Exhibit 10.32
INDEMNIFICATION AGREEMENT
This Indemnification Agreement (the "INDEMNIFICATION AGREEMENT") is effective
August 1, 2004, and is between PORTLAND BREWING COMPANY, an Oregon corporation
("PBC"), and PYRAMID BREWERIES, INC., a Washington corporation ("PMID").
RECITALS
A. PBC and PMID are parties to the following agreements:
- A Production Agreement executed February 14, 2006 and dated effective
August 1, 2004 (the "PRODUCTION AGREEMENT");
- Two Subleases, each executed February 14, 2006 and dated effective
August 1, 2004 (the "SUBLEASES");
- An Equipment Lease executed February 14, 2006 and dated effective
August 1, 2004 (the "EQUIPMENT LEASE");
- A Staffing Agreement executed February 14, 2006 and dated effective
August 1, 2004 (the "STAFFING AGREEMENT"); and
- A Restaurant Management Agreement executed February 14, 2006 and dated
effective August 1, 2004 (the "MANAGEMENT Agreement").
These agreements are referred to herein collectively as the
"AGREEMENTS".
B. The parties are willing to execute and perform the Agreements on the
condition that they sign this Indemnification Agreement.
C. In view of the business relationship between PMID and PBC, the
consideration from PBC to PMID under the Agreements will inure to the
benefit of PMID, and the consideration from PMID to PBC will inure to the
benefit of PBC.
AGREEMENT
1. GENERAL INDEMNIFICATION. To the extent not prohibited by law, PMID will
defend and indemnify PBC and each present and future shareholder, director,
officer, employee and agent of PBC for, from, and against any and all
claims, actions, proceedings, damages, liabilities, and expenses of every
kind, past and future, whether known or unknown, including but not limited
to reasonable attorney's fees, resulting from or arising out of the
Agreements, the relationship created thereby, and the business relationship
of the parties prior to the execution and delivery of the Agreements.
Without limiting the generality of the foregoing, PMID specifically agrees
to defend and indemnify PBC in connection with the specific areas
identified herein.
2. DIRECT CLAIMS. PMID will not make claims based on actions or omissions of
PBC related to duties of PBC under the Agreements, where such duties are
performed by PMID or its employees or agents pursuant to the Staffing
Agreement.
3. THIRD PARTY CLAIMS. The indemnification obligations of PMID set forth
herein will include without limitation indemnification for: (i) injuries to
employees or others in connection with the activities contemplated by the
Production Agreement; (ii) dram shop liability and other liability
concerning the sale of alcoholic beverages related to the operation of the
restaurant as set forth in the Management Agreement; (iii) products
liability claims in connection with the products produced pursuant to the
Production Agreement; (iv) liability related to employment, workers'
compensation, and associated claims in connection with the Staffing
Agreement; and (v) liability arising in connection with health and safety
regulations relevant to activities contemplated by the Production
Agreement, Staffing Agreement, and Management Agreement.
4. INTELLECTUAL PROPERTY. The indemnification obligations of PMID set forth
herein will include without limitation indemnification for any and all
claims or liabilities arising from PBC's use of trademarks and other
intellectual property of PMID and third parties pursuant to the Production
Agreement or Management Agreement.
5. TAXES. The indemnification obligations of PMID set forth herein will
include without limitation indemnification for any and all tax liabilities
assessed or assessable against PBC by the United States Department of the
Treasury or any agency thereof (e.g. IRS, TTB, ATF) or by the Social
Security Administration or by any state taxing agency, arising out of or in
any way related to PBC's business operations pursuant to the Agreements.
Obligations specifically subject to this covenant of indemnification
include, but are not limited to, all state and federal income tax, excise
tax, payroll tax, business and occupations tax, and employment tax
liabilities arising out of PBC's business operations under the Agreements.
PMID shall not be responsible to indemnify PBC from any state or federal
corporate income or payroll tax liabilities that are not related to the
performance of PBC's operations and obligations under the Agreements.
PMID's indemnification obligations will include any accruals, interest,
penalties or fines assessed in connection with tax liabilities.
6. FINES AND PENALTIES. The indemnification obligations of PMID set forth
herein will include without limitation indemnification for any fines and
penalties levied on PBC in connection with the activities contemplated by
the Agreements.
7. DEFENSE COSTS. The indemnification obligations of PMID set forth herein
will include without limitation indemnification for legal fees and any
other costs incurred by PBC in the response to and defense of any claim
covered by this Indemnification Agreement.
8. COMPLIANCE COSTS. The indemnification obligations of PMID set forth herein
will include without limitation indemnification for all of PBC's costs
incurred in complying with all applicable laws and regulations governing
the activities contemplated by the Agreements.
9. SUBROGATION. An indemnitor hereunder shall be subrogated to any recovery
received by or payable to an indemnitee hereunder for any loss, liability
or damage arising from a fact or circumstance invoking indemnification
hereunder, whether from insurance, other indemnity, or other source, and
shall receive the benefit any refund, compromise, or adjustment of any
cost, expense, assesment, fine, tax, or other liability of such indemnitee
that arises from the subject matter of any area specified herein.
10. CERTAIN LIMITATIONS. Notwithstanding any other provision hereof, PMID will
not be required to indemnify PBC with respect to any claim, loss, expense
or liability: (i) for which PBC is covered by any policy of insurance that
PBC holds, and PBC is fully reimbursed under such policy for the claim,
loss, expense or liability (and the associated costs); or (ii) results
solely from PBC's willful or grossly negligent breach of an obligation to
PMID under the Agreements. PMID shall be subrogated to any third party
indemnification for any claim indemnified hereunder by PMID and to any
refund to PBC of tax paid by reason of collection
from, or payment by, PMID of such tax, and PBC shall upon reasonable
request execute all documents reasonably necessary or convenient to effect
such subrogration.
11. GOVERNING LAW. This Agreement is governed by the laws of the State of
Oregon, without giving effect to any conflict-of-law principle that would
result in the laws of any other jurisdiction governing this Agreement.
12. ATTORNEY'S FEES. If any arbitration or litigation is instituted to
interpret, enforce, or rescind this Agreement, including but not limited to
any proceeding brought under the United States Bankruptcy Code, the
prevailing party on a claim will be entitled to recover with respect to the
claim, in addition to any other relief awarded, the prevailing party's
reasonable attorney's fees and other fees, costs, and expenses of every
kind, including but not limited to the costs and disbursements specified in
ORCP 68 A(2), incurred in connection with the arbitration, the litigation,
any appeal or petition for review, the collection of any award, or the
enforcement of any order, as determined by the arbitrator or court.
13. SIGNATURES. This Agreement may be signed in counterparts. A fax
transmission of a signature page will be considered an original signature
page. At the request of a party, the other party will confirm a
fax-transmitted signature page by delivering an original signature page to
the requesting party.
Executed February 14, 2006:
PYRAMID BREWERIES, INC.
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By: Xxxx Xxxxxx
Its: President and Chief Executive
Officer
PORTLAND BREWING COMPANY
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By: R. Xxxxx XxxXxxxxxxx
Its: President
