1 Exhibit 10.15 AGREEMENT This Purchase Agreement, made this _____ day of _______________, 1996, between HERITAGE BREWING COMPANY, INC., a California corporation (hereinafter "HERITAGE"), having its principle office at 571-C Crane Street, Lake Elsinore, California 92530, and CABO DISTRIBUTING COMPANY, INC. (hereinafter "CABO"), having its principle office at 9627 East Rush Street, South El Monte, California 91733: RECITALS A. HERITAGE is in the business of brewing and packaging beer products and has previously produced beer under the label of "Red Pig Ale" using a formula developed by HERITAGE (hereinafter "FORMULA"). B. CABO is in the business of distributing beer products and owns the rights to the "Red Pig Ale" tradename, logos and artwork; and C. HERITAGE and CABO desire to enter into an agreement whereby HERITAGE produces beer and CABO distributes beer under the "Red Pig Ale" label. 1. TERM OF AGREEMENT. Unless otherwise terminated earlier as provided hereinafter, the term of this Purchase Agreement shall be one year from the date set forth above. 2. OWNERSHIP RIGHTS. a. CABO warrants that it is the owner of all rights, title and interest in the trade name of "Red Pig Ale" and all trademarks, logos and artwork associated with "Red Pig Ale" (hereinafter "TRADENAME"). CABO hereby grants HERITAGE the exclusive right to use the TRADENAME in connection with the production and packaging of PRODUCT, as that term is defined in paragraph 3(b), solely and exclusively for sale to CABO for distribution within the United States. b. The parties acknowledge that the FORMULA has been developed by HERITAGE. All proprietary interests in the FORMULA are the property of HERITAGE and shall remain with HERITAGE at all times during the term of this Purchase Agreement and upon termination of this Purchase Agreement. 3. ORDERING AND PRODUCTION OF PRODUCT. a. HERITAGE shall use the FORMULA to produce a malt beverage under the label of "Red Pig Ale" (hereinafter "PRODUCT") for distribution by CABO. All PRODUCT shall conform to the formula and shall be pasteurized. b. CABO shall place orders through HERITAGE at 571-C Crane Street, Lake Elsinore, California 92530 or at such other location as shall be designated in written notice given by HERITAGE to CABO from time to time during the term of this Purchase Agreement. CABO shall issue and deliver to HERITAGE a written purchase order to confirm each order placed. d. Each purchase order shall provide at least 6 weeks of lead time for the completion of the order by HERITAGE. Within 5 working days of receipt of each purchase order, HERITAGE shall provide written notification to CABO of the projected date upon which the PRODUCT will be ready for pickup. Verification of the actual date on which PRODUCT will be ready for pickup will be provided by HERITAGE to CABO one week prior to such date. e. Upon completion of PRODUCT ordered by CABO, HERITAGE shall notify CABO that the product is completed and ready for pickup. HERITAGE shall issue an invoice to cover the order. On the date issued, the invoice shall be mailed to CABO and a copy shall be sent by telefacsimile to CABO. In addition, HERITAGE shall provide notification 2 PURCHASE AGREEMENT Page 2 of completion to CABO by telephone. f. Completed PRODUCT shall be picked up by CABO within 5 days of the date of notification that the product is ready for pickup. The date on which the invoice is sent by HERITAGE to CABO by telefacsimile shall be deemed the date of notification. g. At the time the order is placed, CABO shall designate in the purchase order the HERITAGE facility at which the PRODUCT will be picked up by CABO. However, HERITAGE shall have the option to produce PRODUCT at any of its brewing facilities or under contract with a third party. HERITAGE shall incur any and all costs of shipping PRODUCT to the facility designated by CABO for pickup if such PRODUCT is produced at a facility different than the one designated by CABO as the location for pickup. h. CABO shall be deemed the owner of the PRODUCT upon taking possession, whether directly or through its designated agent, at the time the PRODUCT is picked up from the HERITAGE facility designated by CABO in its purchase order. CABO shall thereafter be liable for and bear the risk of loss or damage to PRODUCT in transit or after transit. i. At the time PRODUCT is picked up, CABO shall exchange a standard wood pallet for each pallet picked up. CABO shall pay to HERITAGE the sum of $7.00 for each pallet picked up for which an empty pallet is not left in exchange. The charges for pallets shall appear on the next invoice issued by HERITAGE. 4. PACKAGING AND LABELS a. HERITAGE shall package the PRODUCT as follows: i. The PRODUCT shall be packaged in 12 oz. and 22 oz. long-neck bottles in quantities specified in the purchase orders placed by CABO. ii. Labels shall be affixed to each bottle. The label that has been previously approved by the Bureau of Alcohol, Tobacco & Firearms for "Red Pig Ale" shall be used unless a different label is designated by CABO or required by law. iii. The 12 oz. bottles shall be packaged in 6-pack cartons. The 6-pack cartons of 12 oz. bottles shall be packaged in printed mother cartons holding 4 of the 6-pack cartons. The mother cartons shall be placed on pallets ready for pickup by CABO. A case of 12 oz. bottles shall be deemed to consist of 24 bottles. iv. The 22 oz. bottles shall be packed with dividers in plain brown cases holding 12 bottles per case. The cases shall be placed on pallets ready for pickup by CABO. A case of 22 oz. bottles shall be deemed to consist of 12 bottles. b. Except as otherwise provided herein, HERITAGE shall supply all materials necessary to the production and packaging of the PRODUCT. HERITAGE shall use only labels and packaging materials bearing logos and artwork previously used for "Red Pig Ale" or hereafter approved in writing by CABO. c. Except as otherwise provided herein, CABO shall be responsible for ensuring that the design and wording of labels conform to the requirements of any applicable Federal, State and local statutes, ordinances and regulations. To the extent that any governmental or regulatory agency requires the participation of the brewery in obtaining approval of labels, HERITAGE will cooperate with CABO and provide all 3 PURCHASE AGREEMENT Page 3 necessary information and documentation. HERITAGE shall be responsible for label design changes that are necessitated by HERITAGE electing to produce PRODUCT outside of California. All expenses incurred in connection with label designs and obtaining approval of label designs shall be borne by CABO except such expenses incurred as a result of HERITAGE electing to produce PRODUCT outside of California. 5. PRICING. a. The prices set forth below shall be effective for the term of this Purchase Agreement, subject to adjustment as set forth in paragraphs 5(b) and 5(c). All prices are FOB brewery, packaging and Federal excise taxes included. As used herein, "packaging" includes bottles, labels, crowns, cartons, dividers and cases, but excludes pallets. Pricing is based on the quantity of PRODUCT ordered by CABO each month as follows: Total quantity of 12 oz. and 22 oz. PRODUCT ordered (stated in Price per case of 12 Price per case of 22 cases) oz. PRODUCT oz. PRODUCT - ----------------------------------------------------------------------------------------------------------- 0 - 50,000 $11.00 $10.00 - ----------------------------------------------------------------------------------------------------------- 4,001-8,000 $10.50 $9.50 - ----------------------------------------------------------------------------------------------------------- 8,001-12,500 $10.00 $9.00 - ----------------------------------------------------------------------------------------------------------- over 12,500 $9.50 $8.50 - ----------------------------------------------------------------------------------------------------------- c. The prices set forth in paragraph 5(a) are based on the current applicable Federal and State tax rates. In the event of increases in the applicable tax rates, the prices may be increased in amounts equal to the increase in taxes payable by HERITAGE. 6. PAYMENTS. b. CABO shall pay all invoices within 30 days of the invoice date. Any balance which remains unpaid after 30 days shall bear interest at the rate of 1% per month until such balance is paid in full. All payments shall be applied first to interest and thereafter to principle. c. HERITAGE shall prepare and issue statements on or about the 10th day of each month for PRODUCT which HERITAGE notified CABO was ready for pickup during the preceding month. Each statement shall clearly state the invoice number, the date of each order to which it applies, the quantities of PRODUCT ordered, the price per case for both 12 oz. and 22 oz. bottles, the total amounts of the current invoice, any unpaid balance and any interest on amounts overdue. 7. TAXES AND LICENSES. 4 PURCHASE AGREEMENT Page 4 a. CABO, at its own expense, shall obtain and maintain current any and all licenses and permits required by any governmental or regulatory agency or under any statute, ordinance or regulation for the right to sell, distribute, or transport alcoholic beverages. HERITAGE shall cooperate and provide any information and documentation needed by CABO to obtain or renew any licenses or permits to the extent such information is not otherwise in the possession of or equally available to CABO. CABO shall, upon reasonable request by HERITAGE, provide copies of or other satisfactory evidence of any such license or permit required in any jurisdiction within which CABO sells, distributes or transports alcoholic beverages. Cabo will provide proof of insurance. b. HERITAGE shall process and pay all applicable manufacturer's Federal excise taxes and all manufacturer's California processing fees. 8. TERMINATION OF AGREEMENT. a. Upon the failure of either party to this Purchase Agreement to fulfill any material obligations hereunder, the party aggrieved by the default may give to the other party written notice, by certified mail, of the default. Notice shall state specifically the aggrieved party's intention to terminate this Purchase Agreement in the event of continued default. If, after 30 days from the date of such notice, the defaulting party has failed or refuses to remedy a default capable of being remedied, or has failed or refuses to pay reasonable compensation for a default not capable of being remedied, this Purchase Agreement may be terminated immediately by written notice given to the defaulting party by certified mail, not later than 60 days after the date of the original notice of default. Such termination shall be without prejudice to any other rights or claims the aggrieved party may have against the defaulting party. b. Either party shall have the right, at its option, to terminate this Purchase Agreement by giving notice to the other party at lease [e.g. five business days] before the termination is to be effective, if: i. The other party shall be adjudicated or become a bankrupt or an insolvent (as that term is defined in 11 USC Section 101(32)); ii. The other party shall file a voluntary petition under any bankruptcy, reorganization or insolvency law; iii. The other party shall apply for or consent to appointment of a trustee or receiver to take possession of all or substantially all its assets; iv. The other party shall consent to, or shall file an answer admitting the jurisdiction of the court and the material allegations of, an involuntary petition filed under any bankruptcy, reorganization, or insolvency law; v. Any proceedings of bankruptcy, reorganization, or insolvency shall be commenced against the other party and not be dismissed within [e.g. 30 calendar days] after commencement; vi. The other party shall make any assignment for the benefit of creditors, other arrangement or composition under any laws for the benefit of insolvents; vii. Any order shall be entered under any bankruptcy, reorganization, or insolvency law of any jurisdiction, and shall not be dismissed or stayed within [e.g. 30 calendar days] after its entry (a) 5 PURCHASE AGREEMENT Page 5 approving an involuntary petition seeking an arrangement with the creditors of the other party, (b) approving an involuntary petition seeking reorganization, or (c) appointing any receiver of trustee of all or a substantial part of the property of the other party; viii. A trustee or receiver shall be appointed to take possession of all or substantially all assets of the other party and shall not be dismissed within [e.g. 30 calendar days] after appointment; or ix. Any writ of attachment, garnishment, or execution shall be levied against all or substantially all assets of the other party, or all or substantially all assets of the other party shall be subject to any attachment, garnishment, execution, or other judicial seizure, and shall not be removed, released, or bonded within [e.g. 30 calendar days] after the date of the attachment, garnishment, execution or other judicial seizure. c. In the event of termination of this Purchase Agreement for any reason whatsoever, all future and continuing rights and obligations under it shall terminate, except: i. CABO shall remain obligated to pay all sums due at the time of termination of the Purchase Agreement; ii. CABO shall pay for all PRODUCT ordered prior to the date of termination of the Purchase Agreement; and iii. CABO shall pay the cost incurred by HERITAGE for all packaging, including that which HERITAGE has in its inventory or has ordered prior to the date notification of termination is given, that bears the TRADENAME or for any other reason cannot be utilized by HERITAGE to package other products. 9. RELATIONSHIP OF THE PARTIES. CABO and HERITAGE are independent contractors under this Purchase Agreement and no agency, joint venture or partnership is created between the parties. Neither party has the right to incur any liabilities on behalf of or binding upon the other party. 10. INDEMNIFICATION. a. CABO shall indemnify, defend and hold harmless HERITAGE, and its officers, directors, shareholders, employees, agents and representatives, against all liability, demands, claims, costs, losses, damages, recoveries, settlements, and expenses, (including interest, penalties, attorney fees, accounting fees, expert witness fees, costs, and other related expenses) directly or indirectly arising from or related to the acts or omissions of CABO, its agents, employees, subcontractors or other persons or entities acting under the direction or control of CABO, its agents, employees, or subcontractors. b. HERITAGE shall indemnify, defend and hold harmless CABO and its officers, directors, shareholders, employees, agents and representatives, against all liability, demands, claims, costs, losses, damages, recoveries, settlements, and expenses, (including interest, penalties, attorney fees, accounting fees, expert witness fees, costs, and other related expenses) directly or indirectly arising from or related to the acts or omissions of HERITAGE, its agents, employees, subcontractors or other persons or entities acting under the direction or control of HERITAGE, its agents, employees, or subcontractors. 11. INSURANCE. 6 PURCHASE AGREEMENT Page 6 a. CABO shall obtain and maintain at all times during the term of this Purchase Agreement a comprehensive general liability insurance policy providing for coverage of at least $1,000,000 for each occurrence. CABO shall furnish to HERITAGE a certificate evidencing the fact that the insurance described in this paragraph has been obtained and is in full force and effect, that the premiums thereon have been paid and that such insurance cannot be cancelled without prior written notice to CABO. b. HERITAGE shall obtain and maintain at all times during the term of this Purchase Agreement a product liability insurance policy providing for coverage of at least $1,000,000 for each occurrence. CABO shall be included as an an additional insured under such policy of insurance. HERITAGE shall furnish to CABO a certificate evidencing the fact that the insurance described in this paragraph has been obtained and is in full force and effect, that CABO has been named as an an additional insured, that the premiums thereon have been paid and that such insurance cannot be cancelled without prior written notice to CABO. 12. FORCE MAJEURE. If HERITAGE fails to perform its obligations because of strikes, lockouts, labor disputes, embargos, acts of God, inability to obtain labor or materials or reasonable substitutes for labor or materials, governmental restrictions, governmental regulations, governmental action, judicial orders, enemy or hostile governmental action, civil commotion, fire or other casualty, or other causes, except financial, beyond the reasonable control of HERITAGE, then HERITAGE'S performance shall be excused for a period equal to the period of such cause for failure to perform as long as HERITAGE gives CABO notice, in writing by certified mail, within three (3) business days after the event causing the failure. 13. ARBITRATION. Any controversy, claim or dispute arising out of this Purchase Agreement or the breach of any provision herein shall be settled in arbitration in accordance with the rules of the American Arbitration Association. Notwithstanding the foregoing, the parties hereby agree that in the event of arbitration, each party may conduct discovery and the provisions of Code of Civil Procedure, Section 1283.05 shall apply. The prevailing party to such arbitration shall be entitled, in addition to such other relief as may be granted, to reasonable attorney's fees. The award rendered by the arbitrator shall be final and binding. The arbitration proceedings shall be conducted in the County of Orange, State of California. 14. NOTICES. All notices and other communications under this Agreement shall be in writing and shall be delivered personally, telegraphed, telexed, sent by facsimile transmission or sent by certified, registered or express mail, postage prepaid. Any such notice or other communication shall be deemed given: (a) upon actual delivery if presented personally or sent by prepaid telegram or telex or by facsimile transmission and (b) three (3) business days following deposit it in the United States mail, if sent by certified, registered or express mail, postage prepaid, in each case to the following address: If to HERITAGE: HERITAGE BREWING COMPANY, INC. 571-C Crane Street Lake Elsinore, California 92530 7 PURCHASE AGREEMENT Page 7 If to CABO: CABO DISTRIBUTING COMPANY, INC. 9627 East Rush Street South El Monte, California 91733 Notice of any change in any such address shall also be given in the manner set forth above. Whenever the giving of notice is required, the giving of such notice may be waived by the party entitled to receive such notice. 15. AMENDMENTS AND WAIVERS. Except as specifically provided for herein, this Purchase Agreement may be amended, superseded, cancelled, renewed or extended, and the terms hereof may be waived, only by a written instrument signed by the parties hereto or, in the case of a waiver, by the party waiving compliance. No delay on the part of any party hereto in exercising any right, power or privilege hereunder shall operate as a waiver thereof. Nor shall any waiver on the part of any party hereto of any such right, power or privilege, nor any single or partial exercise of any such right, power of privilege, preclude any further exercise thereof or the exercise of any other such right, power or privilege. 16. SEVERABILITY; HEADINGS; GOVERNING LAW; COMPLIANCE In the event one or more of the provisions contained herein are found to be illegal or unenforceable in any respect, the legality and enforceability of the remaining provisions of this Purchase Agreement, shall not be affected. The headings of this Purchase Agreement are provided for reference only. This Purchase Agreement shall be governed by and construed in accordance with the laws of the State of California. Both parties mutually agree to do all things reasonably necessary in order to comply with all laws and regulations. In witness whereof, the parties have caused this Purchase Agreement to be signed by their duly authorized and empowered officers or representatives as of the date first above written. CABO DISTRIBUTING COMPANY, INC. _____________________________________ ___________________________ Date _____________________________________ Title of Signator HERITAGE BREWING COMPANY, INC., a California corporation _____________________________________ ___________________________ Date _____________________________________ Title of Signator