Contribution Agreement among Mrs. Fields' Original Cookies, Inc., Subsidiaries, and Mrs. Fields Famous Brands, LLC

Exhibit 10.2

CONTRIBUTION AGREEMENT

        This Contribution Agreement, dated as of March 16, 2004 (this "Agreement"), is made by and among Mrs. Fields' Original Cookies, Inc., a Delaware corporation ("MFOC"), each of the subsidiaries of MFOC identified on the signature pages hereto (collectively, the "MFOC Subsidiaries"), Mrs. Fields Famous Brands, LLC, a Delaware limited liability company ("MFFB"), and each of the subsidiaries of MFFB identified on the signature pages hereto (collectively, the "MFFB Subsidiaries").

W I T N E S S E T H:

        WHEREAS, MFOC formed MFFB as a single-member limited liability company in accordance with the Delaware Limited Liability Company Act on February 4, 2004;

        WHEREAS, MFFB subsequently formed each of the MFFB Subsidiaries in accordance with the Delaware Limited Liability Company Act on February 4, 2004; and

        WHEREAS, in accordance with the terms and subject to the conditions set forth in this Agreement, effective as of the date of this Agreement (the "Contribution Date"), MFOC and the MFOC Subsidiaries desire to contribute all of the assets related to their franchising, licensing, gifts, manufacturing and retail food sales business segments to MFFB and the MFFB Subsidiaries and MFFB and the MFFB Subsidiaries desire to accept the contribution of such assets.

        NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, each of MFOC, the MFOC Subsidiaries, MFFB and the MFFB Subsidiaries hereby agrees as follows:

ARTICLE I
TRANSFER OF ASSETS

        Section 1.1 Assignment of Brandco Assets. MFOC and the MFOC Subsidiaries hereby do transfer, convey, assign and deliver any and all right, title and interest of MFOC and the MFOC Subsidiaries in all of their assets related to or used in connection with their franchising, licensing, gifts, manufacturing and retail food sales business segments (collectively, the "Acquired Business"), including, without limitation, each of the assets listed on Schedule 1.1 attached hereto and each attachment described in Schedule 1.1 (collectively, the "Brandco Assets") to MFFB or the specific MFFB Subsidiaries identified adjacent to each Brandco Asset on Schedule 1.1. In furtherance of the foregoing, each of the parties to this Agreement hereby acknowledges and agrees that all of the Brandco Assets consisting of cash or cash equivalents (the "Contributed Cash") will be identified and contributed to MFFB or the specific MFFB Subsidiaries in a manner consistent with the financial statements attached hereto as Exhibit A.

        Section 1.2 Excluded Assets. Nothing set forth herein shall be construed as a transfer or contribution by MFOC or any of the MFOC Subsidiaries of any of the following assets (collectively, the "Excluded Assets"):

        (a)   any and all assets and properties of every kind and description related to ownership or operation of the retail stores listed on Schedule 1.2(a) (collectively, the "MFOC Stores"), including, without limitation, all furniture, fixtures, equipment, leasehold improvements, signage, inventory, supplies, smallwares, goodwill associated with operation of the MFOC Stores, and petty cash located at each of the MFOC Stores;

        (b)   all of MFOC's stock or other ownership interest in any of its subsidiaries listed on Schedule 1.2(b) (the "Excluded Subsidiaries");

        (c)   all rights of MFOC or any of its Excluded Subsidiaries under any lease for or related to the MFOC Stores premises;

        (d)   all rights of MFOC or any of its Excluded Subsidiaries under the Trademark License Agreements and Franchise Agreements listed on Schedule 1.2(d) (the "New MFOC Franchise and License Agreements");

        (e)   any loss, credit or similar tax attribute that arises out of, or relates to, the ownership, possession or use of the Brandco Assets or the operation of the Acquired Business on or prior to the Contribution Date; and

        (f)    all cash of MFOC or any of its Excluded Subsidiaries as of the Contribution Date, except for (i) the Contributed Cash and (ii) any amounts that are the property of MFFB or any of the MFFB Subsidiaries, as contemplated under Section 1.5(b), which, in either case, will be transferred to MFFB or the MFFB Subsidiaries in accordance with this Agreement.

        Notwithstanding the foregoing, MFOC and the MFOC Subsidiaries shall not retain any rights to any intellectual property used in its operation of the MFOC Stores, including, without limitation, trademarks, trade names, recipes, copyrights or patents, except by virtue of and pursuant to the New MFOC Franchise and License Agreements.

        Section 1.3 Related Assignment Documents. Concurrently with the execution of this Agreement, certain of the parties hereto have entered into certain assignment and assumption agreements or other conveyances as well as related transaction agreements listed on Schedule 1.3 (the "Specified Transaction Agreements"). To the extent that the provisions of any Specified Transaction Agreement contradicts or supplements the provisions of this Agreement, as to the Brandco Assets or MFOC Liabilities (as defined below) that are conveyed to MFFB or the MFFB Subsidiaries pursuant to any such Specified Transaction Agreement, then the provisions of such Specified Transaction Agreement shall prevail and supersede this Agreement, but only to the limited extent necessary to effectuate the intent of the parties to such Specified Transaction Agreement and provided that such Specified Transaction Agreement shall not materially contradict Section 1.1.

        Section 1.4 Nonassignable Brandco Assets. Notwithstanding anything herein to the contrary, this Agreement shall not constitute a transfer, conveyance or assignment of any Brandco Asset if a transfer, conveyance or assignment or attempted transfer, conveyance or assignment of the same without the consent of another person would constitute a breach thereof or entitle any other party thereto to terminate, or accelerate or assert additional material rights thereunder or with respect thereto. If any such consent is not obtained or if an attempted transfer, conveyance or assignment would be ineffective or have such other effect, then (a) MFOC shall (i) promptly seek to obtain any such consent, (ii) provide or cause to be provided to MFFB, to the extent permitted by law, the benefits of any such Brandco Asset, (iii) cooperate in any lawful arrangements designed to provide such benefits to MFFB, (iv) enforce, at the request of and for the account of MFFB, any rights of MFOC arising from such Brandco Asset, including the right to elect to terminate any contract or other arrangement that is a Brandco Asset in accordance with the terms thereof upon the advice of MFFB, and (v) promptly pay or cause to be paid to MFFB when received all moneys received by MFOC with respect to any such Brandco Asset; and (b) in consideration for the matters described in clause (a) above, MFFB shall pay, perform and discharge on behalf of MFOC all of the MFOC Liabilities thereunder (to the extent such MFOC Liabilities would otherwise have been assumed by MFFB pursuant to Section 2.1 hereof) in a timely manner and in accordance with the terms thereof. If and when such consents are obtained, the transfer of the applicable Brandco Asset will be effected in accordance with the terms of this Agreement.

        Section 1.5 Treatment of Cash.

        (a)   Cash Paid Prior to the Contribution Date. MFOC and the MFOC Subsidiaries represent and warrant to MFFB and the MFFB Subsidiaries that, since September 27, 2003, all cash payments in settlement of accounts payable or otherwise have been made (i) in the ordinary course of business in a manner consistent with past practice, (ii) in respect of accounts payable then due and payable (and not in respect of any accounts payable due in the future), and (iii) in a manner consistent with the relative historical payment pattern of accounts payable in respect of the Brandco Assets on the one hand and the Excluded Assets on the other hand.

        (b)   Cash Received On or After the Contribution Date. Notwithstanding anything to the contrary in this Agreement, all cash received by any of the parties to this Agreement that, pursuant to the terms hereof, is the property of another party hereto, promptly shall be remitted to such other party. Each of the parties to this Agreement shall cooperate and promptly pay any such amounts not properly received by it on or after the Contribution Date to the appropriate entity consistent with this Section 1.5(b).

ARTICLE II
ASSUMPTION OF DEBT

        Section 2.1 Assumption of MFOC Liabilities. In exchange for the transfer, conveyance, assignment and delivery of the Brandco Assets pursuant to Article I hereof, MFFB and the MFFB Subsidiaries, as applicable, hereby (a) accept the transfer, conveyance, assignment and delivery of the Brandco Assets pursuant to Article I hereof; and (b) do unconditionally receive, assume and undertake to pay, perform and discharge, in a timely manner and in accordance with the terms thereof, all of the liabilities arising from or related to the Brandco Assets and the Acquired Business, including, without limitation, any liability, obligation or duty arising from or related to all income and similar taxes that arise out of, or relate to, the ownership, possession or use of the Brandco Assets or the operation of the Acquired Business (the "MFOC Liabilities").

        Section 2.2 Excluded Liabilities. Nothing set forth herein shall be construed as an assumption by MFFB or the MFFB Subsidiaries of any liability or obligation of MFOC or its Excluded Subsidiaries not expressly assumed in this Agreement, including, without limitation (collectively, the "Excluded Liabilities"):

        (a)   any liability arising from or in respect of any of the MFOC Stores, including all liabilities, obligations and duties under any lease, sublease or guarantee related thereto;

        (b)   any other liability, obligation or duty arising from any of the Excluded Assets, including any accounts payable, judgments, costs, attorneys fees or other expenses whether incurred prior or subsequent to the Contribution Date;

        (c)   any obligation or liability in respect of employees of MFOC or benefits plans maintained and administered by MFOC on behalf of it and its subsidiaries, except to the extent provided in the Benefits Allocation Agreement listed on Schedule 1.3;

        (d)   any obligation or liability in respect of any insurance coverage or policies maintained in respect of MFOC or the Excluded Subsidiaries, except to the extent provided in the Insurance Allocation Agreement listed on Schedule 1.3.

        Section 2.3 Accounts Payable Transition Period. Notwithstanding anything in this Agreement (including, without limitation, Section 1.3) or any of the Specified Transaction Agreements to the contrary, each of the parties will have until April 3, 2004 to effect the transition of all of the accounts payable associated with the Brandco Assets and the Acquired Business to accounts of MFFB and the MFFB Subsidiaries (the "Transition Period"). During the Transition Period, any of the parties to this Agreement may make payments in respect of accounts payable then due and payable in respect of the Brandco Assets and the Acquired Business, provided, however, that any such amounts paid by MFOC or the MFOC Subsidiaries during the Transition Period shall be reimbursed by MFFB and the MFFB Subsidiaries within five business days of such payment. After the expiration of the Transition Period, MFOC may make payments in respect of invoices recorded during the Transition Period, provided that such payments shall be settled in accordance with this Section 2.3.

ARTICLE III
MISCELLANEOUS

        Section 3.1 Further Assurances. Each party on behalf of itself and its permitted successors and assigns shall, without additional consideration, prepare, execute and deliver such further instruments and take such further actions as may be reasonably requested by the other party to make effective the intent of this Agreement and the transactions contemplated by this Agreement. In addition, MFOC shall take such other actions as may reasonably be requested by MFFB in order to place MFFB or the applicable the MFFB Subsidiary, insofar as reasonably possible, in the same position as if such Brandco Asset had been transferred as contemplated hereby and so that all the benefits and burdens relating thereto, including possession, use, risk of loss, potential for gain and dominion, control and command, will inure to MFFB or the applicable the MFFB Subsidiary.

        Section 3.2 Interpretation. For the purposes of this Agreement, (a) words in the singular will be held to include the plural and vice versa and words of one gender shall be held to include the other gender as the context requires, (b) the terms "hereof," "herein," and "herewith" and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement, (c) the word "including" and words of similar import when used in this Agreement shall mean "including, without limitation," unless otherwise specified and (d) the word "or" shall not be exclusive.

        Section 3.3 Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of Utah.

        Section 3.4 Descriptive Headings. The article, section and other headings contained in this Agreement are for reference purposes only and are to be given no effect in the construction or interpretation of this Agreement.

        Section 3.5 Severability. If any provision of this Agreement is invalid or unenforceable, the balance of this Agreement will remain in full force and effect, provided that the essential terms of this Agreement for both parties remain valid, binding and enforceable and provided, further, that the economic and legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. In the event of any such determination, the parties agree to negotiate in good faith to modify this Agreement to fulfill as closely as possible the original intent and purposes hereof. To the extent permitted by law, the parties hereby waive to the same extent any provision of law that renders any provision hereof prohibited or unenforceable in any respect.

        Section 3.6 Binding Effect; Assignment. This Agreement will be binding upon and inure solely to the benefit of the parties and their respective successors and permitted assigns. Nothing in this Agreement will create or be deemed to create any third party beneficiary rights in any person not a party to this Agreement. No assignment of this Agreement or of any rights or obligations hereunder may be made without the prior written consent of the parties hereto and any attempted assignment without the required consents will be null and void, provided, however, that MFFB may assign any or all of its rights, in whole or in part, to one or more of the MFFB Subsidiaries, but no such assignment will relieve any party of its obligations under this Agreement.

        Section 3.7 Counterparts. This Agreement may be executed in any number of counterparts and any party may execute any such counterpart, each of which when executed and delivered will be deemed to be an original and all of which counterparts taken together will constitute but one and the same instrument. This Agreement will become binding when one or more counterparts taken together will have been executed and delivered (including by facsimile) by the parties. It will not be necessary in making proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts.

        Section 3.8 Transfer Taxes. MFFB shall be responsible for the timely payment of all sales (including, without limitation, bulk sales), use, value added, documentary, stamp, gross receipts, registration, transfer, conveyance, excise, recording, license and other similar taxes and fees, arising out of or in connection with or attributable to the transactions effected pursuant to this Agreement.

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        IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be executed by their respective officers thereunto duly authorized as of the date first above written.

Schedule 1.1

Schedule 1.2(a)