DESCRIPTION OF NOTES

You can find the definitions of certain terms used in this description under the subheading "Certain Definitions." In this description, the word "Mrs. Fields" refers only to Mrs. Fields' Original Cookies, Inc. and not to any of its subsidiaries.

We will issue the new notes under an indenture among Mrs. Fields, the guarantors and The Bank of New York, as trustee. The terms of the new notes being offered in the exchange offer include those stated in the indenture and those made part of the indenture by reference to the Trust Indenture Act of 1939.

The following description is a summary of the material provisions of the indenture and the registration rights agreement. It does not restate those agreements in their entirety. We urge you to read the indenture and the registration rights agreement because they, and not this description, define your rights as holders of these notes. We have filed copies of the indenture and the registration rights agreement as exhibits to the registration statement which includes this prospectus.

Brief Description of the Notes and the Guarantees

The notes

These notes:

. are general unsecured obligations of Mrs. Fields;

. are senior in right of payment to all subordinated Indebtedness of Mrs. Fields;

. are equal in right of payment to all existing and future senior Indebtedness of Mrs. Fields; and

. are unconditionally guaranteed on a senior basis by the guarantors.

As of July 3, 1999, Mrs. Fields had approximately $11.6 million in Indebtedness other than the notes.

The Guarantees

"guarantors" means each of:

(1) The Mrs. Fields' Brand; and

(2) any other Subsidiary that executes a guarantee in accordance with the provisions of the indenture

and their respective successors and assigns.

A "Subsidiary" means, with respect to any person,

(1) any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that person or one or more of the other Subsidiaries of that person (or a combination of the preceding) and

(2) any partnership (a) the sole general partner or the managing general partner of which is that person or a Subsidiary of that person or (b) the only general partners of which are that person or of one or more Subsidiaries of such person (or any combination of the preceding).

These notes are guaranteed by the following subsidiaries of Mrs. Fields:

The Mrs. Fields' Brand, Inc.
Great American Cookie Company, Inc.
Pretzelmaker Holdings, Inc.

Pretzel Time, Inc.

The guarantees of these notes:

. are general unsecured obligations of each guarantor;

. are senior in right of payment to all subordinated Indebtedness of each guarantor; and

. are equal in right of payment to any existing and future senior Indebtedness of each guarantor.

As of July 3, 1999, Mrs. Fields' subsidiaries had approximately $382,000 in indebtedness and had preferred stock with a value upon liquidation of $1.5 million, substantially all of which is senior in right of payment to the notes. The indenture will permit us and the guarantors to incur additional Indebtedness.

The notes will be guaranteed by any additional guarantors.

Principal, Maturity and Interest

Mrs. Fields can issue up to $200.0 million of notes under the indenture. Before August 1998, Mrs. Fields had issued $100.0 million of notes under the indenture. Mrs. Fields issued an additional $40.0 million of notes on August 24, 1998.

. Interest on the notes will accrue at the rate of 10 1/8% per annum.

. We will pay interest on the new notes semi-annually in arrears on June 1 and December 1 of each year, commencing June 1, 1999. We will make each interest payment to holders of record of the new notes on the immediately preceding May 15 and November 15.

. Interest on the new notes will accrue from the date it was most recently paid. We will compute interest on the basis of a 360-day year comprised of twelve 30-day months.

. Old notes that are accepted for exchange will cease to accrue interest from and after the date the exchange offer is completed.

. The notes mature on December 1, 2004.

Methods of Receiving Payments on the Notes

If a holder has given wire transfer instructions to us, we will make all principal, premium and interest and, if any, liquidated damages, payments on those notes in accordance with those instructions. All other payments on the notes will be made at the office or agency that we maintain within the City and State of New York unless we elect to make interest payments by check mailed to the holders at their addresses described in the register of holders. Until we designate otherwise, our office or agency in New York will be the office of the trustee.

Transfer and Exchange

A holder may transfer or exchange notes in accordance with the indenture. The registrar and the trustee may require a holder, among other things, to furnish appropriate endorsements and transfer documents and Mrs. Fields may require a holder to pay any taxes and fees required by law or permitted by the indenture. We are not required to transfer or exchange any note selected for redemption. Also, we are not required to transfer or exchange any note for a period of 15 days before a selection of notes to be redeemed.

The registered holder of a note will be treated as the owner of it for all purposes.

Guarantees

The guarantors will, jointly and severally, unconditionally guarantee Mrs. Fields' obligations under these notes on a senior unsecured basis. The obligations of each guarantor under its guarantee will be limited as

necessary to prevent that guarantee from constituting a fraudulent conveyance under applicable law. See "Risk Factors--Fraudulent conveyance risks; federal and state statutes allow courts, under specific circumstances, to void payments under the notes and guarantees and require noteholders to return payments received."

A guarantor may not consolidate with or merge with or into (whether or not such guarantor is the surviving person), another person unless:

(1) the person formed by or surviving the consolidation or merger assumes all the obligations of that guarantor under a supplemental indenture satisfactory to the trustee;

(2) immediately after giving effect to that transaction, no Default or Event of Default exists;

(3) the guarantor, or any person formed by or surviving the consolidation or merger, would have Consolidated Net Worth immediately after giving effect to the transaction equal to or greater than the Consolidated Net Worth of the guarantor immediately preceding the transaction; and

(4) Mrs. Fields would be permitted by virtue of giving effect to its pro forma Fixed Charge Coverage Ratio, immediately after giving effect to the transaction, to incur at lest $1.00 of additional Indebtedness under the Fixed Charge Coverage Ratio test described in the covenant described below under the caption: "--Certain Covenants--Incurrence of Indebtedness and Issuance of Preferred Stock."

A Default means any event that is or with the passage of time or the giving of notice or both would be an Event of Default. Events of Default are listed under "Event of Default and Remedies" below.

The guarantee of a guarantor will be released:

(1) in connection with any sale or other disposition of all of the assets of that guarantor (including by way of merger or consolidation), if Mrs. Fields applies the Net Proceeds of that sale or other disposition, in accordance with the applicable provisions of the indenture; or

(2) in connection with any sale of all of the capital stock of a guarantor (including by way of a merger or consolidation), if Mrs. Fields applies the Net Proceeds of that sale in accordance with the applicable provisions of the indenture.

In the event of a sale or other disposition of all of the assets of a guarantor, the corporation acquiring the property will be released.

See "Redemption at the Option of Holders--Asset Sales."

Optional Redemption

Until November 20, 2001, Mrs. Fields may on any one or more occasions redeem up to 35% of the total principal amount of notes ever issued under the indenture at a redemption price of 110.125% of the principal amount of those notes, plus accrued and unpaid interest and liquidated damages, if any, to the redemption date, with the net cash proceeds of one or more Public Equity Offerings; provided that

(1) at least 65% of the in total principal amount of notes ever issued under the indenture remains outstanding immediately after the occurrence of the redemption; and

(2) the redemption must occur within 60 days of the date of the closing of the Public Equity Offering.

Except under the preceding paragraph, the notes will not be redeemable at Mrs. Fields' option prior to December 1, 2001.

After December 1, 2001, Mrs. Fields may redeem all or a part of these notes upon not less than 30 nor more than 60 days' notice, at the redemption prices (expressed as percentages of principal amount) described below plus accrued and unpaid interest and liquidated damages, if any, on those notes, to the applicable redemption date, if redeemed during the twelve-month period beginning on December 1 of the years indicated below:

Year                                                               Percentage
----                                                               ----------
2001..............................................................  103.375%
2002..............................................................  101.688%
2003 and thereafter...............................................  100.000%

Repurchase at the Option of Holders

Change of Control

If a Change of Control occurs, each holder of notes will have the right to require Mrs. Fields to repurchase all or any part (equal to $1,000 or an integral multiple of $1,000) of that holder's notes under the Change of Control Offer. In the Change of Control Offer, Mrs. Fields will offer a Change of Control Payment in cash equal to 101% of the total principal amount of notes repurchased plus accrued and unpaid interest on those notes, if any, and liquidated damages, if any, to the date of purchase. Within 60 days following any Change of Control, Mrs. Fields will mail a notice to each holder describing the transaction or transactions that constitute the Change of Control and offering to repurchase notes on the Change of Control Payment Date specified in the notice, under the procedures required by the indenture and described in the notice. Mrs. Fields will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations under the Exchange Act to the extent those laws and regulations are applicable in connection with the repurchase of the notes as a result of a Change of Control.

On the Change of Control Payment Date, Mrs. Fields will, to the extent lawful:

(1) accept for payment all notes or portions thereof properly tendered under the Change of Control Offer;

(2) deposit with the paying agent an amount equal to the Change of Control Payment in respect of all notes or portions of notes so tendered; and

(3) deliver or cause to be delivered to the trustee the notes so accepted together with an officers' certificate stating the total principal amount of notes or portions of notes being purchased by Mrs. Fields.

The paying agent will promptly mail to each holder of notes so tendered the Change of Control Payment for those notes, and the trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each holder a new note equal in principal amount to any unpurchased portion of the notes surrendered, if any; provided that each new note will be in a principal amount of $1,000 or an integral multiple of $1,000. Mrs. Fields will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.

The provisions described above that require Mrs. Fields to make a Change of Control Offer following a Change of Control will be applicable regardless of whether or not any other provisions of the indenture are applicable. Except as described above with respect to a Change of Control, the indenture does not contain provisions that permit the holders of the notes to require that Mrs. Fields repurchase or redeem the notes in the event of a takeover, recapitalization or similar transaction.

Indebtedness of Mrs. Fields currently prohibits, and it is expected that future Indebtedness of Mr. Fields will prohibit, events that would constitute a Change of Control. In addition, the exercise by the holders of notes

of their right to require Mrs. Fields to repurchase the notes could cause a default under that Indebtedness, even if the Change of Control itself does not, due to the financial effect of those repurchases on Mrs. Fields. Finally, Mrs. Fields' ability to pay cash to the holders of notes upon a repurchase may be limited by Mrs. Fields' then existing financial resources.

Mrs. Fields will not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements described in the indenture applicable to a Change of Control Offer made by Mrs. Fields and purchases all notes validly tendered and not withdrawn under the Change of Control Offer.

The definition of Change of Control includes a phrase relating to the sale, lease, transfer, conveyance or other disposition of "all or substantially all" of the assets of Mrs. Fields and its Subsidiaries taken as a whole. Although there is a limited body of case law interpreting, the phrase "substantially all," there is no precise established definition of the phrase under applicable law. Accordingly, the ability of a holder of notes to require Mrs. Fields to repurchase its notes as a result of a sale, lease, transfer, conveyance or other disposition of less than all of the assets of Mrs. Fields and its Subsidiaries taken as a whole to another person or group may be uncertain.

Asset Sales

Mrs. Fields will not, and will not permit any of its Subsidiaries to, consummate an Asset Sale unless:

(1) Mrs. Fields (or the Subsidiary, as the case may be) receives consideration at the time of the Asset Sale at least equal to the fair market value of the assets or Equity Interests issued or sold or otherwise disposed of;

(2) the fair market value is

(a) evidenced by an officers' certificate delivered to the trustee, in the case of an Asset Sale or Asset Sales aggregating $10,000 or more; or

(b) determined by Mrs. Fields' Board of Directors and evidenced by a resolution of the Board of Directors described in an officers' certificate delivered to the trustee, in the case of any Asset Sale having a fair market value or resulting in net proceeds in excess of $5.0 million; and

(3) at least 75% of the consideration therefor received by Mrs. Fields or the Subsidiary is in the form of cash. For purposes of this provision, each of the following shall be deemed to be cash:

(a) any liabilities (as shown on Mrs. Fields' or the Subsidiary's most recent balance sheet), of Mrs. Fields or any Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the notes or any guarantee of those liabilities) that are assumed by the transferee of any assets under a customary novation agreement that releases Mrs. Fields or the Subsidiary from further liability; and

(b) any securities, notes or other obligations received by Mrs. Fields or any the Subsidiary from the transferee that are immediately converted by Mrs. Fields or the Subsidiary into cash (to the extent of the cash received in that conversion).

"Equity Interests" means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

Within 270 days after the receipt of any Net Proceeds from an Asset Sale, Mrs. Fields may apply the Net Proceeds at its option:

(1) to repay senior Indebtedness of Mrs. Fields or any guarantor;

(2) to make a Permitted Investment;

(3) to make a capital expenditure in the same or a similar line of business as Mrs. Fields and its Subsidiaries were engaged in on November 26, 1997, including, without limitation, the specialty retail snack-food business; or

(4) to acquire long-term assets in the same or a similar line of business as Mrs. Fields and its Subsidiaries were engaged in on November 26, 1997, including, without limitation, the specialty retail snack-food business.

Pending the final application of the Net Proceeds, Mrs. Fields may temporarily reduce Indebtedness under a credit facility with a maximum total amount of $15.0 million that is permitted under the indenture, including the credit agreement with La Salle National Bank, or otherwise invest the Net Proceeds in any manner that is not prohibited by the indenture.

Any Net Proceeds from Asset Sales that are not applied or invested as provided in the preceding paragraph will constitute Excess Proceeds. When the total amount of Excess Proceeds exceeds $5.0 million, Mrs. Fields will make an Asset Sale Offer to all holders of notes to purchase the maximum principal amount of notes that may be purchased out of the Excess Proceeds. The offer price in any Asset Sale Offer will be equal to 100% of principal amount plus accrued and unpaid interest, if any, and liquidated damages, if any, to the date of purchase, and will be payable in cash. If any Excess Proceeds remain after completion of an Asset Sale Offer, Mrs. Fields may use those Excess Proceeds for general corporate purposes. If the total principal amount of notes tendered into the Asset Sale Offer exceeds the amount of Excess Proceeds, the trustee shall select the notes to be purchased on a pro rata basis. Upon completion of each Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.

Selection and Notice

If less than all of the notes are to be redeemed at any time, the trustee will select notes for redemption as follows:

(1) if the notes are listed, in compliance with the requirements of the principal national securities exchange on which the notes are listed; or

(2) if the notes are not so listed, on a pro rata basis, by lot or by any method as the trustee shall deem fair and appropriate.

No notes of $1,000 or less shall be redeemed in part. Notices of redemption shall be mailed by first class mail at least 30 but not more than 60 days before the redemption date to each holder of notes to be redeemed at its registered address. Notices of redemption may not be conditional.

If any note is to be redeemed in part only, the notice of redemption that relates to that note shall state the portion of the principal amount thereof to be redeemed. A new note in principal amount equal to the unredeemed portion of the original note will be issued in the name of the holder of that note upon cancellation of the original note. Notes called for redemption become due on the date fixed for redemption. On and after the redemption date, interest ceases to accrue on notes or portions of them called for redemption.

Certain Covenants

Restricted Payments

Mrs. Fields will not, and will not permit any of its Subsidiaries to, directly or indirectly:

(1) declare or pay any dividend or make any other payment or distribution on account of Mrs. Fields' or any of its Subsidiaries' Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving Mrs. Fields) or to the direct or indirect

holders of Mrs. Fields' or any of its Subsidiaries' Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of Mrs. Fields or dividends or distributions payable to Mrs. Fields or any Wholly Owned Subsidiary of Mrs. Fields that is a guarantor);

(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation involving Mrs. Fields) any Equity Interests of Mrs. Fields or any direct or indirect parent of Mrs. Fields or other Affiliate of Mrs. Fields (other than the Equity Interests owned by Mrs. Fields or any Wholly Owned Subsidiary of Mrs. Fields);

(3) make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the notes, except a payment of interest or principal at the Stated Maturity of that Indebtedness; or

(4) make any Investment other than a Permitted Investment

(all of the payments and other actions (1) through (4) above being collectively referred to as "Restricted Payments"),

unless, at the time of and after giving effect to that Restricted Payment:

(1) no Default or Event of Default shall have occurred and be continuing or would occur as a consequence of the Restricted Payment, and

(2) Mrs. Fields would, at the time of the Restricted Payment and after giving pro forma effect to it as if the Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness under the Fixed Charge Coverage Ratio test described in the first paragraph of the covenant described below under the caption "Incurrence of Indebtedness and Issuance of Preferred Stock"; and

(3) the Restricted Payment, together with the total amount of all other Restricted Payments made by Mrs. Fields and its Subsidiaries after November 26, 1997 (excluding Restricted Payments permitted by clauses (2), (3) or (4) of the next succeeding paragraph), is less than the sum of

(a) 50% of the Consolidated Net Income of Mrs. Fields for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing after November 26, 1997 to the end of Mrs. Fields' most recently ended fiscal quarter for which internal financial statements are available at the time of the Restricted Payment (or, if the Consolidated Net Income for that period is a deficit, less 100% of the deficit), plus

(b) 100% of the total net cash proceeds (other than proceeds referred to in the proviso to the first sentence of the definition of "Investments") received by Mrs. Fields since November 26, 1997 of Equity Interests of Mrs. Fields (other than Disqualified Stock, but including the capital contribution from Mrs. Fields Holding on August 24, 1998) or Disqualified Stock or convertible debt securities that have been converted into Equity Interests (other than Equity Interests (or Disqualified Stock or convertible debt securities) sold to a Subsidiary of Mrs. Fields and other than Disqualified Stock or convertible debt securities that have been converted into Disqualified Stock), plus

(c) to the extent that any Investment other than a Permitted Investment that was made after November 26, 1997 is sold for cash or otherwise liquidated or repaid for cash, the lesser of

(1) the cash return of capital with respect to that Investment (less the cost of disposition, if any) and

(2) the initial amount of that Investment.

"Wholly Owned Subsidiary" of any person means a Subsidiary of that person, all of the outstanding Capital Stock or other ownership interests of which (other than directors' qualifying shares) shall at the time be

owned by that person or by one or more Wholly Owned Subsidiaries of that person and one or more Wholly Owned Subsidiaries of that person.

The preceding provisions will not prohibit:

(1) the payment of any dividend within 60 days after the date of declaration of the dividend, if at said date of declaration the payment would have complied with the provisions of the indenture;

(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness or Equity Interests of Mrs. Fields in exchange for, or out of the net cash proceeds of, the substantially concurrent sale (other than to a Subsidiary of Mrs. Fields) of, other Equity Interests of Mrs. Fields (other than Disqualified Stock); provided that the amount of any net cash proceeds that are utilized for that redemption, repurchase, retirement, defeasance or other acquisition shall be excluded from clause (3)(b) of the preceding paragraph;

(3) the defeasance, redemption, repurchase or other acquisition of subordinated Indebtedness with the net cash proceeds from an incurrence of Permitted Refinancing Indebtedness;

(4) the payment of any dividend by a Subsidiary of Mrs. Fields to the holders of any Equity Interests on a pro rata basis; and

(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of Mrs. Fields or any Subsidiary of Mrs. Fields held by any member of Mrs. Fields' (or any of its Subsidiaries') management under any management equity subscription agreement or stock option agreement; provided that the total price paid for all of those repurchased, redeemed, acquired or retired Equity Interests shall not exceed, in any twelve-month period, $250,000, plus the amount of cash proceeds received by Mrs. Fields from any reissuance of Equity Interests by Mrs. Fields to members of management of Mrs. Fields or its Subsidiaries during such period, which total amount shall in no event exceed $500,000 in that period, and no Default or Event of Default shall have occurred and be continuing immediately after the transaction;

(6) payments to Mrs. Fields Holding under the Tax Sharing Agreement;

(7) payments pursuance to the Employment Agreement, dated as of September 2, 1997, between Pretzel Time and Martin E. Lisiewski and the Management Agreement, dated as of September 2, 1997, between Mrs. Fields and Pretzel Time; and

(8) the redemption or repurchase of preferred stock of Pretzel Time outstanding on November 26, 1997.

The amount of all Restricted Payments (other than cash) shall be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by Mrs. Fields or its Subsidiary, as the case may be, under the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant shall be determined by the Board of Directors whose resolution with respect to it shall be delivered to the trustee. The Board of Directors' determination must be based upon an opinion or appraisal issued by an accounting, appraisal or investment banking firm of national standing if the fair market value exceeds $2.0 million. Not later than the date of making any Restricted Payment, Mrs. Fields shall deliver to the trustee an officers' certificate stating that the Restricted Payment is permitted and setting forth the basis upon which the calculations required by this "Restricted Payments" covenant were computed, together with a copy of any fairness opinion or appraisal required by the indenture.

Incurrence of Indebtedness and Issuance of Preferred Stock

Mrs. Fields will not, and will not permit any of its Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Indebtedness), and Mrs. Fields will not

issue any Disqualified Stock and will not permit any of its Subsidiaries to issue any shares of preferred stock; provided that Mrs. Fields may incur Indebtedness (including Acquired Indebtedness) or issue Disqualified Stock, if:

(1) the Fixed Charge Coverage Ratio for Mrs. Fields' most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which the additional Indebtedness is incurred or the Disqualified Stock is issued would have been at least

(a) From the date of the indenture to December 31, 1999, 2.25 to 1 and

(b) thereafter, 2.5 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock had been issued, as the case may be, at the beginning of that four- quarter period; and

(2) the Weighted Average Life to Maturity of the Indebtedness is equal to or greater than the remaining Weighted Average Life to Maturity of the notes, provided that this clause (2) shall not apply in the case of Acquired Indebtedness.

The first paragraph of this covenant will not prohibit the incurrence of any of the following, items of Indebtedness (collectively, "Permitted Indebtedness"):

(1) the incurrence by Mrs. Fields and its Subsidiaries of the Existing Indebtedness other than the notes;

(2) the incurrence by Mrs. Fields and its Subsidiaries on November 26, 1997 of Indebtedness represented by the notes in a total principal amount not to exceed $100.0 million and the guarantees of that Indebtedness by the guarantors;

(3) the incurrence by Mrs. Fields or any of its Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of improvement of property, plant or equipment used in the business of Mrs. Fields or the Subsidiary, in a total principal amount not to exceed $5.0 million at anytime outstanding;

(4) the incurrence by Mrs. Fields or any of its Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace Indebtedness that was permitted by the indenture to be incurred;

(5) the incurrence by Mrs. Fields or any of its Subsidiaries of intercompany Indebtedness between or among Mrs. Fields and any of its Wholly Owned Subsidiaries; provided, that:

(a) if Mrs. Fields is the obligor on that Indebtedness, the Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the notes; and

(b) (1) any subsequent issuance or transfer of Equity Interests that results in any of that Indebtedness being held by a person other than Mrs. Fields or a Wholly Owned Subsidiary of Mrs. Fields and

(2) any sale or other transfer of that Indebtedness to a person that is not either Mrs. Fields or a Wholly Owned Subsidiary of Mrs. Fields shall be deemed, in each case, to constitute an incurrence of that Indebtedness by Mrs. Fields or that Subsidiary, as the case may be;

(6) the incurrence by Mrs. Fields of Hedging Obligations in the ordinary course of business;

(7) the incurrence of Indebtedness in connection with one or more standby letters of credit, guarantees, performance or surety bonds or other reimbursement obligations, in each case, issued

in the ordinary course of business and not in connection with the borrowing of money or the obtaining of advances or credit other than:

(a) advances or credit on open account, includible in current liabilities, for goods and services in the ordinary course of business and on terms and conditions customary in the same or a similar line of business as Mrs. Fields and its Subsidiaries were engaged in on November 26, 1997, including, without limitation, the speciality retail snack-foods business and

(b) the extension of credit represented by the letter of credit, guarantee, bond or other obligation itself,

provided that any draw under or call upon any of the foregoing is repaid in full within 45 days, and provided further that the total amount of all Indebtedness incurred under this clause (7) shall not exceed $5.0 million at any time outstanding;

(8) the incurrence of Indebtedness arising from agreements of Mrs. Fields or a Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or Subsidiary (other than guarantees of Indebtedness incurred by any person acquiring all or a portion of the business, assets or Subsidiary for the purpose of financing the acquisition), provided that the maximum total liability of that Indebtedness shall at no time exceed 50% of the gross proceeds actually received by Mrs. Fields or the Subsidiary in connection with the disposition;

(9) the guarantee by Mrs. Fields or any of the guarantors of Indebtedness of Mrs. Fields or a Subsidiary of Mrs. Fields that is a guarantor that was permitted to be incurred by another provision of this covenant;

(10) the incurrence by Pretzel Time of Indebtedness under a working capital facility, provided that the total principal amount of all Indebtedness (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Pretzel Time thereunder) outstanding thereunder after giving effect to the incurrence, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any other Indebtedness incurred under this clause (10), does not exceed an amount equal to $1.0 million;

(11) the incurrence by Mrs. Fields of additional Indebtedness (including Indebtedness under a credit facility) in a total principal amount (or accreted value, as applicable), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any other Indebtedness incurred under this clause (11), not to exceed $15.0 million at any time outstanding;

(12) the incurrence by Mrs. Fields or any of its subsidiaries of Acquired Indebtedness in a total amount not to exceed $5.0 million at any time outstanding;

(13) the guarantee by Mrs. Fields or any of its Subsidiaries (other than Mrs. Fields' Brand) of operating store lease obligations of Mrs. Fields or any of its Subsidiaries or any franchisee of Mrs. Fields or any of its Subsidiaries in the ordinary course of business and consistent with past practice;

(14) the guarantee by any Subsidiary of Mrs. Fields of Indebtedness of the Mrs. Fields under any credit facility with a maximum total amount of $15.0 million otherwise permitted to be incurred under the indenture;

(15) the incurrence by Mrs. Fields of Indebtedness in the form of notes issued in connection with the repurchase, redemption, acquisition or retirement of Equity Interests of Mrs. Fields or any Subsidiary of Mrs. Fields in an amount not to exceed $500,000 at any time outstanding and subordinated in right of payment to the notes; and

(16) the incurrence by Mrs. Fields of Indebtedness or the guarantee by Mrs. Fields of Indebtedness incurred by franchisees in connection with the cost of purchasing a franchise and the cost of equipment in connection with the set-up of a franchise, provided that the Indebtedness or guarantee does not exceed $3.0 million at any time outstanding.

For purposes of determining compliance with this "Incurrence of Indebtedness and Issuance of Preferred Stock" covenant, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness described in clauses (1) through (16) above, or is entitled to be incurred under the first paragraph of this covenant, Mrs. Fields will be permitted to classify that item of Indebtedness on the date of its incurrence in any manner that complies with this covenant. Accrual of interest and the accretion of accreted value will not be deemed to be an incurrence of Indebtedness for purposes of this covenant.

Liens

Mrs. Fields will not, and will not permit any of its Subsidiaries to, directly or indirectly, create, incur, assume or suffer to exist any Lien except Permitted Liens.

Dividend and Other Payment Restrictions Affecting Subsidiaries

Mrs. Fields will not, and will not permit any of its Subsidiaries, directly or indirectly, to create or permit to exist or become effective any encumbrance or restriction on the ability of any Subsidiary to:

(1) pay dividends or make any other distributions on its Capital Stock to Mrs. Fields or any of Mrs. Fields' Subsidiaries, or with respect to any other interest or participation in, or measured by, its profits, or pay any indebtedness owed to Mrs. Fields or any of Mrs. Fields' Subsidiaries;

(2) make loans or advances to Mrs. Fields or any of Mrs. Fields' Subsidiaries; or

(3) transfer any of its properties or assets to Mrs. Fields or any of Mrs. Fields' Subsidiaries.

However, the preceding restrictions will not apply to encumbrances or restrictions existing under or by reason of:

(1) Existing Indebtedness as in effect on November 27, 1997

(2) the indenture and the notes;

(3) applicable law;

(4) any instrument governing Indebtedness or Capital Stock of a person acquired by Mrs. Fields or any of its Subsidiaries as in effect at the time of the acquisition (except to the extent the Indebtedness was incurred in connection with or in contemplation of the acquisition), which encumbrance or restriction is not applicable to any person, or the properties or assets of any person, other than the person, or the property or assets of the person, so acquired, provided that, in the case of Indebtedness, the Indebtedness was permitted by the terms of the indenture to be incurred;

(5) customary non-assignment provisions in leases entered into in the ordinary course of business and consistent with past practices;

(6) purchase money obligations for property acquired in the ordinary course of business that impose restrictions on the property so acquired of the nature described in clause (4) above;

(7) Permitted Refinancing Indebtedness, provided that the restrictions contained in the agreements governing the Permitted Refinancing Indebtedness are no more restrictive, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced;

(8) customary restrictions imposed on the transfer of copyrighted or patented materials and customary provisions in agreements that restrict the assignees of the agreements or any rights thereunder; or

(9) restrictions with respect to a Subsidiary of Mrs. Fields imposed under a binding agreement relating to the sale or disposition of all or substantially all of the Capital Stock or assets of the Subsidiary.

Merger, Consolidation, or Sale of Assets

Mrs. Fields may not:

(1) consolidate or merge with or into another person (whether or not Mrs. Fields is the surviving corporation); or

(2) sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets, in one or more related transactions, to another person; unless:

(a) either:

(1) Mrs. Fields is the surviving corporation; or

(2) the person formed by or surviving the consolidation or merger (if other than Mrs. Fields) or the entity to which the sale, assignment, transfer, conveyance or other disposition shall have been made is a corporation organized or existing under the laws of the United States, any state of the United States or the District of Columbia;

(b) the person formed by or surviving the consolidation or merger (if other than Mrs. Fields) or the person to which the sale, assignment, transfer, conveyance or other disposition shall have been made assumes all the obligations of Mrs. Fields under the notes and the indenture under a supplemental indenture reasonably satisfactory to the trustee;

(c) immediately after the transaction no Default or Event of Default exists; and

(d) except in the case of a merger of Mrs. Fields with or into a Wholly Owned Subsidiary of Mrs. Fields, Mrs. Fields or the person formed by or surviving the consolidation or merger (if other than Mrs. Fields), or to which the sale, assignment, transfer, lease, conveyance or other disposition shall have been made:

(1) will have Consolidated Net Worth immediately after the transaction equal to or greater than the Consolidated Net Worth of Mrs. Fields immediately preceding the transaction; and

(2) will, on the date of the transaction after giving pro forma effect to it and any related financing transactions as if the same had occurred at the beginning of the applicable four-quarter period, be permitted to incur at least $1.00 of additional Indebtedness under the Fixed Charge Coverage Ratio test described in the first paragraph of the covenant described above under the caption "Incurrence of Indebtedness and Issuance of Preferred Stock."

Transactions with Affiliates

Mrs. Fields will not, and will not permit any of its Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate (each, an "Affiliate Transaction"), unless:

(1) the Affiliate Transaction is on terms that are no less favorable to Mrs. Fields or the relevant Subsidiary than those that would have been obtained in a comparable transaction by Mrs. Fields or the Subsidiary with an unrelated person; and

(2) Mrs. Fields delivers to the trustee:

(a) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving total consideration in excess of $1.0 million, a resolution of the Board of Directors contained in an officers' certificate certifying that the Affiliate Transaction complies with this covenant and that the Affiliate Transaction has been approved by a majority of the disinterested members of the Board of Directors; and

(b) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving total consideration in excess of $5.0 million, an opinion as to the fairness to the holders of the Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm of national standing.

The following items shall not be deemed to be Affiliate Transactions and, therefore, will not be subject to the provisions of the prior paragraph:

(1) payments to Mrs. Fields Holding under the Tax Sharing Agreement;

(2) any employment agreement entered into by Mrs. Fields or any of its Subsidiaries in the ordinary course of business and consistent with the past practice of Mrs. Fields or the Subsidiary;

(3) transactions between or among Mrs. Fields and/or its Subsidiaries;

(4) Restricted Payments that are permitted by the provisions of the indenture described above under the caption "Restricted Payments";

(5) the payment of reasonable fees, expense reimbursements and customary indemnification, advances and other similar arrangements to directors and officers of Mrs. Fields and its Subsidiaries; and

(6) reasonable loans or advances to employees of Mrs. Fields and its Subsidiaries in the ordinary course of business of Mrs. Fields or the Subsidiary.

Additional Subsidiary Guarantees

If:

(1) Mrs. Fields or any of its Subsidiaries acquires or creates another domestic wholly owned Subsidiary after the date of the Indenture having assets

(a) with a fair market value in excess of $100,000 or

(b) consisting of one or more stores; or

(2) Mrs. Fields acquires all remaining common stock of Pretzel Time,

then the newly acquired or created Subsidiary or Pretzel Time, as the case may be, must become a guarantor and execute a supplemental indenture and deliver an opinion of counsel, in accordance with the terms of the indenture.

Limitation on Issuances and Sales of Capital Stock of Wholly Owned Subsidiaries

Mrs. Fields will not, and will not permit any of its Wholly Owned Subsidiaries to, transfer, convey, sell, lease or otherwise dispose of any Capital Stock of any Wholly Owned Subsidiary of Mrs. Fields to any person (other than Mrs. Fields or a Wholly Owned Subsidiary of Mrs. Fields), unless:

(1) the transfer, conveyance, sale, lease or other disposition is of all the Capital Stock of the Wholly Owned Subsidiary; and

(2) the cash Net Proceeds from the transfer, conveyance, sale, lease or other disposition are applied in accordance with the covenant described above under the caption "Repurchase at the Option of Holders--Asset Sales."

In addition, Mrs. Fields will not permit any Wholly Owned Subsidiary of Mrs. Fields to issue any of its Equity Interests (other than, if necessary, shares of its Capital Stock constituting directors' qualifying shares) to any person other than to Mrs. Fields or a Wholly Owned Subsidiary of Mrs. Fields.

Limitations on Issuances of Guarantees of Indebtedness

Mrs. Fields will not permit any of its Subsidiaries, directly or indirectly, to guarantee or pledge any assets to secure the payment of (other than as a result of a Permitted Lien) any other Indebtedness of Mrs. Fields or any subsidiary of Mrs. Fields unless the Subsidiary simultaneously executes and delivers a supplemental indenture providing for the guarantee of the payment of the notes by the Subsidiary, which guarantee shall be senior to or rank equal in right to payment with the Subsidiary's guarantee of or pledge to secure the other Indebtedness.

Notwithstanding the preceding paragraph, any guarantee by a Subsidiary of the notes will provide by its terms that it will be automatically and unconditionally released and discharged under the circumstances described above under the caption "Guarantees." The form of the guarantee is attached as an exhibit to the indenture.

Business Activities

Mrs. Fields will not, and will not permit any Subsidiary to, engage in any business other than the same or a similar line of business as Mrs. Fields and its Subsidiaries were engaged in on November 26, 1997, including, without limitation, the specialty retail snack-food business, except to an extent as would not be material to Mrs. Fields and its Subsidiaries taken as a whole.

In addition,

(1) Mrs. Fields will not engage in any Asset Sale involving Mrs.
Fields' Brand,

(2) neither Mrs. Fields nor Mrs. Fields' Brand will engage in any Asset Sale involving the "Mrs. Fields" or "Pretzel Time" brand name, and

(3) for so long as Mrs. Fields' Brand is a Subsidiary of Mrs. Fields, Mrs. Fields' Brand will not incur any Indebtedness (other than its guarantee of the notes and any guarantee of Indebtedness under a credit facility with a maximum total amount of $15.0 million that is permitted under the indenture).

Payments for Consent

Mrs. Fields will not, and will not permit any of its Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration to or for the benefit of any holder of notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the indenture or the notes unless the consideration is offered to be paid and is paid to all holders of the notes that consent, waive or agree to amend in the time frame described in the solicitation documents relating to the consent, waiver or agreement.

Reports

Whether or not required by the Commission, so long as any notes are outstanding, Mrs. Fields will furnish to the holders of notes, within the time periods specified in the Commission's rules and regulations:

(1) all quarterly and annual financial information that would be required to be contained in a filing with the Commission on Forms 10-Q and 10-K if Mrs. Fields were required to file those Forms,

including a "Management's Discussion and Analysis of Financial Condition and Results of Operations" and, with respect to the annual information only, a report on the annual financial statements by Mrs. Fields' certified independent accountants; and

(2) all current reports that would be required to be filed with the Commission on Form 8-K if Mrs. Fields were required to file those reports.

In addition, whether or not required by the Commission, Mrs. Fields will file a copy of all of the information and reports referred to in clauses (1) and (2) above with the Commission for public availability within the time periods specified in the Commission's rules and regulations (unless the Commission will not accept the filing) and make the information available to securities analysts and prospective investors upon request.

In addition, Mrs. Fields and the guarantors have agreed that, for so long as any notes remain outstanding, they will furnish to the holders of notes and to securities analysts and prospective investors, upon their request, the information required to be delivered under Rule 144A(d)(4) under the Securities Act.

Events of Default and Remedies

Each of the following is an Event of Default:

(1) default for 30 days in the payment when due of interest or liquidated damages, if any, with respect to the notes;

(2) default in payment when due of the principal of or premium, if any, on the notes;

(3) failure by Mrs. Fields for 30 days after notice to comply with any of its other agreements in the indenture or the notes;

(4) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by Mrs. Fields or any of its Subsidiaries (or the payment of which is guaranteed by Mrs. Fields or any of its Subsidiaries) whether the Indebtedness or guarantee now exists, or is created after November 26, 1997, if that default:

(a) is caused by a failure to pay principal of or premium, if any, or interest on that Indebtedness prior to the expiration of the grace period provided in that Indebtedness on the date of that default (a "Payment Default"); or

(b) results in the acceleration of that Indebtedness prior to its express maturity,

and, in each case, the principal amount of that Indebtedness, together with the principal amount of any other Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, totals $2.5 million or more;

(5) failure by Mrs. Fields or any of its Subsidiaries to pay final judgments aggregating in excess of $2.5 million, which judgments are not paid, discharged or stayed for a period of 60 days;

(6) events of bankruptcy or insolvency with respect to Mrs. Fields or any of its Subsidiaries; and

(7) except as permitted by the indenture, any guarantee shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any guarantor, or any person acting on behalf of any guarantor, shall deny or disaffirm its obligations under its guarantee.

In the case of an Event of Default arising from events of bankruptcy or insolvency, with respect to Mrs. Fields, any Significant Subsidiary or any group of Subsidiaries that, taken together, would constitute a

Significant Subsidiary, all outstanding notes will become due and payable without further action or notice. If any other Event of Default occurs and is continuing, the trustee or the holders of at least 25% in principal amount of the then outstanding notes may declare all the notes to be due and payable immediately.

Holders of the notes may not enforce the indenture or the notes except as provided in the indenture. Subject to certain limitations, holders of a majority in principal amount of the then outstanding notes may direct the trustee in its exercise of any trust or power. The trustee may withhold from holders of the notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest.

The holders of a majority in total principal amount of the notes then outstanding by notice to the trustee may on behalf of the holders of all of the notes waive any existing Default or Event of Default and its consequences under the indenture except a continuing Default or Event of Default in the payment of interest on, or the principal of, the notes.

In the case of any Event of Default occurring by reason of any willful action or inaction taken or not taken by or on behalf of Mrs. Fields with the intention of avoiding payment of the premium that Mrs. Fields would have had to pay if Mrs. Fields then had elected to redeem the notes under the optional redemption provisions of the indenture, an equivalent premium shall also become and be immediately due and payable to the extent permitted by law upon the acceleration of the notes. If an Event of Default occurs prior to December 1, 2001 by reason of any willful action (or inaction) taken (or not taken) by or on behalf of Mrs. Fields with the intention of avoiding the prohibition on redemption of the notes before December 1, 2001, then the premium specified in the indenture shall also become immediately due and payable to the extent permitted by law upon the acceleration of the notes. If an Event of Default occurs prior to December 1, 2001 by reason of any willful action (or inaction) taken (or not taken) by or on behalf of Mrs. Fields with the intention of avoiding the prohibition on redemption of the notes prior to December 1, 2001, then the premium specified in the indenture shall also become immediately due and payable to the extent permitted by law upon acceleration of the notes.

Mrs. Fields is required to deliver to the trustee annually a statement regarding compliance with the indenture. Upon becoming aware of any Default or Event of Default, Mrs. Fields is required to deliver to the trustee a statement specifying the Default or Event of Default.

No Personal Liability of Directors, Officers, Employees and Stockholders

No director, officer, employee, incorporator or stockholder of Mrs. Fields or any guarantor, as such, shall have any liability for any obligations of Mrs. Fields or the guarantor under the notes, the guarantees the indenture, or for any claim based on, in respect of, or by reason of, those obligations or their creation. Each holder of notes by accepting a note waives and releases all liability of this kind. The waiver and release are part of the consideration for issuance of the notes. The waiver may not be effective to waive liabilities under the federal securities laws.

Legal Defeasance and Covenant Defeasance

Mrs. Fields may, at its option and at any time, elect to have all of its obligations discharged with respect to the outstanding notes ("Legal Defeasance") except for:

(1) the rights of holders of outstanding notes to receive payments in respect of the principal of, premium, if any, and interest and liquidated damages, if any, on those notes when those payments are due from the trust referred to below;

(2) Mrs. Fields' obligations with respect to the notes concerning issuing temporary notes, registration of notes, mutilated, destroyed, lost or stolen notes and the maintenance of an office or agency for payment and money for security payments held in trust;

(3) the rights, powers, trusts, duties and immunities of the trustee, and Mrs. Fields' obligations in connection with them; and

(4) the Legal Defeasance provisions of the indenture.

In addition, Mrs. Fields may, at its option and at any time, elect to have the obligations of Mrs. Fields released with respect to certain covenants that are described in the indenture ("Covenant Defeasance") and thereafter any omission to comply with those covenants shall not constitute a Default or Event of Default with respect to the notes. In the event Covenant Defeasance occurs, some of the events (not including non-payment, bankruptcy, receivership, rehabilitation and insolvency events) described under "Events of Default and Remedies" will no longer constitute a Default or an Event of Default with respect to the notes.

In order to exercise either Legal Defeasance or Covenant Defeasance:

(1) Mrs. Fields must irrevocably deposit with the trustee, in trust, for the benefit of the holders of the notes, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in amounts that will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium, if any, and interest and liquidated damages, if any, on the outstanding notes on the stated maturity or on the applicable redemption date, as the case may be, and Mrs. Fields must specify whether the notes are being defeased to maturity or to a particular redemption date;

(2) in the case of Legal Defeasance, Mrs. Fields shall have delivered to the trustee an opinion of counsel reasonably acceptable to the trustee confirming that

(a) Mrs. Fields has received from, or there has been published by, the Internal Revenue Service a ruling or

(b) since November 26, 1997, there has been a change in the applicable federal income tax law, in either case to the effect that, and based on which the opinion of counsel shall confirm that, the holders of the outstanding notes will not recognize income, gain or loss for federal income tax purposes as a result of the Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if the Legal Defeasance had not occurred;

(3) in the case of Covenant Defeasance, Mrs. Fields shall have delivered to the trustee an opinion of counsel reasonably acceptable to the trustee confirming that the holders of the outstanding notes will not recognize income, gain or loss for federal income tax purposes as a result of the Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if the Covenant Defeasance had not occurred;

(4) no Default or Event of Default shall have occurred and be continuing either:

(a) on the date of the deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to the deposit); or

(b) insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time in the period ending on the 91st day after the date of deposit;

(5) the Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under any material agreement or instrument (other than the indenture) to which Mrs. Fields or any of its Subsidiaries is a party or by which Mrs.

Fields or any of its Subsidiaries is bound;

(6) Mrs. Fields must have delivered to the trustee an opinion of counsel to the effect that after the 91st day following the deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally;

(7) Mrs. Fields must deliver to the trustee an officers' certificate stating that the deposit was not made by Mrs. Fields with the intent of preferring the holders of notes over the other creditors of Mrs. Fields with the intent of defeating, hindering, delaying or defrauding creditors of Mrs. Fields or others; and

(8) Mrs. Fields must deliver to the trustee an officers' certificate and an opinion of counsel, each stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance have been complied with.

Amendment, Supplement and Waiver

Without the consent of each holder affected, an amendment or waiver may not (with respect to any notes held by a non-consenting holder):

(1) reduce the principal amount of notes whose holders must consent to an amendment, supplement or waiver;

(2) reduce the principal of or change the fixed maturity of any note or alter the provisions with respect to the redemption of the notes (other than provisions relating to the covenants described above under the caption "Repurchase at the Option of Holders");

(3) reduce the rate of or change the time for payment of interest on any note;

(4) waive a Default or Event of Default in the payment of principal of or premium, if any, or interest on the notes (except a rescission of acceleration of the notes by the holders of at least a majority in total principal amount of the notes and a waiver of the payment default that resulted from the acceleration);

(5) make any note payable in money other than that stated in the notes;

(6) make any change in the provisions of the indenture relating to waivers of past Defaults or the rights of holders of notes to receive payments of principal of or premium, if any, or interest on the notes;

(7) waive a redemption payment with respect to any note (other than a payment required by one of the covenants described above under the caption "Repurchase at the Option of Holders"); or

(8) make any change in the preceding amendment and waiver provisions.

Notwithstanding the preceding, without the consent of any holder of notes, Mrs. Fields and the trustee may amend or supplement the indenture or the notes:

(1) to cure any ambiguity, defect or inconsistency;

(2) to provide for uncertificated notes in addition to or in place of certificated notes;

(3) to provide for the assumption of Mrs. Fields' obligations to holders of notes in the case of a merger or consolidation or sale of all or substantially all of Mrs. Fields' assets;

(4) to make any change that would provide any additional rights or benefits to the holders of notes or that does not adversely affect the legal rights under the indenture of any holder; or

(5) to comply with requirements of the Commission in order to effect or maintain the qualification of the indenture under the Trust Indenture Act.

Concerning the Trustee

If the trustee becomes a creditor of Mrs. Fields, the indenture limits its right to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise.

The trustee will be permitted to engage in other transactions; however, if it acquires any conflicting interest it must eliminate the conflict within 90 days, apply to the Commission for permission to continue or resign.

The holders of a majority in principal amount of the then outstanding notes will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the trustee, subject to certain exceptions. The indenture provides that in case an Event of Default shall occur and be continuing, the trustee will be required, in the exercise of its power, to use the degree of care of a prudent man in the conduct of his own affairs. Subject to those provisions, the trustee will be under no obligation to exercise any of its rights or powers under the indenture at the request of any holder of notes, unless that holder shall have offered to the trustee security and indemnity satisfactory to it against any loss, liability or expense.

Book-Entry, Delivery and Form

The new notes exchanged for old notes through the Book-Entry Transfer Facility will be represented by a Global Note (the "New Global Note"). One New Global Note shall be issued with respect to each $100 million or less in total principal amount at maturity of the New Global Note. The New Global Note will be issued on the date of the closing of the exchange offer with the trustee, as custodian of The Depository Trust Company, under a FAST Balance Certificate Agreement between the trustee and The Depository Trust Company and registered in the name of Cede & Co., as nominee of The Depository Trust Company (that nominee being referred to as the "Global Holder").

New notes exchanged for old notes which are in the form of registered definitive certificates will be issued in the form of certificated notes. The certificated notes may, unless the New Global Note has previously been exchanged for certificated notes, be exchanged for an interest in the New Global Note representing the principal amount of new notes being transferred.

The Depository Trust Company has advised us that it is a limited-purchase trust company that was created to hold securities for its participating organizations (collectively, the "Participants") and to facilitate the clearance and settlement of transactions in those securities between Participants through electronic book-entry changes in accounts of its Participants. The Participants include securities brokers and dealers (including the placement agents for the old notes), banks and trust companies, clearing corporations and certain other organizations. Access to The Depository Trust Company's system is also available to the other entities such as banks, brokers, dealers and trust companies (collectively, the "Indirect Participants") that clear through or maintain a custodial relationship with a Participant, either directly or indirectly. Persons who are not Participants may beneficially own securities held by or on behalf of The Depository Trust Company only through the Participants or the Indirect Participants.

We expect that under procedures established by The Depository Trust Company:

(1) upon deposit of the New Global Note, The Depository Trust Company will credit the accounts of Participants with portions of the New Global Note; and

(2) ownership of the notes will be shown on, and the transfer of ownership thereof will be effected only through, records maintained by The Depository Trust Company, the Participants and the Indirect Participants.

The laws of some states require that certain persons take physical delivery in definitive form of securities that they own. Consequently, the ability to transfer notes may be limited.

For so long as the Global Holder is the registered owner of any New Global Notes, the Global Holder will be considered the sole owner of those new notes represented by those New Global Notes outstanding under the indenture. Except as provided below, owners of beneficial interests in a New Global Note will not be entitled to have new notes represented by the New Global Note registered in their names, will not receive or be entitled to receive physical delivery of certificated notes, and will not be considered the owners or holders thereof under

the indenture for any purpose. As a result, the ability of a person having a beneficial interest in new notes represented by a New Global Note to pledge that interest to persons or entities that do not participate in The Depository Trust Company's system or to otherwise take actions in respect of that interest, may be affected by the lack of physical certificate evidencing that interest. Accordingly, each person owning a beneficial interest in a New Global Note must rely on the procedures of The Depository Trust Company, if that person is not a Participant or an Indirect Participant, on the procedures of the Participant through which that person owns its interest, to exercise any rights of a holder under that New Global Note of the indenture.

Neither Mrs. Fields nor the trustee will have any responsibility or liability for any aspect of the records relating to or payments made on account of new notes by The Depository Trust Company, or for maintaining, supervising or reviewing any records of The Depository Trust Company relating to those new notes.

The trustee will make payments in respect of the principal of, premium, if any, interest and liquidated damages, if any, on any new notes registered in the name of a Global Holder on the applicable record date to or at the direction of such Global Holder in its capacity as the registered holder under the indenture. Under the terms of the indenture, Mrs. Fields and the trustee may treat the persons in whose name the notes, including the New Global Notes, are registered as the owners of such notes for the purpose of receiving such payments and all other purposes.

We expect that The Depository Trust Company or its nominee, upon receipt of payments of principal, premium, if any, interest and liquidated damages, if any, on the New Global Notes, will credit their Participants' or Indirect Participants' accounts with payments in amounts proportionate to their respective interests in the principal amount of the New Global Notes as shown on the records of The Depository Trust Company. Neither Mrs. Fields nor the trustee has any responsibility or liability for those payments. Payments by the Participants and the Indirect Participants to the beneficial owners of new notes will be governed by standing instructions and customary practice. Those payments will be the responsibility of the Participants or the Indirect Participants.

Certificated Securities

If:

(1) Mrs. Fields notifies the trustee in writing that The Depository Trust Company is no longer willing or able to act as a depository and Mrs. Fields is unable to locate a qualified successor within 90 days or

(2) Mrs. Fields, at its option, notifies the trustee in writing that it elects to cause the issuance of the new notes in definitive form under the indenture, then, upon surrender by the relevant Global Holder of its New Global Note, new notes in that form will be issued to each person that the Global Holder and The Depository Trust Company identifies as the beneficial owner of the related new notes.

In addition, subject to certain conditions, any person having a beneficial interest in the New Global Note may, upon request to the trustee, exchange that beneficial interest for certificated notes. Upon issuance, the trustee is required to register the new notes in the name of, and cause the same to be delivered to, that person or persons (or the nominee of any of them). The new notes would be issued in fully registered forms.

Exchange Offer; Registration Rights

Mrs. Fields, Mrs. Fields Brand, Great American and the placement agents for the 10 1/8% Series C Senior Notes due 2004 entered into the registration rights agreement on August 24, 1998. The registration rights agreement requires Mrs. Fields and the guarantors to file with the Commission the Registration Statement on the appropriate form under the Securities Act with respect to an offer to exchange the 10 1/8% Series C Senior Notes due 2004 for the new notes, which will have terms substantially similar in all material respects to the old

notes. Upon the effectiveness of the Registration Statement, Mrs. Fields will offer to the holders of notes that are subject to restrictions on transfer under the exchange offer who are able to make the necessary representations the opportunity to exchange their notes for new notes.

If:

(1) Mrs. Fields and the guarantors had not been required to file the exchange offer Registration Statement or are not permitted to consummate the exchange offer because the exchange offer is not permitted by applicable law or Commission policy; or

(2) any holder of notes that are subject to restrictions on transfer notifies Mrs. Fields prior to the 20th day following consummation of the exchange offer that:

(a) it is prohibited by law or Commission policy from participating in the exchange offer or

(b) that it may not resell the new notes acquired by it in the exchange offer to the public without delivering a prospectus and the prospectus contained in the Registration Statement is not appropriate or available for resales;

(c) that it is a broker-dealer and owns 10 1/8% Series C Senior Notes due 2004 acquired directly from Mrs. Fields or an affiliate of Mrs. Fields,

then Mrs. Fields and the guarantors will file with the Commission a Shelf Registration Statement to cover resales of the 10 1/8% Series C Senior Notes due 2004 by the holders of those notes who satisfy specific conditions relating to the provision of information in connection with the Shelf Registration Statement. Mrs. Fields and the guarantors will use their best efforts to cause the applicable registration statement to be declared effective as promptly as possible by the Commission. Notes will be subject to restrictions on transfer until:

(1) a person other than a broker-dealer has exchanged notes in the exchange offer,

(2) a broker-dealer has exchanged notes in the exchange offer and sells them to a purchaser that receives this prospectus from the broker- dealer on or before the sale,

(3) the notes are sold under an effective shelf registration statement that we have filed, or

(4) the notes are sold to the public under Rule 144 of the Securities Act.

The registration rights agreement requires that:

(1) Mrs. Fields and the guarantors must file a Registration Statement with the Commission on or prior to 90 days after August 24, 1998,

(2) Mrs. Fields and the guarantors must use their best efforts to have the Registration Statement declared effective by the Commission on or prior to 150 days after August 24, 1998,

(3) unless the exchange offer would not be permitted by applicable law or Commission policy, Mrs. Fields will commence the exchange offer and use its best efforts to issue on or prior to 30 business days after the date on which the exchange offer Registration Statement was declared effective by the Commission, new notes in exchange for all old notes tendered prior to it in the exchange offer, and

(4) if obligated to file the Shelf Registration Statement, Mrs. Fields and the guarantors will use their best efforts to file the Shelf Registration Statement with the Commission on or prior to 90 days after that filing obligation arises and to cause the Shelf Registration to be declared effective by the Commission on or prior to 150 days after that obligation arises.

If:

(1) Mrs. Fields and the guarantors fail to file any of the Registration Statements required by the registration rights agreement on or before the date specified for the filing,

(2) any of the Registration Statements is not declared effective by the Commission on or prior to the date specified for effectiveness (the "Effectiveness Target Date"), or

(3) Mrs. Fields fails to consummate the exchange offer within 30 business days of the Effectiveness Target Date with respect to the Registration Statement, or

(4) the Shelf Registration Statement or the Registration Statement is declared effective but thereafter ceases to be effective or usable in connection with resales of notes that are subject to restrictions on transfer during the periods specified in the registration rights agreement

each event referred to in clauses (1) through (4) above a "Registration Default", then Mrs. Fields and the guarantors will pay liquidated damages to each holder of old notes, with respect to the first 90-day period immediately following the occurrence of the first Registration Default in an amount equal to $.05 per week per $1,000 principal amount of 10 1/8% Series C Senior Notes due 2004 held by the holder. The amount of the liquidated damages will increase by an additional $.05 per week per $1,000 principal amount of notes with respect to each subsequent 90-day period until all Registration Defaults have been cured, up to a maximum amount of liquidated damages of $.50 per week per $1,000 principal amount of 10 1/8% Series C Senior Notes due 2004. Mrs. Fields will pay all accrued liquidated damages on each damages payment date to the Global Note Holder by wire transfer of immediately available funds or by federal funds check and to holders of certificated old notes by wire transfer to the accounts specified by them or by mailing checks to their registered addresses if no accounts have been specified. Following the cure of all Registration Defaults, the accrual of liquidated damages will cease.

Since the Registration Statement was not effective by January 21, 1999, Mrs. Fields has incurred liquidated damages of approximately $56,000 as of July 3, 1999. On June 1, 1999, Mrs. Fields paid $42,000 of this amount to the holders of 10 1/8% Series C Senior Notes due 2004.

Holders of old notes will be required to make certain representations to Mrs. Fields in order to participate in the exchange offer and will be required to deliver information to be used in connection with the Shelf Registration Statement and to provide comments on the Shelf Registration Statement within the time periods described in the registration rights agreement in order to have their notes included in the Shelf Registration Statement and benefit from the provisions regarding liquidated damages described above.

Certain Definitions

Set forth below are certain defined terms used in the Indenture. Reference is made to the indenture for a full disclosure of all of these terms, as well as any other capitalized terms used in this prospectus for which no definition is provided.

"Accounting Firm" means any of Arthur Andersen LLP, Deloitte & Touche LLP, Ernst & Young LLP, KPMG Peat Marwick LLP and PricewaterhouseCoopers LLP or any of their successor firms.

"Acquired Indebtedness" means, with respect to any specified person:

(1) Indebtedness of any other person existing at the time the other person is merged with or into or became a Subsidiary of the specified person, excluding, however, Indebtedness incurred in connection with, or in contemplation of, the other person merging with or into or becoming a Subsidiary of the specified person; and

(2) Indebtedness secured by a Lien encumbering any asset acquired by the specified person.

"Affiliate" of any specified person means any other person directly or indirectly controlling or controlled by or under direct or indirect common control with the specified Person. For purposes of this definition, "control," as used with respect to any person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of the person, whether through the ownership of

voting securities, by agreement or otherwise; provided that beneficial ownership of 10% or more of the voting stock of a person shall be deemed to be control. For purposes of this definition, the terms "controlling," "controlled by" and "under common control with" shall have correlative meanings.

"Asset Sale" means:

(1) the sale, lease, conveyance or other disposition of any assets or rights, other than sales of inventory in the ordinary course of business consistent with past practices; provided that the sale, conveyance or other disposition of all or substantially all of the assets of Mrs. Fields and its Subsidiaries taken as a whole will be governed by the provisions of the indenture described above under the caption "Change of Control" and/or the provisions described above under the caption "Merger, Consolidation or Sale of Assets" and not by the provisions of the Asset Sale covenant; and

(2) the issuance of Equity Interests of any of Mrs. Fields' Subsidiaries or the sale of Equity Interests in any of its Subsidiaries.

Notwithstanding the preceding, the following items shall not be deemed to be Asset Sales:

(1) any single transaction or series of related transactions that:

(a) involves assets having a fair market value equal to or less than $1.0 million; or

(b) results in net proceeds equal to or less than $1.0 million;

(2) a transfer of assets between or among Mrs. Fields and its Wholly Owned Subsidiaries,

(3) an issuance of Equity Interests by a Wholly Owned Subsidiary to Mrs. Fields or to another Wholly Owned Subsidiary;

(4) a Restricted Payment that is permitted by the covenant described above under the caption "Restricted Payments";

(5) arrangements providing for the receipt by Mrs. Fields of franchise and royalty fees but not otherwise involving the sale of assets of Mrs. Fields or any of its Subsidiaries (other than inventory in the ordinary course of business); and

(6) a disposition of any Non-Core Stores.

"Beneficial Owner" has the meaning assigned to that term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular "person" (as that term is used in Section 13(d)(3) of the Exchange Act), that "person" shall be deemed to have beneficial ownership of all securities that the "person" has the right to acquire, whether that right is currently exercisable or is exercisable only upon, the occurrence of a subsequent condition.

"Capital Lease Obligation" means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a balance sheet in accordance with generally accepted accounting principles in effect on November 26, 1997.

"Capital Stock" means:

(1) in the case of a corporation, corporate stock;

(2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

(3) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and

(4) any other interest or participation that confers on a person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing person.

"Cash Equivalents" means:

(1) United States dollars;

(2) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality of any of them having maturities of not more than six months from the date of acquisition;

(3) marketable direct obligations issued by any State of the United States or any local government or other political subdivision of any of them rated (at the time of the acquisition of the security) at least "AA" by Standard & Poor's Rating Service or an equivalent rating by Moody's Investors Service, Inc. and having maturities of not more than one year from the acquisition of the security;

(4) certificates of deposit and eurodollar time deposits with maturities of six months or less from the date of acquisition, bankers acceptances with maturities not exceeding six months and overnight bank deposits, in each case, with any domestic commercial bank having capital and surplus in excess of $500 million and a Keefe Bank Watch Rating of B or better or with any registered broker-dealer whose commercial paper is rated at least A-1 by Standard & Poor's Rating Service or an equivalent rating by Moody's Investors Service, Inc.;

(5) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (2) and (4) above entered into with any financial institution meeting the qualifications specified in clause (4) above;

(6) commercial paper rated at least A-1 by Standard & Poor's Rating Service or an equivalent rating by Moody's Investors Service, Inc. and, in each case, maturing within six months after the date of acquisition; and

(7) investments in money market funds all of whose assets consist of securities described in clauses (2) through (6) above.

"Change of Control" means the occurrence of any of the following:

(1) the sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of Mrs. Fields and its Subsidiaries taken as a whole to any "person" (as that term is used in Section 13(d)(3) of the Exchange Act) other than Herbert S. Winokur, Jr. and Capricorn Investors II, L.P. or their Related Parties.

(2) the adoption of a plan relating to the liquidation or dissolution of Mrs. Fields;

(3) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any "person" (as defined above), other than Herbert S. Winokur, Jr. and Capricorn Investors II, L.P. or their Related Parties becomes the Beneficial Owner, directly or indirectly, of more than 50% of the voting stock of Mrs. Fields, measured by voting power rather than number of shares; or

(4) the first day on which a majority of the members of the Board of Directors of Mrs. Fields are not Continuing Directors;

For purposes of this definition, any transfer of an equity interest of an entity that was formed for the purpose of acquiring voting stock of Mrs. Fields will be deemed to be a transfer of that portion of the voting stock as corresponds to the portion of the equity of the entity that has been so transferred.

"Consolidated Cash Flow" means, with respect to any person for any period, the Consolidated Net Income of that person for that period plus:

(1) an amount equal to any extraordinary loss plus any net loss realized in connection with an Asset Sale, to the extent those losses were deducted in computing the Consolidated Net Income; plus

(2) provision for taxes based on income or profits of that person and its Subsidiaries for that period, to the extent that the provision for taxes was deducted in computing the Consolidated Net Income; plus

(3) consolidated interest expense of that person and its Subsidiaries for that period, whether paid or accrued and whether or not capitalized (including, without limitation, amortization of debt issuance costs and original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers' acceptance financings, and net payments, if any, under Hedging Obligations), to the extent that the expense was deducted in computing the Consolidated Net Income; plus

(4) depreciation, amortization (including amortization of goodwill and other intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period) and other non-cash expenses (excluding the non-cash expense to the extent that it represents an accrual of or reserve for cash expenses in any future period or amortization of a prepaid cash expense that was paid in a prior period) of the person and its Subsidiaries for that period to the extent that the depreciation, amortization and other non-cash expenses were deducted in computing the Consolidated Net Income; minus

(5) non-cash items increasing the Consolidated Net Income for that period, in each case, on a consolidated basis and determined in accordance with generally accepted accounting principles in effect on November 26, 1997.

Notwithstanding the preceding, the provision for taxes based on the income or profits of, and the depreciation and amortization and other non-cash charges of, a Subsidiary of the specified person shall be added to Consolidated Net Income to compute Consolidated Cash Flow only to the extent and in the same proportion that the net income of the Subsidiary was included in calculating Consolidated Net Income and only if a corresponding amount would be permitted at the date of determination to be dividended to Mrs. Fields by the Subsidiary without prior governmental approval (that has not been obtained), under the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to that Subsidiary or its stockholders.

"Consolidated Net Income" means, with respect to any specified person for any period, the total of the Net Income of the Person and its Subsidiaries for that period, on a consolidated basis, determined in accordance with generally accepted accounting principles in effect on November 26, 1997; provided that:

(1) the Net Income (but not loss) of any person that is not a Subsidiary or that is accounted for by the equity method of accounting shall be included only to the extent of the amount of dividends or distributions paid in cash to the specified person or a Wholly Owned Subsidiary of the person that is a guarantor;

(2) the Net Income of any Subsidiary shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary or its stockholders;

(3) the Net Income of any person acquired in a pooling of interests transaction for any period prior to the date of the acquisition shall be excluded; and

(4) the cumulative effect of a change in accounting principles shall be excluded.

"Consolidated Net Worth" means, with respect to any person as of any date, the sum of:

(1) the consolidated equity of the common stockholders of the person and its consolidated Subsidiaries as of that date plus

(2) the respective amounts reported on that person's balance sheet as of that date with respect to any series of preferred stock (other than Disqualified Stock) that by its terms is not entitled to the payment of dividends unless those dividends may be declared and paid only out of net earnings in respect of the year of declaration and payment, but only to the extent of any cash received by the person upon issuance of the preferred stock, less

(a) all write-ups (other than write-ups resulting from foreign currency translations and write-ups of tangible assets of a going concern business made within 12 months after the acquisition of such business) subsequent to November 26, 1997 in the book value of any asset owned by the person or a consolidated Subsidiary of the person,

(b) all investments as of that date in unconsolidated Subsidiaries and in persons that are not Subsidiaries (except, in each case, Permitted Investments), and

(c) all unamortized debt discount and expense and unamortized deferred charges as of that date, all of the foregoing determined in accordance with generally accepted accounting principles in effect on November 26, 1997.

"Continuing Directors" means, as of any date of determination, any member of the Board of Directors of Mrs. Fields who:

(1) was a member of the Board of Directors on the date of the indenture; or

(2) was nominated for election or elected to the Board of Directors with the approval of a majority of the Continuing Directors who were members of the Board at the time of the nomination or election.

"Disqualified Stock" means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures or is mandatorily redeemable, under a sinking fund obligation or otherwise, or redeemable at the option of its holder, in whole or in part, on or prior to the date that is 91 days after the date on which the notes mature. Notwithstanding the preceding sentence, any Capital Stock that would constitute Disqualified Stock solely as a result of any maturity or redemption of that Capital Stock shall not constitute Disqualified Stock if that maturity or redemption or redemption complies with the covenant described above under the caption "--Certain Covenants--Restricted Payments."

"Existing Indebtedness" means Indebtedness of Mrs. Fields and its Subsidiaries (including preferred stock of Pretzel Time outstanding on November 26, 1999 but excluding any Indebtedness of Mrs. Fields or any of its Subsidiaries under any credit facility with a maximum total amount of $15.0 million that is permitted under the indenture existing on November 26, 1999) in existence on November 26, 1999, until those amounts are repaid.

"Fixed Charges" means, with respect to any person for any period, the sum, without duplication, of

(1) the consolidated interest expense of the Person and its Subsidiaries for that period, whether paid or accrued (including, without limitation, amortization of debt issuance costs and original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers acceptance financings, and net payments (if any) under Hedging Obligations);

(2) the consolidated interest expense of the Person and its Subsidiaries that was capitalized during that period;

(3) any interest expense on Indebtedness of another person that is guaranteed by that person or one of its Subsidiaries or secured by a Lien on assets of that person or one of its Subsidiaries (whether or not that guarantee or Lien is called upon); and

(4) the product of
(a) all dividend payments, whether or not in cash, on any series of preferred stock of the Person or any of its Subsidiaries, other than dividend payments on Equity Interests payable solely in Equity Interests of Mrs. Fields, times
(b) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax rate of the person, expressed as a decimal, in each case, on a consolidated basis and in accordance with generally accepted accounting principles in effect on August 29, 1998.

"Fixed Charge Coverage Ratio" means with respect to any person for any period, the ratio of the Consolidated Cash Flow of that person for that period to the Fixed Charges of that person for that period. In the event that Mrs. Fields or any of its Subsidiaries incurs, assumes, guarantees or redeems any Indebtedness (other than revolving credit borrowings) or issues preferred stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to that incurrence, assumption, guarantee or redemption of Indebtedness, or that issuance or redemption of preferred stock, as if the same had occurred at the beginning of the applicable four-quarter reference period.

In addition, for purposes of making the computation referred to above:

(1) acquisitions that have been made by Mrs. Fields or any of its Subsidiaries, including through mergers or consolidations and including any related financing transactions, during the four- quarter reference period or subsequent to that reference period and on or prior to the Calculation Date shall be deemed to have occurred on the first day of the four-quarter reference period and Consolidated Cash Flow for that reference period shall be calculated without giving effect to clause (3) of the proviso described in the definition of Consolidated Net Income;

(2) the Consolidated Cash Flow attributable to discontinued operations, as determined in accordance with generally accepted accounting principles in effect on November 26, 1997, and operations or businesses disposed of prior to the Calculation Date, shall be excluded,

(3) the Fixed Charges attributable to discontinued operations, as determined in accordance with generally accepted accounting principles in effect on November 26, 1997, and operations or businesses disposed of prior to the Calculation Date, shall be excluded, but only to the extent that the obligations giving rise to those Fixed Charges will not be obligations of the specified person or any of its Subsidiaries following the Calculation Date; and

(4) the financial information of Mrs. Fields with respect to any portion of the four fiscal quarters prior to generally accepted accounting principles in effect on November 26, 1997 may be adjusted to eliminate certain historical expenses that are not expected to recur after the consummation of the Pretzel Contributions so long as those adjustments are not deemed to be contrary to the requirements of Regulation S-X under the Securities Act by an Accounting Firm.

In calculating the Fixed Charge Coverage Ratio for any period, to the extent that the proceeds from the incurrence of any Indebtedness are to be used to fund the acquisition of Equity Interests or assets in the same or a similar line of business as Mrs. Fields and its Subsidiaries were engaged in on November 26, 1997, including, without limitation, the specialty retail snack- food business, Mrs. Fields may include any pro forma adjustments permitted by Regulation S-X under the Securities Act in its calculation of the amount of Consolidated Cash Flow that relate solely to the acquisition, so long as these pro forma adjustments are not deemed to be contrary to the requirements of Rule 11-02 of Regulation S-X under the Securities Act in writing by an Accounting Firm.

"Hedging Obligations" means, with respect to any person, the obligations of that person under:

(1) interest rate swap agreements, interest rate cap agreements and interest rate collar agreements; and

(2) other agreements or arrangements designed to protect that person against fluctuations in interest or foreign currency exchange rates.

"Indebtedness" means, with respect to any specified person, any indebtedness of that person, whether or not contingent, in respect of:

(1) borrowed money;

(2) evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect of those instruments);

(3) banker's acceptances;

(4) representing Capital Lease Obligations;

(5) the balance deferred and unpaid of the purchase price of any property, except any balance that constitutes an accrued expense or trade payable; or

(6) representing any Hedging Obligations,

if and to the extent any of the preceding (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of the specified person prepared in accordance with generally accepted accounting principles in effect on November 26, 1997. In addition, the term "Indebtedness" includes all Indebtedness of others secured by a Lien on any asset of the specified person (whether or not such Indebtedness is assumed by the specified person) and, to the extent not otherwise included, the guarantee by the person of any Indebtedness of any other person.

The amount of any Indebtedness outstanding as of any date shall be:

(1) the accreted value of the Indebtedness, in the case of any Indebtedness that does not require current payments of interest; and

(2) the principal amount of the Indebtedness, together with any interest on the Indebtedness that is more than 30 days past due, in the case of any other Indebtedness.

"Investments" means, with respect to any person, all investments by that person in other persons (including Affiliates) in the forms of direct or indirect loans (including guarantees of Indebtedness or other obligations), advances or capital contributions (excluding commission, travel and similar advances to officers and employees made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with generally accepted accounting principles in effect on November 26, 1997, provided that an acquisition of assets, Equity Interests or other securities by Mrs. Fields for consideration consisting of common stock of Mrs. Fields shall not be deemed to be an Investment. If Mrs. Fields or any Subsidiary of Mrs. Fields sells or otherwise disposes of any Equity Interests of any direct or indirect Subsidiary of Mrs. Fields such that, after giving effect to the sale or disposition, the person is no longer a Subsidiary of Mrs. Fields, Mrs. Fields shall be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value of the Equity Interests of the Subsidiary not sold or disposed of in an amount determined as provided in the final paragraph of the covenant described above under the caption "Certain Covenants--Restricted Payments".

"Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of that asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof,

any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction), provided that the definition of Lien shall not include any option, call or similar right relating to treasury shares of Mrs. Fields to the extent that the option, call or right is granted:

(1) under any employee stock option plan, employee stock ownership plan or similar plan or arrangement of Mrs. Fields or its Subsidiaries or

(2) in connection with the issuance of Indebtedness permitted to be incurred under the covenant described under the caption "Certain Covenants--Incurrence of Indebtedness and Issuance of Preferred Stock".

"Net Income" means, with respect to any person, the net income (loss) of that person, determined in accordance with generally accepted accounting principles in effect on November 26, 1997 and before any reduction in respect of preferred stock dividends, excluding, however:

(1) any gain (but not loss), together with any related provision for taxes on that gain (but not loss), realized in connection with

(a) any Asset Sale (including, without limitation, dispositions under sale and leaseback transactions) or

(b) the disposition of any securities by the person or any of its Subsidiaries or the extinguishment of any Indebtedness of the person or any of its Subsidiaries; and

(2) any extraordinary or nonrecurring gain (but not loss), together with any related provision for taxes on that extraordinary or nonrecurring gain (but not loss).

"Net Proceeds" means the total cash proceeds received by Mrs. Fields or any of its Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any non- cash consideration received in any Asset Sale but only as and when received), net of the direct costs relating to the Asset Sale (including, without limitation, legal, accounting and investment banking fees, and sales commissions) and any relocation expenses incurred as a result thereof, taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements), amounts required to be applied to the permanent repayment of, or permanent reduction in availability or commitment under, Indebtedness secured by a Lien on the asset or assets that were the subject of the Asset Sale and any reserve for adjustment in respect of the sale price of the asset or assets established in accordance with generally accepted accounting principles in effect on November 26, 1997.

"Non-Core Stores" means the stores listed in Exhibit B to the Indenture.

"Permitted Investments" means:

(1) any Investment in Mrs. Fields or in a Wholly Owned Subsidiary of Mrs. Fields that is a guarantor and that is engaged;

(2) any Investment in Cash Equivalents;

(3) any Investment by Mrs. Fields or any Subsidiary of Mrs. Fields in a person, if as a result of the Investment

(a) the person becomes a Wholly Owned Subsidiary of Mrs. Fields and a guarantor that is engaged in the same or a similar line of business as Mrs. Fields and its Subsidiaries were engaged in on November 26, 1997, including without limitation, the specialty retail snack-food business or

(b) the person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, Mrs. Fields or a Wholly Owned Subsidiary of Mrs. Fields that is a guarantor and that is engaged in the same or a similar line of business as Mrs. Fields and its Subsidiaries were engaged in on November 26, 1997, including without limitation, the specialty retail snack-food business;

(4) any Investment other than a Permitted Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made under and in compliance with the covenant described above under the caption "Repurchase at the Option of Holders -- Asset Sales";

(5) any acquisition of assets solely in exchange for the issuance of Equity Interests (other than Disqualified Stock) of Mrs. Fields;

(6) any Investments in accounts and notes receivable acquired in the ordinary course of business;

(7) any Investments in notes of employees, officers, directors and their transferees and Affiliates issued to Mrs. Fields representing payment of the exercise price of options to purchase common stock of Mrs. Fields;

(8) any Investments by Mrs. Fields in Hedging Obligations otherwise permitted to be incurred under the indenture;

(9) any Investments existing on November 26, 1997 (including, without limitation, a $500,000 loan to Martin E. Lisiewski outstanding as of November 26, 1997); and

(10) any purchase of any and all remaining common stock of Pretzel Time.

"Permitted Liens" means:

(1) Liens securing Indebtedness under a credit facility with a maximum total amount of $15.0 million that is permitted under the indenture that was permitted by the terms of the indenture to be incurred;

(2) Liens in favor of Mrs. Fields;

(3) Liens on property of a person existing at the time the person is merged into or consolidated with Mrs. Fields or any Subsidiary of Mrs. Fields, provided that those Liens were in existence prior to the contemplation of the merger or consolidation and do not extend to any assets other than those of the person merged into or consolidated with Mrs. Fields;

(4) Liens on property existing at the time of acquisition thereof by Mrs. Fields or any Subsidiary of Mrs. Fields, provided that those Liens were in existence prior to the contemplation of the acquisition and do not extend to any assets of Mrs. Fields other than the property so acquired;

(5) Liens to secure the performance of statutory obligations, surety or appeal bonds, performance bonds or other obligations of a like nature incurred in the ordinary course of business;

(6) Liens to secure Indebtedness (including Capital Lease Obligations) permitted by clauses (3) and (10) of the second paragraph of the covenant entitled "Incurrence of Indebtedness" and Issuance of Preferred Stock, provided that, in the case of Indebtedness permitted by clause (3), covering only the assets acquired with that Indebtedness;

(7) Liens existing on November 26, 1997;

(8) Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded, provided that any reserve or other appropriate provision as shall be required in conformity with generally accepted accounting principles in effect on November 26, 1997 shall have been made therefor; and

(9) Liens incurred in the ordinary course of business of Mrs. Fields or any Subsidiary of Mrs. Fields that
(a) are not incurred in connection with the borrowing of money or the obtaining of advances or credit (other than trade credit in the ordinary course of business) and
(b) do not in the total materially detract from the value of the property or materially impair the use thereof in the operation of business by Mrs. Fields or the Subsidiary.

"Permitted Refinancing Indebtedness" means any Indebtedness of Mrs. Fields or any of its Subsidiaries issued in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund other Indebtedness of Mrs. Fields or any of its Subsidiaries, provided that

(1) the principal amount (or accreted value, if applicable) of the Permitted Refinancing Indebtedness does not exceed the principal amount of (or accreted value, if applicable), plus accrued interest on, the Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded (plus the amount of reasonable expenses incurred in connection therewith);

(2) the Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded;

(3) if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is subordinated in right of payment to the notes, the Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and is subordinated in right of payment to, the notes on terms at least as favorable to the holders of notes as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; and

(4) the Indebtedness is incurred either by Mrs. Fields or by the Subsidiary who is the obligor on the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded.

"Public Equity Offering" means a public offering registered under the Securities Act (except for any registration under Form S-8) of common stock of:

(1) Mrs. Fields or

(2) Mrs. Fields Holding to the extent that the net proceeds thereof are contributed to Mrs. Fields as a capital contribution,

provided that the total proceeds from the public offering shall in no event be less than $20.0 million.

"Related Party" with respect to Herbert S. Winokur, Jr. and Capricorn Investors II, L.P. means:

(1) any greater than 50% owned Subsidiary, or spouse or immediate family member (in the case of an individual) of Herbert S. Winokur, Jr. or Capricorn Investors II, L.P. or

(2) trust, corporation, general partnership or other entity, the beneficiaries, stockholders, partners, owners or persons beneficially holding a greater than 50% controlling interest of which consist, or a limited partnership, the general partner of which consists, of Herbert S. Winokur, Jr. or Capricorn Investors II, L.P. and/or any other persons referred to in the immediately preceding clause (1).

"Significant Subsidiary" means any Subsidiary that would be a significant subsidiary as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated under the Securities Act, as that Regulation is in effect on November 26, 1997.

"Stated Maturity" means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which that payment of interest or principal was scheduled to be paid in the original documentation governing that Indebtedness, and shall not include any contingent obligations to repay, redeem or repurchase any that interest or principal prior to the date originally scheduled for the payment thereof.

"Tax Sharing Agreement" means any tax allocation agreement between Mrs. Fields or any of its Subsidiaries with Mrs. Fields or any direct or indirect shareholder of Mrs. Fields with respect to consolidated or combined tax returns including Mrs. Fields or any of its Subsidiaries, but, in each case, only to the extent that

amounts payable from time to time by Mrs. Fields or any Subsidiary under any agreement do not exceed the corresponding tax payments that Mrs. Fields or the Subsidiary would have been required to make to any relevant taxing authority had Mrs. Fields or the Subsidiary not joined in those consolidated or combined returns, but instead had filed returns including only Mrs. Fields and its Subsidiaries.

"Weighted Average Life to Maturity" means, when applied to any Indebtedness at any date, the number of years obtained by dividing:

(1) the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between that date and the making of that payment; by

(2) the then outstanding principal amount of that Indebtedness.

DESCRIPTION OF CERTAIN INDEBTEDNESS

Credit Agreement

Mrs. Fields entered into an Amended and Restated Loan Agreement, dated as of February 28, 1998, with LaSalle National Bank. Under the agreement, LaSalle National Bank will provide Mrs. Fields with a revolving loan commitment of up to $15.0 million until the maturity date of March 31, 2001 or until the agreement is otherwise terminated or accelerated by LaSalle National Bank. Principal amounts due on revolving loans made under the agreement bear interest at Mrs. Fields option at either the Prime rate or LIBOR plus two percent per annum. Any amount of principal or interest that is not paid when due bears interest payable on demand at the default rate of interest, which is the regular interest rate plus two percent. The agreement also provides that LaSalle National Bank may issue letters of credit on behalf of Mrs. Fields in a total amount not to exceed $500,000. The total amount of letters of credit issued plus the total amount of revolving loans outstanding cannot exceed $15.0 million. Substantially all of the assets of Mrs. Fields have been pledged to LaSalle National Bank under the agreement, as a result of which the notes to be issued in the exchange offer will be effectively subordinated to amounts outstanding under the agreement. The agreement contains certain restrictions on, among other things, payments, the incurrence of indebtedness and liens, which are substantially similar to the restrictions in the indenture. As of July 3, 1999, there was $7.0 million outstanding under the agreement. Under the borrowing base, Mrs. Fields is limited to borrowing an additional $ 276,000 in accordance with restrictions of the indenture.

On May 27, 1999, Pretzel Time entered into agreements with LaSalle National Bank under which Pretzel Time borrowed, on May 28, 1999, $1,000,000 in aggregate principal amount from LaSalle. Pretzel Time issued a revolving note to LaSalle to evidence its borrowing, which bears interest at the Prime rate, or Prime plus 2% for any balance payable after the note has matured on June 30, 2000. Pretzel Time has pledged its assets to LaSalle to secure its obligations, and Mrs. Fields has guaranteed Pretzel Time's obligations to LaSalle.