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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(b) attached h
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