Prepared by R.R. Donnelley Financial -- Production Agreement



  
 Exhibit 10.15 
  
 PRODUCTION AGREEMENT 
  
 Agreement dated
this 25             day of             March            , 2002
between Frederick Brewing Company, a Maryland brewer (“Brewer”), and Stoudt Brewery, Adamstown, Pennsylvania (“Customer”). 
  
 1.    Term 
  
 The term of this Agreement shall continue for four years
unless terminated by either party upon sixty days prior written notice. 
  
 2.    Production and Packaging

  
 Brewer shall produce and package for Customer the malt beverage products set forth on Exhibit A attached
hereto (“the Products”), as Customer, in its discretion, may order from time to time. Unless otherwise specified on Exhibit A, the Products shall be produced in accordance with Customer’s standard formula for malt beverage products as
provided in writing to Brewer prior to execution of this Agreement. Brewer and Customer anticipate an annual production of approximately 6,000 barrels for Year One. 
  
 3.    Ordering and Delivery 
  
 Customer
shall order the Products not less than seven weeks in advance of the desired date of delivery of lagers, and not less than five weeks for ales. Customer shall order Products in case equivalents not less than 650 (approximately 50 barrels per style).
Customer shall take delivery of the Products FOB Frederick, Maryland brewery on the date specified for delivery. Products not picked up by Customer within thirty days of the date of production shall be assessed a warehousing charge of $4.00 per
pallet per month. 
  
 4.    Packaging Materials 
  
 Customer shall be responsible for the cost of all labels and packaging materials except as defined further in Exhibit A. All packaging materials must be compatible with
Brewer’s packaging machinery. The cost of any required change parts shall be negotiated between the parties. Brewer agrees that liquid loss will not exceed 5% and packaging loss shall not exceed 5% per barrel. In the event actual loss should
exceed percentages set forth above, appropriate credits will be provided by Brewer to Customer. The amount of such credits will be based on how much the actual percentage of loss exceeds the target percentages set forth in the immediately preceding
sentence. The Brewer represents that all Customer products will be of merchantable quality. 
 









  
 5.    Pricing 
  
 Customer will pay Brewer the prices set forth on Exhibit A for each case of the Products ordered by Customer and produced by Brewer under this Agreement pursuant to
Customer’s order. Invoices shall be due and payable net 3 days from production. Prices may be changed by Brewer upon thirty days prior written notice to Customer for any increase or decrease in the cost of raw materials and packaging materials
purchased by Brewer, which are non-controllable by the Brewer. The respective co-packing fees include the cost of loading Products and shrink wrapping pallets. 
  
 6.    Sales and Marketing 
  
 Customer is exclusively responsible
for all sales and marketing for the Products. 
  
 7.    Warranties 
  
 Brewer warrants that the Products shall be free from adulterations as defined in the US Food, Drug and Cosmetics Act. Customer warrants
that the trademarks and artwork applied to the Products shall not infringe upon the trademark rights of any other person. In no event does Brewer have any ownership rights in, or any right to the use of Customer’s trademarks or copyrights
related to the Products provided. Brewer acknowledges that the Products are confidential information of the Customer and include, without limitation, trademarks, copyrights and trade secrets that have been developed by Customer at great expense. All
confidential information of Customer disclosed under this Agreement will remain the exclusive property of Customer. Brewer agrees to take all reasonable measures necessary to safeguard the confidential nature of Customer’s confidential
information disclosed to Brewer, including notifying its employees, agents, contractors, distributors and customers or anyone else with whom the Brewer works to complete the purposes of this Agreement of the confidential nature of Customer’s
confidential information. 
  
 8.    Alternating Proprietorship 
  
 If applicable, upon the request of Customer, Brewer agrees to cooperate in arranging for alternation of proprietorship of the brewery.
Customer shall pay Brewer a fee of 4¢ per case for administration of the alternating proprietorship. Appropriate production and brewing information needed for proper completion of all federal and state reporting to be timely provided by Brewer.

  
 9.    Indemnification 
  
 Brewer and Customer shall indemnify and hold the other party harmless from all liability arising out of breach of their respective warranties. 
 

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 10.    Dispute Resolution 
  
 All disputes arising under the Agreement shall be resolved by arbitration. The parties shall attempt to resolve any dispute before
demanding arbitration. 
  
 11.    Production Deposit 
  
 Simultaneously upon execution of this Agreement, Customer will deposit with Brewer $10,000 (US). 
  
 12.    Entire Agreement 
  
 This Agreement
sets forth the entire agreement between the parties with respect to the subject matter stated therein and there are no other understandings or agreements. The Agreement may not be modified except in writing signed by both parties. 

 
 13.    Notice 
  
 Notice under this Agreement shall be deemed delivered if deposited in first class US mail to addressee as follows: 
  
 
	 Brewer:
 	  	 John Niziolek
 Frederick Brewing Company
 4607 Wedgewood Blvd.
 Frederick, MD 21703
 
	 
	 Customer:
 	  	 Ed Stoudt
 Carol Stoudt
 Stoudt Brewery
 P. O. Box 880
 Adamstown, PA 19501
 

 
  
 14.    Delivery 
  
 Customer shall pay a refundable deposit on all related pallets used in shipment of Products (current deposit is $8 for case and keg
pallets). Brewer shall use reasonable commercial efforts to meet Customer’s requested shipping dates. Brewer, at Customer’s request, may ship to Customer by common carrier. Brewer, at its discretion, may load appropriate POS materials onto
specific destinations. 
  
 15.    Test Brews 
  
 Customer will reimburse Brewer for reasonable liquid cost and expenses incurred by Brewer for such test brewing of the Products. 
 

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 16.  Insurance 
  
 Brewer will maintain all respective insurance and standard coverage limits standard for the industry. Brewer will, if requested, add Customer as an additional insured party
for all policies whereby it is deemed appropriate by both Customer and Brewer. 
  
 17.  Quality Assurance and Reporting

  
 Brewer will conduct at least four quality checks, which consist of air, fill, CO2 and package appearance per
each run. Copy of record keeping per run to be furnished to Ed/Carol Stoudt on a daily basis. Brewer is also responsible for providing Daily Production Reports. 
  
 IN WITNESS THEREOF, the parties have caused this Agreement to be duly executed on the date first above written. 
  
 
	 SNYDER INTERNATIONAL BREWING
GROUP
 	 	  	 	 STOUDT BREWERY
 
	 
	 By:
 	 	 /s/    C. DAVID
SNYDER        
 
	 	  	 	 By:
 	 	 /s/    CAROL A.
STOUDT        
 

	  	 	  	 	  	 	  	 	  
	 
	  	 	 C. DAVID SNYDER
 
	 	  	 	  	 	 CAROL A. STOUDT
 

	  	 	 Print Name
 	 	  	 	  	 	 Print Name
 
	 
	  	 	 CHIEF EXECUTIVE OFFICER
 
	 	  	 	  	 	 PRESIDENT
 

	  	 	 Title
 	 	  	 	  	 	 Title
 

 
 

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 EXHIBIT A 
  
 
	 •      Stoudt’s Flagship Brands (4 year-round labels):
 	  	 $7.10/case*
 
	 •      Mia Bock:
 	  	 $7.85/case*
 
	 •      Winter Ale:
 	  	 $7.55/case*
 
	 •      Sampler Case Assembly:
 	  	 95¢/case upcharge
 
	 •      1/2 bbl/ea:
 	  	 $33 (not including keg rental)
 
	 •      1/6 bbl/ea:
 	  	 $18 (not including keg rental)
 

 
 

	*
	 
	The charges above include liquid and bottle costs in addition to federal excise tax and the co-packing charge. All pricing is FOB our Frederick, Maryland plant.

 

  

	NOTE:
	 
	“Co-packing” increases, if any, will not exceed 3% per year. Co-pack increases will be effective each anniversary date (April 1st of the applicable
year) with notice on or before January 1st of the same year. This is for the co-packing charge only, and does not include any other liquid or packaging costs. Please see Paragraph 5. Any new products produced by the Brewer will be priced in
accordance with gravity, malt and hops required in accordance with present products produced. 
 

  
 Accepted by: 
  
 
Initials

 

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 EXHIBIT B 
  
 Quality Parameters 
  
 1.    The average air content for bottled beers will not exceed .30ml per 12oz. bottle. 
  
 2.    Beers will be of acceptable taste and appearance, i.e. lacking high levels of diacetyl (not to exceed .09ppm for Ales and .08ppm for Lagers), DMS, or other sensory defects. 
  
 3.    Carbonation will be within the range of 2.50 to 2.70 volumes. 
  
 4.    All brewing, fermentation and laboratory analysis information on each beer will be forwarded to Stoudt’s
Brewing Company in a timely manner after the report is completed. 
  
 5.    The shelf-life for
these beers is 6 months from the date of packaging when using the normal processing steps of the Frederick Brewing Company. 
  
 6.    Recipe, process or raw material changes will not be utilized without approval from Stoudt’s Brewing Company. 
  
 7.    It is understood that all beers, especially those subject to warm storage conditions, will undergo flavor changes due to staling reactions. All reasonable efforts will be made
in the brewing, processing and packaging of these beers to minimize exposure to air and oxygen but flavor changes will occur as the beer ages. 
  
 8.    Where applicable, ASBC methods will be used for analysis. 
  
 Accepted by: 
  
 
Initials 
 

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