Document:

Exhibit 10.2

Execution Copy

ESCROW AGREEMENT

THIS ESCROW AGREEMENT (the “Agreement”) is
entered into as of August 7, 2007, by and among NexCen Asset Acquisition, LLC,
a Delaware limited liability company (“Buyer”), NexCen Brands, Inc., a
Delaware corporation (“Parent”), Pretzel Time Franchising, LLC, a
Delaware limited liability company (“Pretzel Time”), Pretzelmaker
Franchising, LLC, a Delaware limited liability company (“Pretzelmaker,”
and with Pretzel Time, each individually, a “Seller,” and collectively,
the “Sellers”), and Wilmington Trust Company, as escrow agent hereunder
(the “Escrow Agent”).  Capitalized
terms used but not defined herein shall have the respective meanings assigned
to them in the Purchase Agreement (as defined herein).  The Escrow Agent, Parent, Buyer and Sellers
are sometimes collectively referred to herein as the “Parties” and
individually as a “Party.”

RECITALS

WHEREAS, Parent,
Buyer, Pretzel Time, Pretzelmaker, and Mrs. Fields Famous Brands, LLC (“MFFB”)
have entered into that certain Asset Purchase Agreement, dated as of August 7,
2007 (the “Purchase Agreement”), pursuant to which the Sellers have
agreed to sell, and Buyer has agreed to purchase, substantially all of the
Sellers’ assets;

WHEREAS, pursuant
to Sections 3.3(a) and 3.6 of the Purchase Agreement, a portion of the Purchase
Price is required to be held in escrow after the Closing Date to secure certain
obligations of the Sellers and MFFB; and

WHEREAS, in order
to fully and exclusively secure (a) (i) the obligation, if any, of the Sellers
for a Purchase Price Deficit under Section 3.2(f) of the Purchase Agreement (an
“Adjustment Claim”) and (ii) the indemnity and payment obligations of
the Sellers and MFFB under Article XI of the Purchase Agreement (an “Indemnification
Claim”), the parties to the Purchase Agreement have agreed, pursuant to
Section 3.6(a) of the Purchase Agreement, that the Buyer shall cause to be
deposited with the Escrow Agent 400,366 shares of common stock of the Parent
(the “Indemnity Escrow Shares”) issued in the names of the Sellers, and
(b) the indemnity and payment obligations of the Sellers and MFFB under Article
VI and Section 11.2(f) of the Purchase Agreement (an “Developing Agents
Liability”), the parties to the Purchase Agreement have agreed, pursuant to
Section 3.6(b) of the Purchase Agreement, that the Buyer shall cause to be
deposited with the Escrow Agent 136,054 shares of common stock of the Parent
(the “Developing Agent Escrow Shares,” and collectively with the
Indemnity Escrow Shares, the “Escrow Shares”) issued in the name of
Pretzel Time, to be held in escrow and disbursed therefrom pursuant to the
terms and conditions set forth in this Agreement.

NOW, THEREFORE, in
consideration of these premises and the mutual obligations and covenants set
forth herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Parties agree as follows:

1.             Appointment
of Escrow Agent; Receipt of  Escrow
Amount.

(a)   The
Buyer, the Parent, and the Sellers appoint the Escrow Agent as their escrow
agent for the purposes set forth herein, and the Escrow Agent hereby accepts
such appointment under the terms and conditions set forth herein.

(b)   Following the execution of this
Agreement, the Buyer shall deposit, or cause to be deposited, with the Escrow
Agent the Escrow Shares as set forth in the Purchase Agreement.  The Buyer or Parent shall deliver to the
Escrow Agent the stock powers necessary to carry forth distributions according
to Section 3 of this Agreement.

 	  
 

  
 

(c)   Upon receipt by the Escrow
Agent of the Escrow Shares, the Escrow Agent shall hold such Escrow Shares
including (i) any securities into which the Indemnity Escrow Shares may be
reclassified or converted (collectively, with the Indemnity Escrow Shares, the “Aggregate
Indemnity Escrow Shares”), (ii) any securities into which the Developing
Agents Escrow Shares may be reclassified or converted (collectively, with the
Developing Agents Escrow Shares, the “Aggregate Developing Agents Escrow
Shares,” and collectively, with the Aggregate Indemnity Escrow Shares, the “Aggregate
Escrow Shares”), (iii) any cash dividends paid on the Aggregate Indemnity
Escrow Shares, and investment income earned on such dividends (the “Aggregate
Indemnity Cash Amount”) and (iv) any cash dividends paid on the Aggregate
Developing Agents Escrow Shares, and investment income earned on such dividends
(the “Aggregate Developing Agent Cash Amount,” and collectively with the
Aggregate Indemnity Cash Amount, the “Aggregate Cash Amount”) in a
separate and distinct account (the “Escrow Account”), subject to the
terms and conditions of this Agreement. 
The Aggregate Cash Amount and the Aggregate Escrow Shares shall be
referred to here as the “Escrow Amount”

(d)   The Escrow Agent shall not
distribute or release the Escrow Amount, except in accordance with the express
terms and conditions of this Agreement.

2.             Treatment of Escrow Property.

(a)   Escrow Shares.

(i)            Voting.  The Aggregate Escrow Shares deposited and
held in the Escrow Account are subject to the Registration Rights Agreement and
Voting Agreement.  The Escrow Agent shall
not have any right to vote or consent with respect to the Aggregate Escrow
Shares.

(ii)           Dividends.  If Parent declares and distributes dividends
with respect to the Parent Shares during such time as the Aggregate Escrow
Shares are held in the Escrow Account, the Parent shall deposit in the Escrow
Account the amount of such dividends allocable to such Aggregate Escrow
Shares.  If the Parent deposits amounts
pursuant to such dividends in the Escrow Account in accordance with the
provisions of this Section 2(a)(ii), Mrs. Fields’ Famous Brands, LLC (“MFFB”)
shall include such dividends in their income for federal, state and local
income tax purposes, provided that the Parent timely provide MFFB with copies
of Internal Revenue Service (“IRS”) Forms 1099 on which is reported the
amount of such dividend income.  In
addition, MFFB shall include in income for federal, state and local income tax
purposes any interest earned on such dividends while held in the Escrow
Account, provided that the Escrow Agent shall timely provide MFFB with IRS
Forms 1099, on which is reported such interest income.

(iii)          Conversion of Parent
Shares.  If the Parent Shares are
converted by the Parent through a stock split or a reverse stock split, then
the Closing Date Reference Price shall be adjusted in direct but inverse
relation to the stock split (the “Adjusted Closing Date Reference Price”).  For example, for illustration purposes only:
(A)  if the Parent Shares are split 2 to
1, then the Adjusted Closing Date Reference Price shall be the Closing Date
Reference Price divided by 2; or (B) if the Parent Shares undergo a reverse
split of 1 to 2, then the Adjusted Closing Date Reference Price shall be the Closing
Date Reference Price multiplied by 2.

(iv)          Transferability.  Other than as provided in Section 18, the
Sellers may not sell, transfer, assign, pledge or otherwise dispose of (whether
with or without consideration and whether voluntarily or involuntarily or by
operation of law) any interest in the Escrow Amount at any time that the
Aggregate Escrow Shares are held in escrow pursuant to this Agreement.

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(v)           New Certificates.  If fewer than the total number of the
Aggregate Escrow Shares represented by any certificate (or certificates)
representing the Aggregate Escrow Shares are to be distributed to the Buyer,
the Parent, or the Sellers hereunder, the Parent shall deliver a new
certificate (or certificates) representing the number of the Aggregate Escrow Shares
not so distributed to the Escrow Agent within ten (10) Business Days after the
Escrow Agent’s surrender of the certificate (or certificates) representing the
distributed Aggregate Escrow Shares.

(vi)          Escrow Agent
Obligations. Except as otherwise provided in Section 2(a) hereof, the
Escrow Agent’s sole obligation with respect to any distribution of the
Aggregate Escrow Shares to the Buyer or Parent shall be to (i) deliver the
certificate (or certificates) representing such Aggregate Escrow Shares and any
related stock powers to the Buyer, the Parent or its designated stock transfer
agent with appropriate instructions to the Parent to issue a new certificate in
the name of the Party or Parties entitled to such Aggregate Escrow Shares along
with proper delivery instructions and (ii) instruct the Parent or its
designated stock transfer agent to issue a new certificate to be returned to
the Escrow Agent for any undistributed Aggregate Escrow Shares.  The Escrow Agent shall not be liable for any
error, mistake, delay or failure to act by the Buyer, the Parent or its
designated stock transfer agent, including without limitation, any error,
mistake, delay or failure in the delivery of the Aggregate Escrow Shares.

(b)   Aggregate Cash Amount.

(i)            Permitted Investments.  The Escrow Agent shall invest and reinvest
the Aggregate Cash Amount pursuant to written directions of the Sellers, and in
the absence of such directions, in any or all of the following: (i) short-term
direct obligations of, or obligations fully guaranteed by, the United States of
America or any agency thereof; (ii) certificates of deposit issued by any bank,
trust company or national banking association having total capital and surplus
in excess of $500,000,000 and rated at least AAA by Standard & Poor’s
Rating Group and AAA by Moody’s Investors Services, Inc., to the maximum extent
permitted by law; (iii) commercial paper rated in the highest grade by Standard
& Poor’s Rating Group and/or Moody’s Investors Service, Inc., in each case
having maturities of not more than 30 days; or (iv) the U.S. Government
Portfolio of the Wilmington family of mutual funds or any other mutual funds
for which Escrow Agent or any affiliate of Escrow Agent may serve as investment
advisor or other service provider (such investment described above in (i)
through (iv) being collectively referred to herein as the “Permitted
Investments”).  Investment earnings
shall be credited to the Escrow Account until disbursed in accordance with this
Agreement.  Any loss incurred from an investment
or sale thereof other than losses resulting directly or indirectly from the
gross negligence or willful misconduct of the Escrow Agent, shall be deducted
from the Aggregate Cash Amount of the Escrow Account.  The Escrow Agent shall not be responsible for
any losses on any uninvested cash remaining in the Escrow Account, which may
occur because of bank failure or the Aggregate Cash Amount exceeding the FDIC
limits.

(ii)           Disposition of
Securities.  At the time that the
Escrow Agent shall be required to make any payment in connection with the
Escrow Account under this Agreement, the Escrow Agent shall promptly and timely
liquidate the Permitted Investments associated with the Escrow Account
hereunder to the extent necessary to make such payment in accordance with the
terms hereof.

3.             Release of Escrow
Amount.  The Escrow Amount shall
only be distributed and released as follows:

(a)   Adjustment Claims.  If the Sellers fail to satisfy any amount
owed to Buyer in accordance with Section 3.2(f) of the Purchase Agreement
within three (3) days following the final determination of the Final Purchase
Price in accordance with Section 3.2 of the Purchase Agreement, the

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Buyer may deliver to the Sellers and the Escrow Agent
a notice (the “Adjustment Draw-Down Notice”) setting forth the amounts
claimed due to the Buyer from the Sellers pursuant to Section 3.2(f) of the
Purchase Agreement, together with either a written confirmation by the Sellers
as to such amount or a copy of the Accountant Statement that confirms such
amount (such amount herein referred to as the “Cash Shortfall”) on or
before the date that is ten (10) Business Days following the final
determination of the Final Purchase Price (the “Adjustment Escrow Notice
Date”).  Within three (3) Business
Days following the Adjustment Escrow Notice Date, the Escrow Agent shall
transfer an amount equal to the Cash Shortfall to the Buyer in accordance with
Section 3(c) of this  Agreement.

(b)   Indemnification and
Developing Agent Claims.

(i)            On each occasion on
which the Parent determines in good faith that any Buyer Indemnified Party is
entitled to payment of a claim for indemnification against the Seller or MFFB
in accordance with Article XI of the Purchase Agreement, the Parent or the
Buyer may deliver to the Sellers, MFFB, and the Escrow Agent a written request
for the payment of such amount (an “Indemnification Draw-Down Request”).  The Indemnification Draw-Down Request shall
set forth the amount requested and, in reasonable detail, the specific basis
(to the extent known) for the determination of the amount of the claim and why
such Buyer Indemnified Party is entitled to the payment of such amount.

(ii)           On each occasion on
which the Parent determines in good faith that any Buyer Indemnified Party is
entitled to payment of a claim for a Developing Agent Liability, the Parent or
the Buyer may deliver to the Sellers, MFFB, and the Escrow Agent a written
request for the payment of such amount (an “Developing Agent Liability
Draw-Down Request”, and collectively with the Indemnification Draw-Down
Request, a “Draw-Down Request”). 
The Developing Agents Liability Draw-Down Request shall set forth the
amount requested and, in reasonable detail, the specific basis (to the extent
known) for the determination of the amount of the claim and why such Buyer
Indemnified Party is entitled to the payment of such amount.

(iii)          Within five (5) Business
Days after receipt by the Sellers and the Escrow Agent of any Draw-Down
Request, the Sellers or MFFB may deliver to the Parent, the Buyer and the
Escrow Agent a written objection to all or any part of the Draw-Down Request
(an “Objection”).

(iv)          If, in connection with
any Draw-Down Request, the Sellers fail to deliver an Objection by the end of
the fifth (5th) Business Day following the receipt by the Sellers of a
Draw-Down Request, the Escrow Agent shall pay to the applicable Buyer
Indemnified Party out of the Escrow Account an amount equal to the amount
requested in the Draw-Down Request, in accordance with Section 3(c) of this
Escrow Agreement. Any such payment shall be made on or before the third (3rd)
Business Day following the expiration of such five (5) day period.

(v)           If the Sellers deliver
a timely Objection with respect to all or any portion of a Draw-Down Request,
the Escrow Agent shall not disburse, and shall continue to hold in the Escrow
Account, the amount requested in the Draw-Down Request or the disputed portion
thereof, as the case may be, pending receipt of either (A) written payment
instructions signed by the Parent and Sellers specifying the agreement of the
parties as to the action to be taken by the Escrow Agent in respect of such
Draw-Down Request (the “Payment Instructions”) or (B) a notice from the
Parent and Sellers stating that such Draw-Down Request has been submitted to a
court of competent jurisdiction for judgment and that a judgment with respect
to such matters has been rendered (a “Judgment Notice”) which is
accompanied by a copy of a final, non-appealable order of such court (an “Order”),
pursuant to which such court has determined whether and to what extent the
Buyer Indemnified Party is entitled to the amount requested in

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the Draw Down Request. Upon receipt of Payment
Instructions or a Judgment Notice, the Escrow Agent shall thereafter act in
accordance with Section 3(b)(v) or Section 3(b)(vi) below, as applicable.

(vi)          If the Escrow Agent
receives Payment Instructions indicating that a Buyer Indemnified Party is
entitled to payment in respect of all or any portion of the applicable
Draw-Down Request, the Escrow Agent shall release from the Escrow Account and
deliver to such Buyer Indemnified Party such amount as is indicated by such
Payment Instructions in accordance with Section 3(c) of this Agreement.  The Escrow Agent shall deliver the amounts
due to the Buyer Indemnified Party on or before the fifth (5th) Business Day
following the date on which the Escrow Agent receives such Payment
Instructions.  If the Payment
Instructions indicate that a Buyer Indemnified Party is not entitled to all or
any portion of the amount claimed in such Draw-Down Request (a “Discharge
Notice”), then the Escrow Agent shall (A) deliver to the Buyer
Indemnified Party that portion, if any, of the amount claimed in the Draw-Down
Request to which such Buyer Indemnified Party is entitled, in accordance with
Section 3(c) of this Agreement, and (B) continue to hold the remaining
amount of such Aggregate Escrow Shares and Aggregate Cash Amount in the Escrow
Account in accordance with the terms of this Agreement.

(vii)         If the Escrow Agent receives
a Judgment Notice and an Order with respect to any Draw-Down Request, then the
Escrow Agent shall release from the Escrow Account and deliver to the
applicable Buyer Indemnified Party such amount from the Escrow Account equal to
the amount due such Buyer Indemnified Party, as indicated in such Order in
accordance with Section 3(c) of this Agreement. 
The Escrow Agent shall deliver the amounts due to the Buyer Indemnified
Party on or before the fifth (5th) Business Day following the date on which the
Escrow Agent receives such Order.  If
such Order indicates that the applicable Buyer Indemnified Party is not
entitled to all or any portion of the amount claimed in the Draw-Down Request
(a “Determination Discharge”), then the Escrow Agent shall (A) deliver
to the Buyer Indemnified Party that portion, if any, of the amount claimed in
the Draw-Down Request to which such Buyer Indemnified Party is entitled, in
accordance with Section 3(c) of this Agreement, and (B) continue to hold
the remaining amount of such Aggregate Escrow Shares and Aggregate Cash Amount
in the Escrow Account in accordance with the terms of this Agreement.

(c)   Payments from the Escrow Fund.  The Escrow Agent shall pay all amounts due
under an Adjustment Draw-Down Notice or Draw-Down Request, determined according
to the terms of Section 3(a) and Section 3(b) of this Agreement, by
releasing  to the appropriate Buyer
Indemnified Party a number of Aggregate Escrow Shares, rounded to the nearest
whole number, equal to the quotient determined by dividing (x) the Adjustment
Draw-Down Notice or Draw-Down Request amount by (y) the Adjusted Closing Date
Reference Price.  If the Escrow Account
does not contain sufficient Aggregate Escrow Shares to satisfy an Adjustment
Draw-Down Notice or Draw-Down Request, then the Escrow Agent shall release to
the appropriate Buyer Indemnified Party all Aggregate Escrow Shares contained
in the Escrow Account, and shall pay the remaining balance in cash from the
Aggregate Cash Amount.

(d)   Release of Remaining Aggregate Escrow Shares.

(i)            Aggregate Indemnity
Escrow Shares.  On the date that is 9
months and one day after the Closing Date (the “Indemnity Release Date”),
the Escrow Agent shall promptly deliver to the Sellers, as instructed in
writing by the Sellers, the Aggregate Indemnity Escrow Shares and Aggregate
Indemnity Cash Amount remaining in the Escrow Account on the Indemnity Release
Date (the “Indemnity Disbursement Amount”); provided, however,
that if the Escrow Agent shall have received on or before the Indemnity Release
Date one or more Indemnity Draw-Down Requests which have not been paid in
accordance with Section 3(c) as of the Indemnity Release Date and as to which,
on the Indemnity Release Date, the Escrow Agent has not received and fully
acted upon Payment Instructions or an Order, nor received a Discharge Notice or
a Determination Discharge (any such Indemnity Draw-Down Request being referred
to as an “Indemnity Outstanding Claim”) (it being agreed that to the
extent that the precise

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amount of Damages with respect to any Indemnity
Outstanding Claim is not known prior to the Indemnity Release Date, the Buyer
shall have the right to send Sellers and the Escrow Agent on or before the
Indemnity Release Date a (or an updated) Indemnity Draw-Down Request with
respect to each Indemnity Outstanding Claim that provides such Parties notice
of such Buyer Indemnified Party’s good faith estimate of the maximum amount of
Damages resulting from such Indemnity Outstanding Claim) the Escrow Agent shall
retain and continue to hold in accordance with the terms of this Agreement an
amount of Aggregate Indemnity Escrow Shares and Aggregate Indemnity Cash Amount
equal to the maximum amount claimed by Buyer Indemnified Parties under all
Indemnity Outstanding Claims (the “Retained Indemnity Amount”).  The Escrow Agent shall deliver to the
Sellers, as instructed by the Sellers such amount equal to the excess, if any,
of the Indemnity Disbursement Amount less the Retained Indemnity Amount; and
thereafter the Escrow Agent shall release from the Escrow Account all or
portions of the Retained Indemnity Amount as and when it receives Payment
Instructions, Orders, Discharge Notices or Determination Discharges, as
applicable, related to the Indemnity Outstanding Claims.  Following the Indemnity Release Date, in the
event that the Retained Indemnity Amount at any time exceeds the maximum amount
(based on the most recent Indemnity Draw-Down Request for each Indemnity
Outstanding Claim) of all Indemnity Outstanding Claims, the Escrow Agent shall
deliver according to the Sellers’ instructions, within five (5) Business Days
of the Sellers’ written request for such delivery, such amount equal to such
excess.

(ii)           Aggregate Developing
Agents Escrow Shares.  Unless
notified by both the Buyer and Sellers to release the Aggregate Developing
Agents Escrow Shares earlier, on the 15th month and one day after the Closing
Date (the “Developing Agents Release Date”), the Escrow Agent shall
promptly deliver to the Sellers, as instructed in writing by the Sellers, the
Aggregate Developing Agents Escrow Shares and Aggregate Developing Agents Cash
Amount remaining in the Escrow Account on the Developing Agents Release Date
(the “Developing Agents Disbursement Amount”); provided, however,
that if the Escrow Agent shall have received on or before the Developing Agents
Release Date one or more Developing Agents Liability Draw-Down Requests which
have not been paid in accordance with Section 3(c) as of the Developing
Agents Release Date and as to which, on the Developing Agents Release Date, the
Escrow Agent has not received and fully acted upon Payment Instructions or an
Order, nor received a Discharge Notice or a Determination Discharge (any such
Developing Agents Liability Draw-Down Request being referred to as an “Developing
Agents Outstanding Claim”) (it being agreed that to the extent that the
precise amount of Developing Agents Liability with respect to any Outstanding
Claim is not known prior to the Developing Agents Release Date, the Buyer shall
have the right to send Sellers and the Escrow Agent on or before the Developing
Agents Release Date a (or an updated) Developing Agents Liability Draw-Down
Request with respect to each Developing Agents Outstanding Claim that provides
such Parties notice of such Buyer Indemnified Party’s good faith estimate of
the maximum amount of the Developing Agents Liability resulting from such
Developing Agents Outstanding Claim) the Escrow Agent shall retain and continue
to hold in accordance with the terms of this Agreement an amount of Aggregate
Developing Agents Escrow Shares and Aggregate Developing Agents Cash Amount
equal to the maximum amount claimed by Buyer Indemnified Parties under all
Developing Agents Outstanding Claims (the “Retained Developing Agents
Liability Amount”).  The Escrow Agent
shall deliver to the Sellers, as instructed by the Sellers such amount equal to
the excess, if any, of the Developing Agents Disbursement Amount less the
Retained Developing Agents Liability Amount; and thereafter the Escrow Agent
shall release from the Escrow Account all or portions of the Retained
Developing Agents Liability Amount as and when it receives Payment
Instructions, Orders, Discharge Notices or Determination Discharges, as
applicable, related to the Developing Agents Outstanding Claims.  Following the Developing Agents Release Date,
in the event that the Retained Developing Agents Liability Amount at any time
exceeds the maximum amount (based on the most recent Developing Agents Liability
Draw-Down Request for each Developing Agents Outstanding Claim) of all
Developing Agents Outstanding Claims, the Escrow Agent shall deliver according
to the Sellers’ 

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instructions, within five (5) Business Days of the
Sellers’ written request for such delivery, such amount equal to such excess.

(e)   Joint Written Instructions. Notwithstanding the foregoing,
if at any time the Escrow Agent shall receive joint written instructions
executed by the Sellers and the Buyer (“Joint Written Instructions”) to
release all or any portion of the Escrow Amount, then within five (5) Business
Days after receipt of such Joint Written Instructions, the Escrow Agent shall
release the Aggregate Escrow Shares and the Aggregate Cash Amount in accordance
with such Joint Written Instructions. 
The Sellers and the Buyer will cooperate in good faith in executing such
Joint Written Instructions wherever reasonably necessary to ensure
distributions of the Escrow Amount to the Party entitled thereto under the
terms of the Purchase Agreement.

(f)    Written Statements. As promptly as practicable following
the delivery of any Escrow Amount from the Escrow Account, the Escrow Agent
shall send a written statement to each of the Sellers and the Buyer stating the
number of Aggregate Indemnity Escrow Shares, Aggregate Developing Agents Escrow
Shares, the amount of Aggregate Indemnity Cash Amount and the amount of
Aggregate Developing Agents Cash Amount so delivered and the amounts of the
Aggregate Indemnity Escow Shares, Aggregate Developing Agents Escrow Shares,
Aggregate Indemnity Cash Amount and Aggregate Developing Agents Cash Amount
remaining in the Escrow Account as of such date.

4.             Conditions
to Escrow.  The Escrow Agent
agrees to hold the Aggregate Escrow Shares and Aggregate Cash Amount and to
perform its responsibilties in accordance with the terms and provisions of this
Agreement.  The Parties agree that the
Escrow Agent shall not assume any responsibility for the failure of any of the
Buyer, the Parent, or the Sellers to perform in accordance with the Purchase
Agreement or this Agreement.  The Escrow
Agent’s acceptance of its responsibilities hereunder is subject to the
following terms and conditions which shall govern and control with respect to
the Escrow Agent’s rights, duties and liabilities hereunder:

(a)   Documents.  The
Escrow Agent shall be fully protected and shall incur no liability (other than
as a result of the Escrow Agent’s gross negligence or willful misconduct), in
relying upon and acting upon any written certification, notice, instruction,
direction, request, waiver, consent, receipt, communication, paper or other
document that the Escrow Agent in good faith believes to be genuine and duly
executed and delivered, and shall have no duty to inquire into or investigate
the validity or accuracy of any thereof.

(b)   Liability.  The
Escrow Agent shall not be liable for anything which it may do or refrain from
doing in connection herewith, except for its own gross negligence, bad faith or
willful misconduct.  In the event that
the Escrow Agent shall in any instance, after seeking the advice of legal
counsel pursuant to Section 4(c) of this Agreement, in good faith be uncertain
as to its duties or rights hereunder or reasonably believe any ambiguity or
uncertainty exists hereunder or in any notice, instruction, direction, request
or other communication, paper or document received by the Escrow Agent
hereunder, it shall be entitled to refrain from taking any action to which such
ambiguity or uncertainty relates and shall be fully protected and shall not be
liable in any way to the Buyer, the Parent, the Sellers or any other Person for
refraining from taking such action, and its sole obligation, in addition to
those of its duties hereunder as to which there is no such ambiguity or
uncertainty and which are not impacted by such ambiguity or uncertainty, shall
be to keep safe all property held in the Escrow Account until it shall be
directed otherwise in writing by the Buyer and the Sellers or by a final,
nonappealable order of a court of competent jurisdiction; provided, however,
in the event that the Escrow Agent has not received such written direction or
court order within 180 days after requesting the same, it shall have the right
to interplead the Buyer and the Sellers in any court of competent jurisdiction
and request that such court determine its rights and duties hereunder.

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(c)   Legal Counsel.  The
Escrow Agent may seek the advice of legal counsel selected with reasonable
care, including  in the event of any
conflicting or inconsistent claims or demands being made in connection with the
subject matter of this Agreement or any dispute or question as to the
construction of any of the provisions of this Agreement or its duties
hereunder, and it shall incur no liability and shall be fully protected in
respect of any action taken, omitted or suffered by it in good faith in
accordance with the written advice of such counsel.

(d)   Limitation of Duties. 
The Escrow Agent shall have no duties except those which are expressly
set forth herein and it shall not be bound by any agreement of any other Party
(whether or not it has any knowledge thereof). 
IN NO EVENT SHALL THE ESCROW AGENT BE LIABLE, DIRECTLY OR INDIRECTLY,
FOR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL LOSSES OR DAMAGES OF ANY KIND WHATSOEVER
(INCLUDING BUT NOT LIMITED TO LOST PROFITS), EVEN IF THE ESCROW AGENT HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH LOSSES OR DAMAGES AND REGARDLESS OF THE FORM
OF ACTION.

(e)   Resignation or Termination of Escrow Agent.  The Escrow Agent is entitled to resign at any
time by delivering not less than thirty (30) days’ advance written notice of
such resignation to the Buyer, the Parent and the Sellers, which notice shall
specify the proposed effective date of resignation. The Buyer and the Sellers
are entitled to terminate the services of the Escrow Agent at any time by
delivering not less than thirty (30) days’ advance written notice (with such
written notice being signed by the Buyer and the Sellers) of such termination
to the Escrow Agent, which notice shall specify the effective date of termination.  Within thirty (30) days after receiving or
delivering the aforesaid notice, as the case may be, the Buyer and the Sellers
shall jointly appoint a successor escrow agent. 
The Escrow Agent’s resignation shall not be effective until (i) such
appointment has been made, (ii) the  Aggregate Escrow Shares and the
Aggregate Cash Amount have been delivered to the successor escrow agent, and
(iii) the successor’s acceptance of this Agreement and receipt of the  Aggregate
Escrow Shares and Aggregate Cash Amount from the successor escrow agent
and copies thereof shall have been sent to the Buyer and the Sellers.  The Escrow Agent may petition a court of
competent jurisdiction to appoint a successor escrow agent if one the Buyer and
the Sellers do not designate one within sixty (60) days of receipt of such
resignation from the Escrow Agent.

(f)    Discharge of Escrow Agent. 
Upon the delivery of all of the Aggregate Indemnity Shares and Aggregate
Cash Amount pursuant to the terms of Section 3 above or to a successor escrow
agent, the Escrow Agent shall thereafter be discharged from any further
obligations hereunder.  The Escrow Agent
is hereby authorized, in any and all events, to comply with and obey any and
all final judgments, orders and decrees of any court of competent jurisdiction
which may be filed, entered or issued, and all final arbitration awards and, if
it shall so comply or obey, it shall not be liable to any other Person by
reason of such compliance or obedience.

5.             Indemnification
and Fees of the Escrow Agent.  In
consideration of its acceptance of the appointment as Escrow Agent, the Buyer
and the Sellers shall each indemnify and hold the Escrow Agent harmless as to
fifty percent (50%) of any loss, liability, cost or expense incurred without
gross negligence, bad faith or willful misconduct by the Escrow Agent to any
Person by reason of its having accepted the same or in carrying out any of the
terms hereof.  The Buyer and the Sellers
shall each reimburse the Escrow Agent on request for fifty percent (50%) of its
reasonable attorneys’ fees and for other reasonable costs and expenses it
incurs in connection with carrying out its duties hereunder, including such
amounts as set forth on the Escrow Agent Schedule of Fees.  In consideration of the Escrow Agent’s duties
hereunder, the Escrow Agent is entitled to a fee in an amount set forth on Schedule
I (the “Escrow Fee”), with such fee payable fifty percent (50%) by
the Buyer and fifty percent (50%) by the Sellers.  Any amounts payable by the Sellers under this
Section 5 (including any indemnification

 8
 

obligations, the Escrow Fee and any other fees or
expenses) shall be payable directly by MFC, on behalf of the Sellers.

 9
 

6.             Notices.  All
notices and other communications required or permitted pursuant to this Agreement
shall be in writing and be deemed duly given when delivered personally (which
shall include delivery by Federal Express or other nationally recognized,
reputable overnight courier service that issues a receipt or other confirmation
of delivery) to the party for whom such communication is intended, or three (3)
business after the date mailed by certified mail, return receipt requested,
postage prepaid, as follows:

If to the Sellers:

Mrs. Fields Famous Brands, LLC

2855 East Cottonwood Parkway, Suite 400

Salt Lake City, UT 84121

Attn:       Michael Ward,
EVP and General Counsel

Fax:         (801) 736-5944

If to the Parent or Buyer:

NexCen Brands,
Inc.

1330 Avenue of the
Americas, 34th Floor

New York, NY  10019

Attn:       Robert W. D’Loren

Fax:         (212)
247-7131

with a copy to:

Kirkland &
Ellis LLP

655 Fifteenth
Street NW

Washington,
DC  20005

Attn:       Mark D. Director, Esq.

Fax:         (202)
879-5200

If to the Escrow Agent:

Wilmington Trust Company

Rodney Square North

1100 N. Market Street, Mail Code 1625

Wilmington, DE 19890

Attention:  Scott Huff/Corporate Custody

Fax: (302) 636-4149

or to such other address as such party shall specify by written notice
to the other Parties. Any notice sent to the Escrow Agent shall also be sent to
the other Parties to this Agreement.

7.             Entire Agreement; Amendments.  This Agreement, together with the Purchase
Agreement, the Registration Rights Agreement and the Voting Agreement, contains
the entire understanding of the Parties with respect to the subject matter
hereof and supersedes any prior understandings or agreements by or among the
Parties, whether written or oral, which may have related to the subject matter
hereof in any way.  This Agreement may be
amended, or any provision of this Agreement may be waived, so long as such
amendment or waiver is set forth in a writing executed by the Buyer and the
Sellers (a copy of which shall be promptly provided by the Buyer to the Escrow
Agent); provided that if any such amendment or waiver would have the
effect of increasing or expanding the

 10
 

Escrow Agent’s obligations or duties under this
Agreement, the written consent of the Escrow Agent shall be required in
addition to the written consent of the Buyer and the Sellers.  No course of dealing between or among the
parties hereto shall be deemed effective to modify, amend or discharge any part
of this Agreement of any rights or obligations of any Party under or by reason
of this Agreement.

8.             Assigns and Assignment.  This Agreement and all actions taken
hereunder shall inure to the benefit of and shall be binding upon all of the
Parties and upon all of their respective successors and assigns; provided
that (a) no assignment of the interest of any other Party shall be binding upon
the Escrow Agent unless and until written notice of such assignment shall be
filed with and acknowledged by the Escrow Agent and (b) the Escrow Agent shall
not be permitted to assign its obligations hereunder except as provided in
Section 4(e) above and Section 17 below.

9.             No Other Third Party Beneficiaries.  Other than as provided in Section 18, nothing
herein expressed or implied is intended or shall be construed to confer upon or
to give any Person other than the Escrow Agent, the Buyer, the Buyer
Indemnified Parties, and the Sellers and their permitted assigns any rights or
remedies under or by reason of this Agreement.

10.          Interpretation.  The headings in this Agreement are inserted
for convenience of reference only and shall not be a part of or control or
affect the meaning hereof.

11.          No Waiver.  No failure or delay by a party hereto in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, and no single or partial exercise thereof shall preclude any right of
further exercise or the exercise of any other right, power or privilege.  The right of the Buyer and Sellers to receive
all or any portion of the Aggregate Escrow Shares or the Aggregate Cash Amount
under the circumstances described in Section 3 above is in addition to, and not
in lieu of, any other remedies that any such Party may have against another
Party pursuant to the Purchase Agreement or in the event of a breach of the
Purchase Agreement.

12.          Severability.  The Parties agree that (a) the provisions of
this Agreement shall be severable in the event that for any reason whatsoever
the provisions hereof are invalid, void or otherwise unenforceable, (b) such
invalid, void or otherwise unenforceable provisions shall be automatically
replaced by other provisions which are as similar as possible in terms to such
invalid, void or otherwise unenforceable provisions, but are valid and
enforceable, and (c) the remaining provisions shall remain enforceable to the
fullest extent permitted by law.

13.          No Strict Construction.  The language used in this Agreement shall be
deemed to be the language chosen by the Parties hereto to express their
collective mutual intent, and no rule of strict construction shall be applied
against any person.  The term “including”
as used herein shall be by way of example, and shall not be deemed to
constitute a limitation of any term or provision contained herein.  Each defined term used in this Agreement has
a comparable meaning when used in its plural or singular form.

14.          Releases on Non-Business Days.  In the event that a release from the Escrow
Account hereunder is required to be made on a date that is not a Business Day,
such release may be made on the next succeeding Business Day with the same
force and effect as if made when required.

15.          Governing Law; Jurisdiction.  This Agreement, and the rights of the Parties
under this Agreement, shall be governed by and construed in accordance with the
laws of the State of New York, including Sections 5-1401 and 5-1402 of the New
York General Obligations Law.

 11
 

16.          Counterparts.  This Agreement may be executed by the Parties
individually or in any combination, in one or more counterparts (including by
means of telecopied signature pages), each of which shall be an original and
all of which shall together constitute one and the same agreement.

17.          Successor Escrow Agent Entity.
Any banking association or corporation into which the Escrow Agent may be
merged, converted or with which the Escrow Agent may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Escrow Agent shall be a party, or any banking association or corporation to
which all or substantially all of the corporate trust or escrow business of the
Escrow Agent shall be sold or otherwise transferred, shall succeed to all the
Escrow Agent’s rights, obligations and immunities hereunder without the
execution or filing of any paper or any further act on the part of any of the
Parties, anything herein to the contrary notwithstanding.

18.          Pledge Under the
Indenture and Collateral Agreements. 
Notwitstanding any other provision herein to the contrary, the
Parties acknowledge and agree that the Sellers are assigning their rights under
this Agreement as collateral under the Indenture and the related Collateral
Agreements (as defined in the Indenture).

[SIGNATURE PAGE FOLLOWS]

 12

To evidence their agreement, the parties have caused
this Agreement to be executed on the date first written above.

	
  

  	
  NEXCEN ASSET ACQUISITION, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  NexCen Brands, Inc., its Managing Member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert D’Loren

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Robert D’Loren

  
	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NEXCEN BRANDS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert D’Loren

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Robert D’Loren

  
	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer

  
					

 

Escrow Agreement

 

	
  

  	
  PRETZELMAKER FRANCHISING, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael Ward

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Michael Ward

  
	
   

  	
   

  	
  Title:

  	
  EVP, General Counsel & Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PRETZEL TIME FRANCHISING, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael Ward

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Michael Ward

  
	
   

  	
   

  	
  Title:

  	
  EVP, General Counsel & Secretary

  
						

 

Escrow Agreement

 

	
  

  	
  WILMINGTON TRUST COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Scott A. Huff

  	
   

  
	
   

  	
   

  	
  Name: Scott A. Huff

  	
   

  
	
   

  	
   

  	
  Title:  Senior
  Financial Services Officer

  

 

Escrow Agreement

Schedule
I

Escrow Agent Schedule
of Fees

NOTE:

Subject to a legal and
administrative review of the governing documents and acceptable indemnification
for our fees and expenses from a creditworthy entity. Out of pocket expenses
(including outside counsel’s fees and expenses in connection with the closing
and in connection with any post-closing matters) are additional and are billed
separately within 30 days from closing. 
Wilmington Trust requests that whenever possible, the Initial Fee and
the first year’s Annual Administration Fee be paid on the closing date by wire
transfer per the following wire transfer instructions: Wilmington Trust
Company, Wilmington, Delaware; ABA No. 031100092; for credit to the account of
Corporate Trust Administration - Income Account; Account No. 082465-000; Attn:
Scott Huff; Ref:  Escrow Agent’s Fees and
Expenses (Nexcen & Pretzel Time Escrow).  
Thereafter, the Annual Administration Fee is due and payable annually in
advance on each anniversary of the closing date.  Transaction Fees are due and payable annually
in arrears.  All fees are non-refundable
and will not be prorated in the event of an early termination of the Trust. In
the event that the transaction does not close, Wilmington Trust reserves the
right to be paid its Initial Fee.  All
fees quoted are guaranteed for a period of 90 days.

	
  Annual Administration Fee

  	
   

  	
  $

  	
  3,500.00

  	
   

  

 

Covers acceptance
of appointment as Escrow Agent including complete study of drafts of Escrow
Agreement and all supporting documents in connection therewith, conferences
until final Agreement is agreed upon, execution of final Agreement and
administrative duties in connection with the security provisions of the
Agreement.

Transaction Fees

	
  a)

  	
   

  	
  Purchase,
  sale, withdrawal, maturities calls and puts of domestic securities

  	
   

  	
  $

  	
  15.00

  	
   

  
	
  b)

  	
   

  	
  Physical
  delivery of domestic securities

  	
   

  	
  $

  	
  50.00

  	
   

  
	
  c)

  	
   

  	
  Purchase
  of Eurodollar certificate of deposit

  	
   

  	
  $

  	
  65.00

  	
   

  
	
  d)

  	
   

  	
  Principal
  amortizing securities(per pool/per month)

  	
   

  	
  $

  	
  10.00

  	
   

  
	
  e)

  	
   

  	
  Check
  Issuance Fee (per check issued and mailed)

  	
   

  	
  $

  	
  15.00

  	
   

  
	
  f)

  	
   

  	
  Wire
  charge (per transfer)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Outgoing**

  	
   

  	
  $

  	
  25.00

  	
   

  
	
   

  	
   

  	
  Incoming**

  	
   

  	
  $

  	
  10.00

  	
   

  
	
  g)

  	
   

  	
  For
  each Form 1099

  	
   

  	
  $

  	
  1.50Exhibit
10.3

Execution Copy

TRANSITION
SERVICES AGREEMENT

This TRANSITION SERVICES AGREEMENT (this “Agreement”) dated as of
August 7, 2007  (the
“Effective Date”), is made and entered into by and between Mrs. Fields
Famous Brands, LLC, a limited liability corporation formed under the laws of
Delaware and the parent company of the Sellers (“MFFB”) and NexCen Asset
Acquisition, LLC, a limited liability corporation formed under the laws of  Delaware (“Purchaser”).  MFFB and Purchaser may each be referred to herein
individually as a “Party”, and collectively as the “Parties.”

RECITALS

WHEREAS, pursuant to that certain Asset Purchase Agreement,
dated as of even date herewith (the “Purchase Agreement”), by and among,
inter alia, Purchaser, MFFB,
Pretzel Time Franchising, LLC, a limited liability corporation formed under the
laws of Delaware (“Pretzel Time”), Pretzelmaker Franchising, LLC, a
limited liability corporation formed under the laws of Delaware (“Pretzelmaker”,
and collectively with Pretzel Time the “Sellers”), Purchaser and/or its
Affiliates are acquiring certain assets of the Sellers related to the “Pretzel
Time” and “Pretzelmaker” brand franchising businesses (the “Businesses”);
and

WHEREAS, in connection with the foregoing, and as
contemplated by the Purchase Agreement, MFFB has agreed to provide certain
services to, or as directed by, Purchaser following the Closing; and

NOW THEREFORE, in consideration of the mutual covenants
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Parties agree as follows:

ARTICLE
I

DEFINITIONS

Each capitalized term used herein without definition shall have the
meaning ascribed to it in the Purchase Agreement.

ARTICLE
II

REPRESENTATIONS AND WARRANTIES

2.1           Representations and Warranties of MFFB.  MFFB makes the following representations and
warranties to Purchaser, each of which is true and correct on the Effective
Date:

(a)           MFFB is a limited
liability company duly formed and in good standing under the Laws of the State
of  Delaware, and has all requisite
limited liability company power and authority to enter into and perform this
Agreement and to carry out the transactions contemplated herein.

(b)           MFFB has, or will use
good faith efforts to obtain, all consents pursuant to applicable regulations
and under existing licenses or contracts with third parties to enter into and
perform this Agreement and to carry out the transactions contemplated herein.

(c)           MFFB’s execution,
delivery and performance of this Agreement has been duly authorized by, and is
in accordance with, its certificate of formation and operating agreement; this
Agreement has been duly executed and delivered for it by the signatory so
authorized; and this Agreement

constitutes its legal, valid,
and binding obligation, enforceable against MFFB in accordance with the terms
hereof, except as such enforceability may be limited by applicable bankruptcy
laws, or by general principles of equity (regardless of whether such
enforcement is considered in equity or at law).

2.2           Representations and Warranties of
Purchaser.  Purchaser makes the
following representations and warranties to MFFB, each of which is true and
correct on the Effective Date:

(a)           Purchaser is a limited
liability company duly incorporated and in good standing under the Laws of the
State of  Delaware.

(b)           Purchaser has all
requisite limited liability  power
and authority to enter into and perform this Agreement and to carry out the
transactions contemplated herein.

(c)           Purchaser’s execution,
delivery and performance of this Agreement have been duly authorized by, and
are in accordance with, its certificate of formation and operating agreement;
this Agreement has been duly executed and delivered for it by the signatory so
authorized; and this Agreement constitutes its legal, valid, and binding
obligation, enforceable against it in accordance with the terms hereof, except
as such enforceability may be limited by applicable bankruptcy laws, or by
general principles of equity (regardless of whether such enforcement is
considered in equity or at law).

ARTICLE
III

PROVISION OF SERVICES

3.1           Services.

(a)           MFFB shall provide, or
cause to  be provided, the services set
forth on Exhibit A to this Agreement (individually, a “Service”
and collectively, the “Services”) to Purchaser, or to an Affiliate of
Purchaser, as Purchaser may direct, in accordance with the terms and conditions
of this Agreement, including without limitation the terms and conditions set
forth on Exhibit A, during the Term (as defined below).  In the event of any inconsistency between the
terms and conditions of this Agreement and the terms and conditions of any
exhibit hereto, the terms and conditions of this Agreement shall govern, except
as otherwise specifically provided herein.

(b)           MFFB hereby covenants,
agrees, and warrants:  (i) that the
Services to be provided by MFFB shall be performed in a good and workmanlike
manner, (ii) that the Services and any reports or advice provided by MFFB with
respect to the Services shall comply in all material respects with all
applicable Legal Requirements, and (iii) that the Services shall comply in all
material respects with GAAP, if applicable.

3.2           Service Fees and Expenses.

(a)           In consideration for
the Services provided to Purchaser by MFFB hereunder and in accordance
herewith, Purchaser shall pay, or cause to be paid, to MFFB the monthly fee set
forth in Exhibit B (the “Service Fee”). In addition, Purchaser shall
reimburse, or cause to be reimbursed to, MFFB for all reasonable out-of-pocket expenses
MFFB incurs in the performance or provision of the Services hereunder (“Expenses”)
as set forth on Exhibit A; provided, however, that MFFB shall
obtain Purchaser’s prior written approval before incurring any out-of-pocket
expenses exceeding $5,000 in the aggregate. 
In addition, Purchaser shall reimburse MFFB, in accordance with Exhibit
C, for any retention payments made by MFFB to retain a employee listed on
Exhibit C who will provide the Services; provided, that MFFB shall
obtain the Purchaser’s prior written approval before agreeing to pay any
additional amounts other than set forth on Exhibit C; provided, further,
that Purchaser’s obligations to reimburse the amounts

 2
 

set forth on Exhibit C shall be
contingent upon such employees staying to the earlier of (i) the termination of
this Agreement, (ii) ninety (90) days after the date hereof, and (iii) a date
mutually agreed upon by the Parties.

(b)           During the Term,
Purchaser shall pay MFFB on the 15th of each month, including August 15, 2007, for
the Services Fee that is due for the Services performed during the month on
which such payment date falls.  In
addition, MFFB shall deliver to Purchaser an invoice setting forth in
reasonable detail any  Expenses (“Expense
Invoice”) incurred in connection with the Services provided to Purchaser or
its Affiliates by MFFB hereunder and in accordance herewith for each calendar
month during the Term.  Purchaser shall
pay, or cause to be paid, to MFFB all amounts due under the Expense Invoice
promptly upon, but in no event later than, the date which is thirty (30) days
following Purchaser’s receipt of the Expense Invoice; provided, however,
that in the event Purchaser has a good faith objection to any portion of such
Expense Invoice, as set forth in a notice to MFFB containing reasonable detail
as to the basis for Purchaser’s objection (an “Objection Notice”),
Purchaser shall pay that portion of such invoice to which it does not object
and upon the resolution of the dispute relating to the portion of the invoice
to which Purchaser has objected, pay any other amounts due and owing to MFFB in
accordance with such resolution.

ARTICLE
IV

TERM; TERMINATION

4.1           Term. 
This Agreement shall commence on the Effective Date and continue for a
term of three (3) months (the “Initial Term”), unless this Agreement is
earlier terminated as provided below. 
Purchaser may renew this Agreement for two (2) successive thirty (30)
day periods upon thirty (30) days prior written notice to MFFB (the “Renewal
Term,” and with the Initial Term, the “Term”).

4.2           Early Termination for Cause.  Either Party (the “Non-Defaulting Party”)
may terminate this Agreement at any time and pursue all rights and remedies
available to it at law, in equity or otherwise if any of the following shall
occur with respect to the other Party (the “Defaulting Party”):

(a)           any representation or
warranty of the Defaulting Party set forth in this Agreement was false or
misleading in any material respect when made;

(b)           the Defaulting Party
fails to pay any obligation hereunder when due and such failure continues for
five (5) Business Days after receipt of notice of such failure from the
Non-Defaulting Party;

(c)           the Defaulting Party
fails to perform any material obligation hereunder (other than payment
obligations) and such failure continues for at least ten (10) Business Days
after receipt of notice of such failure from the Non-Defaulting Party; or

(d)           (i) the Defaulting
Party shall commence any case, proceeding or other action (A)  under any
existing or future Law, relating to bankruptcy, insolvency, reorganization or
relief of debtors, seeking to have an order for relief entered with respect to
it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts, or
(B) seeking appointment of a receiver, trustee, custodian, conservator or
other similar official for it or for all or any substantial part of its assets,
or the Defaulting Party shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against the Defaulting Party
any case, proceeding or other action of a nature referred to in clause (i)
above which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of sixty (60) days; or

 3
 

(iii) there shall be
commenced against the Defaulting Party any case, proceeding or other action
seeking issuance of a warrant or attachment, execution, distraint or similar
process against all or any substantial part of its assets which results in the
entry of an order for any such relief and which shall not have been vacated,
discharged, or stayed or bonded pending appeal within sixty (60) days from the
entry thereof; or (iv) the Defaulting Party shall take any action in
furtherance of, or indicating its consent to, approval of or acquiescence in,
any of the acts set forth in clause (i), (ii) or (iii) above.

4.3           Early Termination for Convenience.  This Agreement may be terminated at any time
by mutual written agreement of the Parties.

ARTICLE
V

INDEMNIFICATION AND LIABILITY

5.1           Indemnification by Purchaser.  Except as provided in Section 5.3,
Purchaser shall indemnify and hold MFFB, 
each of its Affiliates, and the respective officers, directors,
employees, agents, sub-agents and contractors of each (each a “Seller
Indemnitee”), harmless against any losses, damages, costs, liabilities or
expenses (including, without limitation, reasonable counsel fees and expenses)
arising in connection with any claim, action, demand, suit or cause of action
which is brought by any third party, including any employee not indemnified
directly hereunder (a “Claim”), to the extent resulting from (i) the breach of a representation or warranty of Purchaser
set forth in Section 2.2 or (ii) any act done or
suffered by MFFB, its Affiliates, employees or contractors in connection with
their performance under this Agreement in reliance upon and in accordance with
any request, instruction or order given or executed by any of the operating
representatives of Purchaser, or any of its Affiliates having responsibility
for monitoring or supervising the performance of Services.  In the event of any demand for any
indemnification under this Section 5.1, Purchaser shall have the
right, in its sole discretion and at its sole cost and expense, to undertake
and direct the defense of the affected Seller Indemnitee with respect to such
matters.  In the event MFFB or one of its
Affiliates is served or presented with a Claim, MFFB or such Affiliate, as
applicable, shall provide Purchaser with prompt written notice thereof,
provided that MFFB’s or its Affiliate’s, as the case may be, failure or delay
in providing such notice shall not affect Purchaser’s indemnity obligation
hereunder except to the extent Purchaser’s ability to defend or settle a Claim
is materially impaired thereby.  The
obligations under this Section 5.1 shall survive the termination or
expiration of this Agreement.

5.2           Indemnification by MFFB.  Except as provided in Section 5.3,
MFFB shall indemnify and hold Purchaser, each of its Affiliates, and the
respective officers, directors, employees, agents, sub-agents and contractors
of each (each a “Purchaser Indemnitee”), harmless against any losses,
damages, costs, liabilities or expenses (including, without limitation,
reasonable counsel fees and expenses) arising in connection with any Claim to
the extent resulting from (i) the breach of a
representation or warranty of MFFB as set forth in Section 2.1, or (ii) the breach of a covenant of MFFB as set
forth in Section 3.1, or (iii) the gross negligence
of MFFB, its Affiliates, employees or contractors in the performance of
Services hereunder.  In the event of any
demand for any indemnification under this Section 5.2, MFFB shall
have the right, in its sole discretion and at its sole cost and expense, to
undertake and direct the defense of the affected Purchaser Indemnitee with
respect to such matters.  In the event
Purchaser or one of its Affiliates is served or presented with a Claim,
Purchaser or such Affiliate, as applicable, shall provide MFFB with prompt
written notice thereof, provided that Purchaser’s or its Affiliates, as the
case may be, failure or delay in providing such notice shall not affect MFFB’s
indemnity obligation hereunder except to the extent MFFB’s ability to defend or
settle a Claim is materially impaired thereby. 
The obligations under this Section 5.2 shall survive the
termination or expiration of this Agreement.

 4
 

5.3           CONSEQUENTIAL DAMAGES.  NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO
THE CONTRARY, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY IN CONTRACT,
TORT, STRICT LIABILITY, WARRANTY OR OTHERWISE, FOR ANY SPECIAL, INCIDENTAL,
PUNITIVE, INDIRECT OR CONSEQUENTIAL DAMAGES.

ARTICLE
VI

GENERAL PROVISIONS

6.1           Force Majeure.  In the event of an act of God, order or
restraint of a Government Authority, war (declared or undeclared) or warlike
conditions, act of terrorism, blockade, revolution, strike, lockout, civil
commotion, fire, flood, storm, epidemic or any other occurrence beyond a Party’s
reasonable control, such Party shall promptly notify the other Party thereof
and, so long as such condition shall persist, such Party shall not be liable
for the delay in performance of, or the failure to perform, its obligations
(other than obligations for payment of amounts due hereunder) under this
Agreement caused directly or indirectly thereby.

6.2           Sellers as Independent Contractors.  The
Parties agree that MFFB shall perform the Services hereunder in the capacity of
an independent contractor.  Nothing in
this Agreement shall be construed to mean or imply that MFFB is a partner,
joint venturer, agent or representative of, or otherwise associated with,
Purchaser or its Affiliates.  Neither
Purchaser nor MFFB  shall
represent to others, nor shall either
take any action from which others could reasonably infer, that one Party is a partner,
joint venturer, agent or representative of, or otherwise associated with, the other Party.

6.3           Notices.  All notices and requests in connection with
this Agreement shall be given or made upon the respective Parties in writing
and shall be deemed to have been duly given if delivered, telecopied or mailed
by certified mail, return receipt requested, first-class postage prepaid, to
the Parties at the following addresses:

 5
 

If to MFFB, to:

Mrs.
Fields Famous Brands, LLC

2855 East Cottonwood Parkway, Suite 400

Salt Lake City, UT 84121

Attention:  Michael Ward, EVP and General
Counsel

Facsimile:       (801) 736-5944

If to Purchaser, to:

NexCen Franchise
Management, Inc.

1330 Avenue of the
Americas, 34th Floor

New York, NY  10019

Attention:       David
Meister, CFO

Facsimile:       (212)
247-7131

and

Kirkland & Ellis LLP

655 15th Street, N.W.

Washington, DC  20005

Attention:       Mark
D. Director, Esq.

Facsimile:       (202)
879-5200

All notices and other
communications required or permitted under this Agreement that are addressed as
provided in this Section 6.3 will, if delivered personally, be deemed
given upon delivery; will, if delivered by telecopy, be deemed delivered when
confirmed; and will, if delivered by mail in the manner described above, be
deemed given on the third Business Day after the day it is deposited in a regular
depositary of the United States mail. 
Any Party from time to time may change its address for the purposes of
notices to that Party by giving a similar notice specifying a new address, but
no such notice will be deemed to have been given until it is actually received
by the Party sought to be charged with the contents thereof.

6.4           Choice of Law.  This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, including
Sections 5-1401 and 5-1402 of the New York General Obligations Law.

6.5           Validity.  In case any provision in this Agreement shall
found by a court of competent jurisdiction to be invalid, illegal or
unenforceable, such provision shall be construed and enforced as if it had been
more narrowly drawn so as not to be invalid, illegal or unenforceable, or
removed from the Agreement, and the validity and enforceability of the
remaining provisions of this Agreement shall not in any way be affected or
impaired thereby.

6.6           Waiver and Remedies.  Any term or condition of this Agreement may
be waived at any time by the Party that is entitled to the benefit
thereof.  Such waiver must be set forth
in a written instrument duly executed by such Party.  A waiver on one occasion will not be deemed
to be a waiver of the same or any other breach on a future occasion.  All remedies, either under this Agreement, or
by law or otherwise afforded, will be cumulative and not alternative.  The failure of either Party to exercise in
any respect any right provided for herein shall not be deemed a waiver of such
right or of any other right hereunder.

 6
 

6.7           Return of Information.  Upon completion of the Services, or upon
request by either Party, the Party to which any proprietary or confidential
information (“Proprietary Information”) has been disclosed to or
otherwise received or obtained (the “Transferee”) shall deliver over to
the requesting Party (the “Transferor”) all Proprietary Information
embodied in tangible form and material by the Transferee, including all copies
of documents, data, software, programs and things, including all recordings on
magnetic, optical and other media, and all listings, comprising or embodying
Proprietary Information and shall not take or retain any copies thereof.  Notwithstanding the foregoing, the Transferee
shall be entitled to retain one (1) copy of any Proprietary Information for
archival reasons only.

6.8           Successors and Assigns.  This Agreement shall be binding upon the
Parties hereto and their respective successors and permitted assigns and shall
inure to the benefit of the Parties hereto and their respective successors and
permitted assigns.  Neither Party may
assign its rights or delegate its obligations hereunder without the prior
written consent of the other Party, which consent shall not be reasonably
withheld.  Nothing herein shall preclude
either Party from assigning this Agreement to an entity that succeeds to all or
substantially all of the assets or business of the assigning Party, provided
that the succeeding entity agrees to be bound by the terms hereof either in
writing or by operation of law.

6.9           Amendments.  This Agreement may be modified or amended
only by a written instrument duly executed by each of the Parties.

6.10         Entire Agreement.  This Agreement supersedes all prior discussions
and agreements between the Parties with respect to the subject matter of this
Agreement, and this Agreement contains the sole and entire agreement between
the Parties with respect to the subject matter hereof.

6.11         Counterparts.  This Agreement may be executed simultaneously
in any number of counterparts, each of which will be deemed an original, but
all of which will constitute one and the same instrument.  Signatures of the Parties transmitted by
facsimile shall be deemed to be their original signatures for all purposes.

6.12         Headings, Gender. etc.  The headings used in this Agreement have been
inserted for convenience and do not constitute matter to be construed or
interpreted in connection with this Agreement. 
Unless the context of this Agreement otherwise requires, (a) words
of any gender are deemed to include other genders, (b) words using the
singular or plural number also include the plural or singular number,
respectively, (c) the terms “hereof,” “herein,” “hereby,” “hereto,” and
derivative or similar words refer to this entire Agreement, and (d) the
term “Section” refers to the specified Section of this Agreement.

[Signature
page follows]

 7

IN WITNESS WHEREOF, the Parties
have executed this Agreement as of the date first written above.

	
  

  	
  NEXCEN ASSET ACQUISITION, LLC

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  NexCen Brands, Inc., its Managing

  	
   

  	
   

  
	
   

  	
   

  	
  Member

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert D’Loren

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Robert D’Loren

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer

  	
   

  	
   

  

 

Transition Services Agreement

 

	
  

  	
  MRS. FIELDS FAMOUS BRANDS, LLC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael Ward

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Michael Ward

  
	
   

  	
   

  	
  Title:

  	
  EVP,General Counsel and Secretary

  
						

 

Transition Services Agreement

EXHIBIT A

Transition Services Agreement

I.   Description of Services

A.                   Services to be
provided by MFFB

	
  Service

  
	
  1.    Transitioning the data and IT systems from
  Sellers to Purchaser

  
	
   

  
	
  2.    Reporting of franchisee sales through
  MFFB’s current system until Purchaser implements its own system

  
	
   

  
	
  3.    EFT process for sales reported into MFFB’s
  current system until Purchaser implements its own system. EFT funds from the
  Businesses shall be transferred from franchisees directly to Purchaer’s bank
  accounts until Purchaser can set up its own EFT system

  
	
   

  
	
  4.    Reimbursement to Purchaser of any vendor
  rebates, royalties, or other revenues arising on or after the Closing Date
  collected by MFFB or a Subsidiary or Affiliate relating to the Businesses by
  wire on a monthly basis

  
	
   

  
	
  5.    Transitioning of marketing campaigns and
  materials from Sellers to Purchaser

  
	
   

  
	
  6.    Transitioning franchise support services
  from Seller to Purchaser

  
	
   

  
	
  7.    Transitioning vendors

  
	
   

  
	
  8.    Transitioning bank accounts

  
	
   

  
	
  9.    Transitioning royalty collection
  procedures, directing any wrongly transferred funds or checks from
  franchisees following the Closing date to Purchaser

  
	
   

  
	
  10.  Gift card programs

  
	
   

  
	
  11.  Customer complaint hotline / customer
  service (“Navigator”) – transitioning to Purchaser; provided, that
  Purchaser is not acquiring any portion of the Navigator software

  
	
   

  
	
  12.  Training of new franchisees until
  Purchaser’s training facility is built

  
	
   

  
	
  13.  Transitioning development procedures and
  franchisees in various stages of development

  
	
   

  
	
  14.  Construction – transitioning any locations
  under construction to Purchaser’s construction team

  

 

Transition
Services Agreement

II.            Further Assurances

Scope of Other Support Services.  Pursuant to Section 13.4 of the Purchase
Agreement, “Further Assurances”, each Party covenants that it will “take such
actions as may be reasonably requested” by the other party to further the “intent
and purposes” of the transaction. 
Accordingly, and subject to the last sentence of this Section II, MFFB
agrees (on behalf of Sellers) to provide to Purchaser from time to time
additional reasonable transition services upon a reasonable good faith request
by the Purchaser for such reasonable transition services.  Such transition services may consist of any
or all of the following services: management, legal, litigation support, tax,
human resources, information technology, insurance, treasury, and other
services. In the event that Purchaser requests from MFFB additional transition
services that materially increase the costs to MFFB of providing the Services
under this Agreement, the Parties will enter into good faith negotiations to
amend this Agreement for the purpose of setting out the specific services
requested and the specific labor rates for said services.

Transition
Services Agreement

EXHIBIT B

Service Fees for Transition Services Agreement

Initial Term Monthly Fee for Services.  During the Initial Term, Purchaser shall pay,
or cause to be paid, to MFFB, according to Article III of this Agreement, the
following monthly fees, in consideration for the services listed on Exhibit A
hereto:

·                  $50,000 for the
first month of Services, from August 7, 2007, through September 7, 2007;

·                  $25,000 for the
second month of Services, from September 8, 2007, through October 7, 2007; and,

·                  $15,000 for the
third month of Services, from October 8, 2007, through November 7, 2007.

Renewal Term Monthly Fee for Services.  The Service Fee for any Renewal Term pursuant
to Section 4.1 hereof shall be a fixed monthly fee, which shall be mutually
agreed  to by the parties before the
commencement of the Renewal Term.

Transition
Services Agreement

EXHIBIT C

Retention Costs For Employees 

ATTACHED

 

Transition
Services Agreement

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