EXHIBIT 10.20
* denotes expurgated
information
PRODUCTION AGREEMENT
BETWEEN
THE STROH BREWERY COMPANY
AND
BOSTON BEER COMPANY LIMITED PARTNERSHIP
AGREEMENT entered into this 14th day of January, 1997, by
and between THE STROH BREWERY COMPANY, an Arizona corporation
("Stroh"), and BOSTON BEER COMPANY, LIMITED PARTNERSHIP, a
Massachusetts limited partnership ("Boston Beer"). Boston Beer
and Stroh are sometimes referred to herein individually as a
"Party" and collectively as the "Parties."
Stroh and Boston Beer are currently parties to an Agreement dated
as of January 31, 1994, as amended, pursuant to which Stroh has
agreed to brew, package and sell certain Boston Beer products to
Boston Beer at Stroh's Allentown (Lehigh Valley), Pennsylvania
brewery. Stroh also produces products for Boston Beer at the
Portland, Oregon brewery acquired by Stroh from G.Heileman
Brewing Company ("Heileman") on or about June 30, 1996, pursuant
to the December, 1995 agreement between Boston Beer and Heileman
which was assumed by Stroh. Stroh has further agreed that these
existing production arrangements shall remain in effect until at
least June 30, 1998. Stroh and Boston Beer now desire to enter
into a new production agreement, effective as of January 1, 1997,
to supersede the existing arrangements, and which will govern the
production of products by Stroh for Boston Beer, provide Boston
Beer with greater control over the production process, and give
Boston Beer access to * , which are the principal focus
of this Agreement, are sometimes referred to herein individually
as a "Brewery" and collectively as the "Breweries" and other
breweries owned by Stroh at which Beer Products may from time to
time be produced are sometimes referred to individually as an
"Other Brewery" and collectively as "Other Breweries".]
Production under this Agreement shall be deemed to take effect on
the Effective Date, as defined in Section 12.
ACCORDINGLY, in consideration of the mutual agreements
contained in this Agreement, the Parties, intending to be legally
bound, hereby agree as follows:
1. Scope of Agreement.
During the Term, as defined in Section 5, and in accordance with
the terms and conditions set forth herein, Stroh shall give
Boston Beer access to Stroh's production facilities and make
available to Boston Beer Stroh's production personnel to allow
Boston Beer to produce Boston Beer's proprietary Beer Products.
For purposes of this Agreement, Boston Beer's "Beer Products"
shall include Samuel Adams Boston Lager ("Samuel Adams Lager");
Boston Lightship Lager ("Lightship Lager"); Samuel Adams Cream
Stout ("Samuel Adams Stout"); and Samuel Adams Boston Ale
("Samuel Adams Ale"), other products introduced under the "Samuel
Adams" line, all products produced and sold under the "Oregon
Original" line, certain specially ordered and seasonal malt
beverage products identified as such by Boston Beer ("Special
Orders and Seasonals") and such other beer products as Boston
Beer may introduce from time to time. Boston Beer shall
periodically provide to Stroh an updated schedule of all Boston
Beer products which Boston Beer deems to be Beer Products,
subject to this Agreement. [Boston Beer agrees, however, that
Stroh need not permit in excess of * wort streams at
the * Brewery, * wort streams at the *
Brewery, and * wort streams at the * Brewery,
except as the Parties may subsequently agree.]
2. Control of Production of Beer Products: Public
Statements.
(a) All Beer Products shall be brewed and packaged
according to Boston Beer's specifications, including the
maintenance of standards and quality control programs. Boston
Beer shall have ultimate responsibility and authority over every
detail of the production process for Beer Products at each of the
Breweries, with such responsibility and authority as to those
parameters affecting beer taste and quality to be the same as if
Boston Beer were the owner of the Brewery. Boston Beer shall have
the right, at any time, to monitor and review the practices and
procedures of Stroh in the production and packaging of Beer
Products and inspect each of the Breweries and any Other Brewery
at which it is proposed that Beer Products be produced. If a
decision made by Boston Beer in the exercise of its authority
under this Section 2(a) results in unavoidable incremental costs
to Stroh not envisioned by the Parties in the negotiations of the
pricing provisions contained in Section 4, Stroh shall be
entitled to be reimbursed by Boston Beer for such incremental
costs. In addition, in the exercise of its authority under this
Section 2(a), Boston Beer shall not interfere with Stroh's
production processes for its own proprietary brands.
(b) Consistent with the provisions of paragraph (a),
Stroh and Boston Beer will, * .
3. Committed Capacity.
(a) Production. During the Term, Stroh shall, except
as otherwise provided herein, make the following minimum
production capacities available to Boston Beer for the production
of Beer Products
Brewery Committed Capacity
* * barrels per month
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* up to * barrels per
month through
* and up to *
barrels
per month thereafter
* up to * barrels per
month
The Committed Capacity at each Brewery is based on
anticipated tank usage and availability and shall be increased or
decreased in inverse proportion to the extent that actual average
tank usage varies from four and one-half weeks per storage cycle.
Boston Beer shall be under no obligation to avail itself fully of
the Committed Capacity at each Brewery in any month. Boston Beer
will, however, provide Stroh with fifty (50) days' advance
written notice of any expected increase or decrease in its
expected production requirements which varies more than *
from any previously submitted monthly forecasts for the period in
question, in order to allow Stroh to plan its capacity
utilization at any Brewery. Beer Products shall primarily be
produced in units consisting of (i) twenty-four 12-ounce bottles
(a "12-oz. Case Unit"), (ii) twelve 22-ounce bottles (a "22-oz.
Case Unit"), (iii) 7.75 U.S. Gallons (a "Half-Keg"), and (iv)
15.50 U.S. gallons (a "Keg").
(b) Packaging. Stroh shall use all commercially reasonable
efforts to accommodate Boston Beer's requested use of Stroh's
* packaging facilities at the * Brewery for up to
* cases of one or more beer styles per month through *
, for which Stroh shall be entitled to be paid * per
case.
(c) Reallocation of Capacity. Stroh may elect to close one
or more of the Breweries and thereafter satisfy its obligations
under paragraph (a), above, by * .
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(d) * and Other Non-Stroh Breweries. Boston Beer
anticipates entering into production arrangements for the
production of Beer Products at the brewery (the " *
Brewery") in * owned by * . Stroh hereby
agrees that, (i) if the * Brewery is closed or sold and
the buyer is unwilling to continue production arrangements with
Boston Beer on terms that are acceptable to Boston Beer, Stroh
will make a like amount of production capacity available to
Boston Beer at an Other Brewery located in * (a "
* Brewery"), to the extent that Stroh has capacity then
available in its Brewery system for Stroh's own proprietary
brands which would be displaced from a * Brewery, on
the same terms and conditions as otherwise then apply hereunder;
provided that * , incurred by Stroh directly as a result
of relocating the production of Stroh products from the *
Brewery in question, to the extent then mutually agreed by the
Parties, and (ii) in the event that Stroh acquires the *
Brewery, it shall assume all then existing obligations of *
(or any successor in interest) to Boston Beer with respect to the
production of Beer Products at the * Brewery.
Similarly, Stroh hereby agrees that it will assume all production
obligations to Boston Beer, if any, of any other breweries
hereafter acquired by Stroh. Notwithstanding the foregoing, Stroh
shall be relieved of its obligations under clause (i) of this
paragraph (d) to the extent that compliance in full would require
it to keep in operation any brewery that it would otherwise in
the normal course of managing its business elect to close.
4. Price and Manner of Payment.
(a) Boston Beer shall pay Stroh for Beer Products an
amount (the "Price") equal to the sum of (i) a processing charge
(the "Fixed Charge") of * .
(b) The Price is F.O.B. the carrier's trucks at
Stroh's dock (i.e., the Price includes the cost and risk of
loading trucks at Stroh's dock) and includes labor, overhead,
profit, and other costs incurred in the production of packaged
Beer Products suitable for shipment by truck.
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(c) The Price excludes any federal and state excise taxes,
which Stroh may pass along to Boston Beer, if Stroh pays such
taxes in compliance with Federal and state laws. In addition,
Stroh shall be entitled to * , at a rate equal to *
.
(d) The Price also excludes any charge for Boston Beer's
use of pallets owned by Stroh. Stroh shall invoice Boston Beer on
a quarterly basis within thirty (30) days after the end of each
calendar quarter for Boston Beer's proportionate share based on
pallets shipped) of the cost of pallets incurred at each Brewery
during such prior calendar quarter. Such invoices shall be paid
by Boston Beer promptly in the ordinary course.
(e) Stroh will invoice Boston Beer daily for the Price of
Beer Products shipped on the previous day and Boston Beer shall
pay such invoices on Friday of each week for the prior week's
invoices by wire or other mutually agreed upon method. All other
amounts otherwise chargeable to Boston Beer hereunder shall be
invoiced by Stroh reasonably promptly in accordance with normal
business practices following the month in which incurred by
Stroh. Such timely invoices shall similarly be paid by Boston
Beer promptly in the ordinary course in accordance with normal
business practices.
(f) Stroh shall have the right to * . Other
pricing and payment terms for Special Orders or Seasonals shall
be in accordance with the foregoing provisions of this Section 4,
including the timely invoicing requirements of paragraph (e).
(g) Boston Beer shall be entitled to * .
(h) Boston Beer shall also be entitled to a *
contemplated by Section 12 hereof, if made by Boston Beer.
5. Term.
The term of this Agreement (the "Term") shall commence on
January 1, 1997 and continue until terminated pursuant to Section
6 hereof. The Parties acknowledge that either Party's obligtions
pursuant to this Agreement to make paymets to the other Party and
the Parties respective obligations under Sections 6(c), 13 and
14, and Stroh's obligations under Sections 12 and 28 shall
survive the termination of this Agreement.
6. Termination.
(a) Except as the Parties may then otherwise agree, the
Term shall expire on June 30, 1998 in the event that Boston Beer
elects not to make the Investment.
(b) Either Party may terminate this Agreement for any
reason whatsoever on not less than twenty-four (24) months' prior
written notice to the other Party, effective at any time on or
after * .
(c) Boston Beer may also terminate this Agreement effective
immediately upon written notice in the event that Stroh is in
default of any of its obligations to brew, package and ship any
Beer Products, which default continues for a period of ten (10)
business days following receipt by Stroh of written notice from
Boston Beer regarding such default. [Such a default is
hereinafter referred to as a "Stroh Production Default".) Stroh
shall not be deemed to be in default of its obligations for
purposes of this Section 6(c), if it is in good faith both
seeking to correct the circumstances giving rise to its failure
to brew, package and ship Beer Products' and honoring its
obligations under Section 13 hereof, to the extent applicable.
(d) Stroh may terminate this Agreement on thirty (30) days
prior written notice to Boston Beer, in the event that Boston
Beer is in arrears in payment of undisputed amounts representing
in excess of one (1) month's production and such arrearage has
remained outstanding for in excess of one (1) month after written
demand for payment was made by Stroh. Normal credit terms are as
defined in Section 4(e).
(e) Stroh may also terminate this Agreement on thirty-six
(36) months' prior written notice, in the event of * .
(f) Upon termination of this Agreement, Boston Beer shall
(i) promptly pay to Stroh all unpaid invoices in full and all
unpaid costs incurred by Stroh pursuant to this Agreement in the
brewing, packaging, shipping and storage of Beer Products, and
(ii) purchase from Stroh at Stroh's cost all Stroh's inventory of
(i) work in process of Beer Products, (ii) ingredients and raw
materials unique to the Beer Products, and (iii) Packaging
Materials. Stroh will use all reasonable efforts to minimize
such costs upon termination and Boston Beer will have the right
to review documentation evidencing such costs.
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7. Packaging. Deposits. and Minimum Orders.
(a) Packaging of Beer Products shall consist of twelve
ounce (12 oz.) bottles, twenty-two ounce (22 oz.) bottles, Half-
Kegs and Kegs, and such other units as Boston Beer may from time
to time require, exclusive of any units which are proprietary to
Stroh and which are not then being produced for Boston Beer by
Boston Beer or any third party. In that regard, Stroh agrees that
Boston Beer may make use of * . Except for one way
pallets paid for by Boston Beer, a deposit per pallet and per keg
as set forth in Section 4(a) hereof shall be charged to Boston
Beer with corresponding credit applied upon the safe return in
good working order of the pallets or kegs to Stroh. Boston Beer
shall also, at Stroh's request, * to the extent
necessary as a result of Stroh shipping Beer Products to the
* from the * Brewery. Boston Beer has the right,
subject to the approval of Stroh, which approval will not be
unreasonably withheld, to make changes in the packaging used to
produce the Beer Products or the Seasonals, including but not
limited to the packaging of the Beer Products or Seasonals in can
units. The price for * will be adjusted by the
difference in costs between * .
(b) Boston Beer shall order at any given time not less than
one production run (at present * ). Boston Beer
acknowledges and agrees that the minimum order applies to *
; provided, however, that orders for the * of the Beer
Products * , except that for * bottles, an
order may be comprised of as many as * .
8. Packaging Material and Hops.
Crowns, bottles, labels, six-packs, cases, partitions and
other packing materials for Beer Products (collectively
"Packaging Materials"), or any applicable federal or state taxes
(but specifically excluding any taxes in the nature of a tax on
income or profits) are not included in the Fixed Charge and shall
be borne directly by Boston Beer. All Packaging Materials and
all hops to be used in the brewing of Beer Products ("Hops")
shall be (i) purchased directly by Boston Beer at its cost for
delivery to Stroh, (ii) the property solely and exclusively of
Boston Beer, and (iii) segregated and identified as such. Boston
Beer shall be responsible for the storage of Hops and shall
release Hops to Stroh for production on a bi-weekly basis. Stroh
acknowledges that Boston Beer shall be afforded unrestricted 24-
hour access to all Packaging Materials and Hops when under Stroh
control for purposes of removal or otherwise. Delivery of
Packaging Materials and Hops (on such bi-weekly basis) to Stroh
shall be coordinated between Stroh and Boston Beer, provided that
Stroh shall be ultimately responsible for coordinating the timely
delivery of Packaging Materials and Hops to the appropriate
Breweries and Other Breweries. Boston Beer shall invoice Stroh
for all Hops delivered to Stroh hereunder upon delivery and all
such invoices shall be payable withi thirty (30) days of
invoicing. All vendors shall be selected by Boston Beer in its
discretion, subject only to meeting Stroh's customary quality and
performance requirements.
9. Risk of Loss
Stroh and Boston Beer acknowledge and agree that, consistent
with the F.O.B. pricing terms, the risk of loss in loading the
carrier's trucks shall be borne by Stroh. However, the carrier's
driver shall have the right to inspect each shipment for damage
prior to leaving the loading dock and, accordingly, Boston Beer
shall bear the risk of loss on any shipment of Beer Products,
once the carrier's truck leaves Stroh's loading dock.
10. Brewery of Record.
(a) To the extent requested by Boston Beer and consistent
with applicable laws and regulations, Stroh shall provide all
Beer Products brewed hereunder under the name of "The Boston Beer
Company" as the Brewer of Record. Stroh shall, to the fullest
extent permissible, secure any permits, licenses, approvals and
the like related to the production of beer, required by any
federal, state or local governmental agency on behalf of Boston
Beer. Boston Beer agrees to reimburse Stroh promptly for any out-
of-pocket costs, including, without limitation, legal expenses
and increased clerical costs, incurred in connection therewith.
(b) To the extent requested by Boston Beer, Stroh shall use
all commercially reasonable efforts to establish an alternating
proprietorship at each of the Breweries and at such Other
Breweries to which production of Beer Products has been
transferred, if necessary, and, subject to and in compliance with
all applicable federal, state, or local laws, rules and
regulations, to identify Boston, Massachusetts, as the sole label
source for Beer Products. Boston Beer agrees to reimburse Stroh
for its out-of-pocket costs, including, without limitation, legal
expenses and increased clerical costs, incurred in connection
therewith.
11. * .
The Price shall include * .
12. * .
*
13. Force Majeure.
(a) If Stroh is unable, by reason of a labor dispute,
governmental action, act of God or the like, to produce Beer
Products at any Brewery to the extent contemplated by this
Agreement, it shall, in any event, to the extent it is still able
to maintain production at such Brewery, continue to produce Beer
Products at such Brewery in proportion to the capacity at such
Brewery dedicated to beer Products prior to the occurrence of the
event in question. In addition, Stroh shall advise Boston Beer
of the terms on which Stroh is then willing to produce Beer
Products at Other Breweries while the reduction in capacity at
the affected Brewery continues.
(b) If Boston Beer is unable, by reason of a labor dispute,
governmental action, act of God or the like, to produce Beer
Products at any brewery not owned by Stroh but at which from time
to time Boston Beer produces Beer Products, and at that time
Stroh has available production capacity at any of its Breweries,
Stroh shall make such production capacity available to Boston
Beer at a price equal to Stroh's * under this Agreement
for such production.
14. * .
*
15. Agency and Indemnification.
Stroh and Boston Beer understand and agree that each party is
not, by this Agreement or anything herein contained, including
Stroh's affixing to Beer Products or Seasonals and/or registering
the name of "The Boston Beer Company" or "Boston Beer Company",
constituted or appointed the agent of each other for any purpose
whatsoever, nor shall anything herein contained be deemed or
construed as granting Boston Beer or Stroh any right or authority
to assume or to operate any obligation or responsibility, express
or implied, for or on behalf of or in the name of the other, or
to bind the other in any manner or way whatsoever. Boston Beer
shall indemnify and hold harmless Stroh from and against any and
all claims, expenses, causes of action or liabilities of any
nature whatsoever (collectively "Damages"), to the extent that
Damages arise from the independent conduct of Boston Beer;
provided that Damages shall not include any loss, liability, cost
or expense incurred by Stroh as a consequence of an exercise by
Boston Beer of any of its rights under this Agreement.
16. Product Liability"'.
(a) Stroh and Boston Beer shall each maintain product
liability insurance of not less than * and in the
amount of * combined single limit in the aggregate
relating to the Beer Products produced by Stroh for Boston Beer.
(b) Stroh shall indemnify and hold harmless Boston Beer and
all of its affiliates from and against any and all loss,
liability, cost or expense of any nature whatsoever, including
reasonable attorney's fees (collectively, "Product Liability
Damages"), arising out of or associated with all claims made
against Boston Beer by any party or parties for personal injury
or property damage caused by impurities, defects, or adulteration
of any kind in the Beer Products manufactured and packaged by
Stroh, regardless of when manufactured or packaged; except that
Stroh shall have no such indemnification obligations with respect
to (i) Product Liability Damages were caused by (i) Boston Beer's
improper storage, handling, or alteration of the Beer Products in
question or (ii) Packaging Materials or ingredients purchased,
specified or otherwise approved by Boston Beer subsequent to
written notice from Stroh reasonably advising that such Packaging
Materials or ingredients should not be used in the Beer Products
for health and safety reasons, it being understood that Stroh's
sole obligation with respect to providing any such notice shall
be to inform Boston Beer of matters which come to Stroh's
attention and Stroh shall have no independent duty to analyze any
Boston Beer Packaging Materials, ingredients or specifications,
and (iii) Product Liability Damages resulting from inherent
properties and/or characteristics of the Beer Products,
including, by way of example and not of limitation, health and
intoxicating effects of the Beer Products.
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(c) Boston Beer shall indemnify and hold Stroh
and all of its affiliates harmless from and against any and all
Product Liability Damages to the extent arising out of the
courses excepted from Stroh's indemnification obligations under
paragraph (b), above.
(d) Notwithstanding the provisions of subparagraphs
(b) and (c) of this Paragraph 12, in no event shall either Party
be liable to indemnify the other Party for consequential damages
other than consequential damages arising out of willful
managerial misconduct suffered by the other Party and even in
such latter event not in an amount greater than * .
17. Recipe and Quality.
(a) Stroh shall produce the Beer Products using the
ingredients and brewing procedures specified by Boston Beer or
its appointee. Boston Beer has the right to change ingredients
and/or to specify brewing procedures provided that (i) *
, (ii) the specified ingredients are readily available in the
necessary time frame, and (iii) if the brewing time and/or the
tank storage time required for fermentation or aging materially
exceeds that required for Samuel Adams Lager, Boston Beer will
negotiate in good faith with Stroh * at the affected
Brewery or Breweries.
(b) Stroh shall use its best efforts to meet all of
the specifications for each of the Beer Products. Boston Beer has
the right to reject batches of beer which it determines to taste
or look materially different from a representative sample of the
Beer Products or Seasonals, such rejection not to be arbitrary or
unreasonable. Any rejected batches may be blended by Stroh into
any other Beer Product only in accordance with all applicable
regulations and with Boston Beer's prior consent, such consent
not to be unreasonably withheld.
18. Trademarks.
(a) Stroh acknowledges that no trademark or trade name
rights in any of the trademarks, trade names, service marks, or
logos owned by Boston Beer, including specifically but without
limitation those identified on the Trademark Schedule attached
hereto (collectively, the "Trademarks") are granted by this
Agreement.
(b) Boston Beer hereby represents, warrants and
covenants to that it has and will maintain the right to use the
Trademarks and will indemnify and hold harmless Stroh from any
claim of alleged infringement brought by any party against Stroh,
including, but not limited to, Stroh's reasonable costs of legal
expenses.
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19. Successors and Assigns.
The Agreement shall be binding upon and inure to the benefit
of the successors and assigns of the Parties, but shall not be
assigned by any Party without the prior written consent of the
other Parties, which consent will not be unreasonably withheld.
No failure of Boston Beer to consent to a proposed assignment of
this Agreement by Stroh shall be deemed unreasonable if Boston
Beer believes in good faith that the proposed assignee is not
capable of performing the production obligations of Stroh
hereunder. No assignment of this Agreement by Stroh shall relieve
it of its financial obligations hereunder, including its
indemnification obligations, or its obligation to * to
the extent required under Section 12, if the assignee defaults in
the performance of its obligations hereunder, or if an assignee
of Stroh's assets generally elects not to assume Stroh's
obligations hereunder. *
20. Governing Law.
This agreement shall be interpreted and construed in accordance
with the laws of the State of New York.
21. Arbitration.
Any disagreement, dispute, controversy or claim with respect
to the validity of this Agreement or arising out of or in
relation to the Agreement, or breach hereof, shall be finally
settled by arbitration in New York, New York, in accordance with
articles of the American Arbitration Association for Commercial
Arbitration. The arbitrator(s) shall have the right to assess
costs, including legal expenses, in favor of the prevailing
Party, including, if applicable, Stroh travel costs.
Notwithstanding the foregoing, the parties may have recourse to
the courts of the United Sates of America for the purpose of
obtaining preliminary injunctive relief, including spec ifically
in the case of Boston Beer enforcing its rights under Section 12
in the event of a Stroh Production Default.
22. Execution in Counterparts.
This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which
together shall constitute one and the same document.
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23. Amendment.
No Amendment, change, or modification of any of the terms,
provisions or conditions of this Agreement shall be effective
unless made in writing and signed or initialed on behalf of the
parties hereto by their duly authorized representatives.
24. No Third Party Beneficiaries.
Stroh and Boston Beer agree that this Agreement is solely
for their benefit and does not nor is it intended to create any
rights in favor of, or obligations owing to, any person not a
party to this Agreement.
25. Merger: Separability.
Subject to the provisions of Section 26(a), below, this
Agreement terminates and supersedes all prior formal or informal
understandings among the parties with respect to the subject
matter contained herein, except the Letter of Intent, which also
remains in full force and effect. Should any provision or
provisions of this Agreement be deemed ineffective or void for
any reason whatsoever, such provision or provisions shall be
deemed separable and shall not effect the validity of any other
provision.
26. Current Practice: Cooperation.
(a) Except as set forth in this Agreement, the Parties
agree to continue their current business practices with respect
to the Beer Products produced by Stroh for Boston Beer, subject
to modification from time to time as the parties, exercising
reasonable business judgment, shall mutually agree in writing.
(b) *
(c) The Parties also agree to cooperate with one another,
consulting on a regular basis, with a view to achieving further
financial economies, e.g. * , whether at a Brewery, an
Other Brewery or otherwise. In addition, Stroh agrees to advise
Boston Beer of opportunities of which Stroh becomes aware to
purchase from Stroh breweries or brewing, * .
(d) All publicity concerning this Agreement shall be
subject to the restrictions on disclosure set forth in the Letter
of Intent.
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27. Lab Tests.
Stroh will perform at its expense all lab tests currently
performed by Stroh for
Boston Beer on all Beer Products.
28. Non-Exclusive Nature of Agreement.
Nothing contained in this Agreement shall require Boston
Beer to avail itself of the Committed Capacity or preclude Boston
Beer from engaging any other brewer for the purpose of producing
and distributing Beer Products.
29. * .
(a) For so long as this Agreement remains in effect,
without the prior written consent of Boston Beer, Stroh shall
not, on behalf of any unaffiliated person, * .
(b) Boston Beer acknowledges that Stroh's business
includes brewing craft and specialty malt beverage products,
including products that may compete directly with, use the same
brewing ingredients and formulae as, and/or are of the same style
as one or more of the Beer Products. Boston Beer agrees that
nothing contained in this Section 29 shall in any manner prevent,
limit, restrict or otherwise affect Stroh's right to continue and
expand such aspect of its business, including by introducing new
products that compete directly with existing Beer Products, so
long as Stroh does not intentionally (i) copy the identical
brewing formulae and ingredients of any Beer Product, (ii) use
any proprietary yeast specifically supplied to Stroh by Boston
Beer solely for use in producing Beer Products, or (iii) use
labeling or other packaging. which infringes any of Boston Beer's
Trademarks or copies Boston Beer's marketing position and
strategy.
30. Yeast Strains.
Stroh will not use yeast strains supplied by Boston Beer to
brew any beers other than the Beer Products. The obligations of
Stroh under this Section 30 shall survive any termination of this
Agreement.
31. Notices.
All notices required herein shall be given by registered
airmail, return receipt requested, or by overnight courier
service, to the following addresses (unless change thereof has
previously been given to the party given notice) and shall be
deemed effective when received:
If to Boston Beer:
C. James Koch, President,
Alfred W. Rossow, Jr., C.O.O. and
Martin Roper, Vice President
The Boston Beer Company, Inc.
75 Arlington Street, Fifth Floor
Boston, MA 02116
With a copy to:
Frederick H. Grein, Jr., Esq.
Hutchins, Wheeler & Dittmar
101 Federal Street
Boston, MA 02110
if to Stroh:
James R. Avery, Executive V. Pres.-Operations
and Christopher T. Sortwell, Executive V. Pres. and
Chief Financial Officer
The Stroh Brewery Company
100 River Place
Detroit, MI 48207
With a copy to:
George E. Kuehn, Executive V. Pres. and General Counsel
The Stroh Brewery Company
100 River Place
Detroit, MI 48207
32. Rights of Offset.
Stroh and Boston Beer agree that, to the extent that
either of them is at any time owed money by the other Party,
including on regular invoices sent as provided herein, such Party
may set off such amount against any undisputed monies owed by it
to such Party from time to time, any such set off to be
accomplished by written notice to the owing Party, effective upon
being sent.
33. Deliveries to * .
To the extent permitted by applicable law, if so
requested by Boston Beer, Stroh will * .
34. Adverse Product Statements.
Each Party agrees to take all commercially reasonable steps to
prevent any of its personnel from making disparaging or otherwise
adverse remarks about the products of the other Party.
35. Limitation on Period of Claims.
All claims hereunder must be brought no later than one year
after such claim arose or the Party having such claim shall be
deemed to have waived and forever released it; provided that, for
purposes of this Section 34, a claim shall be deemed to have
arise at the time that the Party asserting a claim first became
aware of it.
IN WITNESS WHEREOF, Stroh and Boston Beer have executed this
Agreement as of the date first above written.
BOSTON BEER COMPANY LIMITED
PARTNERSHIP
By: Boston Brewing Company, Inc.,
its
General Partner
By: C. JAMES KOCH, President
THE STROH BREWERY COMPANY
By: CHRISTOPHER T. SORTWELL,
Executive Vice President
and Chief Financial Officer