ALTERNATION AGREEMENT BETWEEN BOSTON BEER CORPORATION AND MILLER BREWING COMPANY Dated October 23, 2007
EXHIBIT 10.59
[ * ] DENOTES EXPURGATED INFORMATION
BETWEEN
BOSTON BEER CORPORATION
AND
XXXXXX BREWING COMPANY
Dated October 23, 2007
TABLE OF CONTENTS
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SECTION 1 | DEFINITIONS |
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SECTION 2 | TERM |
4 | ||||||
SECTION 3 | QUALITY ASSURANCE STANDARDS |
4 | ||||||
3.1 | Compliance with QA Standards |
4 | ||||||
3.2 | Compliance with Foreign Law |
5 | ||||||
SECTION 4 | ALTERNATING PROPRIETORSHIP |
5 | ||||||
4.1 | Intent to Alternate |
5 | ||||||
4.2 | Occupation of Brewery |
5 | ||||||
4.3 | Lease of Employees |
6 | ||||||
4.4 | Cessation of Production at Source Plant |
6 | ||||||
4.5 | Guaranteed Capacity Obligations |
7 | ||||||
4.6 | Annual and Monthly Production Forecasting |
8 | ||||||
4.7 | Manufacturing Obligation Limitations |
8 | ||||||
4.8 | Packaging |
8 | ||||||
4.9 | Manufacturing, Process and Packaging Changes |
9 | ||||||
4.10 | Dunnage |
10 | ||||||
SECTION 5 | INGREDIENTS AND PACKAGING |
11 | ||||||
5.1 | Procurement Services |
11 | ||||||
5.2 | Commodity Markets |
11 | ||||||
5.3 | No Shared Savings |
11 | ||||||
5.4 | Inventory |
11 | ||||||
SECTION 6 | TRANSPORTATION SERVICES |
12 | ||||||
6.1 | Transportation Services |
12 | ||||||
6.2 | Carrier Selection |
12 | ||||||
6.3 | Responsibility for Claims |
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6.4 | No Direct Sales |
12 | ||||||
6.5 | Warehouse Loading and Availability |
12 | ||||||
6.6 | Compliance with QA Standards |
12 | ||||||
6.7 | Transportation Fees |
12 |
TABLE OF CONTENTS
(continued)
(continued)
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SECTION 7 | PRODUCTION REQUESTS |
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7.1 | Production Requests |
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SECTION 8 | ACCEPTANCE |
13 | ||||||
SECTION 9 | ALTERNATION FEES AND PRICING |
13 | ||||||
SECTION 10 | INVOICES AND PAYMENT |
14 | ||||||
10.1 | Boston Responsibility |
14 | ||||||
10.2 | Billing and Payment Terms |
14 | ||||||
10.3 | Withholding of Disputed Amounts |
14 | ||||||
10.4 | Stand-By Letter of Credit |
14 | ||||||
10.5 | Prepayment Rights |
14 | ||||||
10.6 | Interest Offset |
15 | ||||||
SECTION 11 | AUDITS AND RECORDS |
15 | ||||||
11.1 | Audit of Pricing Procedures |
15 | ||||||
11.2 | Boston’s Records |
16 | ||||||
SECTION 12 | INSURANCE |
16 | ||||||
12.1 | Boston Insurance Coverage |
16 | ||||||
12.2 | Coverage Rating |
16 | ||||||
12.3 | Xxxxxx Insurance Coverage |
16 | ||||||
SECTION 13 | WARRANTIES |
17 | ||||||
13.1 | Authority |
17 | ||||||
13.2 | Brands |
17 | ||||||
13.3 | Intellectual Property |
17 | ||||||
SECTION 14 | INDEMNIFICATION |
18 | ||||||
14.1 | Intellectual Property Indemnification |
18 | ||||||
14.2 | Boston Indemnification Obligations |
18 | ||||||
14.3 | Xxxxxx Indemnification Obligations |
18 | ||||||
14.4 | Indemnification Procedures |
19 | ||||||
14.5 | Responsibility for Boston Wholesaler Returns |
19 | ||||||
14.6 | Responsibility for Sales and Marketing Activities |
19 |
[ * ] indicates that information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
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TABLE OF CONTENTS
(continued)
(continued)
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14.7 | Responsibility for Authorized Release of Brands |
19 | ||||||
14.8 | Responsibility for Maintaining Confidential Pricing Information |
19 | ||||||
SECTION 15 | CONFIDENTIALITY |
19 | ||||||
15.1 | No Sharing of Competitive Information |
19 | ||||||
15.2 | Confidentiality Obligations |
20 | ||||||
15.3 | No Disclosure |
20 | ||||||
SECTION 16 | LIMITATION OF LIABILITY AND PERIODS ON CLAIMS |
20 | ||||||
16.1 | No Consequential Damages |
20 | ||||||
16.2 | Limitation on Time for Pricing Claims |
20 | ||||||
16.3 | Limitation on Time for Other Claims |
21 | ||||||
SECTION 17 | DISPUTE RESOLUTION |
21 | ||||||
17.1 | Resolution of Disputes |
21 | ||||||
17.2 | Dispute Procedures |
21 | ||||||
17.3 | ADR Process |
22 | ||||||
17.4 | Other Remedies |
22 | ||||||
17.5 | Continued Performance |
22 | ||||||
SECTION 18 | FORCE MAJEURE |
22 | ||||||
SECTION 19 | CHANGES TO LIST OF BRANDS |
22 | ||||||
SECTION 20 | TERMINATION |
23 | ||||||
20.1 | Boston’s Right to Terminate |
23 | ||||||
20.2 | Xxxxxx’x Right to Terminate |
23 | ||||||
20.3 | Payments Due Upon Expiration or Termination |
25 | ||||||
SECTION 21 | NOTICES |
25 | ||||||
21.1 | Method of Giving Notice |
25 | ||||||
21.2 | Notification of Boston Wholesalers |
26 | ||||||
SECTION 22 | GOVERNING LAW AND VENUE |
26 | ||||||
SECTION 23 | SUCCESSORS AND ASSIGNMENT |
27 | ||||||
SECTION 24 | SEVERABILITY |
27 | ||||||
SECTION 25 | AMENDMENTS |
27 |
[ * ] indicates that information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
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TABLE OF CONTENTS
(continued)
(continued)
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SECTION 26 | PUBLICITY |
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SECTION 27 | NONSOLICITATION OF EMPLOYEES |
27 | ||||||
SECTION 28 | CAPTIONS |
28 | ||||||
SECTION 29 | NO THIRD PARTY BENEFICIARIES |
28 | ||||||
SECTION 30 | ENTIRE AGREEMENT |
28 | ||||||
SCHEDULE 9 | ALTERNATION FEES AND PRICING |
1 | ||||||
[ * ] |
[ * ] indicates that information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
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This ALTERNATION AGREEMENT, dated as of October 23, 2007, is made by and among Boston Beer Corporation a
Massachusetts corporation (“Boston”) and Xxxxxx Brewing Company, a Wisconsin corporation, and its subsidiaries
(“Xxxxxx”).
WHEREAS, Boston and Xxxxxx are currently parties to an Amended and Restated Production Agreement (the “Prior
Agreement”) dated as of November 1, 1998, originally executed by and between Boston and Xxxxx Brewing Company, which
Prior Agreement has been amended and assigned from time to time; and
WHEREAS, as of the Effective Date, the parties wish to enter into this Alternation Agreement, which shall
thereafter supplant and supersede the Prior Agreement as amended or revised, which Prior Agreement shall thereafter be
deemed terminated and no longer have any force or effect.
NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter contained, the parties agree
as follows:
SECTION 1
DEFINITIONS
DEFINITIONS
As used herein, the following capitalized terms shall have the following meanings:
1.1 “Agreement” shall mean this agreement, including the Exhibits and Schedules attached hereto.
1.2 “Alternation” shall mean an election by a xxxxxx with the TTB whereby one xxxxxx is treated as having
full use and control over the manufacturing facility of another.
1.3 “Applicable Taxes” shall have the meaning ascribed in Section 9.2.C. of Schedule 9.
1.4 “BPA” or brand/package/alcohol shall mean any specific combination of (i) a Brand, (ii) a package
type, style, size and configuration and (iii) an alcohol content; for example six packs of 12 ounce bottles of Xxx
Xxxxx beer with 4% alcohol by volume.
1.5 “Barrel” shall mean a quantity of beverages equal to 31 U.S. gallons.
1.6 “Boston Wholesalers” shall mean those third party licensed beer wholesalers that have entered into
agreements with Boston to distribute the Brands on behalf of Boston and have been specifically authorized by Boston to
receive the Brands at the Source Plant pursuant to this Agreement. Boston Wholesalers shall be deemed to include any
duly licensed broker or agent specifically authorized by Boston to receive the Brands at the Source Plant pursuant to
this Agreement. Boston has provided a written list of Boston Wholesalers to Xxxxxx prior to the date of this Agreement, and shall provide Xxxxxx with written notification of any changes to the identities of the
Boston Wholesalers on that list before Xxxxxx will be required to give effectiveness to any such change pursuant to
this Agreement.
[ * ] indicates that information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
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1.7 “Boston’s Percent Use” shall mean the percentage, calculated to two decimal points (i.e.
one-hundredths of one percent), derived by dividing the use of the applicable process, space, capacity, cost or other
item for the manufacturing, packaging or other production of the Brands for a particular period of time at a
particular Source Plant, by the total use (including under this Agreement and for other contract brewing or alternation
relationships) of such process, space, capacity, cost or other item for the applicable period of time at the applicable
Source Plant.
1.8 “Brands” shall mean Boston’s Core Brands and Seasonal Brands listed on Schedule 1.8 attached hereto.
1.9 “Brands Manufacturing Price” shall have the meaning set forth in Schedule 9 attached hereto.
1.10 “Brewing Period” shall mean each of the twelve (12) month periods commencing on the first day of each
Fiscal Year; provided that the first Brewing Period (the “First Brewing Period”) shall be the shortened period
commencing as of the date of this Agreement and ending on the last day of the Fiscal Year in which this Agreement
becomes effective.
1.11 “Brewing Period Quarter” shall mean each of the four, three-calendar month periods comprising a
Brewing Period.
1.12 “Core Brands” shall mean Xxxxxx Xxxxx Boston Lager and Xxx Xxxxx Light
1.13 “Destruction Costs” shall mean the costs and expenses described in Section 6.6.
1.14 “Dunnage” shall mean pallets, protective blankets, cardboard separators, plywood bulkhead material,
airbags, returnable bottles and cartons.
1.15 “Effective Date” shall have the meaning described in Section 2.
1.16 “Fiscal Year” shall mean, for purposes of this contract, Xxxxxx’x fiscal year, which may change from
time to time. As of the commencement of this Agreement, Xxxxxx’x fiscal year begins on April 1st and ends on March
31st.
1.17 “Ingredients” shall mean any material used by Boston in the manufacture of the Brands.
1.18 “New Packaging Materials Costs” shall mean the costs and expenses described in Section 4.8.C.
[ * ] indicates that information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
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1.19 “No Show” shall mean when the Boston assigned carrier fails to arrive, ready to load, just prior to
the prescribed loading period.
1.20 “Occupation” shall have the meaning described in Section 4.1.
1.21 “Order Cycle” shall mean the four or five week shipping period that starts with the first day of each
month and ends with the last day of such month.
1.22 “Packaging” shall mean any materials required for the packaging of the Brands to be distributed in
the United States in a saleable package and which are compatible with equipment and other operating limitations at the
respective Source Plant.
1.23 “Pricing Procedures” shall have the meaning described in Section 11.1.
1.24 “Prime Rate” shall mean the rate announced by Xxxxxx Guaranty Trust Company of New York as its prime
rate in effect as of the last day of the subsequent Brewing Period Quarter.
1.25 “Prior Agreement” shall have the meaning described in the preamble of this Agreement.
1.26 “Process Change Costs” shall mean the costs and expenses described in Section 4.9.A.
1.27 “Production Requests” shall mean those requests for production of Brands which are made by Boston as
set forth in Section 7.1.
1.28 “Purchase Discount” shall mean any purchase discount, quantity discount, refund or rebate, but
specifically excluding those received as a result of credit terms.
1.29 “QA Standards” shall mean Boston’s Quality Assurance Standards, including all quality assurance
requirements, procedures, guidelines and specifications currently established and promulgated by Boston, agreed to by
Xxxxxx, and attached hereto as Schedule 1.29. “QA Standards” also incorporates any required federal or state law or
regulation imposed on any service rendered hereunder.
1.30 “Reservation Fee” shall have the meaning described in Section 9.4 of Schedule 9.
1.31 “Seasonal Brands” shall mean the brands of malt beverages listed and identified as such on Schedule
1.8 attached hereto, and substitutions for these brands that Boston Beer may make from time to time in accordance with
Section 19 hereof.
1.32 “Shipped Unit” shall mean a particular type, style, size and configuration of packaging manufactured
by Xxxxxx for sale and shipment to Boston Wholesalers located in the United States in accordance with the terms of this
Agreement.
[ * ] indicates that information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
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1.33 “Source Plant” shall mean those lines of the brewery owned and operated by Xxxxxx (or any of its
Affiliates from time to time) located in Eden, North Carolina which are listed on Schedule 1.33, and such other lines,
whether located at the Eden, North Carolina brewery or such other brewery owned and operated by Xxxxxx (or any of its
Affiliates from time to time), as the parties may from time to time mutually agree to add to Schedule 1.33 after the
Effective Date.
1.34 “SVC Component Parts” shall mean the SVC Component Parts set forth in Schedule 1.34.
1.35 “TTB” shall mean the Alcohol and Tobacco Tax and Trade Bureau of the U.S. Department of the Treasury
or successor agency.
1.36 “Term” shall mean the period of time during which this Agreement is in effect, as described in
Section 2.
1.37 “Transportation Fees” shall mean the actual cost to Xxxxxx of the Transportation Services, including
without limitation all freight charges, stop off charges, fuel charges, load control center fees, no show freight
charges, distributor detention charges, claims fees, premiums, and all other costs and expenses associated with the
provision of Transportation Services.
1.38 “Transportation Services” shall mean those services related to the timely removal of Brands from any
Xxxxxx Brewery and the shipment of those Brands to Boston Wholesalers.
1.39 “Unique Materials” shall mean any materials that are not used by Xxxxxx in the manufacture of its own
brands of malt beverages.
1.40 “Wire Transfer” shall mean the wire transfer of immediately available funds to such account or
accounts as may be designated to the payor by the payee in writing from time to time.
SECTION 2
TERM
TERM
This Agreement shall become effective as of November 1, 2008 (the “Effective Date”) and shall end on [ * ], unless
terminated earlier pursuant to Section 20. The parties agree that on or before [ * ] they will confer to discuss their
respective intent to amend or extend this Agreement or to enter into a new brewing agreement or alternation agreement
to become effective as of [ * ]. The parties agree that, prior to the Effective Date, the Prior Agreement shall remain
in full force and effect.
SECTION 3
QUALITY ASSURANCE STANDARDS
QUALITY ASSURANCE STANDARDS
3.1 Compliance with QA Standards.
[ * ] indicates that information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
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X. Xxxxxx and Boston shall each conform their actions hereunder to the QA Standards. Xxxxxx shall perform all
services pursuant to this Agreement in compliance with the QA Standards, and Boston agrees to accept the QA Standards
for all services performed hereunder. All Packaging utilized by Boston must satisfy the QA Standards. The QA
Standards may be changed by Boston from time to time with Xxxxxx’x consent, which consent shall not be unreasonably
withheld. The parties agree that it shall not be unreasonable for Xxxxxx to withhold its consent to a change in the
QA Standards if, among other reasons, Xxxxxx reasonably believes the requested change to the QA Standards would: (a)
compromise or be inferior to Xxxxxx’x QA standards, (b) result in a decrease in the efficiency and/or capacity of the
Source Plant, (c) not be compatible with Xxxxxx’x facilities and equipment, or (d) result in increased costs that
Boston does not agree to pay. Xxxxxx may not change the QA Standards without consent from Boston Beer.
B. In the event that Boston fails to comply with any QA Standard (including but not limited to the QA Standards
applicable to Packaging), any increased costs associated with such failure shall be passed through to Boston as part
of the Standard Variable Cost.
3.2 Compliance with Foreign Law.
Boston acknowledges that it is wholly responsible for compliance with any foreign law, regulation or other
standard for any Brand that will be shipped outside of the United States. Boston shall provide Xxxxxx with written
notice of any such applicable foreign law, regulation or standard before Xxxxxx will be required to allow Boston to
produce Brands to be shipped internationally. Xxxxxx has the sole right to either accept compliance with any such
applicable foreign law, regulation or standard or to reject any such production requests.
SECTION 4
ALTERNATING PROPRIETORSHIP
ALTERNATING PROPRIETORSHIP
4.1 Intent to Alternate. It is the intent of the parties to establish an alternating proprietorship
relationship in accordance with the rules and regulations established by the TTB, as amended from time to time, whereby
Boston will occupy the Source Plant and lease Xxxxxx’x employees, for the purpose of producing Boston’s Brands in the
Xxxxxx Breweries (the “Occupation”). From immediately prior to the commencement of the brewing process, and for all
times thereafter, Boston shall own all Ingredients, packaging, work in progress, etc. and shall bear the full risk of
loss.
4.2 Occupation of Brewery.
X. Xxxxxx grants to Boston the right to occupy the Source Plant for the purpose of storing raw ingredients,
manufacturing, processing, packing, and storing Brands. Nothing in this Agreement shall in any way be construed to
grant Boston any property interest in the Source Plant.
[ * ] indicates that information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
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B. During the course of an Occupation, upon at least 24 hours prior notice to Xxxxxx’x Source Plant Manager
(except in the event of an emergency involving an injury or actual or likely production stoppage, in which case Boston
shall provide notice as promptly as practicable), Boston shall be entitled to full supervised access to the Source
Plant, including but not limited to the ability to take routine line samples of the Brands at any time; provided that
Boston will in no event have access to Xxxxxx’x records (except to the extent required by Section 4.2.C), packaging
materials, or other proprietary information or materials.
C. Boston shall keep books and records related to the production of Boston Brands at the Source Plant, separate
and apart from the books and records of Xxxxxx. Upon at least 24 hours prior notice to Xxxxxx, Boston shall have
supervised, 24 hour access to Boston’s books and records.
4.3 Lease of Employees.
X. Xxxxxx shall make available to Boston the services of those Xxxxxx employees necessary for Boston to produce
its Brands in accordance with this Agreement, including but not limited to supervisory employees. Such employees shall
at all times remain employees of Xxxxxx, and shall only be leased to Boston for the specific purpose of producing
Boston’s Brands in accordance with this Agreement. Xxxxxx shall at all times retain the sole authority to hire and
fire employees, including but not limited to those employees leased to Boston. Subject to Xxxxxx’x obligation to
ensure that sufficient employees are leased to Boston to allow Boston to produce its Brands in accordance with this
Agreement, Xxxxxx shall retain the full authority and sole discretion to determine which employees will be leased to
Boston from time to time, and may make any substitutions and changes that Xxxxxx chooses.
X. Xxxxxx shall at all times be responsible for the payment of wages and benefits to the leased employees. Boston
shall pay Xxxxxx for the services of the leased employees as part of the Brands Manufacturing Price in accordance with
this Agreement. Boston shall have no other obligations with respect to the leased employees.
C. All Leased Employees shall, at all times during the Occupation, remain at-will employees of Xxxxxx. Xxxxxx
shall have the ultimate authority to make all employee-related decisions regarding the leased employees.
D. Boston agrees that it will lease from Xxxxxx all employees necessary for the production of the Brands at the
Source Plant, and shall have no right to supply its own employees.
4.4 Cessation of Production at Source Plant.
X. Xxxxxx reserves the right to terminate operations at the Source Plant without liability to Boston.
[ * ] indicates that information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
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B. If Xxxxxx should terminate operations at a Source Plant, Xxxxxx and Boston agree to negotiate in good faith
to modify this Agreement to include a new Source Plant, and to use commercially reasonable efforts to avoid a material interruption in Boston’s production
requirements. The parties acknowledge and agree that nothing herein shall be construed to require Xxxxxx to pay for
any capital expenditures or other costs associated with preparing an alternative Source Plant for Boston production.
C. In the event Xxxxxx determines to terminate operations at the Source Plant, Xxxxxx will continue to permit
Boston to occupy the Source Plant and produce the Brands pursuant to the terms of this Agreement for [ * ] from the
date Xxxxxx provides Boston notice of its intent or the date Xxxxxx publicly announces it intent, whichever is
sooner; provided that Xxxxxx agrees to negotiate in good faith with Boston to allow Boston to occupy such Source
Plant for so long as Boston’s Occupation is commercially and operationally reasonable. During the [ * ] period
following Xxxxxx providing notice to Boston or publicly announcing the closing of the Source Plant, there will be no
increase in the Brands Manufacturing Price nor any Brands Manufacturing Price Adjustment as a result of such change
in operations at the Source Plant (but changes in such prices and adjustments may be made in the ordinary course).
If Xxxxxx agrees to allow Boston to continue to occupy the Source Plant for more than [ * ] after Xxxxxx notifies
Boston or makes a public announces the closure of the Source Plant, then Xxxxxx, as part of the good faith
negotiations described above, may require Boston to accept an increase in the Brands Manufacturing Price.
D. Thereafter, if the parties are not able to reach agreement regarding relocating Boston’s production to a new
Source Plant, this Agreement shall terminate and Xxxxxx shall have no liability to Boston; except that if this
Agreement terminates as a result of this paragraph D in [ * ] of a Brewing Period and Xxxxxx and Boston do not agree
to modify this Agreement to permit an alternative Source Plant, then Xxxxxx will repay Boston a pro rata portion of
the Reservation Fee paid by Boston for the Fiscal Year in which the Source Plant terminated operations.
4.5 Guaranteed Capacity Obligations. Subject to the provisions of Sections 4.4 and 4.7 of this Agreement,
during the Term of this Agreement Xxxxxx shall make available to Boston the number of Barrels of brewing capacity
described below:
[ * ]
4.6 Annual and Monthly Production Forecasting.
A. No less than [ * ] before the beginning of each fiscal year, Boston shall provide to Xxxxxx its estimated
package and volume levels for the subsequent Brewing Period, itemized by BPA.
B. On a monthly basis, on or before the 15th day of each month, Boston shall provide Xxxxxx with an updated
forecast of its production requirements for the next three months, itemized by BPA.
4.7 Manufacturing Obligation Limitations. Xxxxxx has no obligation during any Order Cycle:
[ * ] indicates that information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
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[ * ]
4.8 Packaging.
A. Boston is solely responsible for the design and configuration of any Packaging, including but not limited to a
container, label, crown, end, keg cap or label, carrier, carton or any other material that might be utilized for any
Brand. Boston agrees that all Packaging chosen to be utilized for their brands will be in full conformance with the QA
Standards and that all of its packaging will meet the QA Standards, including, but not limited to, standards regarding
color, integrity and field performance.
B. Boston will be responsible for obtaining any licenses and approvals from all authorities, and will secure all
necessary federal, state, foreign or other required licenses or approvals for the label or primary packaging and all
necessary federal, state, foreign or other required licenses or approvals for all secondary packaging. Xxxxxx will
provide Boston, upon its reasonable request, with documents and information within Xxxxxx’x sole control that are
necessary in order for Boston Beer to apply for and secure such licenses and approvals; provided that Xxxxxx shall have
no obligation to provide Boston with any competitively sensitive information.
C. Provided that Xxxxxx has approved the Packaging and Boston has authorized the specific expenditure in advance,
Boston may purchase and install any tooling, dies, cylinders and plates or any other material that must be specially
purchased for Packaging of the Brands. Boston shall reimburse Xxxxxx for any out of pocket and incremental cost
increases arising as a result of the installation of any such tooling, dies, cylinders, plates or other material, such
that all such changes will be cost neutral to Xxxxxx (the “New Packaging Materials Costs”). Xxxxxx shall retain
responsibility for the maintenance of such new equipment.
D. Boston shall provide its own kegs for its use in fulfilling its obligations hereunder. The parties hereby
acknowledge and agree that all such kegs are, and shall remain, the property of Boston.
E. The pallet loading requirements for finished product are set forth on Schedule 4.8.E. [ * ]
4.9 Manufacturing, Process and Packaging Changes.
A. Boston may make any changes to its manufacturing, process and packing as it desires; provided that Boston must
consult with Xxxxxx before implementing such changes, and Xxxxxx consents to such changes, which consent may not be
unreasonably withheld. The parties agree that it shall not be unreasonable for Xxxxxx to withhold its consent to any
changes that are not compatible with Xxxxxx’x production of its own products, or which have the potential to disrupt
Xxxxxx’x plant efficiencies or quality control standards, or which are physically or
[ * ] indicates that information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
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logistically impractical to implement. In the event that any such change requires any costs or expenditures,
capital or otherwise, those expenditures shall be the sole responsibility of Boston, and shall be reimbursed to Xxxxxx
in the event they are incurred by Xxxxxx (“Process Change Costs”). In addition, if any such changes result in
increased production costs, Xxxxxx may condition its consent to such changes on Boston agreeing to an increase in the
Brands Manufacturing Price, such that all such changes are cost neutral to Xxxxxx. Xxxxxx shall retain responsibility
for the maintenance of such new equipment.
B. Boston acknowledges that Xxxxxx has in the past and will from time to time make certain innovations, changes or
introductions to its manufacturing processes and packaging materials or processes. Boston acknowledges that it will
have no rights of access to these manufacturing processes, Packaging or processes innovations, changes or introductions
unless Xxxxxx, in its sole and absolute discretion, agrees to that access. In the event that any change or
introductions to Xxxxxx’x manufacturing processes and packaging materials or processes becomes universal as to Xxxxxx’x
products, Xxxxxx shall have the right to require Boston to adopt such changes or introductions for Boston’s
manufacturing processes and packaging materials and processes; provided that Boston is in no way required to change any
of its QA Standards or packaging, nor required to make any changes in its brewing processes that Boston can reasonably
claim are a requirement of its brand equity or a requirement of its brand taste profile; and provided further that in
the event that Xxxxxx makes such a change and Boston refuses to accept such a change for the issues described above,
Xxxxxx shall have no liability to Boston in connection with any resulting inability to perform hereunder. Any change
Xxxxxx requires Boston to make pursuant to this Section 4.9.B shall be made effective as of the first day of any
Brewing Period, on not less than 6 months advance notice, unless the parties agree to an earlier date.
C. If Boston requests access to any changes or introductions in manufacturing processes and packaging materials or
processes and Xxxxxx grants Boston such access, then Boston shall reimburse Xxxxxx for all related Process Change Costs
related thereto, in an amount equal to Boston’s Percent Use (based on volume) of such changed packaging materials or
process multiplied by the total Process Change Costs associated with such changes or introductions. For example, if
the manufacture of the Brands constitutes 5.00% of the volume of use of the changed packaging materials or processes,
then Boston shall reimburse Xxxxxx for 5% of the total Process Change Costs. If Boston does not request access to any
such change but is required to change its QA Standards or its packaging to conform to Xxxxxx’x innovations, changes or
introductions to its manufacturing processes and packaging materials or processes, then Boston Beer will bear none of
the Process change Costs related thereto.
4.10 Dunnage.
A. Boston understands that Xxxxxx employs an automated system for tracking the return of all Dunnage shipped to
Boston’s wholesalers called the Dunnage Return System (“DRS”). Boston agrees that it will require all Boston
Wholesalers to utilize the DRS or any replacement system used in the future for all Brands produced at the Source
Plant.
[ * ] indicates that information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
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B. Boston agrees that Boston and the Boston Wholesalers will abide by all Xxxxxx policies and procedures for the
proper inventory, storage and return of any Dunnage as may be communicated by Xxxxxx in written notice to Boston from
time to time, within forth-five (45) days of Boston’s receipt of such written notice.
C. Boston will purchase all Dunnage delivered with the Brands to Boston or Boston Wholesalers. Except as otherwise
agreed to by Boston and Xxxxxx in writing, the purchase price for such Dunnage shall be equal to that charged by Xxxxxx
to its own wholesalers for such items. Upon return to Xxxxxx by Boston of such Dunnage in a condition in conformance
with Xxxxxx policies, procedures and QA Standards, Xxxxxx will purchase from Boston the Dunnage at a price equal to
that paid by Xxxxxx to its own wholesalers for such items. If Dunnage is not returned in accordance with Xxxxxx
policies, procedures and QA Standards, they will not be accepted; if such Dunnage is off-loaded and the purchase price
paid to Boston, Boston will be charged the price paid by Xxxxxx plus the actual cost of removal and disposal of such
Dunnage by Xxxxxx.
D. Boston shall not return Xxxxxx’x pallets to any other party (including any other contract brewery or
alternative partner) and shall not deliver to Xxxxxx any other party’s pallets. Boston will be responsible for all
costs of rectifying any such misdeliveries.
SECTION 5
INGREDIENTS AND PACKAGING
INGREDIENTS AND PACKAGING
5.1 Procurement Services. Boston shall supply and ship to the Source Plant, at no cost to Xxxxxx, all
malt, hops, flavorings and Unique Materials and certain Packaging which shall at all times remain separately
identifiable as Boston’s property. Other than the malt, hops, flavoring, Unique Materials, and certain Packaging
described in the preceding sentence, Boston agrees to purchase all of its requirements of Ingredients and Packaging
from Xxxxxx immediately prior to the commencement of the brewing process for all Brands produced hereunder. Xxxxxx has
no obligation to stock any minimum supply of Ingredients, but will maintain such stock in accordance with its own
policies and procedures. Xxxxxx will sell such Ingredients to Boston immediately prior to the commencement of the
manufacturing of a batch of beer. To the extent any Ingredients are procured by Xxxxxx, Boston shall pay Xxxxxx for
such Ingredients as part of the Brands Manufacturing Price described in Schedule 9.
5.2 Commodity Markets. Boston acknowledges that there may be instances where Xxxxxx may acquire positions
in certain commodity markets. Boston acknowledges that there are certain inherent risks associated with taking these
forward market positions and that in order to take advantage of the potential cost savings gained by these types of
transactions, Boston also may be subject to costs that might be higher than the market at the time a position is closed
out. Xxxxxx and Boston agree that Xxxxxx shall sell such Ingredients to Boston at Xxxxxx’x actual cost (including but
not limited to procurement costs and overhead), pursuant to the terms and conditions of this Agreement. Xxxxxx does
not represent, warrant or guarantee in any way that engaging in the types of transactions described above will reduce
the costs charged to Boston. Boston acknowledges that the costs related to such transactions may result in costs that
are higher than would have been the case if the materials had been purchased at ordinary market rates.
[ * ] indicates that information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
10
5.3 No Shared Savings. In addition to the positions in commodity markets described in Section 5.2, Boston
acknowledges that there may be instances where Xxxxxx may expend additional resources to acquire positions in certain
commodity markets for strategic purposes solely to benefit Xxxxxx, and that Xxxxxx is not required to share those
savings with Boston.
5.4 Inventory. Upon receipt of Ingredients and Packaging, Xxxxxx shall inspect the goods for damage and
accuracy of quantities delivered. Xxxxxx shall notify Boston of any such issues promptly in writing via facsimile.
Bills of lading for Ingredients and Packaging received by Xxxxxx shall be signed and dated by a Xxxxxx employee and
forwarded to Boston via facsimile on a daily basis at the end of each day. Xxxxxx shall provide to Boston perpetual
inventory of all work in progress, finished goods and Packaging on a weekly basis and at month-end as of Boston’s
fiscal month-end and shall perform inspections, counts, and other checks similar to those performed on its own
materials. Boston employees will be allowed to participate in inventory counts provided reasonable advance notice is
given to Xxxxxx.
SECTION 6
TRANSPORTATION SERVICES
TRANSPORTATION SERVICES
6.1 Transportation Services. The parties anticipate that in the ordinary course Boston shall manage its
own transportation requirements. However, Xxxxxx agrees that, from time to time at Boston’s request, it will provide
Transportation Services to Boston during the Term of this Agreement. In addition, in the event of any No Shows Xxxxxx
shall be entitled (but not required) to arrange alternate Transportation Services for Boston without the prior request
or consent of Boston. Boston acknowledges that Xxxxxx will provide Transportation Services by utilizing the same
transportation policies and procedures it utilizes for its own products; provided that the payment for such
Transportation Services shall be in accordance with Section 6.7 of this Agreement. When Xxxxxx provides Transportation
Services for Boston, whether in the case of No Shows or at Boston’s request, Xxxxxx shall make all required payments to
carriers directly, and shall xxxx Boston for the Transportation Fees as provided in Section 6.7.
6.2 Carrier Selection. When Boston utilizes its own carriers, such carriers must be certified and
qualified by Xxxxxx in accordance with Xxxxxx’x policies and procedures for its own carriers.
6.3 Responsibility for Claims. Boston shall have the sole responsibility to deal with any claims or
issues regarding the Transportation Services directly with the carriers and/or Boston Wholesalers. Xxxxxx shall report
to Boston any claims or issues of which it may be aware.
6.4 No Direct Sales. Boston shall not produce any Brands hereunder that are sold by Boston directly to
licensed retailers or shipped to retailers without coming to rest at a warehouse licensed to Boston or a Boston
Wholesaler.
[ * ] indicates that information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
11
6.5 Warehouse Loading and Availability. Xxxxxx will provide Source Plant warehouse and loading services
to Boston without additional cost to Boston, except as otherwise included in the SVC. Nothing herein will require
Xxxxxx to expand existing storage areas to accommodate the Brands at any Source Plant or to store such Brands to the
exclusion of Xxxxxx’x own products and brands.
6.6 Compliance with QA Standards. As part of the Transportation Services, orders for Brands will be
filled in accordance with age policy procedures set forth in the QA Standards. In the event that the Brands become
unsalable for any reason except for Xxxxxx’x negligence or willful misconduct, Boston shall be solely responsible and
shall pay Xxxxxx the applicable usage fee as if such products had been shipped in accordance with this Agreement, and
shall either pay all costs to destroy such Brands or reimburse Xxxxxx for any costs or expenses incurred by Xxxxxx to
destroy such products (“Destruction Costs”).
6.7 Transportation Fees. Boston shall pay Xxxxxx the Transportation Fees in consideration of Xxxxxx’x
provision of the Transportation Services; provided that, in each instance of a No Show, and in each instance that
Boston provides Xxxxxx with less than forty-eight (48) hours notice of its need or desire for Xxxxxx to provide
Transportation Services, Boston shall also pay Xxxxxx an additional fee equal to the amount of the load handling fee
(or similar fee) charged to Xxxxxx by the carrier for such services. For the avoidance of doubt, whenever this
Agreement states that Xxxxxx will provide services to Boston in accordance with Xxxxxx’x policies and procedures for
its own products, such services shall be executed in accordance with Xxxxxx’x policies and procedures, but payment for
such services shall be governed solely by the terms of this Agreement.
SECTION 7
PRODUCTION REQUESTS
PRODUCTION REQUESTS
7.1 Production Requests. At least eight weeks prior to the commencement of the Order Cycle to which the
request relates, Boston shall provide Xxxxxx a request to produce Brands, itemized by BPA and volume, using the
electronic production request system jointly developed by Xxxxxx and Boston, as modified from time to time. Subject to
Xxxxxx’x right to accept or reject production requests in its sole discretion once Xxxxxx has satisfied its guaranteed
capacity obligations as provided in Section 4.5, Xxxxxx may not reject such production requests; provided, however, in
the event that Xxxxxx believes that for any reason it will be unable to allow Boston to produce the Brands as specified
by Boston in the production request, then Xxxxxx will give Boston at least seven days (or such shorter number of days
as is reasonably practical under the circumstances) advance notice of such fact and shall use commercially reasonable
efforts to allow Boston to satisfy its production request as promptly as possible. If the terms of the preceding
sentence are complied with, Xxxxxx shall have no liability to Boston for Xxxxxx’x inability to satisfy Boston’s
production request. Boston acknowledges that from time to time, Xxxxxx will temporarily shutdown of the Source Plant
for maintenance, holidays, inventory adjustments and other routine short-term, temporary stoppages of production,
including but not limited to an annual Source Plant shut down generally running from Christmas Day through New Year’s
Day. Xxxxxx shall provide Boston with reasonable advance notice of any such shutdown
[ * ] indicates that information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
12
and shall use commercially reasonable efforts to allow Boston to increase production in advance of such shut down
consistent with the production requirements forecasted by Boston in accordance with Section 4.6 hereof; provided that
Xxxxxx shall not be required to permit Boston to produce more than Xxxxxx’x guaranteed capacity obligation described in
Section 4.5 hereof. Boston understands and agrees that Boston shall not be permitted to produce any Barrels of the
Brands during any such shutdown, and that Xxxxxx shall not be liable to Boston for any increased costs or lost
opportunities on account of any such shutdown.
SECTION 8
ACCEPTANCE
ACCEPTANCE
From immediately prior to the commencement of the brewing process, and for all times thereafter, Boston shall own
all Ingredients, packaging, work in progress, finished Brands, etc. and shall bear the full risk of loss. Title to all
Ingredients and packaging supplied by Boston and risk of loss on such Ingredients and packaging supplied by Boston
shall at all times be Boston’s. Acceptance of the load by the carrier as evidenced by the xxxx of lading will
constitute completion of any responsibility by Xxxxxx to Boston and Boston Wholesalers for the shipment.
SECTION 9
ALTERNATION FEES AND PRICING
ALTERNATION FEES AND PRICING
Alternation Fees and Pricing shall be governed according to Schedule 9 attached hereto.
SECTION 10
INVOICES AND PAYMENT
INVOICES AND PAYMENT
10.1 Boston Responsibility. Boston assumes all responsibility and obligation for pricing and credit terms
relating to the Brands and for invoicing Boston Wholesalers. All risk of payment and collection arising out of the
sale of the Brands will be solely that of Boston.
10.2 Billing and Payment Terms.
X. Xxxxxx will xxxx Boston electronically for the Brands Manufacturing Price plus the Transportation Fees, if any,
and applicable fees relating to Deposit Items and Dunnage, on the first business day after the release of the packaged
Brands for shipment. Except as may be otherwise agreed by Boston and Xxxxxx, Boston agrees to pay such xxxx by Wire
Transfer not later than the eleventh (11th) business day following receipt thereof. Xxxxxx will xxxx Boston
by delivering a written invoice, by mail or facsimile, to Boston for all other charges under this Agreement. Except as
may be otherwise agreed by Boston and Xxxxxx, Boston agrees to pay such invoice by Wire Transfer not later than the
eleventh (11th) business day following receipt thereof. All other costs, fees, and expenses arising under
this Agreement will be billed periodically by Xxxxxx to Boston and all such bills shall be paid by Wire Transfer not
later than the thirtieth (30th) day following receipt thereof. Payments that are late will bear interest at
the Prime Rate, compounded daily. Notwithstanding the forgoing, in the event that Xxxxxx becomes entitled to terminate
this Agreement pursuant to Section 20.2.A.1, Xxxxxx shall be entitled to change the payment terms hereunder to cash on
delivery or cash in advance.
[ * ] indicates that information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
13
10.3 Withholding of Disputed Amounts. In the event of a dispute as to an amount due, only the disputed
amount may be withheld. In the event of such a dispute, the parties agree to reasonably cooperate with each other to
resolve such dispute within 30 days of the date on which such disputed amount was withheld. If such dispute cannot be
resolved within such 30 day period, then the dispute shall be subject to the dispute resolution provisions contained in
Section 17 of this Agreement.
10.4 Stand-By Letter of Credit. If, at any time during the Term of this Agreement, Boston is late in its
payments five or more times in any period of twelve consecutive months, Boston will immediately obtain and have issued
to Xxxxxx a stand-by letter of credit in an amount equal to the monthly average, calculated over the last twelve months
prior to issuance of the letter of credit, of Xxxxxx’x production expense and inventory exposure. Such letter of
credit shall remain in force until Boston has had no late payments for a period of twelve consecutive months.
10.5 Prepayment Rights.
A. Notwithstanding the provisions of Section 9.3 of Schedule 9 relating to the payment of the quarterly Brands
Manufacturing Price Adjustment, Xxxxxx and Boston shall have the right to make prepayments of all or any part of the
quarterly Brands Manufacturing Price Adjustment estimated to be due the other party. Such prepayments, if any, may be
made in such amounts and at such times as Boston or Xxxxxx in its respective sole discretion shall determine, provided
that no such prepayment may be in an amount less than [ * ]. All such prepayments shall be made by Wire Transfer upon
not less than one business day notice to the payee, and each such prepayment shall be designated as being a prepayment
of estimated liability for the quarterly Brands Manufacturing Price Adjustment.
B. The amount of such prepayment(s) shall be treated as a credit to payor and a debit to the payee in determining
the quarterly Brands Manufacturing Price Adjustment, to be owed by one party to the other party.
10.6 Interest Offset. Xxxxxx and Boston may deduct from payments, if any, due the other party under this
Agreement, an amount equal to interest at the Prime Rate on all amounts due under this Agreement from the other party
which have not been timely paid in accordance with this Agreement and upon which interest has not otherwise accrued
under this Agreement. Such interest shall be for the period commencing on the day after the due date of such payment
and shall run to the day of the offsetting deduction as provided in this Section 10.6. The offset right provided for
in this Section 10.6 is not in derogation or limitation of any other rights provided to the parties in this Agreement.
SECTION 11
AUDITS AND RECORDS
AUDITS AND RECORDS
11.1 Audit of Pricing Procedures. As Boston deems appropriate and at Boston’s request, but in no event
more often than once in any Brewing Period, and only after Boston and its independent auditors shall have entered into
an appropriate confidentiality agreement with Xxxxxx, the independent auditors of Xxxxxx will examine the relevant
books and records of Xxxxxx
[ * ] indicates that information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
14
to verify the pricing, costing and cost accounting procedures used by Xxxxxx (collectively, the “Pricing
Procedures”) as they relate to compliance with the Agreement. Xxxxxx’x auditors will promptly thereafter disclose the
results of the audit and their work product to the independent auditors of Boston. As to any dispute arising between
the parties pertaining to the Pricing Procedures both parties agree to be bound by any mutual resolution of that
dispute reached by Boston’s and Xxxxxx’x respective auditors. The details of each audit shall remain confidential to
the respective auditors and only the summary result of the audit will be communicated to Boston except that, if a
dispute regarding the Pricing Procedures is not mutually resolved by the parties’ respective independent auditors, then
Boston’s auditors may disclose the details of the audit to Boston to the extent necessary to fully apprise Boston of
the issues underlying the dispute. Thereafter, at either party’s request, the dispute will be submitted to an
independent third party accounting firm, mutually agreed upon by Xxxxxx and Boston (or in the absence of such
agreement, by agreement of Xxxxxx’x and Boston’s respective independent auditors), which will act as a binding arbiter
of the dispute. Xxxxxx and Boston hereby agree to be bound by the decision of such third party accounting firm. Such
third party accounting firm may be required by either party to execute an appropriate confidentiality agreement. The
costs of the third party accounting firm will be borne equally by Xxxxxx and Boston. The cost of each audit requested
by Boston will be borne by Boston provided that Xxxxxx will reimburse Boston the amount of the fee up to and including
the net amount found by the auditor to be due to Boston. Such reimbursement will be separate and in addition to any
reimbursement of the net amount found by the auditor to be due to Boston. Payment of such reimbursement will be due
within eleven (11) business days of the auditors’ final determination.
11.2 Boston’s Records. Boston shall keep independent records of the Brands Boston produces at the Source
Plant. Such records will be kept at the Source Plant in accordance with law, and Boston shall have 24 hour access to
such records.
SECTION 12
INSURANCE
INSURANCE
12.1 Boston Insurance Coverage. Prior to Boston manufacturing any Brands hereunder, Boston will procure
at its sole cost, and maintain in full force and effect during the Term of this Agreement and any extensions or
renewals hereof:
A. Commercial general liability insurance with total general aggregate and each occurrence limits of not less than
[ * ], covering bodily injury, death and property damage, product liability, advertising injury and all liability
arising out of any claim (whether or not valid) for infringement of any copyright, title, slogan, libel, slander,
defamation or invasion of rights of privacy of a third party arising out of or relating to the Brands or Boston’s
advertising and promotional activities, and covering any incident that may occur involving this Agreement, directly or
indirectly.
B. Workers compensation insurance as required by state law and employer’s liability insurance in an amount not
less than [ * ].
[ * ] indicates that information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
15
12.2 Coverage Rating. Boston shall obtain each policy of insurance required under this Agreement from an
insurance carrier with an A.M. Best rating of A (-) or higher and, upon Boston obtaining the insurance in compliance
with this Section, shall supply Xxxxxx (Attention: Corporate Banking and Insurance) with certificates evidencing such
insurance, each in a form satisfactory to Xxxxxx, along with satisfactory evidence of payment in full of all premiums
for such insurance. Each such certificate of insurance shall provide that such insurance cannot be modified,
terminated or canceled by the carrier except upon thirty (30) days prior written notice to Xxxxxx of such event.
Promptly following the execution of this Agreement, Boston shall cause each such policy to name as additional insureds
Xxxxxx, its parent SABMiller plc, subsidiary and affiliated companies, successors, licensees and assigns and the
respective officers, directors, agents and employees of any and all of the foregoing and shall contain an endorsement
that negates the “other insurance” clause in the policy and a statement that the insurance being provided is primary
and that any errors and omissions insurance carried by Xxxxxx or any other person or entity (other than Boston) is not
primary. Insurance maintained by Xxxxxx is for its exclusive benefit and will not inure to the benefit of Boston. In
the event Boston does not timely supply to Xxxxxx such certificates of insurance after Xxxxxx’x demand for such
certificates, Xxxxxx shall have the right (without limiting any of its rights and remedies), acting in its discretion,
to withhold any rights granted in this Agreement until such certificates are furnished.
12.3 Xxxxxx Insurance Coverage. Xxxxxx will procure at its sole cost, and maintain in full force and
effect during the Term of this Agreement and any extensions or renewals hereof:
A. Commercial general liability insurance with total general aggregate and each occurrence limits of not less
than [ * ], covering bodily injury, death and property damage, advertising injury and all liability arising out of
any claim (whether or not valid) for infringement of any copyright, title, slogan, libel, slander, defamation or
invasion of rights of privacy of a third party arising out of or relating to the Brands or Boston’s advertising and
promotional activities, and covering any incident that may occur involving this Agreement, directly or indirectly.
B. Workers compensation insurance as required by state law and employer’s liability insurance in an amount not
less than [ * ].
SECTION 13
WARRANTIES
WARRANTIES
13.1 Authority. Each party represents to the other party that it is duly incorporated and in good
standing in its respective state of incorporation, that it has the authority to enter into and perform this Agreement,
and that the consummation of this Agreement will not violate any agreement or judicial order to which it is a party or
by which it is bound.
13.2 Brands. BOSTON IS SOLELY RESPONSIBLE FOR PROVIDING RIGHTS WITH RESPECT TO THE INTANGIBLE ASSETS AND
RECIPES NECESSARY FOR XXXXXX TO FULFILL ITS OBLIGATIONS UNDER THIS AGREEMENT, AND XXXXXX MAKES NO WARRANTIES WITH
RESPECT TO SAID ASSETS AND RECIPES. BOSTON
[ * ] indicates that information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
16
SPECIFICALLY ASSUMES ALL LIABILITY RELATING TO WARNINGS (OR THE LACK OR ADEQUACY THEREOF) ON THE PACKAGING FOR THE
BRANDS. XXXXXX MAKES NO WARRANTIES WITH RESPECT TO THE BRANDS OTHER THAN THE WARRANTIES EXPRESSLY SET FORTH IN THIS
AGREEMENT, AND XXXXXX HEREBY EXPRESSLY DISCLAIMS THE EXISTENCE OF ANY OTHER WARRANTIES, WHETHER EXPRESS, IMPLIED, OR
OTHERWISE. XXXXXX WILL NOT BE LIABLE TO BOSTON FOR ANY COSTS OR DAMAGES, INCLUDING CONSEQUENTIAL DAMAGES, ARISING OUT
OF THE DISTRIBUTION OF BRANDS OUTSIDE OF THE UNITED STATES, THAT BECOME UNSALABLE PURSUANT TO THE QA STANDARDS THROUGH
NO FAULT OF XXXXXX, OR THAT WERE MANUFACTURED IN ACCORDANCE WITH THE QA STANDARDS.
13.3 Intellectual Property. Boston represents and warrants to Xxxxxx that: (1) Boston has and owns all
rights to the recipes and formulas for the Brands and all trademarks, trade dress, copyrights and other intellectual
property that Xxxxxx will be using in performing its obligations under this Agreement, and such rights and assets do
not and will not infringe any patent, trademark, trade secret, copyright, or other proprietary right of any third
party; (2) that all formulas for the Brands and all Packaging designated by it hereunder will comply with all
applicable federal and state laws and regulations; and (3) neither the execution and delivery of this Agreement by
Boston nor the consummation by Boston of the transactions contemplated hereby will conflict with or result in a breach
of any statute or administrative regulation, any order, writ, injunction, judgment, or decree of any court or
governmental authority, testamentary or trust document, contract, debt or other financing agreement or any agreement to
which Boston is a party or by which Boston is bound.
SECTION 14
INDEMNIFICATION
INDEMNIFICATION
14.1 Intellectual Property Indemnification. Should any claim or claims be made against Xxxxxx by any
third party or parties for unfair competition, infringement, invasion or other misappropriation of any patent,
trademark, copyright or any other proprietary rights based solely on Xxxxxx’x performance of it’s obligations under
this Agreement, Boston will defend, at its expense, each and every one of such claims on Xxxxxx’x behalf, and Boston
further undertakes to indemnify and hold Xxxxxx harmless from and against any loss, costs, expense or other damage,
including without limitation, reasonable attorneys’ fees and expenses resulting from, arising out of or incurred with
respect to such claim or claims.
14.2 Boston Indemnification Obligations. Except to the extent arising out of a situation in which Xxxxxx
has a duty of indemnity pursuant to Section 14.3., Boston agrees to indemnify and hold Xxxxxx harmless from and against
all loss, costs, expense, liabilities or other damage, including, without limitation, reasonable attorneys’ fees and
expenses, resulting from, arising out of or incurred with respect to: (1) any breach or inaccuracy of any
representation or warranty made by Boston in or pursuant to this Agreement; (2) any failure by Boston to carry out,
perform, satisfy and discharge any of its covenants, agreements, undertakings, liabilities or obligations under this
Agreement; (3) any claim for damages or liability against Xxxxxx, by any
[ * ] indicates that information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
17
third party, alleging that Xxxxxx has impaired or interfered with that third party’s contractual relationship with
Boston through Xxxxxx’x negotiating, entering into or performing under this Agreement; (4) any product recall, product
tampering, or product extortion related to the Brands and not directly caused by the negligence of Xxxxxx; (5) all
claims (i) of noncompliance of Packaging and designs thereof approved by Boston for the Brands with federal or state
requirements, where such noncompliance is through no fault of Xxxxxx; (ii) by public agencies or private persons with
respect to the distribution, sales, marketing or promotion of the Brands, except to the extent Xxxxxx is responsible
therefore and provided that Xxxxxx will not be deemed responsible merely by virtue of allowing an Occupation of the
Source Plant by Boston for the purpose of manufacturing, packaging or shipping the Brands pursuant to this Agreement;
and (iii) by public agencies or private persons with respect to impurities or defects of any kind in the Brands and/or
Packaging when Xxxxxx has complied with the QA Standards for the Brands; provided that in no event shall Boston be
liable for Consequential Damages under this Section 14, except as otherwise provided in Section 16.
14.3 Xxxxxx Indemnification Obligations. Except to the extent arising out of a situation in which Boston
has a duty of indemnity pursuant to Section 14.2, Xxxxxx agrees to indemnify and hold Boston harmless from and against
all loss, costs, expense or other damage, including, without limitation, reasonable attorneys’ fees and expenses,
resulting from, arising out of or incurred with respect to: (1) any breach or inaccuracy of any representation or
warranty made by Xxxxxx in or pursuant to this Agreement; (2) any failure by Xxxxxx to carry out, perform, satisfy and
discharge any of its covenants, agreements, undertakings, liabilities or obligations under this Agreement; and (3) all
claims made against Boston by any party or parties for personal injury or property damage caused by impurities or
defects of any kind in the Brands hereunder except to the extent Xxxxxx has complied with the QA Standards for the
Brands; provided that in no event shall Xxxxxx be liable for Consequential Damages under this Section 14, except as
otherwise provided in Section 16.
14.4 Indemnification Procedures. If any action, claim or demand shall be brought or asserted against any
party to this Agreement in respect of which indemnity may be sought pursuant to this Section 14, the party seeking
indemnification (the “Indemnified Party”) shall promptly notify in writing the other party from which indemnification
is sought (the “Indemnifying Party”), stating, to the extent applicable and known by the Indemnified Party, the name
and address of each claimant, the nature of the claim, and the provision or provisions of this Agreement under which
such claim for indemnity is asserted. The Indemnifying Party shall have the right to participate in the defense of
third-party claims by counsel of its choosing and at its expense. No third-party claim may be settled without the
written consent of the Indemnified Party and the Indemnifying Party. If the Indemnified Party declines to accept a
bona fide offer of settlement of a third-party claim which is recommended by the Indemnifying Party, the maximum
liability of the Indemnifying Party shall not exceed the amount it would have been liable for had such settlement been
accepted. If the Indemnifying Party declines to accept a bona fide offer of settlement recommended by the Indemnified
Party, the Indemnifying Party shall be liable for whatever outcome results from such third-party claim.
[ * ] indicates that information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
18
14.5 Responsibility for Boston Wholesaler Returns. All demands by Boston Wholesalers for return of Brands
manufactured hereunder will be the sole responsibility of Boston.
14.6 Responsibility for Sales and Marketing Activities. The sale of the products of the Brands to Boston
Wholesalers and all marketing and promotional activities incident to sale and distribution of the Brands will be the
sole obligation and responsibility of Boston, and Boston indemnifies Xxxxxx against any claim that might be raised by
any party or governmental agency relating to that obligation and responsibility.
14.7 Responsibility for Authorized Release of Brands. Boston agrees to indemnify and hold Xxxxxx harmless
from and against all damages, claims, demands or liabilities that Xxxxxx may incur, and further agrees to defend any
suits or actions which may be brought against Xxxxxx, arising out of Xxxxxx releasing Brands to any party designated by
Boston.
14.8 Responsibility for Maintaining Confidential Pricing Information. Boston agrees that it will not
provide any information regarding the pricing, marketing or credit terms it sets for its business, and will indemnify
and defend Xxxxxx from any costs associated with any claim made that Boston has done so.
SECTION 15
CONFIDENTIALITY
CONFIDENTIALITY
15.1 No Sharing of Competitive Information. Boston will furnish to Xxxxxx such information as is
reasonably necessary for Xxxxxx to fulfill its obligations under this Agreement, including the respective brewing
formulas and manufacturing processes for the Brands. Under no circumstances will Boston provide to Xxxxxx information
about Boston pricing, marketing, or sales plans, or similar competitive information. Xxxxxx will use information
received from Boston solely for purposes of complying with its obligations under this Agreement. Xxxxxx shall take
reasonable steps to maintain the confidentiality of any information provided to it by Boston which is not in the public
domain or otherwise known to Xxxxxx, and to limit access to such information to Xxxxxx employees involved in carrying
out Xxxxxx’x obligations under this Agreement.
15.2 Confidentiality Obligations. All information about Xxxxxx that is obtained by Boston or its
employees, directly or indirectly, as a consequence of Xxxxxx’x fulfillment of its obligations under this Agreement
shall be treated by Boston as confidential and shall not be used for any purpose other than to assist Xxxxxx in
carrying out its obligations under this Agreement. Such information may include, but is not limited to, Millers
manufacturing processes, operating procedures, contract manufacturing arrangements, costs, and labor practices. Boston
employees who are involved in assisting Xxxxxx to carry out its obligations under this Agreement shall be instructed by
Boston on their obligation to treat all information about Xxxxxx as confidential. Boston shall ensure that its
employees take reasonable steps to avoid obtaining access to any information about Xxxxxx pricing, marketing, sales
plans, contract manufacturing arrangements, or similar competitive information relating to Xxxxxx.
[ * ] indicates that information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
19
15.3 No Disclosure. Xxxxxx and Boston agree to refrain from disclosing this Agreement or its terms and
conditions to any person or entity not a party hereto, except as may be required by any court, government agency or
proper discovery request or as reasonably needed to enforce this Agreement, it being understood that Boston is required
to file this Agreement as a material contract with it periodic reports required under the Securities Exchange Act of
1934. If a party is required to disclose this Agreement or any of its terms and conditions, the disclosing party
shall: (a) use its best efforts to insure that such disclosure is made on a confidential basis and (b) in the case of
disclosure required as the result of any order of any court or government agency or discovery request, give prompt
notice thereof so that the other party may, if it so chooses, assert any rights it may have to maintain confidentiality
or obtain relief from public disclosure. Xxxxxx acknowledges that Boston Beer will be required to file this Agreement
in its periodic SEC filings. Boston Beer will consult with Xxxxxx and make all reasonable efforts to ensure that any
sensitive or confidential information, including but not limited to Schedule 9 hereof, is redacted, omitted, or
otherwise given confidential treatment; provided that the parties acknowledge that Boston cannot ensure such treatment.
SECTION 16
LIMITATION OF LIABILITY AND PERIODS ON CLAIMS
LIMITATION OF LIABILITY AND PERIODS ON CLAIMS
16.1 No Consequential Damages. Neither Xxxxxx or Boston shall be liable to the other for any incidental
or consequential damages arising out of this Agreement, whether in contract, tort or otherwise (including strict
liability), whether at law or in equity; provided, however, that nothing herein shall be deemed to waive any damages or
limit the parties’ liability to each other with respect to claims brought against Xxxxxx or Boston by unrelated third
parties.
16.2 Limitation on Time for Pricing Claims. Except as provided below, any claim or assertion of a dispute
by Boston regarding: (i) Boston Standard Variable Cost or the Pricing Procedures or (ii) any other calculation made
pursuant to Schedule 9 must be made within [ * ] after the end of the Brewing Period to which the claim or assertion
relates or the claim or dispute shall be deemed waived and forever released by Boston. Notwithstanding the foregoing,
any claim or assertion of a dispute regarding calculated pursuant to the Brands Manufacturing Price Adjustment must be
made during the [ * ] following payment thereof, or shall be deemed waived and forever released by Boston.
16.3 Limitation on Time for Other Claims. All other claims hereunder must be brought no later than [ * ]
after such claim arose or the party having such claim shall be deemed to have waived and forever released it; provided
that for this purpose, a claim will be deemed to have arisen at the time the party asserting the claim first became
aware of such claim.
SECTION 17
DISPUTE RESOLUTION
DISPUTE RESOLUTION
17.1 Resolution of Disputes. It is the intention of the parties to make a good faith effort to resolve,
without resort to litigation or arbitration, any dispute arising under or related to this Agreement according to the
procedures set forth in this Article. In the event of a dispute,
[ * ] indicates that information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
20
controversy or claim arising out of or relating to this Agreement, or any breach, termination or invalidity hereof
(a “Dispute”), each party has agreed to designate employees and senior executives with authority to resolve the
Dispute. The designated employees and senior executives shall promptly begin discussions in an effort to agree upon a
resolution of the Dispute. Notwithstanding the requirements of this Section 17, each party retains its rights to
terminate this Agreement pursuant the provisions contained in Section 20. The issue of whether such a termination or
cancellation is proper shall not be considered a Dispute hereunder, and as a result shall be subject to the provisions
of Section 17.4.
17.2 Dispute Procedures. This dispute resolution process begins with the receipt of written notification
of a Dispute by either party.
A. If the Dispute involves any of the services provided hereunder, it will be negotiated by Boston’s Director of
Operations (as of the date of this Agreement, Xxxxx Xxxxxxx) and Xxxxxx’x Contract Manager (as of the date of this
Agreement, Xxxx Xxxxxxxxxxx). If these parties are unable to reach an acceptable resolution after a period of ninety
(90) days, both parties agree that the Dispute will be referred to Boston’s Vice President of Operations (as of the
date of this Agreement, Xxxxxx X. Xxxxx) and Xxxxxx’x Director Business Development Contract Manufacturing (as of the
date of this Agreement, Xxxxxx Xxxxxxxxxx) for negotiation. If these parties are unable to reach an acceptable
resolution after a period of sixty (60) days, both parties agree that the matter will be referred to Mediation.
B. If the Dispute involves any other aspect of this Agreement, the matter will be referred to Xxxxxx’x Director
Business Development Contract Manufacturing (as of the date of this Agreement, Xxxxxx Xxxxxxxxxx) and Boston’s Vice
President of Operations (as of the date of this Agreement, Xxxxxx X. Xxxxx). If these parties are unable to reach an
acceptable resolution after a period of ninety (90) days, both parties agree that the Dispute will be referred to
Boston’s President and Chief Executive Officer (as of the date of this Agreement, Xxxxxx Xxxxx) and Xxxxxx’x Executive
Vice President of Operations (as of the date of this Agreement, Xxxx Xxxx) for negotiation. If these parties are
unable to reach an acceptable resolution after a period of sixty (60) days, both parties agree that the matter will be
referred to Mediation.
17.3 ADR Process. The Mediation process shall be conducted in accord with the Alternative Dispute
Resolution process of the State Bar of Wisconsin, attached hereto as Exhibit C. The exclusive venue for the Mediation
process shall be Chicago, Illinois.
17.4 Other Remedies. If the Mediation process does not result in a resolution of the Dispute, either
party shall have the right to pursue any and all remedies available under this Agreement, at law or in equity in a
court of competent jurisdiction. Neither the giving of notice of a dispute or controversy nor the pendency of any
dispute resolution process as described in this Section 17 shall extend any notice or cure period described in this
Agreement or any period within which a party must act as described in this Agreement.
[ * ] indicates that information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
21
17.5 Continued Performance. Subject to the rights of the parties to terminate this Agreement or suspend
their performance as set forth in this Agreement, both parties shall continue to perform their obligations under this
Agreement during the pendency of any Dispute.
SECTION 18
FORCE MAJEURE
FORCE MAJEURE
In the event of a Force Majeure at the Source Plant causing a temporary reduction or cessation of production at
the Source Plant, Xxxxxx shall be entitled to suspend its performance hereunder. Xxxxxx will not be liable to Boston
for any failure to perform hereunder which results from events beyond Xxxxxx’x reasonable control, including without
limitation, acts of God, fires, explosions, earthquakes, raw material shortages, energy shortages, acts of terrorism
and strikes or other labor problems. This Agreement may not be terminated by Boston as a result of any such failure to
perform; provided however, upon the occurrence of any of the foregoing events, Boston’s obligations to perform
hereunder will be suspended to the extent that Xxxxxx is unable to perform; provided that in any event Boston shall
continue to be required to make payments to Xxxxxx as required by this Agreement for all Barrels of the Brands actually
produced by Boston pursuant to the terms of this Agreement.
SECTION 19
CHANGES TO LIST OF BRANDS
CHANGES TO LIST OF BRANDS
If Boston wishes to add a new brand of beverage under this Agreement, it will provide Xxxxxx with a written
request to include such new brand under this Agreement, which notice shall include a description of the brand and all
required manufacturing processes, Packaging, Ingredients, and other services that the new brand might require. Xxxxxx
will have the sole discretion to determine whether any new brand requested by Boston will be accepted. If accepted,
any additional new brand will be made subject to all provisions of this Agreement. The parties acknowledge that Boston
may, from time to time, substitute a new brand for a Seasonal Brand upon notice to Xxxxxx, provided that such
substituted brand is manufactured using a similar process as the prior Seasonal Brand, which does not place any
additional burden on the Source Plant, as determined in Xxxxxx’x reasonable discretion.
SECTION 20
TERMINATION
TERMINATION
20.1 Boston’s Right to Terminate.
A. Boston has the right to terminate this Agreement without any liability to Xxxxxx if:
1. Within five business days’ after receipt of written notice from Boston, Xxxxxx fails to pay any amount then due
Boston hereunder, unless such amount is a Dispute subject to the procedures in Section 17, including, without
limitation, any matter related to the Brands Manufacturing Price Adjustment;
[ * ] indicates that information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
22
2. Despite its best efforts, Boston is denied a Xxxxxx’x Notice for the Source Plant as an alternating
proprietorship, or such Xxxxxx’x Notice is cancelled through no fault of Boston; provided that, in the event the
Xxxxxx’x Notice is cancelled, the termination of this Agreement shall not be effective for thirty (30) days from the
date of notice of such cancellation, during which period Xxxxxx shall be entitled to take such actions as it deems
appropriate, at its sole cost and in its sole discretion, to reinstate the Xxxxxx’x Notice (it being expressly
understood that Xxxxxx shall not be obligated to take any action to reinstate the Xxxxxx’x Notice), in which case this
Agreement shall remain in effect;
3. Xxxxxx liquidates, dissolves, makes an assignment for the benefit of creditors, or receivership or bankruptcy
proceedings are instituted by or against Xxxxxx; or
4. Xxxxxx is in material default of a material provision of this Agreement and such material default remains
uncured for 60 days after Boston provides written notice to Xxxxxx specifying in detail the nature of such default.
5. Boston provides Xxxxxx with at least [ * ] advance written notice of its intent to terminate this Agreement,
with an effective date on or after [ * ]; provided that if the effective date is not the last day of a Brewing Period,
then Xxxxxx shall remain entitled to receive and retain the full Reservation Fee related to the Brewing Period in which
the termination occurs.
6. Xxxxxx agrees to such termination.
B. Limitation on Boston’s Right to Terminate. Boston has no right to terminate this Agreement except as
expressly provided in Section 20.1(A.), provided no limitation will apply to Boston’s rights under law to suspend its
performance under this Agreement and/or seek damages in the event of the non-performance of this Agreement by Xxxxxx in
a manner not specified in Section 20.1(A.). A termination in accordance with this Section 20.1 shall not affect the
right of Boston to obtain such additional relief at law or in equity to which it is entitled as a result of a breach of
this Agreement by Xxxxxx. Notwithstanding the foregoing, Xxxxxx shall in no event have any liability for Consequential
Damages, except as otherwise provided in Section 16.
[ * ] indicates that information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
23
20.2 Xxxxxx’x Right to Terminate.
X. Xxxxxx has the right to terminate this Agreement, without any liability to Boston:
1. Immediately on written notice if, within five business days’ after receipt of written notice from Xxxxxx,
Boston fails to pay any amount then due Xxxxxx hereunder (other than as noted in subsection 5 below), unless such
amount is a Dispute subject to the procedures in Section 17, including, without limitation, any matter related to the
Brands Manufacturing Price Adjustment;
2. Immediately on written notice if Boston liquidates, dissolves, makes an assignment for the benefit of
creditors, or receivership or bankruptcy proceedings are instituted by or against Boston;
3. Immediately on written notice if Boston consummates any reorganization, merger, or consolidation with an entity
not directly or indirectly 100% owned by The Boston Beer Company, Inc.;
4. Immediately on written notice if Boston sells substantially all of its assets;
5. Immediately on written notice if Boston fails to pay any Reservation Fee when due and such failure remains
uncured for five (5) business days after receipt of written notice from Xxxxxx;
6. [ * ];
7. [ * ];
8. [ * ];
9. Immediately on written notice if Boston is in material default of a material provision of this Agreement and
such material default remains uncured for 60 days after Xxxxxx provides written notice to Boston specifying in detail
the nature of such default; or
10. If Boston agrees to such termination.
For purposes of this Section:
[ * ]
“Affiliate” shall mean, with reference to a Person, any other Person that, directly or indirectly through one or
more intermediaries, controls, is controlled by or is under common control with the first Person.
[ * ] indicates that information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
24
“Person” shall mean a corporation, an association, a partnership (general or limited), a joint venture, an estate,
a trust, a limited liability company, any other legal entity, or an individual.
B. Limitation on Xxxxxx’x Right to Terminate. Xxxxxx has no right to terminate this Agreement except as
expressly provided in Sections 20.2(A) and (B). However, Xxxxxx shall be entitled to suspend its performance under
this Agreement and/or seek damages in the event of any non-performance of or non-compliance with this Agreement by
Boston in a manner not specified in Sections 20.2(A) and (B), including a breach of any representation or warranty, or
a failure to comply with the QA Standards. A termination in accordance with this Section 20.2 shall not affect the
right of Xxxxxx to obtain such additional relief at law or in equity to which it is entitled as a result of a breach of
this Agreement by Boston. Notwithstanding the foregoing, Boston shall in no event have any liability for Consequential
Damages, except as otherwise provided in Section 16.
20.3 Payments Due Upon Expiration or Termination. At the expiration of this Agreement, or upon the
rejection of this Agreement in bankruptcy proceedings, or upon earlier termination of this Agreement in accordance with
Sections 20.1, or 20.2., Boston shall remove from Xxxxxx property all Packaging and Unique Ingredients or any other
Boston specific material in Xxxxxx’x physical possession, and all usable Ingredients and work-in-process. In addition,
within thirty (30) days of the date of such expiration or termination, the parties will settle in cash all other
accounts.
SECTION 21
NOTICES
NOTICES
21.1 Method of Giving Notice. Notices or other communications required or permitted hereunder will be
sufficiently given if personally delivered, or sent by facsimile or registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
If to Xxxxxx: | Xxxxxx Brewing Company | |||
0000 Xxxx Xxxxxxxx Xxxxxxxxx | ||||
Xxxxxxxxx, Xxxxxxxxx 00000 | ||||
Copies to: Senior Vice President General Counsel, Senior Vice | ||||
President Finance, and Executive Vice President of Operations | ||||
Fax: (000) 000-0000 | ||||
with a copy to: | Xxxxxxx & Xxxxx LLP | |||
000 Xxxx Xxxxxxxxx Xxxxxx | ||||
Xxxxxxxxx, Xxxxxxxxx 00000 | ||||
Attention: Xxxxxxx X. Xxxxx | ||||
Fax: (000) 000-0000 |
[ * ] indicates that information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
25
If to Boston: | Boston Beer Corporation | |||
Xxx Xxxxxx Xxxxxx Xxxxx, Xxxxx 000 | ||||
Xxxxxx, XX 00000 | ||||
Copies to: Vice President of Operations and | ||||
Legal Department | ||||
Fax: (000) 000-0000 | ||||
with a copy to: | Xxxxx Xxxxxxx LLP | |||
000 Xxxxxx Xxxxxx | ||||
Xxxxxx, XX 00000 | ||||
Attention: Xxxxxxxxx X. Xxxxx, Xx., Esq. | ||||
Fax: (000) 000-0000 |
or to such other persons and addresses as shall be furnished by like notice by such party or person. Any notice given
in accordance with this provision shall be deemed to have been given and effective when received.
21.2 Notification of Boston Wholesalers. From time to time, Boston or Xxxxxx will notify Boston
Wholesalers of any Xxxxxx required policies or procedures to be used by Boston or Boston Wholesalers and of such other
information as is mutually agreed to by Boston and Xxxxxx. Boston will supply to Xxxxxx and is responsible to keep
current any list of Boston Wholesalers for this purpose. Xxxxxx will allow Boston to review and approve any planned
communication by Xxxxxx to Boston Wholesalers that concern Boston products and/or services.
SECTION 22
GOVERNING LAW AND VENUE
GOVERNING LAW AND VENUE
This Agreement shall be governed by and construed in accordance with the provision of the laws of the State of
Wisconsin, without regard to the application of its rules on conflict of laws. All parties consent to the exclusive
jurisdiction of the federal or state courts in the state of Wisconsin as having both personal and subject matter
jurisdiction and venue in connection with any matter, dispute or cause of action arising hereunder or pursuant hereto.
SECTION 23
SUCCESSORS AND ASSIGNMENT
SUCCESSORS AND ASSIGNMENT
This Agreement is binding upon, and the benefits hereof inure to, the parties hereto and their respective
successors and assigns; provided that neither this Agreement nor any right or obligation under this Agreement may be
assigned by either party without the written consent of the other party hereto, except that no consent is necessary for
(i) an assignment by Xxxxxx to an affiliate of Xxxxxx that is owned, directly or indirectly, 100% by SABMiller plc, or
(ii) an assignment by Boston to an affiliate of Boston that is owned, directly or indirectly 100% by The Boston Beer
Company, Inc.; in either case so long as the assigning party gives prompt written notice of such assignment to the
other party. Any attempted assignment in violation of the provisions of this Section 23 will be void. Assignment of
this Agreement shall not relieve the assigning Party of its financial obligations hereunder, including its
indemnification obligations, if an assignee defaults in the performance of its assigned obligations.
[ * ] indicates that information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
26
SECTION 24
SEVERABILITY
SEVERABILITY
In case any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid,
illegal or unenforceable in any respect, that invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement, and this Agreement shall be construed as if the invalid, illegal or unenforceable
provision had never been contained within the body of the Agreement.
SECTION 25
AMENDMENTS
AMENDMENTS
No amendment, modification or waiver of any term hereof shall be effective unless set forth in writing and signed
by Boston and Xxxxxx.
SECTION 26
PUBLICITY
PUBLICITY
Xxxxxx and Boston agree not to publicly disclose the terms, conditions and other details of this Agreement without
the prior written consent of the other party, except as required by law, and then, to the extent possible, only upon
prior notice to the other party. It being understood, however, that Boston will report the existence of this Agreement
by filing a current report form 8-K under the Securities Exchange Act of 1934.
SECTION 27
NONSOLICITATION OF EMPLOYEES
NONSOLICITATION OF EMPLOYEES
Each party will not solicit the personnel of the other for employment during the term of this contract. However,
each party acknowledges that a party may post all job openings on appropriate bulletin boards at its locations for the
benefit of its employees and such postings are visible to consultants, visitors and others. For the purposes of this
Agreement, such postings, and any newspaper advertisements or similar information about employment opportunities shall
not constitute a solicitation of the other’s personnel and each party shall be free to interview and hire any such
personnel.
SECTION 28
CAPTIONS
CAPTIONS
Captions to Sections of this Agreement have been included solely for the sake of convenient reference, and are
entirely without substantive effect.
SECTION 29
NO THIRD PARTY BENEFICIARIES
NO THIRD PARTY BENEFICIARIES
Xxxxxx and Boston agree that this Agreement is solely for their benefit and it does not nor is it intended to
create any rights in favor of, or obligations owing to, any third parties.
[ * ] indicates that information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
27
SECTION 30
ENTIRE AGREEMENT
ENTIRE AGREEMENT
This Agreement, including the Schedules and Exhibits attached hereto, embodies the entire agreement of the parties
with respect to the subject matter hereof and supersedes all prior agreements with respect thereto, including the Prior
Agreement.
Each party has therefore caused this Agreement to be executed on its behalf.
BOSTON BEER CORPORATION |
||||
By: | ||||
Name: | ||||
Title: | ||||
XXXXXX BREWING COMPANY |
||||
By: | ||||
Name: | ||||
Title: | ||||
[ * ] indicates that information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
28
SCHEDULE 1.8
SEASONAL BRANDS
[ * ]
[ * ] indicates that information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
SCHEDULE 1.29
QA STANDARDS
See Attachment.
[ * ] indicates that information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
SCHEDULE 1.33
SOURCE PLANTS
Eden, North Carolina
[ * ] indicates that information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
SCHEDULE 1.34
SVC COMPONENT PARTS
[ * ]
[ * ] indicates that information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
SCHEDULE 4.7.C
APPROVED BPA
[ * ]
[ * ] indicates that information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
SCHEDULE 4.8.E
PALLET LOADING REQUIREMENTS
See Attachments.
[ * ] indicates that information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
SCHEDULE 9
ALTERNATION FEES AND PRICING
[ * ]
[ * ] indicates that information has been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.