Exhibit 10.14
December 12, 1997
Mr. Xxxx Xxxxxxxx
paradise Bakery & Cafe
0000 Xxxxx Xxx (Xxxxx 000)
Xxxxxxxxxx, Xxxxxxxxxx 00000
Subject: Agreement between Host International, Inc. ("Host") and
Java Centrale, Inc. ("Licensor")
Dear Xxxx:
This letter, when executed on behalf of Licensor will constitute the agreement
(the "Letter Agreement") with Host as of the date above. Assuming that the
terms are agreeable, please execute both originals and return one original to
me.
Background. Licensor has the right and authority to license the use of the
trade name, trademarks and system of the concept listed at Exhibit A (referred
to herein as the "Concept" or "Paradise Bakery"), and the other licensed marks
of Licensor, service marks, copyrights, interior and exterior designs and
specifications ("Marks"). Host is in the business of conducting food and
beverage and merchandise concessions at domestic and international airports,
tollroads, malls (but only those instances when a mall owner or developer is
seeking either a master concessionaire for operation of a food court, or a
master concessionaire for another multiple concept area in such mall), stadiums
& arenas, and other off-airport locations )the "Locations"). The parties desire
to enter into this Letter Agreement for the purpose of creating a binding
obligation on each party with respect to future development opportunities for
the Concept.
1. FORM AGREEMENT. Host and Licensor will consider development of
licensed sites for the Concept in Host's Locations, including but not
limited to domestic and international airport concessions ("Airport
Locations"), tollroad concessions ("Tollroad Locations"), malls ("Mall
Locations"). Within the next sixty (60) days the parties will agree
upon a form of license or franchise agreement for each Location (the
"Form Agreement") to document the agreement of the parties for each
Location developed during the term of this Letter Agreement. Host
may, in its sole discretion, designate an affiliate of Host to hold or
be transferred the site-specific Form Agreement, so that the entity
which operates the Concept at the Location will be the same entity
which holds the rights to concession space under the ground lease or
master concession agreement for the Location. By way of example, host
and Licensor acknowledge that the Form Agreement for mall Locations
would ordinarily be entered into in the name of Host Marriott Services
USA, Inc., while Host Marriott Tollroads, Inc. may be the entity which
holds or is transferred the rights to operate a Paradise Bakery
facility at certain Tollroad Locations.
Exhibit 10.14
2. INCLUSION IN PORTFOLIO; RENEWAL RIGHTS; EXCLUSIVITY. The parties
hereby agree and acknowledge that the following shall apply to Host
and Licensor regarding the Concept (or other later version of the
Concept) and the parties' relationship for all Locations (except that
Mall Locations are subject to the additional provisions of Subsection
2(c) below):
a. New Locations. New Locations (i.e. those where Licensor has
not previously granted Host a Form Agreement) are governed by
this Subsection 2(a). For terms applicable to Locations where
Licensor has granted Host a Form Agreement, see Subsection 2(b).
i. Consideration for this Letter Agreement. Licensor
recognizes that Host is a developer of real estate at
Locations pursuant to master concession agreements which
frequently provide Host the exclusive right to offer for
sale food and beverages. The Licensor and Host now desire
that some of the available square footage at one or more of
the Locations be operated by Host, subleased by Host to an
entity authorized to operate the Concept at the
Locations(s). Host has agreed to include Licensor in its
portfolio of available brands for development of the Concept
at its Locations, in return for this Letter Agreement, which
provides certain assurances to Host, in the form of a
legally binding commitment from the Licensor and its
affiliates as provided in this Section 2.
ii. Right to First Offer. The Locations include but are
not limited to Airport Locations which are typically put out
to bid or for a request for proposals ("RFP") by the City,
County or other entity controlling the Airport; Tollroad
Locations which are typically put out to bid or RFP by an
agency of the applicable state; or mall Locations which seek
a master concessionaire for operation of multiple locations
in the mall food court or other areas subject to a master
concession agreement (collectively a "Mall Location master
Concessionaire"). Host is willing to open these
opportunities to Licensor for consideration on a
case-by-case evaluation of opportunities by Host, in
consideration of which Licensor agrees:
A. If there is a bid or RFP pending at a
location, Licensor agrees that it shall not
directly or indirectly permit the Concept to be
included in the proposal of any other entity than
host, unless Host has failed to notify the
Licensor that the Concept has been included in
such bid or RFP. Host's deadline for notice is
the lesser of two (2) months prior to the
submission date, or a date which is one-half the
number of days between the public release of the
request for proposals and the bid/RFP submission
date (the Deadline").
Exhibit 10.14
If Host fails to provide such notice by the
deadline, Licensor is free to submit a bid or
proposal in response to the RFP.
B. Rejection by the Licensor. If Host provides
notice to the Licensor that the Concept will be
included in Host's proposal, the Licensor will
have five (5) days to reject Host's notice. In
the event that Licensor has declined the option to
have the Concept included in Host's bid or
proposal, Licensor will not pursue such Location
with another party or on its own, or otherwise
permit the Concept in any other bid or proposal
for concessions at such Location.
C. Acceptance of Option. If Licensor accepts the
option to become part of the bid or proposal for a
Location by Host or its affiliates, host shall
promptly notify Licensor of whether or not the
proposal was awarded to host. If the bid or
proposal was not awarded to host, Licensor shall
not thereafter, directly or indirectly, enter into
an agreement, or otherwise permit, the use of the
Licensor's marks at the Location or Locations
which were the subject of the bid or proposal.
D. Bids and Proposals for which Host is
Ineligible. The Licensor recognizes that the
entities announcing an opportunity at one of the
Locations (i.e. at a commercial airport or
Tollroad in North America, or at a proposal for a
Mall Location operated by mall Master
Concessionaire) may announce opportunities for
which Host is ineligible. For example, an airport
authority may release an RFP which has a master
concessionaire component and a component which has
been set aside for minority business enterprises
("MBE's"), or it may release two or more separate
RFPs. Licensor hereby agrees that (unless Host
has previously indicated that Licensor's Concept
will not be in Host's proposal) is will cause
irreparable harm to Host for Licensor to be a part
of a proposal other than Host's for a Location,
and it will reduce Host's likelihood of winning
the award of such RFP to have the Concept in
multiple bids/proposals.
E. Opportunities Not Awarded in a Bid or Proposal
Process. If Licensor has an opportunity to
develop a Concept at a Location where host (and
its affiliates) have no Form Agreement, and if
such opportunity is not offered pursuant by public
bid or award process, Licensor shall
Exhibit 10.14
notify Host of the opportunity and shall offer
Host a right of first refusal to act as Licensor's
licensee/franchisee for such Location. Host shall
have thirty (30) days following receipt of all
relevant information regarding such potential
site, to accept or reject development of such site
under the same terms and conditions as the Form
Agreement. If, after Host declines such
opportunity, Licensor desires to grant a
license/franchise to a party other that Host or
its affiliates under terms more favorable than
those in the Form Agreement, Licensor shall first
offer such improved terms to Host, and Host shall
have thirty (30) days to accept or reject such
Location. Notwithstanding the foregoing, Host
agrees that this paragraph does not apply to all
malls; it applies only to those instances when a
mall owner or developer is seeking either a master
concessionaire for operation of a food court, or a
master concessionaire for another multiple concept
area in such mall.
b. Locations Where Host (or one of its affiliates or
subcontractors) has a Form Agreement from Licensor. Each of the
Form Agreements will include: a provision allowing host (or the
affiliate or subcontractor of Host) to extend the term of the
license/franchise agreement for any renewal or extension of the
underlying concession agreement; and a provision allowing Host a
radius restriction precluding a Licensor form authorizing use of
the Marks by a party other than Host within the Location.
c. Additional Mall Provisions. With regard to Mall Locations,
in addition to other restrictions contained herein, the parties
agree that if Licensor becomes aware of an opportunity for a
master lease to develop food and beverage facilities for a food
court or similar multi-concept areas, Licensor shall notify Host
of such opportunity pursuant to the notice provision of this
Agreement. Licensor continues to have the right to operate a
Paradise Bakery restaurant in a mall, so long as the site is not
then being developed or leased by a master concessionaire/master
lessee of a mall food court/mall. In malls where there is a
master concessionaire/master lessee of a mall food court/mall,
Host shall have the same limited exclusivity for Paradise Bakery
as it has in Airport Locations or Tollroad Locations pursuant to
this subsection 2(b), above, subject to any territorial rights
granted by Licensor prior to the effective date of this
Agreement, as set forth in a letter provided to Host at the time
of execution of this Letter Agreement.
3. TERM. The term of the Letter Agreement shall commence effective as of
the date first above written and shall terminate December 31, 2002;
except that Host shall have the option to extend this Letter Agreement
for three (3) additional terms of
Exhibit 10.14
five (5) years each upon written notice not less than thirty (30) days
prior to the expiration of the then-current term. The Form Agreements
shall continue in full force and effect for their individual terms,
notwithstanding any termination of this Letter Agreement.
4. OTHER TERMS. Notwithstanding any other provision of this Letter
Agreement, or any provision of the For Agreement, the parties agree
that:
a. Host and its subsidiaries and affiliates are experienced
Hosts of food and beverage concessions, and Host is the holder of
numerous competing licenses (e.g., for pizza, Host operates both
Pizza Hut and Sbarro concepts). Licensor acknowledges and agrees
that Host shall not be prohibited from developing its own
concept, operating other such concepts, or granting others the
right to operate competing concepts.
b. At Host's option. Host may designate a minority business
enterprise ("MBE") to operate a Location, and in such event,
Licensor shall, subject to compliance with applicable law and the
conditions described below, take all steps necessary to assure
that such MBE is provided a Paradise Bakery Form Agreement, as
attached hereto. In the alternative, Host may assign any such
Form Agreement, subject to compliance with applicable law and the
conditions described below, to any of Host's MBE to Licensor and
Licensor shall have the opportunity to perform Licensor's normal
approval and due diligence investigation with regard to such MBE,
in accordance with Licensor's standard policies and practices.
Licensor shall not be required to enter into the Form Agreement
with a proposed MBE unless the MBE meets Licensor's then-current
criteria for new owners of Paradise Bakery restaurants, as
determined by Licensor in its discretion. Notwithstanding the
foregoing, Host may assign or transfer any Form Agreement to
joint venture or other entity, such as a joint venture with a
DBE, so long as Host retains at least fifty and one-tenth percent
(50.1%) ownership of assignee or transferee.
c. There shall be no press releases without the mutual written
agreement of the parties.
d. Notices issued hereunder shall be by certified or registered
mail, return receipt requested, to the addresses first listed
above. Notices sent in accordance with this Section shall be
deemed effective on the date of dispatch, and an affidavit of
mailing or dispatch, executed under penalty of perjury, shall be
deemed presumptive evidence of the date of dispatch.
e. The parties agree that the interpretation of this Agreement
and the rights and liabilities of the parties hereto shall be
governed by the laws of the state of Delaware. The prevailing
party in any litigation, arbitration or other
Exhibit 10.14
proceedings shall be ensiled to payment of its reasonable costs,
including attorney's fees.
f. The rights and remedies of either party hereunder shall not
be mutually exclusive (i.e., the exercise of one or more of the
provisions hereof shall not preclude the exercise of any other
provisions hereof). Each party confirms that damages at law will
be an inadequate remedy for a breach or threatened breach of any
provision hereof, the respective rights and obligations hereunder
shall be enforceable by specific performance, injunction or other
equitable remedy, but nothing herein contained is intended to,
nor shall it, limit or affect any rights of law or by stature or
otherwise of any party aggrieved as against the other for a
breach or threatened breach of any provision hereof, it being the
intent of the parties that the respective rights and obligations
of the parties be enforceable in equity as well as at law.
5. ENTIRE AGREEMENT. This Letter Agreement and the Addendum to this
Letter Agreement, the Existing License Agreement, and the Form
Agreement (with form addendum) attached hereto, constitute the entire
agreement between the parties, superseding any other written and oral
agreements between the parties. If any article, section, provision,
term or condition of the Agreement is held to be invalid by a court of
competent jurisdiction, such article, section, provision term or
condition shall be reformed to the extent necessary to be held valid,
and the parties agree that the remainder of this Agreement shall not
be affected thereby.
Assuming that you agree with the terms of this Letter Agreement, please
have both originals executed and returned to the following notice address
for Host:
Host International, Inc.
Third Floor, Mail Stop 17
0000 Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Vice President and
Chief Counsel, Development/Brands
Dept. 72/928.83
Sincerely,
Xxxxx X. Xxxxxxx
Senior Vice President
Concept Portfolio
Exhibit 10.14
THE FORGOING TERMS OF THIS LETTER AGREEMENT, AND THE ATTACHED FORM AGREEMENT ARE
HEREBY AGREED TO, AS OF THE DATE FIRST ABOVE WRITTEN, BY:
JAVA CENTRALE, INC.
Attest: /s/ Xxxxxxx Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
---------------------- ------------------------
Title: Vice President
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Exhibit 10.14
EXHIBIT A
The Trade Name and Trademarks
Under the Franchise Agreement, Paradise authorizes you to operate a
Bakery & Cafe utilizing the xxxx "Paradise Bakery & Cafe" and such
other trade names, service marks and trademarks designated for use by
you as are now designated and may be designated and/or changed in the
future by Paradise. You may only use the marks of Paradise as
instructed by paradise. The marks under the Franchise Agreement may
be changed, deleted, or replaced.
United States Patent Office Trademark Registrations. No "Paradise
Bakery & Cafe" marks have been registered as of the date of this
Offering Circular. The following marks of Paradise have been
registered with the United States Patent and Trademark office, all
required affidavits have been filed as of the date of this offering
circular.
1. The xxxx "Paradise Bakery" registration number 1,466,754, issued
November 24, 1987 on the principal register for restaurant
services and food carry out services in Class 42. It is not yet
subject to renewal.
2. The xxxx "Paradise Bakery" registration number 1,543,798, issued
June 13, 1989 on the principal register for carbonated drinks for
consumption and off the premises in Class 32. It is not yet
subject to renewal.
3. The xxxx "Paradise Bakery Unique Quality" and design,
registration number 1,482,003, issued March 22, 1988 on the
principal register for restaurant services and food carry out
services in Class 42. It is not yet subject to renewal.
4. The xxxx "Paradise Bakery & Cafe" registration number 1,971,471,
issued April 30, 1996 on the principal register for restaurant
services, retail bakery store services, and food carry out
services in Class 42. It is not yet subject to renewal.
Trademark Filings. Paradise has filed for the following additional
marks:
1. The xxxx "Paradise Bakery Unique Quality" and design, serial
number 74/692634, filed 06/23/95, for restaurant services, retail
bakery store services, and food carry out services in Class 42.
This xxxx has been approved for publication.
