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EXHIBIT 10.3
LICENSE AND CREDIT ENHANCEMENT AGREEMENT
THIS LICENSE AND CREDIT ENHANCEMENT AGREEMENT ("Agreement") is entered
into effective as of the ____ day of May, 2000, between Cafe Odyssey, LLC, a
Minnesota limited liability company ("Licensor"), and Odyssey Restaurants, LLC,
a Minnesota limited liability company ("Licensee"):
WITNESSETH:
WHEREAS, Licensor expects to acquire from PopMail.com, Inc.
("PopMail") the Cafe Odyssey Restaurant located in the Mall of America in
Bloomington, Minnesota and the Cafe Odyssey Restaurant located in the Denver
Pavilions Shopping Center in Denver, Colorado (the "Existing Cafe Odyssey
Restaurants"); and
WHEREAS, Licensor also expects to acquire from PopMail certain
intellectual property rights which are used in connection with the Existing Cafe
Odyssey Restaurants; and
WHEREAS, Licensee desires to obtain the right to develop new Cafe
Odyssey Restaurants and, in connection therewith, Licensee desires to obtain a
perpetual nonexclusive license to use such intellectual property rights; and
WHEREAS, Licensee also wants Licensor to provide certain financial
assistance and credit enhancements in connection with Licensee's development of
new Cafe Odyssey Restaurants; and
WHEREAS, Licensor and Licensee have entered into a Management
Agreement effective as of even date herewith, pursuant to which Licensee will
manage the Existing Cafe Odyssey Restaurants on behalf of Licensor upon the
terms and subject to the conditions thereof (the "Management Agreement"); and
WHEREAS, as a condition to entering into the Management Agreement,
Licensee has required Licensor to enter into this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. GRANT OF LICENSE. Licensor hereby grants unto Licensee a perpetual
nonexclusive right, upon the terms and subject to the conditions hereinafter set
forth, to use all intellectual property rights including, without limitation,
all trade names and trademarks which are developed for use in connection with
Cafe Odyssey Restaurants and which are now or hereafter owned by
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Licensor (the "Intellectual Property Rights"), but only in connection with any
Cafe Odyssey Restaurants owned by Licensee. This license is coupled with an
interest and is irrevocable and nonterminable except in accordance with the
terms hereof. Licensor makes no representation or warranty to Licensee with
respect to the validity, or any other aspect, of the Intellectual Property
Rights and Licensor shall have no obligation to register, take any actions to
obtain registration of, or continue registration of any Intellectual Property
Rights under applicable law. In addition, Licensor shall not be required to
defend Licensee against any infringement, unfair competition or other claim
respecting Licensee's use of any Intellectual Property Rights. Licensee agrees
not to contest Licensor's sole right to register, use or to license the
Intellectual Property Rights to others except to the extent necessary to protect
Licensee's rights under this Agreement. Upon any termination of this Agreement,
Licensee shall execute such documents and perform such acts as may be reasonably
necessary to evidence Licensee's disassociation from Licensor and the fact that
Licensee has ceased using any of the Intellectual Property Rights and that
Licensee has no further interest or right thereto.
2. LIMITATIONS ON LICENSE. Notwithstanding anything to the contrary in
this Agreement, Licensee shall have no right to assign the license rights
granted in Section 1 above without first obtaining the written consent of
Licensor, which consent shall be granted only if the proposed assignee is
acquiring a Cafe Odyssey Restaurant owned by Licensee and such proposed assignee
agrees in a writing reasonably acceptable to Licensor to be bound by such
limitations as are reasonably necessary to protect the Intellectual Property
Rights. The license of rights granted to Licensee in Section 1 above shall
terminate and may no longer be used by Licensee on the date on which Licensee no
longer owns any Cafe Odyssey Restaurant.
3. MODIFICATIONS TO RESTAURANT CONCEPT. Although Licensee shall have the
right, in connection with its operation of any new Cafe Odyssey Restaurants, to
modify the concepts used in connection with and the ambiance of the Existing
Cafe Odyssey Restaurants, Licensee shall not have the right to modify such
concepts or ambiance in a manner that would materially adversely affect the
value of the Existing Cafe Odyssey Restaurants or the Intellectual Property
Rights.
4. DEVELOPMENT RIGHTS. Licensor hereby grants Licensee the exclusive
right prior to the third anniversary of the Management Agreement (the "Exclusive
Development Rights Expiration Date"), to develop, own and operate the next four
(4) Cafe Odyssey Restaurants in any location (other than the Twin Cities and the
Denver metropolitan areas). In addition, Licensee shall have the right to
develop, own and operate a total of four (4) new Cafe Odyssey Restaurants
(including among such four (4) restaurants any new Cafe Odyssey Restaurants
which are opened prior to the Exclusive Development Rights Expiration Date)
whether or not any of such restaurants are opened prior to the Exclusive
Development Rights Expiration Date. Further, if, after Licensee has developed
the four (4) new Cafe Odyssey Restaurants provided for in this Section, Licensee
desires to develop, own and operate additional new Cafe Odyssey Restaurants (the
"Additional New Cafe Odyssey Restaurants"), Licensee shall request Licensor's
approval therefor, which approval shall not be unreasonably withheld,
conditioned or delayed. Notwithstanding anything herein to the contrary,
Licensor shall not be obligated to guarantee a lease for any such Additional New
Cafe Odyssey Restaurant.
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5. LICENSOR'S APPROVAL RIGHTS. Notwithstanding anything to the contrary
in this Agreement, Licensee's right to develop new Cafe Odyssey Restaurants
shall be conditioned upon Licensee's obtaining Licensor's prior written approval
of the proposed location and the terms and conditions of any lease for such
site, which approval will not be unreasonably withheld, conditioned or delayed.
6. GUARANTEES OF LICENSOR. Licensor hereby agrees to execute and deliver
a full, unconditional guarantee of any lease for a new Cafe Odyssey Restaurant
(including the Dearborn Lease as described in Section 13 of this Agreement)
which is entered into prior to the Exclusive Development Rights Termination
Date, but only if Licensor has approved such lease agreement, which approval
will not be unreasonably withheld, conditioned or delayed; provided that, in no
event, shall Licensor be required to guarantee more than four (4) leases for new
Cafe Odyssey Restaurants pursuant to this Section. Notwithstanding the
foregoing, Licensor's obligation to enter into such guarantees shall terminate
and have no further force and effect on the date the Management Agreement
expires or is terminated for any reason other than because of Licensor's default
in the performance of its obligations under the Management Agreement or because
the Existing Cafe Odyssey Restaurants are closed by reason of casualty or
condemnation or are sold, whether through a sale of assets or equity interests,
or the date on which substantially all of the assets of, or the equity interests
in Licensor are sold.
7. NONCOMPETITION COVENANT. Licensor agrees that it shall not, either
directly or indirectly, develop, or license or grant to any other entity the
right to develop any Cafe Odyssey Restaurant in any resort, theme park or
metropolitan area in which Licensee owns or is developing a Cafe Odyssey
Restaurant. Further, Licensor shall not develop, directly or indirectly, or
license or grant to any other entity the right to develop, any Cafe Odyssey
Restaurant in any location until the earlier of (i) the Exclusive Development
Rights Expiration Date, or (ii) the date on which Licensee has developed four
(4) new Cafe Odyssey Restaurants.
8. BRIDGE LOAN AND PLEDGE. If Licensee proceeds with the development and
construction of the proposed Cafe Odyssey Restaurant pursuant to the Dearborn
Lease (as defined in Section 13 of this Agreement) Licensor agrees, if requested
by Licensee, to loan Licensee up to Five Hundred Thousand Dollars ($500,000.00)
to pay for the cost of leasehold improvements for such restaurant; provided that
(i) such loan proceeds shall be disbursed in a manner reasonably acceptable to
Licensor and shall be used only to pay up to the last $500,000.00 in leasehold
improvement construction costs, (ii) such loan shall be documented (at the time
the first of such loan proceeds are to be drawn) in a manner reasonably
satisfactory to Licensor, which documentation shall include, but not be limited
to, a negotiable promissory note from Licensee to Licensor which will provide
for interest to accrue at a rate of nine percent (9%) per annum and a maturity
date of December 31, 2000, and a collateral pledge of options (which have an
aggregate value equal to 150% of the amount of such loan on the date the loan
documents are executed) to acquire stock in PopMail.com, Inc. held by Ronald K.
Fuller or Thomas W. Orr to secure such loan, and (iii) no portion of the loan
proceeds shall be disbursed prior to July 15, 2000. If Licensee enters into the
Dearborn Lease, Licensor also agrees to pledge as collateral the cash flow from
the Existing Cafe
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Odyssey Restaurants in order to secure repayment of up to but not more than
$1,300,000 in loans which are used to pay for any leasehold improvements to the
premises to be demised under the Dearborn Lease; provided that any such security
interest in such cash flow shall be subordinate in all respects to any of
Licensor's existing credit facilities and any refinancings thereof.
9. LEGAL PROCEEDINGS. If any claims, demands, suits or other legal
proceedings are instituted by any person against Licensor or Licensee with
respect to the subject matter of this Agreement, each of the parties hereto
shall cooperate with each other and provide reasonable assistance in the defense
or other disposition thereof.
10. NOTICES: AUTHORIZED REPRESENTATIVES.
10.1 NOTICES. Any notice or report provided for or permitted under
this Agreement shall be personally served, telecopied or sent by overnight
courier or U.S. Mail and shall be deemed given: (a) if served in person, when
served; (b) if telecopied, on the date of transmission if before 3:00 p.m.
(Minnesota time) on a business day; provided that a hard copy of such notice is
also sent pursuant to (c) or (d) below; (c) if by overnight courier, on the
first business day after delivery to the courier; or (d) if by U.S. Mail,
certified or registered mail, return receipt requested on the third (3rd) day
after deposit in the mail postage prepaid, if properly addressed (i) if to
Licensor, to PopMail.com, Inc., c/o BaryCenter Capital Management,8260
NorthCreek Drive, Suite 140, Cincinnati, OH 45236, Attention: Stephen D. King,
President, with a copy to Maslon Edelman Borman & Brand, LLP, 3300 Norwest
Center, Minneapolis, MN 55402, Attention: Counsel for PopMail.com, Inc. or (ii)
if to Licensee, to Odyssey Restaurants, LLC, a Minnesota limited liability
company, Attention: Thomas W. Orr, 500 16th Street, Suite 350, Denver, CO 80202,
with a copy to Senn Lewis & Visciano, 1801 California Street, Suite 4300,
Denver, CO 80202, Attention: Mark A. Senn, Esq., or to such other address as
Licensor may specify in a written notice to Licensee or Licensee may specify in
a written notice to Licensor in accordance with this Section 10.1.
10.2 AUTHORIZED REPRESENTATIVES. Subject to the other requirements of
this Agreement, Licensor and Licensee agree that the following persons are
entitled to act on its behalf in dealing with the other party and such other
party shall be entitled to rely thereon:
On behalf of Licensor: Steven D. King
On behalf of Licensee: Thomas W. Orr
Ronald K. Fuller
Licensor and Licensee shall each have the right to designate additional or
substitute persons as authorized representatives by written notice to the other.
11. NO FRANCHISE. It is the intention of the parties hereto that this
Agreement does not constitute a franchise agreement and that the relationship
between them shall not be deemed to be
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that of franchisor and franchisee. Each party agrees to do such things, perform
such acts, and make, execute, acknowledge and deliver such documents as may be
reasonably necessary or proper to insure that this Agreement will not be deemed
to be or treated as a franchise agreement, and that the relationship between the
parties will not be deemed to be or treated as a franchisor-franchisee
relationship, by any person, entity, court or any governmental or
quasi-governmental agency.
12. DISCLAIMER OF RELATIONSHIP. The relationship between Licensor and
Licensee shall be that of licensor-licensee only. No term in this Agreement and
no course of dealing between the parties shall be deemed to create any
relationship of agency, partnership, joint venture or franchisor-franchisee, nor
to create any relationship of parent-subsidiary or any other affiliation between
the parties.
13. DEARBORN LEASE. Prior to the date of this Agreement, Maslon Edelman
Borman & Brand, the attorneys for PopMail, have been negotiating a lease for a
new Cafe Odyssey Restaurant for premises to be located in the Fairlane Town
Center in Dearborn, Michigan (the "Dearborn Lease"). Contemporaneously with the
execution of this Agreement, PopMail is assigning to Licensee any and all rights
which PopMail may have with respect to the Dearborn Lease. Licensee hereby
acknowledges that if Licensee enters into the Dearborn Lease, Licensee shall not
be relying in any manner upon the advice or counsel of Maslon Edelman Borman &
Brand with respect to the Dearborn Lease. Licensee further acknowledges that it
is experienced in the acquisition, development, leasing, ownership and
management of restaurants; that to the extent that Licensee's own expertise or
experience with respect to any aspect of the Dearborn Lease or the location to
be demised thereunder is insufficient to enable Licensee to reach an informed
conclusion with respect to the desirability of entering into the Dearborn Lease,
Licensee will have had the opportunity to engage, prior to the execution of the
Dearborn Lease, the services of persons qualified to advise Licensee with
respect to such matters including legal counsel of Licensee's choosing.
14. MISCELLANEOUS.
14.1 SEVERABILITY. Wherever possible, each provision of this Agreement
shall be interpreted so as to be effective and valid under applicable law, but
if any provision hereof shall be prohibited by or invalid under such law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Agreement.
14.2 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be effective only upon delivery and thereafter
shall be deemed an original, and all of which shall be taken to be one and the
same instrument to the same effect as if all parties hereto had signed the same
signature page. Any signature page of this Agreement may be detached from any
counterpart of this Agreement without impairing the legal effect of any
signatures thereon and may be attached to another identical counterpart of this
Agreement, but having attached to it one or more additional signature pages.
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14.3 NO BLANKET WAIVER. In the event of a waiver of a default by
either party under this Agreement, such waiver shall not operate as a waiver of
any subsequent default.
14.4 ARBITRATION. Any disputes that may arise between the parties
under this Agreement, or with respect to or arising out of subject matter
hereof, shall be submitted to arbitration in the state of, and pursuant to the
laws of, Minnesota under the following procedure:
(1) Any party hereto (the "Initiating Party") can declare a dispute to
be irreconcilable, thereby invoking binding arbitration, by giving notice
thereof in accordance with the provisions of Section 10 hereof. Such notice
shall identify the Initiating Party's designated independent arbitrator. Each
arbitrator appoint pursuant to this Section 14.5 shall have at least ten (10)
years of experience in the field of restaurant operations and management.
(2) The party so notified (the "Responding Party") shall then have
twenty (20) days to identify the Responding Party's designated independent
arbitrator by notice to the Initiating Party and by having the Responding
Party's designated arbitrator contact the Initiating Party's designated
arbitrator within said twenty (20) days. If the Responding Party fails to do so,
the Initiating Party may designate the Responding Party's arbitrator.
(3) The two arbitrators shall, within twenty (20) days of the date
they initially make contact, designate a third arbitrator. If the two
arbitrators cannot agree within said twenty (20) days on a third arbitrator,
then the two arbitrators shall petition the District Court of Hennepin County,
Minnesota, to appoint the third arbitrator.
(4) Notwithstanding anything herein to the contrary, at the time an
Initiating Party invokes binding arbitration, the Initiating Party may request
that the Responding Party agree upon a single arbitrator to determine the
matter, in which event the arbitration shall proceed before, and be determined
by, the single arbitrator agreed upon by the parties.
(5) The arbitrators, using procedures of the American Arbitration
Association or any like organization acceptable to the arbitrators, shall
determine liability and damages, if any, to be awarded. The parties shall each
advance their proportionate share of any advance fees required to be paid to the
arbitrators. The losing party shall pay all arbitration fees and shall also be
liable for attorneys' fees incurred by the successful party. Should the
arbitrators determine that both parties bear some liability in connection with
the dispute, then the arbitrators shall assess arbitration and attorneys' fees
as they deem appropriate under the circumstances.
(6) The award of the arbitrators shall be final and binding and may be
enforced by the District Court of Hennepin County, Minnesota.
14.5 WAIVER OF JURY TRIAL. NOTWITHSTANDING THE PROVISIONS OF THE
PRECEDING SECTION, SHOULD ANY PROCEEDINGS IN CONNECTION WITH THIS AGREEMENT OR
THE SUBJECT MATTER HEREOF BE CONDUCTED IN THE COURTS OF MINNESOTA, OR ANY OTHER
JURISDICTION, THE PARTIES EACH WAIVE TRIAL BY JURY TO THE FULLEST EXTENT
PERMITTED BY LAW.
14.6 ATTORNEYS' FEES. If any action (including a lawsuit, arbitration,
mediation, or administrative proceeding) is brought for or on account of any
breach of this Agreement, or to enforce or interpret any of the terms, covenants
or conditions of this Agreement, the substantially prevailing party shall be
entitled to receive from the other party attorneys' fees and costs (including
without limitation expert witness and consulting fees) incurred in the action.
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14.7 FURTHER ASSURANCES. Each party agrees to do such things, perform
such acts and make, execute acknowledge and deliver such documents as may be
reasonably necessary or proper to insure that the purpose and intent of this
Agreement are accomplished.
14.8 AMENDMENTS. Any and all amendments to this Agreement shall be
null and void unless approved by the parties in writing.
14.9 HEADINGS. All headings in this Agreement are inserted only for
convenience and ease of reference and are not to be considered in the
construction or interpretation of any provision of this Agreement.
14.10 BINDING EFFECT. This Agreement shall be binding upon and be
enforceable by Licensor, its successors and assigns, and shall be binding upon
and be enforceable by Licensee, its successors and permitted assigns.
14.11 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between Licensor and Licensee with respect to the subject matter
hereof.
14.13 GOVERNING LAW. This Agreement shall be governed by the laws of
the State of Minnesota.
IN WITNESS WHEREOF, Licensor and Licensee have executed this Agreement
effective as of the date first set forth above.
LICENSEE
ODYSSEY RESTAURANTS, LLC
By: /s/ RK Fuller
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Name: Ronald K. Fuller
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Title: Chief Operating Manager
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LICENSOR
CAFE ODYSSEY, LLC
By: /s/ Mark D. Dacko
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Name: Mark D. Dacko
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Title: Vice President
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