

(d)           **Licensing of LicensedNames and Marks After Termination**. Upon any expiration or earlier termination of this Agreement, MFF maylicense others to use the Licensed Names and Marks to produce, sell, market andadvertise products similar or identical to the Royalty Bearing Products throughDesignated Distribution Channels in the Territory.

 

17.           **DISPOSAL OF INVENTORY UPONEXPIRATION**

 

For a period ofsix (6) months following the termination or expiration of this Agreement,Shadewell shall have the right to sell any Royalty Bearing Products inShadewell’s inventory. Any sales of Royalty Bearing Products under this Sectionshall be, at all times, in accordance with the policies, prices, and standardsestablished for marketing and distribution of Royalty Bearing Products pursuantto this Agreement, and shall include payment of all Running Royalties accruedin accordance with Section 5 hereof.

 

 

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18.           **FINAL STATEMENT UPONTERMINATION OR EXPIRATION**

 

As soon aspracticable after termination or expiration of the license granted hereunder,but in no event more than thirty (30) days thereafter, Shadewell shall deliverto MFF a statement indicating the number and description of Royalty BearingProducts packaged in packaging using the Licensed Names and Marks then inShadewell’s inventory.  MFF shall havethe option to conduct a physical inventory to ascertain or verify suchstatement.

 

19.           **REPRESENTATIONS ANDWARRANTIES**

 

(a)                                  **Title**. MFF represents and warrants and Shadewell acknowledges that MFF hasrepresented that MFF is the owner of all right, title, and interest in and tothe Licensed Names and Marks and that such licensing and Licensed Names andMarks under this Agreement to Shadewell does not infringe upon the rights ofany third parties.  Shadewell furtheracknowledges the good will associated with the Licensed Names and Marks andthat such Licensed Names and Marks have acquired secondary meaning in the mindof the public.  Shadewell shall notduring the term of this Agreement dispute or contest, directly or indirectly,or due or cause to be done, any action which in any way contests, impairs, ortends to impair MFF’s exclusive rights and title to the Licensed Names andMarks or the validity of any registrations thereof and Shadewell shall notassist others in so doing.  Shadewellshall not in any manner represent that it owns any rights in the Licensed Namesand Marks (and/or registrations therefore), but may, only during the term ofthis Agreement, and only if Shadewell has complied with all laws, regulationsand registration requirements within the jurisdiction for so doing, representthat it is a “licensee” or “official licensee” hereunder.  Shadewell shall not register or attempt toregister in its own name, or that of any third party, any Licensed Name orMark.  Subject to the terms andconditions of this Agreement, Shadewell agrees that any and all uses byShadewell of the Licensed Names and Marks under this Agreement shall be onbehalf of and accrue and inure to the benefit of MFF.  MFF will maintain at its sole expense, theproper registration of all Licensed Names and Marks used under this Agreement.

 

(b)                                 **Right To Enter Into ThisAgreement**.  MFF and Shadewell each warrant and representfor itself that it has the right to enter into this Agreement, that it will notknowingly subsequently take any action contrary to this Agreement, and that theentering into of this Agreement will not knowingly violate any other agreementto which it is a party or conflict with or violate any law, rule or regulationby which it is bound.

 

(c)                                  **MFF’s Image**. MFF represents and warrants that it will not intentionally do anythingto destroy or impair its existing image.

 

(d)                                 **Compliance with Laws.** MFF represents and warrants the Royalty Bearing Products will bemanufactured in compliance with, and will not be adulterated or misbrandedwithin the meaning of, the Federal Food, Drug and Cosmetic Act of 1938, or anyother federal, state, foreign or local laws or regulations applicable thereto,will not constitute an article which may not be introduced into interstatecommerce and will be

 

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manufactured insubstantial compliance with all applicable federal, state, foreign or locallaws and regulations applicable thereto. MFF agrees to notify Shadewell promptly of any regulatory action ofwhich MFF has knowledge that is taken in relation to it by any federal, state,foreign, country or municipal authority which relates to or affects themanufacture, storage, distribution or sale of the Royalty Bearing Products.

 

20.           **INDEMNIFICATION**

 

(a)                                  **MFF Indemnification**. MFF hereby indemnifies Shadewell and forever holds Shadewell harmlessfrom and against all claims, suits, actions, proceedings, damages, losses orliabilities, costs or expenses (including reasonable attorneys’ fees andexpenses) arising out of, based upon, or in connection with (i) any breach ofany of MFF’s warranties or representations as set forth in this Agreement or(ii) any claim that the use by Shadewell of the Licensed Names and Marks as providedin this Agreement infringes upon any franchise agreement, third partytrademark, service mark, or trade name.

 

(b)                                 **Shadewell Indemnification**. Shadewell hereby indemnifies MFF and forever holds MFF harmless from andagainst all claims, suits, actions, proceedings, damages, losses orliabilities, costs or expenses (including reasonable attorneys’ fees andexpenses) arising out of, based upon, or in connection with, unless it is atthe direction of MFF (i) any breach of any of Shadewell’s warranties or representationsas set forth in this Agreement, (ii) any alleged defects inherent in thedistribution or sale of Royalty Bearing Products;(iii)any injuries or damagesto purchasers, users, or consumers of Royalty Bearing Products arising from orrelated to the use or consumption of Royalty Bearing Products; (iv) anyinjuries or damages arising from Shadewell or any of Shadewell’s customers,advertising, marketing or promotion of the Licensed Names and Marks or RoyaltyBearing Products; or (v) any alleged infringement or injuries of any thirdparty’s copyright, patent, or trademark unless and to the extent (with respectto (iv) and (v) above) such alleged infringement is based upon Shadewell’s useof the Licensed Names and Marks as authorized in this Agreement.

 

(c)                                  **Conditions of Indemnification**. As a condition of indemnification under this Section 20, the partyseeking indemnification shall give the other party (for purposes of thisSection 20 called the “**Indemnifying Party**”)immediate notice of and copies of all pleadings and correspondence related tothe assertion of any such claim, proceeding, action, or suit and agrees not tosettle, compromise, or otherwise dispose of any such claim, proceeding, actionor suit without the prior written consent of the Indemnifying Party.  The Indemnifying Party shall have the right(but not the obligation) to assume the defense or settlement of any such claim,proceeding, action, or suit at its expense, by counsel of its choice.  Except for the settlement of a claim which involvesthe payment of money only and for which the party seeking indemnification iswholly indemnified by the Indemnifying Party, no claim may be settled by theIndemnifying Party without the written consent of the party seekingindemnification such consent not to be unreasonably withheld.  If the Indemnifying Party assumes suchdefense, the Party seeking indemnity shall cooperate fully with theIndemnifying Party in defense of the action and the

 

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Indemnifying Partyshall not be liable to pay or reimburse the other party for attorneys’ fees orexpenses, except such out-of-pocket costs or expenses incurred by theIndemnified Party in cooperating with the Indemnifying Party.

 

21.           **NOTICES**

 

All notices providedby this Agreement shall be in writing and shall be given by facsimile orregistered mail, postage prepaid, or by personal delivery, by one party to theother, addressed to such other Party at the applicable address set forth below,or to such other addresses as may be given for such purpose by such other partyby notice duly given hereunder.  Noticeshall be deemed properly given on the date of a confirmed facsimiletransmission, three (3) days after the date mailed if given by first class mailor on the date of delivery, which ever applies:

 
| To MFF:       |   | Mrs. Fields  Franchising, LLC          |
|---------------|--------|----------------------------------------|
|          |   | 2855 E. Cottonwood  Parkway, Suite 400 |
|          |   | Salt Lake City, UT  84121              |
|          |   | Attention: General  Counsel            |
|          |   | Fax No: (801) 736-5944                 |
|          |   |                                   |
| To Shadewell: |   | Shadewell Grove IP, LLC                |
|          |   | 100 West 5th                           |
|          |   | Suite 700                              |
|          |   | Tulsa, OK 74103                        |

 

 

 

22.           **GENERAL PROVISIONS**

 

(a)           **No Fiduciary or OtherRelationship**.  It isunderstood and agreed by the parties hereto that this Agreement does not createa fiduciary relationship between them, that MFF and Shadewell are and shall beindependent contractors and that nothing in this Agreement is intended to makeeither party a general or special agent, joint venturer, partner or employee ofthe other for any purpose whatsoever.

 

(b)           **Use of Licensed Names andMarks in Contracts**.  Shadewellshall not employ any of the Licensed Names and Marks in signing any contract orapplying for any license or permit or in a manner that may result in MFF’sliability for any of Shadewell’s indebtedness or obligations, nor may Shadewelluse the Licensed Names and Marks in any way not expressly authorized byMFF.  Except as expressly authorized inwriting, neither MFF nor Shadewell shall make any express or impliedagreements, warranties, guarantees or representations or incur any debt in thename or on behalf of the other, represent that their relationship is other thanlicensor and licensee or be obligated by or have any liability under anyagreements or representations made by the other that are not expresslyauthorized in writing.

 

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(c)           **Severability**.  Except as expressly provided to the contraryherein, each Section, paragraph, term and provision of this Agreement, and anyportion thereof, shall be considered severable and if, for any reason, any suchprovision of this Agreement is held to be invalid, contrary to or in conflictwith any applicable present or future law or regulation in a final,unappealable ruling issued by any court, agency or tribunal with competentjurisdiction in a proceeding to which MFF is a party, that ruling shall notimpair the operation of, or have any other effect upon, such other portions ofthis Agreement as may remain otherwise intelligible, which shall continue to begiven full force and effect and bind the parties hereto, although any portionheld to be invalid shall be deemed not to be a part of this Agreement from thedate the time for appeal expires, if Shadewell is a party thereto, otherwiseupon Shadewell’s receipt of a notice of non-enforcement thereof from MFF.  If any covenant herein which restrictscompetitive activity is deemed unenforceable by virtue of its scope in terms ofarea, business activity prohibited and/or length of time, but would beenforceable by reducing any part or all thereof, Shadewell and MFF agree thatthe same shall be enforced to the fullest extent permissible under the laws andpublic policies applied in the jurisdiction in which enforcement is sought.

 

(d)           **Substitution of Provisions**.  If any applicable and binding law or rule ofany jurisdiction requires a greater prior notice of the termination of thisAgreement than is required hereunder, or the taking of some other action notrequired hereunder, or if, under any applicable and binding law or rule of anyjurisdiction, any provision of this Agreement is invalid or unenforceable, theprior notice and/or other action required by such law or rule shall besubstituted for the comparable provisions hereof.  Shadewell agrees to be bound by any promiseor covenant imposing the maximum duty permitted by law which is subsumed withinthe terms of any provision hereof, as though it were separately articulated inand made a part of this Agreement, that may result from striking from any ofthe provisions hereof, any portion or portions which a court may hold to beunenforceable in a final decision to which MFF is a party, or from reducing thescope of any promise or covenant to the extent required to comply with such acourt order.  Such modifications to thisAgreement shall be effective only in such jurisdiction, unless MFF elects togive them greater applicability, and shall be enforced as originally made andentered into in all other jurisdictions.

 

(e)           **Waiver**.  MFF and Shadewell may by written instrumentunilaterally waive or reduce any obligation of or restriction upon the otherunder this Agreement, effective upon delivery of written notice thereof to theother or such other effective date stated in the notice of waiver.  Any waiver so granted by the waiving partyshall be without prejudice to any other rights the waiving party may have, willbe subject to continuing review by the waiving party and may be revoked, in thewaiving party’s sole discretion, at any time and for any reason, effective upondelivery to the other party of ten (10) days’ prior written notice.

 

(f)            **Waiver by Custom orPractice**.  MFF and Shadewellshall not be deemed to have waived or impaired any right, power or optionreserved by this Agreement (including, without limitation, the right to demandexact compliance with

 

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every term,condition and covenant herein or to declare any breach thereof to be a defaultand to terminate this Agreement prior to the expiration of its term) by virtueof any custom or practice of the parties at variance with the terms hereof; anyfailure, refusal or neglect of MFF or Shadewell to exercise any right underthis Agreement or to insist upon exact compliance by the other with itsobligations hereunder; any waiver, forbearance, delay, failure or omission byMFF or Shadewell to exercise any right, power or option, whether of the same,similar or different nature, or MFF’s acceptance of any payments due fromShadewell after any breach of this Agreement.

 

(g)           **Force Majeure**.  Neither MFF nor Shadewell shall be liable forloss or damage or deemed to be in breach of this Agreement if their failure toperform obligations results from:

 

(i)                                     compliance with any law, regulation,requirement or instruction of any federal, state, municipal or foreign governmentor any department or agency thereof; or

 

(ii)                                  acts of God; or

 

(iii)                               fires, strikes, embargoes, war or riot;or

 

(iv)                              any other similar event or cause.

 

Any delayresulting from any of said causes shall extend performance accordingly orexcuse performance, in whole or in part, as may be reasonable, except that saidcauses shall not excuse payments of amounts owed at the time of such occurrenceor payment of any Running Royalties for Royalty Bearing Products due on anysales thereafter.

 

(h)           **Press Release**.  Unless consented to by either party inadvance or as required by law, regulation, statute, etc., both parties agreenot to issue any formal press release prior to the introduction of RoyaltyBearing Products through the Designated Distribution Channels.

 

(i)            **Temporary RestrainingOrders**.  Notwithstandinganything to the contrary contained in this Agreement, MFF and Shadewell shalleach have the right in a proper case to obtain temporary restraining orders andtemporary or preliminary injunctive relief from a court of competentjurisdiction.

 

(j)            **Rights Cumulative**.  The rights of MFF and Shadewell hereunder arecumulative and no exercise or enforcement by MFF or Shadewell of any right orremedy hereunder shall preclude the exercise or enforcement by MFF or Shadewellof any other right or remedy hereunder which MFF or Shadewell is entitled bylaw to enforce.

 

(k)           **Costs and Attorney Fees**.  If a claim for amounts owed by Shadewell to

 

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MFF or itsaffiliates is asserted in any judicial proceeding or appeal thereof, or if MFFor Shadewell is required to enforce this Agreement in any judicial proceedingor appeal thereof, the party prevailing in such proceeding shall be entitled toreimbursement of its reasonable costs and expenses, including reasonableaccounting and legal fees, whether incurred prior to, in preparation for, or incontemplation of the filing of any written demand, claim, action, hearing orproceeding to enforce the obligations of this Agreement.  If MFF incurs expenses in connection withShadewell’s failure to pay when due amounts owing to MFF, to submit when dueany reports, information or supporting records or otherwise to comply with thisAgreement, or if Shadewell incurs expenses in connection with MFF’s failure tocomply with this Agreement, including, but not limited to legal and accountingfees, the party incurring the expense shall be reimbursed by the other partyfor any such reasonable costs and expenses which it incurs.

 

(l)            **Governing Law**.  Except to the extent governed by the UnitedStates Trademark Act of 1946 (Lanham Act, 15 U.S.C. ‘‘ 1051 *et seq.*) or other federal law, this Agreement, and therelationship between Shadewell and MFF, shall be governed by the laws of theState of Utah.

 

(m)          **Jurisdiction**.  Shadewell and MFF hereby irrevocably consentand agree that any legal action, suit or proceeding arising out of or in anyway in connection with this Agreement may be instituted or brought in theUnited States District Court for the District of Utah. Shadewell and MFF herebyirrevocably consent and submit to, for themselves and in respect of theirproperty, generally and unconditionally, the jurisdiction of such Court, and toall proceedings in such Court.  Further,Shadewell and MFF irrevocably consent to actual receipt of any summons and/orlegal process at their respective addresses as set forth in this Agreement asconstituting in every respect sufficient and effective service of process inany such legal action or proceeding. Shadewell and MFF further agree that final judgment in any such legalaction, suit or proceeding shall be conclusive and may be enforced in any otherjurisdiction, whether within or outside the United States of America, by suitunder judgment, a certified or exemplified copy of which will be conclusiveevidence of the fact and the amount of the liability.

 

(n)           **Waiver of Punitive Damages**.  Except with respect to the indemnificationobligations of the parties hereunder, the parties waive to the fullest extentpermitted by law any right to or claim for any punitive or exemplary damagesagainst the other and agree that, in the event of a dispute between them, theparty making a claim shall be limited to recovery of any actual damages itsustains.

 

(o)           **Headings**.  The headings of the several sections andparagraphs hereof are for convenience only and do not define, limit or construethe contents of such sections or paragraphs.

 

(p)           **Entire Agreement**.  This Agreement and the Exhibits heretorepresent the

 

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entire agreementbetween MFF and Shadewell with respect to the subject matter hereof andsupersede any prior agreements and negotiations between the parties.  This Agreement does not affect my rights orobligations of the parties under the Retail Agreement.

 

(q)           **Exhibits**.  All Exhibits hereto form part of thisAgreement.

 

(r)            **Counterparts**.  This Agreement may be executed simultaneouslyin two counterparts, each of which shall be deemed an original, but both ofwhich together shall constitute one and the same agreement, binding upon bothparties hereto, notwithstanding that both parties are not signatories to theoriginal or the same counterpart.

 

(s)           **Expenses**.  Each party shall bear its own expenses(including attorneys’ fees and expenses) in connection with the preparation,negotiation, execution, and delivery of this Agreement.

 

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**INWITNESS THEREOF**,this Agreement has been executed by the Parties hereto as of the date and yearfirst written above.

 

 
|   | SHADEWELL GROVE IP, LLC       |
|--------|-------------------------------|
|   |                          |   |
|   | By:                           | /s/ Tim Bruer |   |
|   |                          | Tim Bruer |
|   | Its:                          | President |
|   |                          |   |
|   | MRS. FIELDS  FRANCHISING, LLC |
|   |                          |   |
|   | By:                           | /s/ Michael Ward |   |
|   |                          | Michael Ward |
|   | Its:                          | Executive Vice  President, General Counsel |

 

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**EXHIBIT “A”**

 

**LICENSEDNAMES AND MARKS**

 

 

##### Mrs. Fields

 

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**EXHIBIT “B”**

 

**ROYALTYBEARING PRODUCTS**

 

 

“BrownieProducts”:

 

1.  Shelf stable ready-to-eat brownies packagedfor retail sale.

 

 

“ToppingProducts”:

 

1.  Shelf stable ready-to-eat dessert toppingspackaged for retail sale.

 

2.  Shelf stable ready-to-eat syrups packaged forretail sale.

 

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