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EXHIBIT 10.3
TRADEMARK LICENSE AGREEMENT
THIS TRADEMARK LICENSE AGREEMENT (this "Agreement") is made and
entered
into as of February 10th, 2005, by and
between Gloria Jean's Gourmet Coffees
Corp., an Illinois corporation
("Licensor"), and Gloria Jean's Gourmet Coffees
Franchising Corp., an Illinois corporation
("GJGCFC"), on the one hand, and
Gloria Jean's Coffees Holdings Pty. Ltd., a
corporation organized under the laws
of Australia ("Licensee"), Gloria Jean's
Coffees International Pty. Ltd., a
corporation organized under the laws of
Australia ("GJCI"), Jireh International
Pty. Ltd., a corporation organized under
the laws of Australia ("Jireh"), and
Jireh Group Pty. Ltd., a corporation
organized under the laws of Australia
("Jireh Group," and together with GJCI and
Jireh, the "Jireh Parties").
WHEREAS, the parties hereto have entered into that certain
Asset
Purchase Agreement, dated December 5, 2004
(the "Asset Purchase Agreement"),
pursuant to which Licensee has agreed to
purchase certain assets of Licensor, to
assume certain liabilities of Licensor, and
to license the use of the Marks (as
defined below) from Licensor;
WHEREAS, Licensor is the owner of the Australian trademark
applications
(collectively, the "Australian Marks")
identified on Exhibit A attached hereto;
WHEREAS, Licensor is the owner of the United States trademarks
and
trademark applications (collectively, the
"Guam Marks") identified on Exhibit B
attached hereto;
WHEREAS, the Australian Marks and the Guam Marks are
collectively
referred to herein as the "Marks;"
WHEREAS, Licensee seeks to acquire the right to use the Marks in
the
field of gourmet coffees and related
products and services (the "Field") and the
goodwill associated with the Marks; and
WHEREAS, this Agreement is being entered into pursuant to Article V
of
the Asset Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing, and other good
and
valuable consideration, the receipt and
sufficiency of which are hereby
acknowledged, the parties hereto agree as
follows:
1. Licenses.
(a) Licensor hereby grants to Licensee the exclusive license
to use the Guam Marks in Guam in connection
with Licensee's sale of products and
services to be used or consumed in Guam
(and not for export to the United
States) in the Field (the "Guam License").
In consideration for the Guam
License, Licensee and the Jireh Parties
shall be jointly and severally
responsible for the payment of license fees
to Licensor in the amounts and on
the dates reflected on Schedule 1(a)
attached hereto (the "Guam License Fee
Payments"). The Guam License granted herein
includes the right of Licensee to
grant sublicenses to use the Guam Marks in
Guam in accordance with the terms and
conditions of this Agreement and the Brand
Management Agreement (as defined in
the Asset Purchase Agreement).
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(b) Licensor hereby grants to Licensee the exclusive license
to use the Australian Marks in Australia in
connection with the granting of
franchise rights and the Licensee's sale of
products and services in the Field
(the "Australian License"). In
consideration for the Australian License,
Licensee and the Jireh Parties shall be
jointly and severally responsible for
the payment of license fees to Licensor in
the amounts and on the dates
reflected on Schedule 1(b) attached hereto
(the "Australian License Fee
Payments"). The Australian License granted
herein includes the right of Licensee
to grant sublicenses to use the Australian
Marks in Australia in accordance with
the terms and conditions of this Agreement
and the Brand Management Agreement.
2. Security for
Payments. As security for the payment of the Guam
License Fee Payments and the Australian
License Fee Payments (collectively, the
"License Payments"), and for the payments
due under the Consulting Agreement and
the Roasting License Agreement (each, as
defined in the Asset Purchase
Agreement, and, together with this
Agreement, referred to herein as the
"Post-Closing Payment Agreements"),
Licensee and the Jireh Parties shall provide
the following for the benefit of
Licensor:
(a)
Concurrent with the execution of this Agreement, Licensee
and the Jireh Parties shall obtain and
deliver to Licensor two irrevocable
documentary letters of credit (each, a
"Letter of Credit") from National
Australia Bank Ltd. (the "Bank") in favor
of Licensor, each in the amount of
US$500,000 and expiring no earlier than
August 30, 2005 and February 28, 2006,
respectively, and otherwise on the terms
and substantially in the form of
Exhibit C attached hereto. Notwithstanding
the fact that, pursuant to Schedule
1(a) and Schedule 1(b) attached hereto, the
License Payments due to Licensor
under this Agreement are due on January 31
of each year hereafter (with January
31, 2011 being the date of the last
payment), the parties acknowledge that it is
the intent of the parties that Licensor
will receive US$500,000 of the amount
due approximately six (6) months prior to
the date it is due under this
Agreement via a documentary letter of
credit issued by the Bank. Furthermore,
notwithstanding the fact that the payment
of the License Payments is currently
contemplated to be made to Licensor using
the Letter of Credit mechanism,
Licensee's obligation to make the License
Payments on January 31 each year
(until January 31, 2011) is an absolute
obligation, regardless of whether there
are Letters of Credit in place to make such
payments.
(ii) Licensee shall use commercially reasonable
efforts to renew each Letter of Credit as
soon as practicable after it is fully
drawn upon to effect the intent of the
parties as described above until such
time as all amounts due pursuant to the
Post-Closing Payment Agreements have
been paid in full.
(b) Licensee and GJCI hereby grant to Licensor and GJGCFC a
security interest in the Acquired Assets,
which security interest shall be
subject and subordinate only to the lien of
the Bank in the Acquired Assets.
Concurrent with the execution of this
Agreement, Licensee and the Jireh Parties
shall execute and deliver to Licensor and
GJGCFC: (i) a Deed of Charge in the
form of Exhibit D attached hereto to
evidence the security interest granted
thereby; and (ii) a Guarantee and Indemnity
Deed in the form of Exhibit E
attached hereto.
(c) Licensee and the Jireh Parties authorize Licensor and
GJGCFC to file a Form UCC-1 with the
Secretary of State of the State of
California with respect to the Acquired
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Assets, and agree to file the Australian
counterpart to such form in Australia
promptly after the execution and delivery
of the Deed of Charge.
3. Quality Control. Licensee agrees that its use of the Marks will
be
consistent with the quality currently
associated with Licensor's products and
services, that Licensee will cooperate with
Licensor in addressing any material
quality concerns reasonably raised by
Licensor, and that, in addition to the
terms and conditions contained herein, the
Brand Management Agreement shall also
govern the Licensee's use of the Marks.
4. Infringement By Third Parties. Licensee shall have the
obligation to
enforce the Australian Marks against
potential infringing third parties and
shall be responsible for all expenses and
costs related to the protection and
enforcement of the Australian Marks.
Licensor shall have the obligation to
enforce the Guam Marks against potential
infringing third parties; provided that
Licensee shall be responsible for all
expenses and costs related to the
protection and enforcement of the Guam
Marks with respect to Guam. Licensee
agrees to notify Licensor, and Licensor
agrees to notify Licensee, of any
potential acts of infringement of the Marks
by third parties as promptly as such
may come to the attention of Licensee or
Licensor, as the case may be.
5. Term. Unless terminated earlier by Licensor in accordance
with
Section 6(b) hereof, this Agreement shall
commence on the date hereof and shall
continue until the Marks are transferred to
Licensee in accordance with the
terms of Section 1.8 of the Brand
Management Agreement of even date herewith.
Notwithstanding the foregoing or Section
1.8 of the Brand Management to the
contrary, upon the payment by Licensee to
Licensor of the Final Australian
License Fee Payment (as defined in Schedule
1(
