EXHIBIT 10.2

[*] DENOTES EXPURGATED INFORMATION

 

EQUIPMENT LEASE AGREEMENT

FOR

[*]

 

      THIS EQUIPMENT LEASE AGREEMENT (this "Equipment Lease") is entered into as
of December 1, 2004, by and between Boston Beer Corporation, a Massachusetts
corporation with its principal place of business at 75 Arlington Street, Boston,
MA 02116 ("Lessor"), and High Falls Brewing Company, LLC, a New York limited
liability company with its principal place of business at 445 St. Paul Street,
Rochester, NY 14605 ("Lessee"). Lessor and Lessee are sometimes referred to in
this Equipment Lease individually as a "Party" and together as the "Parties".

 

I. THE LEASE

 

      1.1 Lease of Assets. In accordance with the terms and conditions of this
Equipment Lease, Lessor hereby leases to Lessee, and Lessee hereby leases from
Lessor all of the personal property and equipment described in Schedule 1
attached hereto and made a part hereof (the "Equipment" or the "Leased Assets").
The Leased Assets, and Lessee's obligations with respect to Lease Payments under
this Equipment Lease, are, as of the date hereof, the only assets owned by
Lessor and being used by Lessee, and the only obligations, related to
investments made by Lessor in parts, modifications and equipment, under the
Second Amended and Restated Agreement between Lessor and Lessee dated as of
April 15, 2002.

 

      1.2 Term of Lease. The term of the lease under this Equipment Lease shall
begin on December 1, 2004 (the "Commencement Date") and shall continue in effect
(the "Lease Term") until the earlier of Lessee's payment of the Value specified
on Schedule 1 and accrued interest thereon at the annual rate of [*]%, or
termination of the Third Amended and Restated Agreement between Lessor and
Lessee of even date (the "Production Agreement").

 

      1.3 Lease Payments. Lessee shall pay to Lessor Lease Payments for the
lease of the Leased Assets in the amount set forth on Schedule 2 ("Lease
Payments"). Lease Payments for the Lease Term shall be payable in consecutive,
weekly payments, commencing with the first shipment made pursuant the Production
Agreement. Lessor agrees that no Lease Payments shall be payable for any period
prior to the Commencement Date. In addition, the Parties acknowledge that
shipments under the Production Agreement are not anticipated to commence until
on or about [*]. All Lease Payments and other amounts payable by Lessee to
Lessor hereunder shall be paid to Lessor at such address as Lessor may designate
in writing to

   

[*] Indicates that information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment.

<PAGE>

Lessee from time to time. Lessee shall have the right to prepay all or part of
the unpaid Value and/or unpaid interest from time to time, without premium.

 

      1.4 Lessee Option to Purchase. Lessee shall have the right to purchase the
Leased Assets at any time during and at the end of the Lease Term for an
aggregate payment of [*] plus the applicable "Purchase Option Amount" set forth
on Schedule 3. Lessee shall also have the right to purchase the Leased Assets
for an aggregate payment of [*] upon the termination of the Production Agreement
either (a) by Lessor pursuant to Section 10 (a) thereof or (b) by Lessee under
Section 10 (b), (c) or (d) thereof.

 

II. DISCLAIMERS AND WARRANTIES

 

      2.1 Disclaimers; Warranties. LESSEE LEASES THE LEASED ASSETS AS IS, AND
LESSOR MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, AS TO THE
MERCHANTABILITY, FITNESS FOR ANY PARTICULAR PURPOSE, DESIGN OR CONDITION OF THE
EQUIPMENT.

 

III. LESSEE OBLIGATIONS

 

      3.1 Net Lease; Payments Unconditional. THIS AGREEMENT IS A NET LEASE, AND
ALL COSTS, EXPENSES AND LIABILITIES RELATING TO THE LEASED ASSETS, INCLUDING IN
RESPECT OF TAXES, INSURANCE AND MAINTENANCE, SHALL BE BORNE SOLELY BY LESSEE.
LESSEE'S OBLIGATION TO PAY ALL LEASE PAYMENTS AND OTHER SUMS HEREUNDER, AND THE
RIGHTS OF LESSOR IN AND TO SUCH PAYMENTS, SHALL BE ABSOLUTE AND UNCONDITIONAL,
AND SHALL NOT BE SUBJECT TO ANY ABATEMENT, REDUCTION, SETOFF (except as provided
in Section 16 of the Production Agreement), DEFENSE, COUNTERCLAIM, INTERRUPTION,
DEFERMENT OR RECOUPMENT, FOR ANY REASON WHATSOEVER.

 

      3.2 Use of Leased Assets. Lessee shall use the Leased Assets solely in the
conduct of its business, in a manner and for the use contemplated by the
manufacturers thereof, and in material compliance with all laws, rules and
regulations of every governmental authority having jurisdiction over the Leased
Assets or Lessee and with the provisions of all policies of insurance carried by
Lessee pursuant to Section 3.6.

 

      3.3 Maintenance and Repair; Inspection. Lessee shall, at its expense, keep
the Equipment in good repair, condition and working order, ordinary wear and
tear excepted. Lessor shall be entitled to inspect the Equipment at reasonable
times upon reasonable notice.

 

[*] Indicates that information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment.

<PAGE>  -2-

      3.4 Taxes. Lessee shall pay, and hereby indemnifies Lessor on a net,
after-tax basis, against, and shall hold it harmless from, all license fees,
assessments, and sales, use, property, excise and other taxes and charges, other
than those measured by Lessor's net income, now and hereafter imposed by any
governmental body or agency upon or with respect to any of the Leased Assets, or
the possession, ownership, use or operation thereof. Notwithstanding the
foregoing, to the extent required of it by applicable law and in reliance upon
Lessee's disclosure of the location of any of the Equipment, Lessor shall file
personal property tax returns, and shall pay personal property taxes payable
with respect to the Equipment.

 

      3.5 Loss of Equipment. Lessee assumes the risk that, and shall promptly
notify Lessor in writing if, any item of Equipment becomes lost, stolen, damaged
or destroyed from any cause whatsoever. Lessee shall repair such equipment or
replace such Equipment with equipment of equivalent usefulness and value and
such replacement equipment shall become Equipment. Lessee shall be entitled to
the proceeds of any recovery in respect of such Equipment from insurance or
otherwise.

 

      3.6 Insurance. Lessee shall obtain and maintain for the Lease Term at its
own expense, property damage and liability insurance and insurance against loss
or damage to the Equipment as a result of fire, explosion, theft, vandalism and
such other risks of loss as are normally maintained on equipment of the type
leased hereunder by companies carrying on the business in which Lessee is
engaged, in such amounts, in such form and with such insurers as shall be
reasonably satisfactory to Lessor. Each insurance policy shall name Lessee as
insured and shall provide that it may not be cancelled or altered without at
least 30 days' prior written notice thereof being given to Lessor (or 10 days',
in the event of non-payment of premium).

 

      3.7 Prohibitions Related to Lease. Without the prior written consent of
Lessor, which consent shall not be unreasonably withheld, Lessee shall not
(a) assign, transfer or otherwise dispose of Leased Assets, this Equipment Lease
or any rights or obligations hereunder; (b) sublease any of the Leased Assets or
permit the Leased Assets to be controlled by any other person; or (c) create or
incur, or permit to exist, any security interest, lien or encumbrance with
respect to any of the Leased Assets.

 

      3.8 Lessee Representations. Lessee hereby represents that (a) the
execution, delivery and performance of this Equipment Lease have been duly
authorized by all necessary corporate action; (b) the person executing this
Equipment Lease is duly authorized to do so; and (c) this Equipment Lease
constitute the legal, valid and binding obligation of Lessee, enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
moratorium, fraudulent conveyance and other similar laws of general application
affecting the rights of creditors and applicable laws and regulations and
principles of equity that may restrict the enforcement of certain equitable
remedies.

   

[*] Indicates that information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment.

<PAGE>  -3-

      3.9 Lessor representations. Lessor hereby represents that this Equipment
Lease constitutes the legal, valid and binding obligation of Lessor, enforceable
in accordance with its terms, subject to applicable bankruptcy, insolvency,
moratorium, fraudulent conveyance and other similar laws of general application
affecting the rights of creditors and applicable laws and regulations and
principles of equity that may restrict the enforcement of certain equitable
remedies.

 

IV. DEFAULT AND REMEDIES

 

      4.1 Events of Default. The occurrence of any of the following shall
constitute an "Event of Default" hereunder: (a) Lessee fails to pay any Lease
Payments or other amount due hereunder within [*] days after receipt of written
notice thereof from Lessor; (b) Lessee fails to perform any other covenant,
condition or agreement made by it under this Equipment Lease, and such failure
continues for [*] days after receipt of written notice thereof from Lessor; or
(c) bankruptcy, receivership, insolvency, reorganization, dissolution,
liquidation or other similar proceedings are instituted by or against Lessee, or
all or any part of Lessee's property, under the Federal Bankruptcy Code or other
law of the United States or of any other competent jurisdiction, and, if such
proceeding is brought against Lessee, Lessee consents thereto or fails to cause
the same to be discharged within [*] days after it is filed.

 

      4.2 Remedies. If an Event of Default exists, and remains uncured for [*]
days after receipt of written notice thereof from Lessor, and the Production
Agreement has been terminated, Lessor may exercise any one or more of the
following remedies: (a) proceed, by appropriate court action, to enforce
performance by Lessee of the applicable covenants under this Equipment Lease; or
(b) terminate this Equipment Lease by written notice to Lessee and recover any
and all then accrued and unpaid Lease Payments and other amounts then due and
owing under this Equipment Lease and, provided that Lessee does not purchase the
Equipment pursuant to Section 1.4 above, either (i) reclaim possession of any or
all of the Equipment or (ii) recover from Lessee the then applicable Purchase
Option Amount for such of the Leased Assets as Lessor chooses not to reclaim. If
Lessee exercises its remedy under clause (b)(i), Lessee shall allow Lessor to
enter Lessee's premises and remove the applicable Leased Assets. Any failure or
delay on the part of either party in exercising any right or remedy hereunder
shall not operate as a waiver thereof. The remedies set forth in this Section 4
shall be in addition to such other remedies that Lessor might have, whether at
law or in equity.

 

V. MISCELLANEOUS

 

      5.1 Right to Use. So long as no Event of Default exists, Lessor shall not
interfere with Lessee's right to use the Equipment or interfere with Lessee's
relationships with its customers.

 

[*] Indicates that information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment.

<PAGE>  -4-

      5.2 Assignment by Lessor This Equipment Lease 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, whether by merger, consolidation,
reorganization, operation of law or otherwise, without the prior written consent
of the other Party, which consent will not be unreasonably withheld.
Notwithstanding the foregoing, Lessor may assign this Equipment Lease Agreement
without the consent of High Falls to any corporation or other entity that
succeeds to all or substantially all of Lessor's business and assets, provided
that (a) such assignment is made simultaneously with Lessor's assignment of the
Production Agreement to the same assignee and (b) the successor corporation or
other successor entity taking assignment of this Equipment Lease Agreement is
reasonably capable of performing all of Lessor's obligations hereunder and under
the Production Agreement. No failure of a Party to consent to a proposed
assignment of this Equipment Lease Agreement by the other Party shall be deemed
unreasonable if such Party believes in good faith that the proposed assignee is
not capable of performing the financial or production obligations of the Party
proposing to assign this Equipment Lease Agreement. Permitted assignment of this
Equipment Lease Agreement and assumption by the assignee of such obligations
shall relieve the assigning Party of its financial obligations hereunder.

 

      5.3 UCC Filings. The parties agree to execute appropriate UCC financing
statements to reflect their respective interests in the Leased Assets. Lessor
shall execute and deliver to Lessee UCC termination statements, bills of sale
and any other documentation reasonably requested by Lessee upon the transfer of
ownership to Lessee of any of the Leased Assets, pursuant to Section 1.4.

 

      5.4 Notices. All notices required herein shall be given by registered
airmail, return receipt requested, or by overnight courier service, in both
cases with a copy also sent by telecopier or email, to the following addresses
(unless change thereof has previously been given to the Party giving the notice)
and shall be deemed effective when received:

   

If to Lessor:

Jeffrey D. White, COO, and

   

Martin F. Roper, President and CEO

   

Boston Beer Corporation

   

75 Arlington Street

   

Boston, MA 02116

   

Fax: (617) 368-5553

   

martin.roper@bostonbeer.com

   

jeff.white@bostonbeer.com

       

with a copy to:

Frederick H. Grein, Jr., Esq.

   

Nixon Peabody LLP

   

100 Summer Street

   

Boston, Massachusetts 02110

     

[*] Indicates that information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment.

<PAGE>  -5-

 

Fax: (866) 369-4741

   

fgrein@nixonpeabody.com

       

If to High Falls:

Samuel T. Hubbard, Jr., Chairman and CEO and

   

John B. Henderson President and COO

   

High Falls Brewing Company, LLC

   

445 St. Paul Street

   

Rochester, NY 14605

   

Fax: (585) 235-1964

   

sthubbard@genbrew.com

   

jhenderson@genbrew.com

       

with a copy to:

Michael C. Dwyer, Esq.

   

Harter, Secrest & Emery LLP

   

1600 Bausch & Lomb Place

   

Rochester, New York 14604-2152

   

Fax: 585-232-2152

   

mdwyer@hselaw.com

 

      5.5 Entire Agreement. This Equipment Lease constitutes the entire
agreement between Lessor and Lessee with respect to the lease of the Leased
Assets. No waiver or amendment of, or any consent with respect to, any provision
of this Equipment Lease shall bind either party unless set forth in a writing,
specifying such waiver, consent or amendment, signed by both parties.

 

      5.6 Severability. Should any provision of this Equipment Lease be
determined to be illegal or unenforceable under applicable law, the other
provisions of this Equipment Lease shall not be affected and shall remain in
full force and effect.

 

      5.7 Governing Law and Jurisdiction. THIS EQUIPMENT LEASE SHALL BE GOVERNED
IN ALL RESPECTS BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY
CONFLICT OF LAWS PRINCIPLES. THE PARTIES CONSENT TO THE NON-EXCLUSIVE
JURISDICTION OF THE STATE COURTS OF THE NEW YORK AND THE FEDERAL COURTS SITTING
IN NEW YORK, FOR THE RESOLUTION OF ANY DISPUTES UNDER ANY LEASE DOCUMENT.

 

      5.8 Counterparts. This Equipment Lease may be executed in counterparts,
and when so executed each counterpart shall be deemed to be an original, and
such counterparts together shall constitute one and the same instrument.

 

[*] Indicates that information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment.

<PAGE>  -6-

LESSEE, BY THE SIGNATURE BELOW OF ITS AUTHORIZED REPRESENTATIVE, ACKNOWLEDGES
THAT IT HAS READ THIS AGREEMENT, UNDERSTANDS IT, AND AGREES TO BE BOUND BY ITS
TERMS AND CONDITIONS. EACH PERSON SIGNING BELOW ON BEHALF OF LESSEE REPRESENTS
THAT HE OR SHE IS AUTHORIZED TO EXECUTE AND DELIVER THIS AGREEMENT ON BEHALF OF
LESSEE.

 

LESSOR:

LESSEE:

   

Boston Beer Corporation

High Falls Brewing Company, LLC

   

By:

/s/ Jeffrey D. White

 

By:

/s/ Samuel T. Hubbard, Jr.

 

--------------------------------------------------------------------------------

   

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[*] Indicates that information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment.

<PAGE>  -7-

Schedule 1

 

LEASED EQUIPMENT AND VALUE AT DECEMBER 1, 2004

 

Equipment

Value

See Attached Exhibit 1

$2,100,000

 

[*]

   

[*] Indicates that information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment.

<PAGE>  -8-

Schedule 2

 

LEASE PAYMENTS

 

      Lease Payments commence upon the first purchase of Product by Lessor under
the Production Agreement dated December 1, 2004 and shall equal $[*] sold during
the preceding week. Interest shall accrue at the rate of [*]% on unpaid Value,
which amount shall begin to accrue as of the first purchase date, compounded
monthly, until fully paid. All Lease payments will be applied first to Value and
then to the interest.

   

[*] Indicates that information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment.

<PAGE>  -9-

Schedule 3

 

PURCHASE OPTION AMOUNTS

 

The purchase option amount shall be the unpaid balance OF THE VALUE SPECIFIED on
ScHEDULE 1 plus accrued but unpaid interest.

<PAGE>  -10-