TRADEMARK ASSIGNMENT AND CO-EXISTENCE AGREEMENT

Exhibit 10.3

 

TRADEMARK ASSIGNMENT

 

AND

 

CO-EXISTENCE AGREEMENT

 

Between

 

GORDON BIERSCH BREWING

COMPANY

 

And

 

GB ACQUISITION, INC.

 

Dated as of December 10, 1999

TABLE OF CONTENTS

 

 

i

 

ii

 

EXHIBITS

 

 

iii

AGREEMENT

 

This ASSIGNMENT and CO-EXISTENCE AGREEMENT, (this “ Agreement ”), dated December 10, 1999 (the “ Effective Date ”), is by and between Gordon Biersch Brewing Company, Inc., a California corporation (“ GBC ”), 2960 W. Sahara Avenue, Suite 200, Las Vegas, Nevada 89102 and GB Acquisition, Inc., a Tennessee corporation (“ Big River ”). 100 East 10 ^th Street, Suite 600, Chattanooga, Tennessee 37402 (each individually a “ Party ”; collectively the “ Parties ”).

 

W I T N E S S E T H :

 

WHEREAS, the Parties entered into an Asset Purchase Agreement dated September 28, 1999 pursuant to which GBC has agreed to sell, transfer and assign to Big River all of the assets relating to GBC’s Restaurant Business, and Big River has agreed to acquire all of the assets relating to GBC’s Restaurant Business; and

 

WHEREAS, Big River desires to acquire from GBC all right, title and interest in, to and under the Restaurant Marks exclusively for use in the Restaurant Business, and the goodwill associated with the Restaurant Business and Promotional Goods and Services in the Territory; and

 

WHEREAS, GBC desires to obtain Big River’s consent to use the Restaurant Marks and Brewery Marks on or in connection with the Concession Business and Promotional Goods and Services within the Territory; and

 

WHEREAS, the Parties believe that there is no likelihood of confusion between the Brewery Marks and Restaurant Marks, provided that the Brewery Marks and Restaurant Marks are used and registered in connection with the Brewery Business and the Restaurant Business in accordance with the terms and conditions of this Agreement.

 

NOW THEREFORE, for and in consideration of the mutual covenants and agreements contained herein and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

 

ARTICLE 1 DEFINITIONS .

 

1.01 Affiliate shall mean any person or entity of any kind effectively controlling, effectively controlled by or under common control with a Party.

 

1.02 Brand Management Council shall refer to the joint administrative body composed of representatives of GBC and Big River, as more fully described in Article 4.

 

1.03 Brewery shall mean, without limitation, any facility used by GBC to manufacture the Product in accordance with this Agreement.

 

1.04 Brewery Business shall mean without limitation, beer brewed in accordance with the Recipes under this Agreement, beer brewing services, beer bottling, beer kegging and beer

 

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distribution services, malt beverages, other beverages, food that is distributed outside the Restaurants, in accordance with Section 3.02(p), bottled or brewed beverages of any kind, alcoholic beverages, alcohol products or services, any product or service intended for use in connection with beverages or alcoholic beverages, and Promotional Goods and Services related to the foregoing, and the Concession Business, all of the foregoing as conducted under the Brewery Marks in all trade channels outside the Restaurants.

 

1.05 Brewery Marks shall mean those Marks set forth on Exhibit A and Exhibit B3-B4 , and, with respect to the Brewery Business, those Marks set forth on Exhibit B-5 .

 

1.06 Concession Business shall mean the sale of beer under the Brewery Marks and the sale of GORDON BIERSCH GARLIC FRIES ^® fried potatoes, and no other products under the Restaurant Marks without Big River’s permission, through concessions, including without limitation stands, booths, bars and kiosks in sports arenas, stadiums, coliseums, ski resorts, universities, airports, public parks, zoos, and other sports, recreation and entertainment facilities, in all instances excluding restaurants.

 

1.07 Confidential and Proprietary Information shall mean this Agreement, the Recipes, and any information relating to technical, marketing, product and/or business affairs which is disclosed in the course of this Agreement and which is clearly designated as “confidential” or “proprietary” by the disclosing party, including trade secrets relating to each Party’s food or beverage products or services, software research and developments, inventions, processes, formulae, techniques, methods, procedures, designs or other technical and business information. Confidential and Proprietary information shall not include any information which (1) becomes generally available to the public without breach of this Agreement, (2) except for Exhibit E regarding the Recipes, is in the possession of one Party prior to its disclosure by the other Party as evidenced by records kept in the ordinary course of business or by proof of actual possession or (3) becomes available from a third party not in breach of any obligations of confidentiality or any legal, fiduciary or ethical disclosure restraints.

 

1.08 Marks shall refer to all registered and unregistered trademarks, service marks, trade dress, logos, slogans, brands and designs, trade names, Internet domain names, keywords, metatags and hyperlinks and any other designation of source used to identify and distinguish the Restaurant Business and the Brewery Business, or any combination thereof, owned or used by GBC prior to the Effective Date, including, without limitation, those set forth on Exhibit B .

 

1.09 Metropolitan Statistical Area (MSA) shall refer to a geographic area with a population of at least 500,000 and consisting of one or more counties, or a statistically equivalent area, as designated and defined by the Federal Office of Management and Budget and meeting the official published standards of population and metropolitan character. In the six New England states (Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont), cities and towns (rather than counties) are used as the component geographic units.

 

1.10 Product shall mean the alcoholic malt beverages which are brewed by the Parties pursuant to this Agreement in accordance with the (i) the Recipes, product specifications and guidelines attached hereto as Exhibit E; (ii) the German Purity Law (Reinheitsgebot), unless otherwise amended by the Parties in writing; (iii) and, initially, in the following styles, as may be

 

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amended by the Parties from time to time: Pilsner, Märzen, Blonde Bock, Winterbock, Festbier, Hefeweizen, Maibock, Dunkels, Dunkel Weizen, and Export.

 

1.11 Point-of-Sale Material shall mean without limitation, coasters, displays, table cards, bar cards, signage, napkins and ashtrays.

 

1.12 Promotional Goods and Services shall mean without limitation, wearing apparel, namely shirts, t-shirts, sport shirts, hats and caps, and glassware and the concession facilities to which the Marks are affixed, and any other goods or services, including promotional events, sold, distributed or provided exclusively to advertise and promote the Restaurant Business and/or the Brewery Business.

 

1.13 Recipes shall mean without limitation all formulae, recipes, product specifications, brewing processes, trade secrets, know-how and scientific and technical information necessary for the manufacture of an alcoholic malt beverage having the taste, color, makeup, character and product profile corresponding to the beers under the Marks and the product specifications for manufacturing GORDON BIERSCH GARLIC FRIES ^® both as listed on Exhibit E . The Recipes may be amended or supplemented from time to time in the future.

 

1.14 Restaurant Business shall mean restaurant table dining and bar services featuring food and beer brewed under the Restaurant Marks and Recipes on the premises and rendered in an upscale and casual dining atmosphere, catering services, preparation and sale of deep fried potatoes and Promotional Goods and Services and Point-of-Sale Material related to the foregoing, excluding the Brewery Business and the Concession Business.

 

1.15 Restaurants shall mean the premises where restaurant and bar dining services are rendered, which feature Product brewed under the Restaurant Marks in accordance with this Agreement.

 

1.16 Restaurant Marks shall mean those Marks set forth on Exhibit B-6 , Exhibit C , and, with respect to the Restaurant Business, those Marks set forth on Exhibit B-5 , and any other marks associated exclusively with the Restaurant Business.

 

1.17 Territory shall mean the world.

 

1.18 Trade Dress shall mean those Marks set forth on Exhibit B-3 to B-6.

 

1.19 Web Site shall be defined as the web site under the Internet Domain Name “gordonbiersch.com” operated by GBC on the Effective Date.

 

1.20 Web Site Content shall include, without limitation, all of the Web Site contents, including without limitation, hypertext markup language or HTML files, text, graphics, graphics files in any file format, images, artwork, audio files, audiovisual materials, and electronic commerce and database applications which are contained in the Web Site source code and object code, technology, methods, techniques, software, algorithms, electronic commerce and database applications, and all copyrights, trademark rights, patent rights and any other intellectual property

 

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rights thereto owned by GBC and used by GBC solely in connection with the Web Site on the Effective Date.

 

ARTICLE 2 REPRESENTATIONS AND WARRANTIES .

 

2.01 By Big River . In addition to the covenants made in Articles 3 and 4, in order to induce GBC to execute this Agreement, Big River represents and warrants that:

 

(1)

subject to the receipt of the Recipes and product specifications attached hereto as Exhibit E , Big River is in possession of (or will acquire) and will use all necessary ability, knowledge, know-how and methods of production to brew, sell and serve beer in accordance with the terms and conditions of this Agreement;

 

(2)

Big River has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement;

 

(3)

the execution, delivery and performance of this Agreement has been duly authorized by Big River;

 

(4)

Big River is duly licensed, authorized or qualified to do business and is in good standing in every jurisdiction in which a license, authorization or qualification is required for the ownership or leasing of its assets and the transaction of the Restaurant Business and the business of the character transacted by it and contemplated by this Agreement, except where the failure to be so licensed, authorized or qualified would not have a material adverse effect on its ability to fulfill its obligations under this Agreement;

 

(5)

Big River is in compliance with all applicable Federal, state and local laws and regulations pertaining to the Restaurant Business and its obligations under this Agreement, except where the failure to be so compliant would not have a material adverse effect on its ability to fulfill its obligations under this Agreement.

 

2.02 By GBC . In addition to the covenants made in Articles 3 and 4, in order to induce Big River to execute this Agreement, GBC represents and warrants that:

 

(1)

GBC has full legal title to the Marks in the United States free and clear of any liens or encumbrances and, to its knowledge, of any right or interest of others therein, direct or contingent, except as set forth on Exhibit B ;

 

(2)

Exhibit B sets forth the Marks under which GBC presently conducts the Restaurant Business and the Brewery Business. However, Exhibit B does not necessarily include all of the Marks or trade dress used in advertising, packaging and labeling materials for the Product, which Brewery Marks and trade dress will be made available to Big River

 

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solely for use in connection with Point-of-Sale Materials for Product brewed under the Restaurant Marks in the Restaurants;

 

(3)

GBC is the owner of the Recipes, and there are no existing process patents with respect thereto;

 

(4)

GBC has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement;

 

(5)

except as set forth on Exhibit F , GBC is not a party to any other contract, agreement or understanding, written or oral, that will be assumed by Big River (with the exception of agreements with respect to the Concession Business listed on Exhibit F , which will not be assumed by Big River) pursuant to the Asset Purchase Agreement and which materially affects the manufacture, promotion, marketing or sale of beer under the Marks in the Territory;

 

(6)

the execution, delivery and performance of this Agreement has been duly authorized by GBC;

 

(7)

GBC is duly licensed, authorized or qualified to do business and is in good standing in every jurisdiction in which a license, authorization or qualification is required for the ownership or leasing of its assets and the transaction of the Brewery Business, and the business of the character transacted by it and contemplated by this Agreement, except where the failure to be so licensed, authorized or qualified would not have a material adverse effect on its ability to fulfill its obligations under this Agreement; and

 

(8)

GBC is in compliance with all applicable Federal, state and local laws and regulations pertaining to the Brewery Business and it obligations under this Agreement, except where the failure to be so compliant would not have a material adverse effect on its ability to fulfill its obligations under this Agreement.

 

ARTICLE 3 CERTAIN COVENANTS .

 

3.01 Covenants by Big River .

 

Big River covenants and agrees that, except as otherwise expressly provided for herein, it:

 

(a)

shall not use or seek to register the Restaurant Marks or any confusingly similar trademark, service mark, trade dress, Internet Domain name, or similar electronic designation of address, in connection with the Brewery Business, or any products or services closely related thereto, except as expressly provided for herein;

 

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(b)

shall never use or seek to register the Brewery Marks in close connection with the Restaurant Marks or any other marks owned by Big River or any third party marks so as to convey the impression of a unitary or composite mark, or otherwise “co-brand” the Restaurant Marks with any third party marks, except as expressly provided for in this Agreement;

 

(c)

shall not sell or serve any draft or bottled beer not brewed in accordance with the Recipes in a manner likely to confuse or mislead customers to believe that such beer is Product or beer brewed under the Restaurant Marks. Big River shall not affix the Restaurant Marks to any beer other than beer brewed in accordance with Recipes. In addition, Big River shall display bottled beer bearing the Brewery Marks of GBC in the Restaurants of the styles which Big River is brewing in the Restaurants;

 

(d)

shall not expand its use of the Restaurant Marks beyond the scope of Restaurant Business without GBC’s prior written consent;

 

(e)

shall not challenge or contest the ownership or validity of, or knowingly facilitate the violation, infringement or dilution by others of (1) the Brewery Marks as used and registered in connection with the Brewery Business in accordance with the terms and conditions of this Agreement; or (2) the Gordon Biersch Website Content associated with the Brewery Business, as used and registered in connection with accordance with the terms and conditions of this Agreement;

 

(f)

shall brew and sell in the Restaurants, at its choice, at least three of the following four Product styles: Märzen, Pilsner, Blond Bock and Export;

 

(g)

may provide written notice to GBC within ninety (90) days of the scheduled opening of a Restaurant;

 

(h)

shall use its best efforts to promote and support the Restaurant Business, and educate and train Restaurant personnel to brew, sell and serve the Product; provided that Big River shall not use the Web Site to promote and support the Brewery Business under the Brewery Marks without GBC’s written permission. In addition, Big River shall not use the Restaurant Marks in advertising and promotional materials to promote and advertise any business other than the Restaurant Business. Big River shall not use the Web Site to promote or sell any goods or services other than the goods and services associated with the Restaurant Business;

 

(i)

shall keep confidential and secret and shall not disclose or make available the Confidential and Proprietary Information, directly or indirectly to anyone other than its own employees. Only the employees of Big River who are required to know the details of the Confidential and Proprietary information to enable Big River to perform its obligations hereunder shall receive such details. Each such

 

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employee shall have entered into a secrecy agreement with Big River in which he or she agrees to keep the Confidential and Proprietary Information secret;

 

(j)

shall not conduct any Brewery Business under the Restaurant Marks, or Concession Business under the Restaurant Marks, or allow any third party to do so in the Territory;

 

(k)

shall brew Product exclusively under the Restaurant Marks in the Territory solely on the premises of Restaurants in the Territory; provided, however that Big River may (1) transfer Product brewed in the Restaurants between the Restaurants or (2) brew Product for use in the Restaurants exclusively in other locations which shall be operated by Big River or GBC. Big River shall not contract with or permit any third party to brew Product. Big River may also conduct events outside the Restaurants solely for marketing and promotion of the Restaurant Business or the Brewery Business. Notwithstanding the foregoing, Big River shall not regularly conduct any Brewery Business outside the Restaurants under the Restaurant Marks.

 

(l)

shall not object to GBC’s use of the Brewery Marks in connection with the Brewery Business conducted outside the Restaurants under the Brewery Marks, including brewing, bottling and kegging various beers for sale through trade channels outside the Restaurants;

 

(m)

shall operate the Restaurant Business in a manner that conforms at least to the greater level of quality exemplified by (1) the past practices of GBC or (2) the then-current use of the Brewery Marks by GBC in the Brewery Business, and otherwise in a manner consistent with the image, goodwill and reputation symbolized and associated with the Brewery Marks and GBC; and

 

(n)

Big River shall obtain all applicable permits and licenses in connection with its obligations under this Agreement, except where the failure to be so licensed, authorized or qualified would not have a material adverse effect on its ability to fulfill its obligations under this Agreement.

 

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3.02 Covenants by GBC . GBC covenants and agrees that, except as expressly provided herein, it:

 

(a)

shall not use or seek to register the Brewery Marks or any confusingly similar trademark, service mark, trade dress, Internet Domain name, or similar electronic designation of address, in connection with the Restaurant Business, or any products or services closely related thereto, except as expressly provided for herein. Nothing herein shall preclude GBC from serving Product in glassware bearing the Brewery Marks, or using the Brewery Marks in the Concession Business; provided, however, that in no event will such Concession Business service be rendered on or in close proximity to the premises of any Restaurant;

 

(b)

shall never use or seek to register the Restaurant Marks in close connection with the