8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 10, 2005

DIEDRICH COFFEE, INC.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction
of incorporation) 0-21203
(Commission
File Number) 33-0086628
(IRS Employer
Identification No.)

28 Executive Park, Suite 200
Irvine, California 92614
(Address of principal executive offices, including Zip Code)

Registrant’s telephone number, including area code: (949) 260-1600

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 1.01 Entry into a Material Definitive Agreement
	Item 2.01 Completion of Acquisition or Disposition of Assets
	Item 9.01 Financial Statements and Exhibits
SIGNATURES
EXHIBIT INDEX
EXHIBIT 10.1
EXHIBIT 10.2
EXHIBIT 10.3
EXHIBIT 99.1
EXHIBIT 99.2

Item 1.01 Entry into a Material Definitive Agreement

     On February 10, 2005, in connection with the closing of the transactions discussed in Item 2.01 below, Diedrich Coffee, Inc., along with two of its wholly-owned subsidiaries, Gloria Jean’s Gourmet Coffees Corp. and Gloria Jean’s Gourmet Coffees Franchising Corp. (collectively, the “Company”), entered into three material agreements. The agreements, a Roasting License Agreement, a Trademark License Agreement and a Consulting Agreement, provide for the payment to the Company of an aggregate of approximately $7.0 million over the next six years.

     Pursuant to the Roasting License Agreement, which is filed herewith as Exhibit 10.1, the Company has agreed to license Jireh International Pty. Ltd. (“Jireh”) the exclusive right to roast, blend, flavor and package gourmet coffees under the Gloria Jean’s brand name for sale to Gloria Jean’s customers in all countries of the world other than the United States and Puerto Rico. The agreement requires the payment of a license fee of $480,000 per year in each of the first five years of the agreement and a payment of $850,000 in the final year of the agreement. The total amount due to the Company under this agreement over the next six years is $3,250,000.

     Pursuant to the Trademark License Agreement, which is filed herewith as Exhibit 10.2, the Company has agreed to license the use of certain trademarks and applications to Jireh and its affiliates. The agreement requires the payment of $400,000 during each of the first four years of the agreement, $1,400,000 during the fifth year of the agreement and $50,000 during the final year of the agreement. The total amount due to the Company under this agreement over the next six years is $3,050,000.

     Pursuant to the Consulting Agreement, which is filed herewith as Exhibit 10.3, the Company has agreed to provide consulting and transition services to Jireh and its affiliates. The agreement requires the annual payment of $120,000 to the Company during the six year term of the agreement. The total amount due to the Company under this agreement is $720,000.

     The payments under the agreements in the first year after the closing, totaling $1,000,000, are guaranteed by two bank letters of credit, each in the amount of $500,000, issued by National Australia Bank Ltd.

Item 2.01 Completion of Acquisition or Disposition of Assets

     As previously announced, on December 5, 2004, the Company entered into a definitive agreement with Jireh, the Company’s then current Gloria Jean’s franchisee in Australia, and certain of its affiliates, pursuant to which the Company agreed to sell its Gloria Jean’s international franchise operations for $16 million in cash at closing and an additional amount equal to approximately $7.0 million over a six-year period pursuant to related license and consulting agreements. On February 10, 2005, the Company completed the sale.

     On February 11, 2005, the Company issued a press release announcing the completion of the sale. The press release is attached hereto as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits

(a)	Financial Statements of Business Acquired.
	Not applicable.
(b)	Pro Forma Financial Information.

     The following pro forma financial information is attached hereto as Exhibit 99.2 and is incorporated herein by reference:

(i)   Unaudited Pro Forma Balance Sheet of Diedrich Coffee, Inc. as of December 15, 2004

(ii)	Unaudited Pro Forma Statement of Operations of Diedrich Coffee, Inc. for the twenty-four weeks ended December 15, 2004
(iii)	Unaudited Pro Forma Statement of Operations of Diedrich Coffee, Inc. for the fiscal year ended June 30, 2004
(iv)	Notes to Unaudited Pro Forma Financial Statements of Diedrich Coffee, Inc.

(c)   Exhibits

Exhibit No.	Description
10.1	Roasting License Agreement, dated February 10, 2005
10.2	Trademark License Agreement, dated February 10, 2005
10.3	Consulting Agreement, dated February 10, 2005
99.1	Press Release, dated February 11, 2005
99.2	Unaudited Pro Forma Financial Statements and Information

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: February 16, 2005

DIEDRICH COFFEE, INC.
By:	/s/ Martin A. Lynch
	Martin A. Lynch
	Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
10.1	Roasting License Agreement, dated February 10, 2005
10.2	Trademark License Agreement, dated February 10, 2005
10.3	Consulting Agreement, dated February 10, 2005
99.1	Press Release, dated February 11, 2005
99.2	Unaudited Pro Forma Financial Statements and Information

EX-10.1

                                                                    EXHIBIT 10.1


                           ROASTING LICENSE AGREEMENT



         THIS AGREEMENT is made and entered into this 10th day of February,
2005, by and between Gloria Jean's Gourmet Coffees Corp., a corporation
organized under the laws of Illinois ("Licensor"), and Jireh International Pty.
Ltd., a corporation organized under the laws of Australia ("Licensee").

         WHEREAS, Licensor has expended considerable time, effort and money
developing the gourmet coffee businesses, including the roasting, blending,
flavoring and packaging of gourmet coffees under the Gloria Jean's brand name
(the "Products");

         WHEREAS, the Products are marketed and sold under various names and
packages with distinctive Gloria Jean's trademarks which Licensor and Licensee
own (the "Marks");

         WHEREAS, Licensee has expended considerable time, effort and money to
establish a coffee roasting and packaging facility in Australia, and Licensee
desires to roast, blend, flavor and package the Products under the above
referenced Marks in accordance with standards established by Licensor;

         WHEREAS, the Products are to be supplied to authorized Gloria Jean's
customers in Australia and in other countries other than the United States and
Puerto Rico; and

         WHEREAS, the parties hereto, among others, have entered into a Brand
Management Agreement of even date herewith, which agreement is considered to be
in the interests of the parties to maintain and develop the Gloria Jean's brand
on a consistent basis.

1.       ROASTING RIGHTS AND OBLIGATIONS.

         1.1 Subject to the terms and conditions of this Agreement, Licensor
hereby grants Licensee the exclusive right to roast, blend, flavor and package
Products for sale to authorized Gloria Jean's customers (the "Customers") in all
countries of the world other than the United States and Puerto Rico (the
"Territory"). Licensee agrees that, during the Agreement term, it will at all
times faithfully, honestly and diligently perform its obligations hereunder and
will continuously exert its best efforts to roast and package Products in
accordance with standards, criteria and markings established by Licensor.

         1.2 Licensee has the exclusive right to designate which Products it
roasts, blends, flavors and packages.

2.       LICENSE FEE.

         2.1 Licensee shall pay to Licensor, as a license fee, the amounts set
forth on Schedule 2.1 hereto (the "Guaranteed License Fees") on the dates set
forth therein.

         2.2 As security for the payment of the Required Payments (as defined
below) due to Licensor under this Agreement, and for the payments due under the
Trademark License



Agreement and the Consulting Agreement (each as defined in the Asset Purchase
Agreement by and among, among others, the parties hereto, dated December 5,
2004, and, together with this Agreement, referred to herein as the "Post-Closing
Payment Agreements"), Licensee shall provide the following for the benefit of
Licensor:

                  (a)(i) Concurrent with the execution of this Agreement,
Licensee 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 A attached
hereto. Notwithstanding the fact that, pursuant to Exhibit A attached hereto,
the Required 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 Required Payments is currently contemplated to be made to
Licensor using the Letter of Credit mechanism, Licensee's obligation to make the
Required 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 hereby grants to Licensor 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 shall execute and deliver to Licensor: (i)
a Deed of Charge in the form of Exhibit B attached hereto to evidence the
security interest granted thereby; and (ii) a Guarantee and Indemnity Deed in
the form of Exhibit C attached hereto.

                  (c) Licensee authorizes Licensor to file a Form UCC-1 with the
Secretary of State of the State of California with respect to the Acquired
Assets, and agrees to file the Australian counterpart to such form in Australia
promptly after the execution and delivery of the Deed of Charge.

         2.3 Licensee's obligation to pay Licensor all of the Required Payments
is an absolute, irrevocable commitment on the part of Licensee. Without limiting
the foregoing, no cancellation or termination of this Agreement, breach of this
Agreement by Licensor, or action or inaction on the part of Licensor (regardless
of whether such actions or inactions are intentional, negligent or otherwise),
shall relieve Licensee from its obligation to pay all of the Required Payments
to Licensor. Furthermore, this Agreement may not be terminated by Licensee;
provided, however, that if Licensor breaches this Agreement, and such breach is
not remedied within fifteen (15) days of Licensor receiving notice of such
breach, Licensee may seek damages for such breach;



                                       2


provided further that, while any such action may be pending, Licensee shall
continue to make all payments due Licensor hereunder.

         2.4 Not later than five (5) days after each anniversary of this
Agreement, Licensee shall pay the Guaranteed License Fee identified on Schedule
2.1 to Licensor by wire transfer of immediately available funds to an account
identified by Licensor in writing.

         2.5 Licensee agrees to maintain and preserve at its principal office,
full, complete and accurate records and reports pertaining to the roasting,
blending, flavoring, packaging and sales of Products. Licensor shall have the
right to inspect, audit and make copies of such records and reports, during
normal business hours and to inspect the premises of Licensee's roasting
facility. Licensor will give Licensee ten (10) days prior written notice of any
such inspection or audit.

3.       TERM.

         3.1 Unless otherwise specifically provided herein, the term of this
Agreement shall commence on the date hereof and shall expire on the later of the
date that all of the Required Payments have been paid to Licensor or the sixth
(6th) anniversary of the date hereof (the "Initial Term").

         3.2 On January 31, 2011, Licensee shall purchase from Licensor all
roasting rights granted pursuant to this Agreement for consideration of
US$850,000 (the "Roasting Rights Purchase Payment," and together with the
Guaranteed License Fees, the "Required Payments"); provided that, Licensor shall
not be obligated to sell and transfer such rights to Licensee unless and until:
(a) Licensee or its affiliates have made all payments required to be made to
Licensor or its affiliates under the Trademark License Agreement and the
Consulting Agreement; and (b) GJGCFC has entered into a U.S. Master Franchise
Agreement in substantially the manner set forth in the Brand Management
Agreement.

4.       SPECIFICATIONS.

         4.1 Licensor shall provide to Licensee specifications and standards for
all Products, and Licensee shall establish roasting, blending, flavoring
packaging procedures to be adhered to for the roasting and packaging of the
Products by Licensee in accordance with the specifications prescribed by
Licensor.

         4.2 Licensee shall forward to Licensor a one pound sample of each and
every Gloria Jean's coffee that Licensee roasts on request, but not more
frequently than every six (6) months.

5.       INSURANCE.

         Licensee agrees to maintain insurance necessary to comply with all
Legal Requirements (as defined in the Asset Purchase Agreement) concerning
insurance in Australia and to maintain general liability insurance against
claims for product liability, bodily and personal injury, death and property
damage caused by or occurring in connection with the conduct of Licensee's
coffee roasting business pursuant to this Agreement.



                                       3


6.       COMPLIANCE WITH LEGAL REQUIREMENTS/GOOD BUSINESS PRACTICES.

         Licensee shall secure and maintain in force in its name all required
licenses, permits and certificates relating to the conduct of its business
pursuant to this Agreement. Licensee shall in all dealings with Licensor,
customers, public officials and other third parties adhere to high standards of
honesty, integrity, fair dealing and ethical conduct.

7.       CURRENCY OF PAYMENT.

         Payments by Licensee to Licensor hereunder shall be made in US$ unless
otherwise specified by Licensor. All payments hereunder to be calculated in
United States Dollars and paid in US$ to Licensor.

8.       INDEPENDENT CONTRACTORS.

         8.1 It is understood and agreed by the parties hereto that this
Agreement does not create a fiduciary relationship between them, that Licensor
and Licensee are and shall be independent contractors, and that nothing in this
Agreement is intended to make either party a general or special agent, joint
venture, partner, or employee of the other for any purpose.

         8.2 Except as expressly authorized in writing, neither Licensor nor
Licensee shall be obligated by or have liability under any agreement or
representation made by the other that is not expressly authorized in writing,
nor shall Licensor be obligated for any damages to any person or property
directly or indirectly arising out of the roasting or packaging of Products
pursuant to this Agreement.

9.       MARKS.

         Any unauthorized use of the Marks of Licensor by Licensee shall
constitute a breach of this Agreement.

10.      TERMINATION.

         10.1 This Agreement may be terminated by Licensor in the event that:
(i) Licensee breaches this Agreement and such breach is not remedied by Licensee
within fifteen (15) days of Licensee receiving notice of such breach; or (ii)
Licensee breaches the Trademark License Agreement, the Consulting Agreement or
the Brand Management Agreement (each as defined in the Asset Purchase Agreement)
or any financing agreement with the Bank that pertains to the transactions
contemplated by this Agreement or the transactions contemplated by the Asset
Purchase Agreement and such breach is not cured within the time period set forth
in the applicable document, if any.

         10.2 Upon the occurrence of any event referred to in Section 10.1, in
addition to, and not in limitation of, the other remedies that Licensor may
have, Licensor shall have the option to cause Licensee to immediately pay
Licensor a sum certain amount equal to the sum of all amounts remaining to be
paid under this Agreement.



                                       4


         10.3 The amount of any late payments under this Agreement shall accrue
interest at a simple rate per annum equal to the lesser of 9% or the maximum
rate permitted by applicable law. Licensee acknowledges that its failure to pay
all such amounts when due shall constitute grounds for termination of this
Agreement notwithstanding the provisions of this Section 10.3.

11.      RIGHTS AND OBLIGATIONS UPON TERMINATION OR EXPIRATION.

         11.1 Licensor and Licensee agree that after the termination of this
Agreement or expiration of the Agreement term, Licensee will return to Licensor
all copies of any confidential materials which may have been loaned or made
available by Licensee pursuant to this Agreement; and Licensee shall not
represent any former affiliation with Licensor.

         11.2 Licensor recognizes that Licensee and its owners presently own and
operate, and will continue to own and operate other businesses which roast,
distribute and sell coffee through wholesale and retail channels in Australia.

12.      MISCELLANEOUS

         12.1 Licensee and Licensor may, by written instrument, waive any
obligation of or restriction upon under this Agreement.

         12.2 The rights of Licensor and Licensee hereunder are cumulative and
no exercise or enforcement by Licensor or Licensee of any right or remedy
hereunder shall preclude the exercise or enforcement by Licensor or Licensee of
any other right or remedy hereunder.

         12.3 Licensor and Licensee hereby waive to the fullest extent permitted
by law any right to or claim for any punitive, exemplary or special damages
against the other and agree that in the event of a dispute between them, except
as otherwise provide herein, each shall be limited to the recovery of any actual
damages sustained by it. Licensor and Licensee irrevocably waive trial by jury
in any action, proceeding or counterclaim whether at law or in equity by either
of them.

         12.4 Except as otherwise expressly provided in this Agreement, all
legal, accounting and other fees, costs and expenses incurred in connection with
this Agreement will be paid by the party incurring such fees, costs and
expenses. If any party to this Agreement brings any action, suit, counterclaim,
appeal, arbitration, mediation or other proceeding, in equity or at law (an
"Action"), to enforce this Agreement or to declare rights under this Agreement,
in addition to any damages and costs which the prevailing party or parties
otherwise would be entitled, the losing party or parties in any such Action
shall pay to the prevailing party or parties reasonable attorneys' fees and
costs incurred in connection with such Action and/or enforcing any judgment,
order, ruling or award (collectively, a "Decision") granted by a court,
arbitrator or mediator, all of which must be paid whether or not such Action is
prosecuted to a Decision. "Prevailing party" means, without limitation, any
party who agrees to dismiss an action on the other party's payment of the sum
allegedly due or performance of the covenants allegedly breached, or who obtains
substantially the relief sought by it. If there are multiple claims, the
prevailing party is to be determined with respect to each claim separately. The
prevailing party is the party that has obtained the greater relief in connection
with any particular claim, although,


                                       5


with respect to any claim, it may be determined by the court, arbitrator or
mediator that there is no prevailing party.

         12.5 This Agreement will be governed by, construed and enforced in
accordance with the laws of the State of California, without regard to conflicts
of laws doctrines.

         12.6 All provisions of this Agreement are severable and this Agreement
shall be interpreted and enforced as if all completely invalid or unenforceable
provisions were not contained herein and partially valid and enforceable
provisions shall be enforced to the extent they are valid and enforceable.

         12.7 This Agreement shall be binding upon and inure to the benefit of
the parties and their respective successors and assigns. Neither this Agreement
nor any of the rights, interests or obligations hereunder may be assigned by
either party hereto without the prior written consent of the other party;
provided that, Licensor, in its sole discretion, may assign this Agreement to an
affiliate of Licensor; provided, further that, Licensor shall not be relieved of
any of its obligations under this Agreement as a result of such assignment. This
Agreement is not intended to confer upon any other person except the parties
hereto any rights or remedies hereunder.

         12.8 This Agreement, together with the exhibits and schedules attached
hereto and incorporated herein, constitutes the entire agreement of the parties,
and there are no other oral or written understandings or agreements between
Licensor and Licensee relating to this Agreement. The headings of the several
sections and subsections hereof are for convenience only and do not define,
limit or construe the contents of such sections or subsections.

         12.9 All notices and other communications hereunder must be in writing
and will be deemed given when delivered by hand, by commercial courier or
overnight delivery service or by facsimile to the parties at the following
addresses (or at such other address for a party as may be specified by like
notice):

                  If to Licensor, to:
                                            Gloria Jean's Gourmet Coffees Corp.
                                            28 Executive Park, Suite 200
                                            Irvine, California  92614
                                            Attn:  Chief Executive Officer
                                            Facsimile:  (949) 260-1610

                  If to Licensee, to:
                                            Jireh International Pty. Ltd.
                                            11 Hoyle Avenue
                                            Castle Hill, NSW 2154
                                            Australia
                                            Attn:  Nabi Saleh
                                            Facsimile:  +61 2 9894 2210



                                       6


         12.10 This Agreement may be executed in any number of counterparts,
each of which will be deemed an original, but all of which together will
constitute one instrument. Signatures transmitted electronically or by facsimile
shall be deemed original signatures.



                                       7


         IN WITNESS WHEREOF, the parties hereto have executed this Roasting
License Agreement as of the date first above written.


                                        GLORIA JEAN'S GOURMET COFFEES CORP.


                                        By: /s/ Matthew C. McGuinness
                                            ------------------------------------
                                            Matthew C. McGuinness
                                            President


                                        JIREH INTERNATIONAL PTY. LTD.


                                        By: /s/ Nabi Saleh
                                            ------------------------------------
                                            Nabi Saleh
                                            Director




                                  SCHEDULE 2.1

                             GUARANTEED LICENSE FEES




PAYMENT DUE                           GUARANTEED LICENSE FEES (US$)
- -----------                           -----------------------------
                                   
January 31, 2006                      $480,000

January 31, 2007                      $480,000

January 31, 2008                      $480,000

January 31, 2009                      $480,000

January 31, 2010                      $480,000

January 31, 2011                      $850,000 (the Roasting Rights Purchase Payment)





Exhibit A:        Form of Letter of Credit

Exhibit B:        Deed of Charge

Exhibit C:        Guarantee and Indemnity Deed

EX-10.2

                                                                    EXHIBIT 10.2


                              CONSULTING AGREEMENT

         THIS CONSULTING 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 ("GJGC"), and Gloria Jean's Gourmet Coffees Franchising
Corp, an Illinois corporation ("GJGCFC," and together with GJGC, the
"Consultants"), on the one hand, and Gloria Jean's Coffees International Pty
Ltd., a company organized under the laws of Australia ("GJCI"), Gloria Jean's
Coffees Holdings Pty. Ltd., a company organized under the laws of Australia
("GJCH"), Jireh International Pty. Ltd., a company organized under the laws of
Australia ("Jireh"), and Jireh Group Pty. Ltd., a company organized under the
laws of Australia ("Jireh Group," and together with Jireh, GJCI and GJCH, the
"Companies"), on the other hand.

         WHEREAS, the Companies and the Consultants have entered into that
certain Asset Purchase Agreement dated as of December 5, 2004 (the "Asset
Purchase Agreement"), pursuant to which GJCI and GJCH have agreed to purchase
certain assets, and to assume certain liabilities, of GJGC and GJGCFC; 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 for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

         1. Services. During the term of this Agreement, the Consultants shall
make themselves and their representatives available, at reasonable times and on
reasonable notice, to provide the Companies with such reasonable consulting and
transition services that the Companies, or any of them, may reasonably request.
In consideration for the foregoing, the Companies shall be jointly and severally
responsible for the payment of the fees in the amounts and on the dates set
forth on Exhibit A attached hereto (the "Guaranteed Consulting Fees") to the
Consultants. In addition, in connection with the provision of such consulting
and transition services, the Companies agree that they will reimburse the
Consultants for the fees of and expenses incurred by the Consultants in
connection with the provision of such services, including, but not limited to,
fees for time spent on consulting matters, travel and lodging expenses,
disbursements, and similar expenses. The parties agree that, upon receiving a
request to provide services hereunder, the Consultants and the Companies will
seek to mutually agree upon the fees and expenses to be paid by the Companies
for the services to be rendered by the Consultants. Upon reaching such mutual
agreement, the Consultants will provide the Companies with the agreed upon
services on the agreed upon terms.

         2. Security for Payments. As security for the payment of the Guaranteed
Consulting Fees due to the Consultants under this Agreement, and for the
payments due under the Trademark License Agreement and the Roasting License
Agreement (together with this Agreement, the "Post-Closing Payment Agreements"),
the Companies shall provide the following for the benefit of the Consultants:




                  (a)(i) Concurrent with the execution of this Agreement, the
Companies shall obtain and deliver to the Consultants two irrevocable
documentary letters of credit (each, a "Letter of Credit") from National
Australia Bank Ltd. (the "Bank") in favor of the Consultants, 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 B attached hereto. Notwithstanding the fact that, pursuant to Exhibit A
attached hereto, the Guaranteed Consulting Fees due to the Consultants 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 the Consultants 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 Guaranteed Consulting Fees is
currently contemplated to be made to the Consultants using the Letter of Credit
mechanism, the Companies' obligation to pay a total of US$120,000 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) The Companies 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) GJCH and GJCI hereby grant to GJGC 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, GJCH, GJCI and Jireh shall execute and deliver
to GJGC and GJGCFC: (i) a Deed of Charge in the form of Exhibit C attached
hereto to evidence the security interest granted thereby; and (ii) a Guarantee
and Indemnity Deed in the form of Exhibit D attached hereto.

                  (c) GJCH, GJCI and Jireh authorize GJGC and GJGCFC to file a
Form UCC-1 with the Secretary of State of the State of California with respect
to the Acquired 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. Term of Agreement. Unless terminated earlier by the Consultants in
accordance with Section 4 hereof, this Agreement shall commence on the date
hereof and shall continue until the Marks are transferred to the Companies in
accordance with Section 1.8 of the Brand Management Agreement of even date
herewith.

         4. Termination.

                  (a) The Companies' obligation to pay the Consultants all of
the Guaranteed Consulting Fees is an absolute, irrevocable commitment on the
part of the Companies. Without limiting the foregoing, no cancellation or
termination of this Agreement, breach of this Agreement by the Consultants, or
any of them, or action or inaction on the part of the Consultants (regardless of
whether such actions or inactions are intentional, negligent or otherwise), or
any of them, shall relieve the Companies from their obligation to pay the
Guaranteed Consulting Fees to the Consultants. Furthermore, this Agreement may
not be terminated by the Companies, or any of them; provided, however, that if
the Consultants, or any


                                       2


of them, breach this Agreement, and such breach is not remedied within fifteen
(15) days of the Consultants receiving notice of such breach, the Companies may
seek damages for such breach; provided further that, while any such action may
be pending, the Companies shall continue to make all payments due the
Consultants hereunder.

                  (b) This Agreement may be terminated by the Consultants in the
event that: (i) the Companies, or any of them, breach this Agreement and such
breach is not remedied by the Companies within fifteen (15) days of the
Companies receiving notice of such breach; or (ii) the Companies, or any of
them, breach the Trademark License Agreement, the Roasting License Agreement,
the Brand Management Agreement, or any financing agreement with the Bank that
pertains to the transactions contemplated by this Agreement or the transactions
contemplated by the Asset Purchase Agreement and such breach is not cured within
the time period set forth in the applicable document, if any.

         5. Acceleration. Upon the occurrence of any event referred to in
Section 4(b)(i) or (ii) above, in addition to, and not in limitation of, the
other remedies that the Consultants may have, the Consultants shall have the
option to cause the Companies to immediately pay the Consultants a sum certain
amount equal to the sum of all amounts remaining to be paid under this
Agreement. In addition, the amount of any late payments under this Agreement
shall accrue interest at a simple rate per annum equal to the lesser of 9% or
the maximum rate permitted by applicable law.

         6. Nature of Relationship. At all times during the performance of any
services under this Agreement, the Consultants shall act and discharge their
duties as independent contractors with respect to the Companies. The Consultants
and their respective representatives shall not be deemed agents or employees of
the Companies for the purposes of any employee benefit program, income tax
withholding, FICA taxes, unemployment benefits or otherwise. The Consultants
shall not enter into any agreement or incur any obligations on the Companies'
behalf, or commit the Companies in any manner, without the Companies' prior
written consent.

         7. Confidentiality.

                  (a) The Consultants agrees that they shall not use, except for
the Companies' benefit, or divulge to any person, firm or corporation, either
during the term of this Agreement or thereafter, any of the Companies' trade
secrets or other proprietary data or information of any kind whatsoever acquired
by the Consultants; provided that, the Consultants' non-use and confidentiality
obligations shall not apply:

                           (i) to information that, at the time it is disclosed
by the Companies to the Consultants, is in the public domain or is otherwise
lawfully known to or in the Consultants' possession;

                           (ii) if, after the Companies disclose information to
the Consultants, the information becomes a part of the public domain, other than
disclosure by the Consultants or their Affiliates, or otherwise becomes lawfully
known to the Consultants or their Affiliates; or

                           (iii) to information that the Consultants are
required to disclose by law or other governmental authority; provided that the
Consultants shall provide the Companies a



                                       3


reasonable opportunity to seek confidential treatment for such information prior
to any disclosure thereof.

                  (b) The Consultants agree that, upon completion or termination
of this Agreement, the Consultants will turn over to the Companies any
notebooks, data, information or other material acquired or compiled by the
Consultants in carrying out the terms of this Agreement.

                  (c) The Consultants represent that their performance of the
terms of this Agreement does not and will not conflict with the terms of any
agreement to which the Consultants are a party that require the Consultants to
keep in confidence proprietary information and trade secrets acquired in
confidence or in trust. The Consultants will not disclose to the Companies, or
induce the Companies to use, any confidential or proprietary information or
material belonging to any third party.

         8. Further Assurances. Each party hereto shall execute such additional
documents and instruments and take such further action as reasonably may be
required or desirable to carry out the provisions hereof.

         9. Amendment and Modification. Subject to applicable law, this
Agreement may be amended, modified, or supplemented only by written agreement of
the parties hereto.

         10. Waiver of Compliance; Consents. Any failure of the Companies on the
one hand, or the Consultants on the other hand, to comply with any obligation,
covenant, agreement, or condition herein may be waived by the Companies or the
Consultants, or any of them, only by a written instrument signed by an officer
of the party granting such waiver, but such waiver or failure to insist upon
strict compliance with such obligation, covenant, agreement or condition shall
not operate as a waiver of, or estoppel with respect to, any subsequent or other
failure. Whenever this Agreement requires or permits consent by or on behalf of
any party hereto, such consent shall be given in writing.

         11. Notices. All notices and other communications hereunder must be in
writing and will be deemed given when delivered by hand, by commercial courier
or overnight delivery service or by facsimile to the parties at the following
addresses (or at such other address for a party as may be specified by like
notice):

             If to the Consultants, to:
                                             Diedrich Coffee, Inc.
                                             Gloria Jean's Gourmet Coffees, Inc.
                                             28 Executive Park, Suite 200
                                             Irvine, California  92614
                                             Attn:  Chief Executive Officer
                                             Facsimile:  (949) 260-1610



                                       4


             With a copy to:
                                             Gibson, Dunn & Crutcher LLP
                                             4 Park Plaza
                                             Irvine, California  92614
                                             Attn:  John M. Williams
                                             Facsimile:  (949) 475-4673
             If to the Companies, to:
                                             Gloria Jean's Coffees International
                                                 Pty. Ltd.
                                             11 Hoyle Avenue
                                             Castle Hill, NSW 2154
                                             Australia
                                             Attn:  Nabi Saleh
                                             Facsimile:  +61 2 9894 2210
             With a copy to:
                                             Foley & Lardner LLP
                                             2029 Century Park East, Suite 3500
                                             Los Angeles, California  90067
                                             Attn:  Richard W. Lasater II
                                             Facsimile:  (310) 557-8475

         12. Assignment. This Agreement and all of the provisions hereof will be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder may be assigned by any of the parties
hereto without the prior written consent of the other parties, nor is this
Agreement intended to confer upon any other person except the parties hereto any
rights or remedies hereunder. Notwithstanding the foregoing, the Consultants
shall have the right to assign the payment of the Guaranteed Consulting Fees
without the consent of the Companies, or any of them.

         13. Governing Law. This Agreement will be governed by, construed and
enforced in accordance with the laws of the State of California, without regard
to conflicts of laws doctrines.

         14. Fees, Costs and Expenses. Except as otherwise expressly provided in
this Agreement, all legal, accounting and other fees, costs and expenses
incurred in connection with this Agreement will be paid by the party incurring
such fees, costs and expenses. If any party to this Agreement brings any action,
suit, counterclaim, appeal, arbitration, mediation or other proceeding, in
equity or at law (an "Action"), to enforce this Agreement or to declare rights
under this Agreement, in addition to any damages and costs which the prevailing
party or parties otherwise would be entitled, the losing party or parties in any
such Action shall pay to the prevailing party or parties reasonable attorneys'
fees and costs incurred in connection with such Action and/or enforcing any
judgment, order, ruling or award (collectively, a "Decision") granted by a
court, arbitrator or mediator, all of which must be paid whether or not such
Action is prosecuted to a Decision. "Prevailing party" means, without
limitation, any party who agrees to dismiss an action on the other party's
payment of the sum allegedly due or performance of the covenants allegedly
breached, or who obtains substantially the relief sought by it. If there are
multiple claims, the prevailing party is to be determined with respect to each
claim separately. The prevailing party is the party that has obtained the
greater relief in connection with any



                                       5


particular claim, although, with respect to any claim, it may be determined by
the court, arbitrator or mediator that there is no prevailing party.

         15. Construction. The captions and titles of the articles, sections and
subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement. This Agreement has been jointly
prepared by the Companies and the Consultants and shall be construed without
regard to any presumption or other rule requiring the resolution of any
ambiguity regarding the interpretation or construction hereof against the party
causing this Agreement to be drafted.

         16. Submission to Jurisdiction. All actions or proceedings arising in
connection with this Agreement shall be tried and litigated in the state or
federal courts located in the County of Orange, State of California. The
foregoing choice of venue is intended by the parties to be mandatory and not
permissive in nature, thereby precluding the possibility of litigation between
the parties with respect to or arising out of this Agreement in any jurisdiction
other than that specified in this Section 16. Each party hereby waives any right
it may have to assert the doctrine of forum non conveniens or similar doctrine
or to object to venue with respect to any proceeding brought in accordance with
this Section 16, and stipulates that the state and federal courts located in the
County of Orange, State of California shall have in personam jurisdiction over
each of them for the purpose of litigating any such dispute, controversy or
proceeding. Each party hereby authorizes and accepts service of process
sufficient for personal jurisdiction in any action against it as contemplated by
this Section 16 by registered or certified mail, return receipt requested,
postage prepaid, to its address for the giving of notices as set forth in
Section 11. Nothing herein shall affect the right of any party to serve process
in any other manner permitted by law.

         17. Taxes. The Companies hereby agree to indemnify the Consultants to
the fullest extent from any withholding taxes that may be imposed on the
payments made by the Companies to the Consultants hereunder.

         18. Entire Agreement. This Agreement, including the exhibits attached
hereto and incorporated herein, embodies the entire agreement and understanding
of the parties hereto in respect of the subject matter contained herein. This
Agreement supersedes all prior agreements and the understandings between the
parties with respect to such subject matter. No discussions regarding or
exchange of drafts or comments in connection with the transactions contemplated
herein will constitute an agreement among the parties hereto.

         19. Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one instrument. Signatures transmitted electronically
or by facsimile shall be deemed original signatures.



                                       6


         IN WITNESS WHEREOF, the parties hereto have executed this Consulting
Agreement as of the date first above written.

                                        Consultants:

                                        GLORIA JEAN'S GOURMET COFFEES CORP.


                                        By: /s/ Matthew C. McGuinness
                                            -----------------------------------
                                            Matthew C. McGuinness
                                            President

                                        GLORIA JEAN'S GOURMET COFFEES
                                        FRANCHISING CORP.


                                        By: /s/ Matthew C. McGuinness
                                            -----------------------------------
                                            Matthew C. McGuinness
                                            President

                                        The Companies:

                                        GLORIA JEAN'S COFFEES INTERNATIONAL
                                        PTY LTD.


                                        By: /s/ Nabi Saleh
                                            -----------------------------------
                                            Nabi Saleh
                                            Director

                                        GLORIA JEAN'S COFFEES HOLDING PTY LTD.


                                        By: /s/ Nabi Saleh
                                            -----------------------------------
                                            Nabi Saleh
                                            Director

                                        JIREH INTERNATIONAL PTY LTD.


                                        By: /s/ Nabi Saleh
                                            -----------------------------------
                                            Nabi Saleh
                                            Director

                                        JIREH GROUP PTY LTD.


                                        By: /s/ Nabi Saleh
                                            -----------------------------------
                                            Nabi Saleh
                                            Director




                                    EXHIBIT A

                           GUARANTEED CONSULTING FEES

         The Companies shall pay the following fees to the Consultants:


                                                           
January 31, 2006                                              $120,000

January 31, 2007                                              $120,000

January 31, 2008                                              $120,000

January 31, 2009                                              $120,000

January 31, 2010                                              $120,000

January 31, 2011                                              $120,000





Exhibit B:        Form Of Letter Of Credit

Exhibit C:        Deed Of Charge

Exhibit D:        Guarantee And Indemnity Deed

EX-10.3

                                                                    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).





                  (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





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 hereto) on or prior to
January 31, 2010, Licensor shall transfer, convey and assign the Australian
Marks to Licensee.

         6. Termination.

                  (a) The obligation of the Licensee and the Jireh Parties to
pay Licensor all of the License Payments is an absolute, irrevocable commitment
on the part of Licensee and the Jireh Parties. Without limiting the foregoing,
no cancellation or termination of this Agreement, breach of this Agreement by
Licensor, or action or inaction on the part of Licensor (regardless of whether
such actions or inactions are intentional, negligent or otherwise), shall
relieve Licensee or the Jireh Parties from their obligation to pay the License
Payments to Licensor. Furthermore, this Agreement may not be terminated by
Licensee or the Jireh Parties, or any of them; provided, however, that if
Licensor breaches this Agreement, and such breach is not remedied within fifteen
(15) days of Licensor receiving notice of such breach, Licensee may seek damages
for such breach; provided further that, while any such action may be pending,
Licensee and the Jireh Parties shall continue to make all payments due Licensor
hereunder.

                  (b) This Agreement may be terminated by Licensor in the event
that: (i) Licensee or the Jireh Parties breach this Agreement and such breach is
not remedied by Licensee or the Jireh Parties within fifteen (15) days of
Licensee or the Jireh Parties receiving notice of such breach; or (ii) Licensee
or any of its Affiliates (as defined in the Asset Purchase Agreement) breach the
Consulting Agreement, the Brand Management Agreement, the Roasting License
Agreement or any financing agreement with the Bank that pertains to the
transactions contemplated by this Agreement or the transactions contemplated by
the Asset Purchase





Agreement and such breach is not cured within the time period set forth in the
applicable document, if any.

         7. Acceleration of Payments. Upon the occurrence of any event referred
to in Section 6(b)(i) or (ii) above, in addition to, on not in limitation of,
the other remedies that Licensor may have, Licensor shall have the option to
cause Licensee and the Jireh Parties to immediately pay Licensor a sum certain
amount equal to $3,050,000 (which amount is the sum of the Australian License
Fee Payments listed on Schedule 1(b) plus the Guam License Fee Payments listed
on Schedule 1(a), and which Licensee and the Jireh Parties agree are guaranteed
payments hereunder) plus any late fees or additional amounts then payable by
Licensee to Licensor at the date that Licensor requires Licensee to pay such
amount minus (ii) the amount of any License Fees already paid by Licensee to
Licensor. In addition, the amount of any late payments under this Agreement
shall accrue interest at a simple rate per annum equal to the lesser of 9% or
the maximum rate permitted by applicable law.

         8. Ownership. Licensee acknowledges that Licensor is the sole owner of
the Marks and of the goodwill associated therewith, and that Licensee hereby
acquires no right, title interest or claim of ownership in or to the Marks
except the licenses granted herein. Licensee agrees not to contest Licensor's
ownership of the Marks and not to take any action to lessen or dilute the
uniqueness of the Marks in any manner. Licensee expressly acknowledges the value
and uniqueness of the Marks. All use of the Marks by Licensee shall inure to the
benefit of Licensor.

         9. Further Assurances. Each party hereto shall execute such additional
documents and instruments and take such further action as reasonably may be
required or desirable to carry out the provisions hereof.

         10. Amendment and Modification. Subject to applicable law, this
Agreement may be amended, modified or supplemented only by written agreement of
Licensor and Licensee.

         11. Waiver of Compliance; Consents. Any failure of Licensor on the one
hand, or Licensee on the other hand, to comply with any obligation, covenant,
agreement or condition herein may be waived by Licensor or Licensee,
respectively, only by a written instrument signed by an officer of the party
granting such waiver, but such waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure. Whenever this Agreement requires or permits consent by or on behalf of
any party hereto, such consent shall be given in writing.

         12. Notices. All notices and other communications hereunder must be in
writing and will be deemed given when delivered by hand, by commercial courier
or overnight delivery service or by facsimile to the parties at the following
addresses (or at such other address that a party may specify by like notice):




             If to Licensor, to:
                                        Gloria Jean's Gourmet Coffees Corp.
                                        28 Executive Park, Suite 200
                                        Irvine, California  92614
                                        Attn:  Chief Executive Officer
                                        Facsimile:  (949) 260-1610
             With a copy to:
                                        Gibson, Dunn & Crutcher LLP
                                        4 Park Plaza
                                        Irvine, California  92614
                                        Attn:  John M. Williams
                                        Facsimile:  (949) 475-4673
             If to Licensee or
             the Jireh Parties, to:
                                        Gloria Jean's Coffees Holdings Pty. Ltd.
                                        11 Hoyle Avenue
                                        Castle Hill, NSW 2154
                                        Australia
                                        Attn:  Nabi Saleh
                                        Facsimile:  +61 2 9894 2210
             With a copy to:
                                        Foley & Lardner LLP
                                        2029 Century Park East, Suite 3500
                                        Los Angeles, California  90067
                                        Attn:  Richard W. Lasater II
                                        Facsimile:  (310) 557-8475

         13. Assignment. This Agreement and all of the provisions hereof will be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder may be assigned by any of the parties
hereto without the prior written consent of the other parties, nor is this
Agreement intended to confer upon any other person except the parties hereto any
rights or remedies hereunder. Notwithstanding the foregoing, Licensor shall have
the right to assign the receipt of the License Fees without the consent of
Licensee or the Jireh Parties, or any of them.

         14. Governing Law. This Agreement shall be governed by, construed and
enforced in accordance with the laws of the State of California, without regard
to conflicts of laws doctrines.

         15. Fees, Costs and Expenses. Except as otherwise expressly provided in
this Agreement, all legal, accounting and other fees, costs and expenses
incurred in connection with this Agreement will be paid by the party incurring
such fees, costs and expenses. If any party to this Agreement brings any action,
suit, counterclaim, appeal, arbitration, mediation or other proceeding, in
equity or at law (an "Action"), to enforce this Agreement or to declare rights
under this Agreement, in addition to any damages and costs which the prevailing
party or parties otherwise would be entitled, the losing party or parties in any
such Action shall pay to the prevailing party or parties reasonable attorneys'
fees and costs incurred in connection with such Action and/or enforcing any
judgment, order, ruling or award (collectively, a "Decision") granted




by a court, arbitrator or mediator, all of which must be paid whether or not
such Action is prosecuted to a Decision. "Prevailing party" means, without
limitation, any party who agrees to dismiss an action on the other party's
payment of the sum allegedly due or performance of the covenants allegedly
breached, or who obtains substantially the relief sought by it. If there are
multiple claims, the prevailing party is to be determined with respect to each
claim separately. The prevailing party is the party that has obtained the
greater relief in connection with any particular claim, although, with respect
to any claim, it may be determined by the court, arbitrator or mediator that
there is no prevailing party.

         16. Construction. The captions and titles of the articles, sections and
subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement. This Agreement has been jointly
prepared by Licensor and Licensee and shall be construed without regard to any
presumption or other rule requiring the resolution of any ambiguity regarding
the interpretation or construction hereof against the party causing this
Agreement to be drafted.

         17. Submission to Jurisdiction. All actions or proceedings arising in
connection with this Agreement shall be tried and litigated in the state or
federal courts located in the County of Orange, State of California. The
foregoing choice of venue is intended by the parties to be mandatory and not
permissive in nature, thereby precluding the possibility of litigation between
the parties with respect to or arising out of this Agreement or any Transaction
Document (as defined in the Asset Purchase Agreement) in any jurisdiction other
than that specified in this Section 17. Each party hereby waives any right it
may have to assert the doctrine of forum non conveniens or similar doctrine or
to object to venue with respect to any proceeding brought in accordance with
this Section 17, and stipulates that the state and federal courts located in the
County of Orange, State of California shall have in personam jurisdiction over
each of them for the purpose of litigating any such dispute, controversy or
proceeding. Each party hereby authorizes and accepts service of process
sufficient for personal jurisdiction in any action against it as contemplated by
this Section 17 by registered or certified mail, return receipt requested,
postage prepaid, to its address for the giving of notices as set forth in
Section 12. Nothing herein shall affect the right of any party to serve process
in any other manner permitted by law.

         18. Taxes. Licensee and the Jireh Parties hereby agree to indemnify
Licensor and GJGCFC to the fullest extent from any withholding taxes that may be
imposed on the payments made by Licensee or the Jireh Parties hereunder.

         19. Entire Agreement. This Agreement, including the exhibits attached
hereto and incorporated herein, embodies the entire agreement and understanding
of the parties hereto in respect of the subject matter contained herein. This
Agreement supersedes all prior agreements and the understandings between the
parties with respect to such subject matter. No discussions regarding or
exchange of drafts or comments in connection with the transactions contemplated
herein will constitute an agreement among the parties hereto.

         20. Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one instrument. Signatures transmitted electronically
or by facsimile shall be deemed original signatures.





         IN WITNESS WHEREOF, the parties hereto have executed this Trademark
License Agreement as of the date first written above.

                                        Licensor:

                                        GLORIA JEAN'S GOURMET COFFEES CORP.

                                        By: /s/ Matthew C. McGuinness
                                            -----------------------------------
                                            Matthew C. McGuinness
                                            President

                                        GJGCFC:

                                        GLORIA JEAN'S GOURMET COFFEES
                                        FRANCHISING CORP.

                                        By: /s/ Matthew C. McGuinness
                                            -----------------------------------
                                            Matthew C. McGuinness
                                            President

                                        Licensee:

                                        GLORIA JEAN'S COFFEES HOLDINGS PTY. LTD.

                                        By: /s/ Nabi Saleh
                                            -----------------------------------
                                            Nabi Saleh
                                            Director

                                        The Jireh Parties:

                                        GLORIA JEAN'S COFFEES INTERNATIONAL PTY.
                                        LTD.

                                        By: /s/ Nabi Saleh
                                            -----------------------------------
                                            Nabi Saleh
                                            Director

                                        JIREH INTERNATIONAL PTY. LTD.

                                        By: /s/ Nabi Saleh
                                            -----------------------------------
                                            Nabi Saleh
                                            Director

                                        JIREH GROUP PTY. LTD.

                                        By: /s/ Nabi Saleh
                                            -----------------------------------
                                            Nabi Saleh
                                            Director




                                  SCHEDULE 1(A)




           PAYMENT DATES                  GUAM LICENSE FEE PAYMENTS (US$)
           -------------                  -------------------------------
                                       
           January 31, 2006               $50,000

           January 31, 2007               $50,000

           January 31, 2008               $50,000

           January 31, 2009               $50,000

           January 13, 2010               $50,000

           January 31, 2011               $50,000






                                  SCHEDULE 1(B)




PAYMENT DATES                  AUSTRALIAN LICENSE FEE PAYMENTS (US$)
- -------------                  -------------------------------------
                            

January 31, 2006               $350,000

January 31, 2007               $350,000

January 31, 2008               $350,000

January 31, 2009               $350,000

January 31, 2010               $1,350,000 (the "Final Australian License Fee Payment")






Exhibit A:        Australian Marks

Exhibit B:        Guam Marks

Exhibit C:        Letter of Credit

Exhibit D:        Deed of Charge

Exhibit E:        Guarantee and Indemnity Deed

EX-99.1

                                                                    EXHIBIT 99.1


                         DIEDRICH COFFEE REPORTS SALE OF
                  INTERNATIONAL FRANCHISE OPERATIONS COMPLETED

IRVINE, Calif., Feb 11, 2005 -- Diedrich Coffee, Inc. (Nasdaq: DDRX) today
announced that it has completed the sale of its Gloria Jean's international
franchise operations to Jireh International Pty. Ltd., formerly the Gloria
Jean's master franchisee for Australia, for $16 million USD in cash. Under
related license and consulting agreements the Company will also receive
$7,020,000 USD over the next six years. The Company had previously announced
this pending transaction on December 6, 2004.

After all payments have been made to Diedrich Coffee under the license and
consulting agreements, all remaining Gloria Jean's trademarks, including those
in the U.S., will be transferred to Jireh. Concurrent with such future transfer,
the Company, through it's U.S.-based Gloria Jean's subsidiary, will then enter
into a perpetual royalty-free master franchise agreement with Jireh under which
the Company will continue to have exclusive rights to operate, franchise and
develop Gloria Jean's locations throughout the United States and Puerto Rico,
and to continue its wholesale operations under the Gloria Jean's Coffees brand
in these same markets.

As of February 11, 2005, there were 475 Gloria Jean's retail locations
worldwide, including 242 in Australia, and 147 in the United States. As a result
of this transaction closing, all Gloria Jean's Coffees locations outside the
U.S. and Puerto Rico are now affiliated with Jireh. The Company's domestic
Gloria Jean's outlets will not be materially affected by the sale of the
international trademarks and franchises. The Company's 55 Diedrich Coffee and
Coffee People company-operated units, it's Castroville roasting facility, and
its wholesale operations are also not materially affected by this transaction,
except that the Company has agreed to not compete internationally through it's
Diedrich Coffee and Coffee People brands for a period of two years.

About Diedrich Coffee

With headquarters in Irvine, California, Diedrich Coffee specializes in
sourcing, roasting and selling the world's highest quality coffees. The
Company's three brands are Gloria Jean's Coffees, Diedrich Coffee, and Coffee
People. The Company's 200 domestic retail outlets, the majority of which are
franchised, are located in 35 states. Diedrich Coffee also sells its coffees
through more than 460 wholesale accounts including office coffee service
distributors, restaurants and specialty retailers, via mail order and the
Internet. For more information about Diedrich Coffee, call 800/354-5282, or
visit the Company's Web sites at www.diedrich.com,www.gloriajeans.com, or
www.coffeepeople.com.

Forward-Looking Statements

Statements in this news release that relate to future plans, financial results
or projections, events or performance are forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, and fall under the safe
harbor. Actual results and financial position could differ materially from those
anticipated in the forward-looking statements as a result of a number of
factors, including, but not limited to, the successful management of Diedrich
Coffee's growth strategy, risks that arise in the context of operating a
business with significant franchise




operations, the impact of competition, the availability of working capital and
other risks and uncertainties described in detail under "Risk Factors and Trends
Affecting Diedrich Coffee and its Business" in the Company's annual report on
Form 10-K/A for the fiscal year ended June 30, 2004.

Information Contact:
Marty Lynch, Chief Financial Officer
(949) 260-6788


                                       2

EX-99.2

EXHIBIT 99.2

Notes to Unaudited Pro Forma Financial Statements Information

     The following unaudited pro forma balance sheet as of December 15, 2004 presents the financial position of Diedrich Coffee, Inc. (the “Company”) assuming the sale on February 10, 2005 of certain assets of the Company’s Gloria Jean’s brand international operations (the “Transaction”) had been completed on that date.

     The following unaudited pro forma statements of operations for the twenty-four weeks ended December 15, 2004 and for the fiscal year ended June 30, 2004 present the Company’s results of operations assuming that the Transaction had been completed on July 3, 2003, the first day of the fiscal year ended June 30, 2004. In the opinion of management, these statements include all material adjustments necessary to reflect, on a pro forma basis, the impact of the Transaction on the historical financial information of the Company. The adjustments set forth in the “Pro Forma Adjustments” column are described in the Notes to Unaudited Pro Forma Financial Statements.

     The sale of the Gloria Jean’s brand international operations provided $16.0 million in cash and approximately $7.0 million in future payments less estimated sales expenses of approximately $350,000. The sale resulted in a gain of approximately $18.9 million. Proceeds from the sale will be invested in safe, short-term liquid investments until such time as the Company’s Board of Directors and senior management decide on the use of proceeds.

     The unaudited pro forma financial statements for the periods presented do not purport to represent what the Company’s results of operations or financial position actually would have been had the Transaction occurred on the dates noted above, or to project the Company’s results of operations for any future periods. The pro forma adjustments are based upon available information and certain assumptions that the Company believes are reasonable under the circumstances. Actual amounts could differ materially from these estimates. The pro forma results should be read in conjunction with the financial statements and notes thereto in the Company’s Annual Report on Form 10-K for the year ended June 30, 2004 and quarterly report 10-Q for the twenty-four weeks ended December 15, 2004.

DIEDRICH COFFEE, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS

	As Reported							Pro Forma
	December 15,			Pro Forma				December 15,
	2004			Adjustments			Footnote	2004
Cash	$	1,315,000		$	16,941,000		A, B	$	18,256,000
Accounts Receivable, net		4,026,000			(1,291,000	)	B		2,735,000
Inventories		2,841,000			—				2,841,000
Current Portion of Other Receivable		—			1,000,000		A		1,000,000
Current Portion of Notes Receivable		198,000			—				198,000
Advertising Fund Assets, restricted		197,000			—				197,000
Prepaid expenses		712,000			—				712,000
Total Current Assets		9,289,000			16,650,000				25,939,000
Property & Equipment, net		7,333,000			—				7,333,000
Goodwill		10,190,000			(2,100,000	)	A		8,090,000
Other Receivables, net		—			4,390,000		A		4,390,000
Notes Receivable		36,000			—				36,000
Other assets		530,000			(20,000	)	A		510,000
Total Assets	$	27,378,000		$	18,920,000			$	46,298,000
Current installments of obligations under capital leases		(144,000	)		—				(144,000	)
Current installments of long-term debt		(425,000	)		—				(425,000	)
Accounts payable		(2,591,000	)		—				(2,591,000	)
Accrued compensation		(2,232,000	)		—				(2,232,000	)
Accrued expenses		(743,000	)		(800,000	)	D		(1,543,000	)
Franchisee deposits		(619,000	)		—				(619,000	)
Deferred franchise fee income		(1,060,000	)		940,000		C		(120,000	)
Advertising fund liabilities		(197,000	)		—				(197,000	)
Provision for store closure		(92,000	)		—				(92,000	)
Total Current Liabilities		(8,103,000	)		140,000				(7,963,000	)
Obligations under capital lease, excluding current installments		(334,000	)		—				(334,000	)
Long-term debt, excluding current installments		(1,394,000	)		—				(1,394,000	)
Deferred rent		(483,000	)		—				(483,000	)
Common stock warrants		(9,000	)		—				(9,000	)
Total Liabilities		(10,323,000	)		140,000				(10,183,000	)
Common stock		(52,000	)		—				(52,000	)
Additional paid-in capital		(58,182,000	)		—				(58,182,000	)
Accumulated deficit		41,179,000			(19,060,000	)	A, C, D		22,119,000
Total Stockholders’ Equity		(17,055,000	)		(19,060,000	)			(36,115,000	)
Total Liabilities and Stockholders’ Equity	$	(27,378,000	)	$	(18,920,000	)		$	(46,298,000	)

DIEDRICH COFFEE, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

	As Reported							Pro Forma
	24 Weeks Ended			Pro Forma				24 Weeks Ended
	December 15, 2004			Adjustments			Footnote	December 15, 2004
Retail Sales	$	14,686,000		$	—			$	14,686,000
Wholesale and other		8,312,000			(381,000	)	E		7,931,000
Franchise Revenue		3,789,000			(1,765,000	)	E		2,024,000
Total Net Revenue		26,787,000			(2,146,000	)			24,641,000
Cost of sales and related occupancy costs		12,351,000			(281,000	)	E		12,070,000
Operating Expenses		7,801,000			6,000		E		7,807,000
Depreciation & Amortization		1,134,000			—				1,134,000
General & Administrative Expenses		5,355,000			(383,000	)	E		4,972,000
Gain On Asset Disposals		(12,000	)		—				(12,000	)
Total Costs and Expenses		26,629,000			(658,000	)			25,971,000
Operating Income		158,000			(1,488,000	)			(1,330,000	)
Interest Expense, net		(93,000	)		—				(93,000	)
Income Before Tax		65,000			(1,488,000	)			(1,423,000	)
Income Tax provision		11,000			(11,000	)	E		—
Net income/(loss) from continuing operations	$	54,000		$	(1,477,000	)	E	$	(1,423,000	)
Net earnings per share from continuing operations
Basic		0.01			(0.29	)			(0.28	)
Diluted		0.01			(0.27	)			(0.26	)
Common Equivalent Shares Outstanding
Basic		5,165,000			5,165,000				5,165,000
Diluted		5,521,000			5,521,000				5,521,000

DIEDRICH COFFEE, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

	As Reported							Pro Forma
	Year Ended			Pro Forma				Year Ended
	June 30, 2004			Adjustments			Footnote	June 30, 2004
Retail Sales	$	31,617,000		$	—			$	31,617,000
Wholesale and other		15,466,000			(573,000	)	E		14,893,000
Franchise Revenue		7,542,000			(3,134,000	)	E		4,408,000
Total Net Revenue		54,625,000			(3,707,000	)			50,918,000
Cost of sales and related occupancy costs		25,112,000			(428,000	)	E		24,684,000
Operating Expenses		16,707,000			(7,000	)	E		16,700,000
Depreciation & Amortization		2,289,000			—				2,289,000
General & Administrative Expenses		9,813,000			(333,000	)	E		9,480,000
Provision for Asset Impairment & Restructuring		94,000			—				94,000
Gain On Asset Disposals		(2,000	)		—				(2,000	)
Total Costs and Expenses		54,013,000			(768,000	)			53,245,000
Operating Income		612,000			(2,939,000	)			(2,327,000	)
Interest Expense, net		(318,000	)		—				(318,000	)
Income (loss) Before Tax		294,000			(2,939,000	)			(2,645,000	)
Income Taxes		28,000			(29,000	)	E		(1,000	)
Net income/(loss) from continuing operations	$	266,000		$	(2,910,000	)	E	$	(2,644,000	)
Net earnings per share from continuing operations
Basic		0.05			(0.56	)			(0.51	)
Diluted		0.05			(0.56	)			(0.51	)
Common Equivalent Shares Outstanding
Basic		5,161,000			5,161,000				5,161,000
Diluted		5,218,000			5,218,000				5,218,000

Notes to Unaudited Pro Forma Financial Statements of Diedrich Coffee, Inc.

A.   The asset allocation of the sale of the Gloria Jean’s international operations to Jireh

Purchase price — Cash				$	16,000,000
Purchase price — Future payments					7,020,000
Deferred interest					(1,630,000	)
Goodwill					(2,100,000	)
Trademarks, net					(20,000	)
Estimated Expenses					(350,000	)
Gain on Sale of Gloria Jean’s international operations				$	18,920,000
Future payments are payable under a consulting agreement, a trademark license agreement and a roasting agreement. As 50% of the Year 1 payment will be received in 6 months and the remaining amount is due within a year, the first payment is not discounted, whereas Years 2-6 payments are discounted at an annual rate of 8%. The deferred interest amount represents the discount amount of the future payments using an 8% discount rate. The Company has a subordinated security interest in the assets being acquired by Jireh. Aggregate payments are payable as follows:
Payment #1	January 31, 2006	$	1,000,000
Payment #2	January 31, 2007		1,000,000
Payment #3	January 31, 2008		1,000,000
Payment #4	January 31, 2009		1,000,000
Payment #5	January 31, 2010		2,000,000
Payment #6	January 31, 2011		1,020,000
		$	7,020,000

B.   To record the collection of outstanding accounts receivable from Jireh

Cash	$	1,291,000
Accounts Receivable		(1,291,000	)

C.   To recognize deferred franchise fees no longer subject to any performance by the Company

Deferred Franchise Fee Income	$	940,000
Franchise Fee Income		(940,000	)

D.   To record an income tax provision on the gain on sale of Gloria Jean’s international operations based on an estimated effective rate of 4%. This estimated tax rate is different than the statutory tax rates due to the projected utilization of net operating loss (NOL) carry-forwards and alternative minimum taxes. The utilization of these NOL carry-forwards could be limited due to restrictions imposed under federal and state laws. Because the Company has not completed its tax analysis of this transaction, the estimated tax liability may differ significantly from the actual tax liability.

Tax Provision Gain on Sale of Assets	$	800,000
Accrued Taxes		(800,000	)

E.   To eliminate Gloria Jean’s international operations revenue, costs and expenses assuming the sale was consumated on July 3, 2003

	24 Weeks Ended			52 Weeks Ended
	December 15, 2004			June 30, 2004
Wholesale and other	$	(381,000	)	$	(573,000	)
Franchise Revenue		(1,765,000	)		(3,134,000	)
		(2,146,000	)		(3,707,000	)
Cost of sales and related occupancy costs		(281,000	)		(428,000	)
Operating Expenses		6,000			(7,000	)
Depreciation & Amortization		—			—
General & Administrative Expenses		(383,000	)		(333,000	)
		(658,000	)		(768,000	)
Operating Loss		(1,488,000	)		(2,939,000	)
Interest (Expense)/Income, net		—			—
Loss Before Tax		(1,488,000	)		(2,939,000	)
Income Tax Provision		(11,000	)		(29,000	)
Net loss	$	(1,477,000	)	$	(2,910,000	)