EXHIBIT 10.62
TERMINATION AGREEMENT AND
RELEASE
THIS TERMINATION AGREEMENT AND
RELEASE (the “Agreement”) is entered into effective as
of December 24, 2004, by and between MRS. FIELDS FRANCHISING, LLC,
a Delaware limited liability corporation (“MFF”), the
successor in interest to MRS. FIELDS’ BRAND, INC, and
SHADEWELL GROVE IP, LLC (“Shadewell”), the successor in
interest to NONNI’S FOOD COMPANY, INC. MFF and
Shadewell sometimes are referred to in this Agreement individually,
as a “Party” and collectively, as the
“Parties.”
RECITALS
A.
MFF is in the business of selling high-end specialty cookies and
other treat items, or franchising or licensing others to use its
marks and trade names to sell similar or related
products.
B.
Shadewell is a food production and distribution company that had
obtained the right to use MFF marks and trade names to sell,
inter alia, frozen cookie dough under the MFF marks and
trade names. The right to produce and market frozen cookie
dough was granted by way of an agreement entered into between the
Parties dated the 2 nd of January, 2002, and entitled
TRADEMARK LICENSE AGREEMENT (the “Dough Agreement”)
attached hereto as Exhibit A.
C.
The Parties desire now to terminate and end all activities
pertaining to the Dough Agreement and their relationship
thereunder, and to set forth in this Agreement the terms and
understandings concerning termination of the Dough
Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of
the foregoing recitals and the mutual promises and covenants set
forth herein, the Parties hereby agree as follows:
1.
Termination of the Dough Agreement . The Parties
acknowledge and agree, in accordance with the terms and conditions
set forth herein, that the Dough Agreement and all of the
Parties’ obligations thereunder, except those that shall
expressly survive termination as set forth herein, are hereby
terminated and shall have no further force and effect after the
effective date of this Agreement
THE PARTIES ACKNOWLEDGE AND AGREE
THAT THOSE OBLIGATIONS AND DUTIES WHICH HAVE EFFECT ON A
POST-TERMINATION BASIS AND WHICH ARE EXPRESSLY SET FORTH IN THE
DOUGH AGREEMENT SHALL BE PERFORMED AND OBSERVED HEREAFTER TO THE
EXTENT AND FOR A TERM AS EXPRESSED IN THE DOUGH
AGREEMENT.
2.
Termination Fee Payment by MFF to Shadewell . In
consideration of each of the covenants and terms set forth herein,
including without limitation agreeing to terminate its rights under
the Dough Agreement and agreeing to grant MFF a Release from
liability pertaining to such, MFF hereby agrees to pay Shadewell,
which includes any amounts that may be owed to
Shadewell by MFF under the Dough
Agreement for any reason, One Million Fifty Thousand U.S. Dollars
($1,050,000.00 USD) which shall be due and payable to Shadewell
upon full execution of this Agreement.
3.
Disposal of Inventory; Merchandising Materials . The
Parties agree that Shadewell shall (i) immediately cease all
marketing and sales activity with respect to the Royalty Bearing
Products under the Dough Agreement (“Dough Products”)
and (ii) within six (6) months from the date hereof (such period,
the “Sell-Off Period”), complete any current business
commitments and delivery of product that pertains to its operations
under the Dough Agreement. In addition, as previously agreed
to in Section 17 of the Dough Agreement, during the Sell-Off Period
Shadewell shall be permitted to sell off all inventory through its
normal business activities and channels, and in accordance with the
policies, prices and standards established for marketing and
distribution of the Dough Products in the manner set out in the
Dough Agreement. All activities during the Sell-Off Period
shall include the payment of all royalties accrued as determined by
Section 5 of the Dough Agreement. After the expiration of the
Sell-Off Period, the Parties agree that no further Dough Products
will be sold by Shadewell to any third party, and all remaining
excess inventory, if any, will be destroyed or otherwise disposed
of in the manner mutually agreed upon by the parties at that
time. Shadewell agrees, if requested by MFF, to provide an
accounting of the inventory at the end of the Sell-Off Period and
to provide proof of disposal or destruction of all excess
inventory. The Parties agree that all business operations of
Shadewell that pertain to the Dough Agreement shall cease by, at
the latest June 30, 2005. MFF agrees to use its commercially
reasonable efforts to cause its franchisees to buy at cost the
merchandising materials (including ovens and marketing displays)
currently used by Shadewell in connection with the sale and
distribution of Dough Products.
4.
Indemnification and Insurance . Notwithstanding
anything to the contrary set forth herein, the Parties’
provisions regarding Insurance in Section 14, and the Parties
Indemnification obligations under Section 20 of the Dough
Agreement, shall remain in place as long as the product
contemplated in the Dough Agreement remain in the stream of
commerce.
5.
No Obligations . Shadewell hereby represents and
warrants that (i) it has not entered into any agreements that would
obligate Shadewell to sell, deliver or distribute any Dough
Products at any point after t
