Exhibit 10.66
OPTION AGREEMENT AND
AMENDMENT TO LICENSE
AGREEMENT
This OPTION AGREEMENT AND AMENDMENT
TO LICENSE AGREEMENT (“Agreement”), dated effective as
of December 12, 2005 (the “Effective Date”), is entered
into by and between MRS. FIELDS FRANCHISING, LLC, a Delaware
limited liability company (“Mrs. Fields”) and MAXFIELD
CANDY CO., a Utah corporation (“Maxfield”). Mrs. Fields
and Maxfield are sometimes referred to collectively herein as the
“parties.”
A.
Maxfield and Mrs. Fields’ predecessor-in-interest entered
into a Trademark License Agreement dated January 3, 2000, as
amended by the First Amendment (the “First Amendment”)
to Trademark License Agreement dated July 1, 2004 (as so amended,
the “License Agreement”). Capitalized terms used but
not defined herein shall have the meanings ascribed to them in the
License Agreement.
B.
Effective August 13, 2005, Mrs. Fields delivered a Notice of
Default and Termination (the “2005 Disputed Termination
Notice”) to Maxfield for an alleged failure to pay timely
certain royalties for guaranteed minimum sales. Maxfield disputes
Mrs. Fields’ allegations and claims set forth in the 2005
Disputed Termination Notice.
C.
The parties now wish to come to an understanding where Mrs. Fields
would withdraw the 2005 Disputed Termination Notice and Maxfield
would grant to Mrs. Fields an option to repurchase all of
Maxfield’s rights and interests under the License Agreement
in exchange for certain payments, all subject and pursuant to this
Agreement.
NOW, THEREFORE, in consideration of
the premises and of the respective representations, warranties,
agreements and conditions contained herein, the parties hereby
agree as follows:
1.
Withdrawal of the Termination; Amendment to the License
Agreement .
(a)
As of the Effective Date, Mrs. Fields withdraws the 2005 Disputed
Termination Notice and acknowledges the continued effectiveness of
the License Agreement.
(b)
The License Agreement is hereby amended to delete any and all
references and requirements therein, to any Volume Commitments,
minimum requirements for Royalty Bearing Products, minimum Running
Royalties, any Guaranteed Amounts and/or Maxfield’s
obligations to make any royalty payments to Mrs. Fields, to retain
the license or to exercise any Option Periods in connection with
such minimum requirements, including, without limitation, those
contained in Sections 6(a), 6(b) and 7. This amendment shall not
affect Maxfield’s obligations to pay timely the other Running
Royalties and amounts due to Mrs. Fields under the License
Agreement in accordance with the terms thereof, as amended by this
Agreement.
(c)
The License Agreement is further amended by replacing Section
16(b)(i)
1
thereof with the following:
“(i)
If MCC defaults in the payment of any Running Royalties,
adjustments or other payment provisions set forth in this Agreement
(including the First Amendment or any additional amendments hereto)
and such default continues unremedied for ten (10) days after the
date on which MCC receives written notice of such payment default
from MFB, then this Agreement and the license granted hereunder may
be terminated upon notice by MFB effective thirty (30) days after
receipt of such notice, without prejudice to any and all other
rights and remedies MFB may have hereunder or by law
provided.”
Except as otherwise amended or
modified by this Agreement, the License Agreement shall remain in
full force and effect in accordance with the terms
thereof.
2.
The Option; Option Purchase Price . Maxfield hereby
grants to Mrs. Fields an option (the “Option”) to
repurchase the license and to terminate the License Agreement prior
to the expiration of the term (and any exercised Option Periods)
thereof. The purchase price for the Option (the “Option
Purchase Price”) is $1,000,000, payable by Mrs. Fields to
Maxfield in immediately available funds as follows: (a)
$500,000 on the Effective Date, and (b) $500,000 on the first
anniversary of the Effective Date. One-half of the Option Purchase
Price ($500,000) (the “Option Credit”) shall be
credited and applied to the License Repurchase Price (defined
below) if Mrs. Fields exercises the Option as provided
herein. Any portion of the License Repurchase Price paid to
Maxfield shall become non-refundable upon Maxfield’s receipt
thereof. $500,000 of the Option Purchase Price shall become
non-refundable upon the date hereof and the remaining $500,000 (the
“Remaining Amount”) shall become non-refundable upon
the earlier to occur of (x) the Option Exercise Date and (y) an
additional $100,000 of the Remaining Amount shall become
non-refundable on each anniversary of this Agreement.
3.
Option Exercise and Repurchase Price .
(a)
Option Exercise . Mrs. Fields may exercise the Option
following the second anniversary, but prior to the fifth
anniversary, of the Effective Date (the “Option
Period”) by delivering written notice of its election to
exercise the Option (the “Option Exercise Notice”), at
least 6 months prior to the expiration of each anniversary of the
Effective Date (but no sooner than 12 months prior to such
anniversary). Mrs. Fields shall set forth its intended
“Option Exercise Date” in the Option Exercise Notice.
The Option Exercise Date (i) may not be any date prior to the
commencement of the Option Period, (ii) may not be sooner than 6
months after the date Mrs. Fields delivers the Option Exercise
Notice, and (iii) may not be later than 190 days after the date
Mrs. Fields delivers the Option Exercise Notice; provided, however,
Mrs. Fields shall be permitted to deliver the Option Exercise
Notice within 6 months prior to the commencement of the Option
Period in accordance with the first sentence of this Section 3(a)
hereof. Once Mrs. Fields has delivered the Option Exercise Notice,
the exercise of the Option may not be rescinded, cancelled or
otherwise terminated. The License Repurchase Price shall be paid to
Maxfield in accordance with Section 3(c).
2
(b)
License Repurchase Price . The amount due to Maxfield
upon Mrs. Fields’ exercise of the Option (the “License
Repurchase Price”) during the Option Period shall be
calculated and paid as follows:
|
If the Option Exercise Notice is delivered in
accordance with Section 3(a):
|
|
License Repurchase
Price
|
|
|
Prior to the end of the Second
Anniversary (i.e., December 12, 2007)
|
|
$
|
7.0 million
|
|
|
Prior to the end of the Third
Anniversary (i.e., December 12, 2008)
|
|
$
|
6.0 million
|
|
|
Prior to the end of the Fourth
Anniversary (i.e., December 12, 2009)
|
|
$
|
5.0 million
|
|
|
Prior to the end of the Fifth
Anniversary (i.e., December 12, 2010)
|
|
$
|
4.5 million
|
|
In the event that the Option
Exercise Notice is not delivered in accordance with Section
3(a)
