exv10w60



 





EXHIBIT
10.60



[ * ]
DENOTES EXPURGATED INFORMATION


GLASS BOTTLE SUPPLY AGREEMENT


BETWEEN


BOSTON BEER CORPORATION


AND


ANCHOR GLASS CONTAINER CORPORATION


 








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GLASS BOTTLE SUPPLY AGREEMENT


This GLASS BOTTLE
SUPPLY AGREEMENT executed on this 2nd day of November, 2007 (the
“Agreement”), is by and between BOSTON BEER CORPORATION, a
Massachusetts corporation with a principal office located at One Design Center
Place, Suite 850, Boston, Massachusetts 02210 (“Boston Beer”), and
ANCHOR GLASS CONTAINER CORP., a Delaware corporation with a principal office
located at 3101 Martin Luther King Blvd, Suite 301, Tampa, Florida 33607
(“Anchor”).


WHEREAS, Boston Beer
and Anchor have agreed to enter into a supply agreement under which Anchor will
provide from specified Anchor Plants to Boston Beer at certain Boston Beer
breweries glass bottle containers for beverages meeting Boston Beer’s
Specifications, subject to the following terms and conditions.


THEREFORE, in
consideration of the foregoing premises and the mutual promises set forth
below, the parties to this Agreement have agreed as follows:


1. DEFINITIONS.


The following defined
terms used in this Agreement shall have the respective meanings specified below:


1.1.
“Agreement” shall mean this Glass Bottle Supply Agreement dated as
of the date set forth above between Boston Beer and Anchor, as the same may be
amended, restated and/or replaced from time to time, and references to
“hereof” and “hereunder” refer to this Agreement as a
whole and not to any particular section or article of this Agreement.


1.2 “Alternate
Plant” shall mean an Anchor bottle production facility other than a Plant
set forth in Attachment 2.1 that may be used to produce Bottles subject to the
terms and conditions of this Agreement, provided that Boston Beer has given its
prior written consent to the used of such production facility.


1.3.
“Anchor” shall mean Anchor Glass Container Corporation, a Delaware
corporation.


1.4. “Annual
Base Price Adjustment” has the meaning set forth in Attachment 3.3.


1.5 “Annual
Estimate” has the meaning given to it in Section 2.2(a).


1.6.
“Auditor” has the meaning given it in Section 9.1.


1.7 “Average
Category Price” has the meaning given it in Attachment 3.3.


1.8. “Base
Price” shall mean a portion of the Selling Price for each type of Bottle,
as set forth in Attachment 3.1.


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


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1.9. “Base Price
Adjustment Date” has the meaning set forth in Attachment 3.3.


1.10. “Boston
Beer” means Boston Beer Corporation, a Massachusetts corporation.


1.11. “Boston
Beer Unused Capacity” has the meaning set forth in Section 2.2(c).


1.12.
“Bottle” shall mean a 12 oz. or a 24 oz returnable glass receptacle
of specified size, shape and color used in the packaging of Boston Beer’s
beverage products, and which otherwise conforms to the applicable
Specifications including, without limitation, any New Bottle.


1.13.
“Brewery” shall mean any of the applicable breweries described in
Attachment 2.1 and any additional breweries that may be added to Attachment 2.1
by Boston Beer in its sole discretion.


1.14. “Bulk
Bottle” shall mean any Bottle delivered in bulk, and not delivered with
Packaging Components.


1.15. “Category
Impact” has the meaning given it in Attachment 3.3.


1.16. “Category
Percent” has the meaning given it in Attachment 3.3.


1.17. “Category
Percent Change” has the meaning given it in Attachment 3.3.


1.18.
“Confidential Information” has the meaning given it in
Section 11(b).


1.19. “Contract
Year” shall mean any twelve (12) month period during the Term
starting on a January 1 and ending the following December 31, with the
first Contract Year to be the period commencing [ * ].


1.20. “Cost
Adjustment Percentage” has the meaning given it in Attachment 3.3.


1.21 “Cost
Categories” has the meaning given it in Attachment 3.3.


1.22.
“Dispute” has the meaning given it in Section 18.1.


1.23. “Excess
Bottles” has the meaning given to it in Section 2.2(b).


1.24. “Force
Majeure Event” has the meaning given it in Section 7.1(a).


1.25.
“Lightweighting” shall mean any reduction in the weight of a given
size and shape Bottle, which does not materially alter the size or shape of
such Bottle.


1.26. “material
discrepancy” has the meaning given it in Section 9.2.


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


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1.27.
“Manufacturing Costs” shall mean the aggregate of all actual costs
incurred by Anchor in producing Bottles under this Agreement, net of all
discounts, rebates or allowances received by Anchor with respect to any
services or materials acquired by Anchor in connection with its performance of
this Agreement.


1.28. “New
Bottle” has the meaning given it in Section 3.4(b).


1.29. “Packaging
Components” shall mean all packaging materials used to package Packed
Bottles and which conform to the Specifications, including, but not limited to,
any of the corrugated boxes, trays, carriers, cartons, partitions, and basket
carriers.


1.30. “Packed
Bottle” shall mean any Bottle which is not a Bulk Bottle.


1.31. “Pallet
Float Limit” has the meaning given it in Section 5.3.


1.32.
“Plant” shall mean any of the applicable Anchor bottle production
facilities specified in Attachment 2.1.


1.33. ”Quality
Standards” shall have the meaning given to it in Section 2.6.


1.34.
“Recipients” has the meaning given it in Section 11(a).


1.35. “Selling
Prices” shall have the meaning given it in Section 3.1.


1.36. “Shipping
Materials” shall have the meaning given it in Section 5.3(a).


1.37.
“Specifications” shall mean Boston Beer’s specifications for
each of the Bottles, each of the Packaging Components, and the pallets and
other packaging components to be used for Bulk Bottles, and shall also include
packaging and unit load specifications for Bottle deliveries to each Brewery,
as communicated from time to time by Boston Beer to Anchor (provided Boston
Beer gives Anchor at least sixty (60) days’ advance notice). The
Specifications in effect as of the date of this Agreement, have been delivered
to Anchor and Anchor by its execution of this Agreement acknowledges its
receipt and acceptance of such Specifications.


1.38. “Surcharge
Percentage” shall have the meaning given it in Attachment 3.2.


1.39.
“Term” shall mean the term of the Agreement, as described in
Section 8.1 below.


1.40.
“UCC” shall mean the Uniform Commercial Code as in effect from time
to time in the Commonwealth of Massachusetts.


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


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2. PURCHASE
AND SALE OF BOTTLES.


2.1. Purchase and
Sale of Bottles. Anchor shall make available each Contract Year for
purchase by Boston Beer, Bottles meeting Specifications requested by Boston
Beer, from the Plants specified in Attachment 2.1. Subject to the terms of
Section 2.2(b) and (c) below, Boston Beer shall each Contract Year
purchase the Bottles solely from Anchor for the Breweries specified in
Attachment 2.1, in the quantities and on the terms specified in the following
provisions of this Section 2.


2.2. Purchase
Quantities.


(a) On or before
October 1, 2008 and on or before October 1st of each Contract Year, Boston
Beer shall advise Anchor of Boston Beer’s estimate of Boston Beer’s
Bottle requirements for the following Contract Year, stated separately for each
Brewery and for each Bottle size, shape, color and type of packaging (i.e.,
Packed Bottles or Bulk Bottles) to be produced for Boston Beer by Anchor under
this Agreement (the “Annual Estimate”).


(b) In the event
Boston Beer’s actual aggregate demand for Bottles in a Contract Year
exceeds [ * ] of the Annual Estimate (such excess is referred to as
“Excess Bottles”), Anchor will use commercially reasonable efforts
to supply such Excess Bottles. 

[ * ].


(c) [ * ].


(d) For the
purposes of determining the total Bottles actually purchased by Boston Beer in
a Contract Year for determining Boston Beer Unused Capacity, if any, credit
will be given to Boston Beer for Brewery shut-downs or other interruptions that
are less than two weeks in duration, but not for more than ten
(10) business days in the aggregate in any Contract Year for any Brewery,
or Force Majeure Events and for any failure of Anchor to fulfill Boston Beer
orders during the Contract Year, or for any replacement supply agreement with
other bottle supplies that Boston Beer may have entered into pursuant to
Sections 2.5(b), 2.5(c) or 3.6(a).


2.3. Forecasts and
Shipment Instructions. During each Contract Year, Boston Beer shall provide
Anchor with the following forecasts supplementing the Annual Estimate:


(a) On or before
the last business day of each month, Boston Beer’s forecast for each of
the succeeding [ * ] of the Boston Beer Bottle requirements to be produced by
Anchor under this Agreement, stated separately for each Brewery and by Bottle
size, shape, color, carton style, and type of packaging (i.e., Packed Bottles
or Bulk Bottles).


(b) Anchor will
report all shipments of Bottles upon their departure from the specified Plant,
including but not limited to, shipping information related to truck load
identification, carrier contact information, drive contact information,
expected delivery date, delivery location, and quantity of Bottles in the load,
in the format specified by Boston Beer and using the electronic reporting media
specified by Boston Beer.


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


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2.4. Inventory.
Anchor shall maintain at no additional cost to Boston Beer a finished goods
inventory of Bottles at each Plant or at a warehouse maintained by Anchor in
the vicinity of the applicable Brewery if such Brewery is more than [ * ] from
the Plant. Anchor shall ensure that Boston Beer has at least [ * ] inventory of
Bulk Bottles and [ * ] inventory of Packed Bottles at each Plant, as well as [
* ] of Packaging Components. However, to the extent that Anchor may elect to
maintain an inventory in excess of such amount of Bulk Bottles and Packed
Bottles, or an inventory of Packaging Components in excess of [ * ], Boston
Beer shall have no responsibility for any costs incurred by Anchor because of
any graphics or other changes to the Bottles, any related Packaging Components,
or any packaging components used for Bulk Bottles. Without limiting the
foregoing, Anchor agrees that it will always maintain in such inventory at
least [ * ] worth of finished goods inventory at a local warehouse for each
Brewery, allocated by carton style and based on the three-month forecasts
provided for in Section 2.3 above.


2.5. Anchor Failure
to Fulfill Boston Beer Orders. Subject to the provisions of Section 7:


[ * ]


2.6. Quality
Standards. Anchor will manufacture the Bottles in accordance with the
standards set forth in Attachment 2.6. In the event that the Bottles fail to
meet such standards, Boston Beer may, upon notice to Anchor, terminate or phase
out Boston Beer’s purchases of Bottles from a Plant if such failure is
based on a deficiency which may reasonably be expected to adversely affect the
quality, flavor, or safety characteristics of the Bottles being delivered to
Boston Beer from such Plant or has a materially adverse effect on the operating
efficiency of a Brewery. In such event, Anchor shall replace such Bottles with
deliveries from an Alternate Plant, provided that Boston Beer shall not be
required to pay any additional charge for transportation, storage or delivery
from such Alternate Plant over that which it would have paid had the Bottle
order been fulfilled by the originally designated Plant. Consistent failure to
meet the Quality Standards shall constitute a material breach of this Agreement.


3. PRICE.


3.1. Base
Price. Subject to any applicable adjustments provided for in this
Section 3, the selling price, excluding freight costs, for each color,
size and shape Bottle ordered by Boston Beer from Anchor under this Agreement
for delivery at any time during the Term is set forth in Attachment 3.1. The
parties acknowledge that the Base Price is set based on the Manufacturing Costs
at the Plants set forth in Attachment 2.1.


3.2. Natural Gas
Surcharge/Credit. The Surcharge Percentage will be applied to the Base
Price on a monthly basis in accordance with the calculation set forth in
Attachment 3.2.


3.3. Annual Base
Price Adjustment. The Base Price shall be adjusted annually based on
Anchor’s Manufacturing Costs breakdown of each Plant as set forth in
Attachment 3.3.


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


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3.4. Specification
Changes.


(a) If Boston
Beer makes any changes to the Specifications of an existing Bottle type [ * ]
which result in an increase or decrease to the Manufacturing Costs for those
particular Bottles and/or necessitate that Anchor purchase or lease capital
equipment not otherwise required to satisfy its obligations under the Agreement
prior to the Specification change, [ * ].


(b) If at any
time during the Term, Boston Beer should add a new Bottle shape, size or color
to its existing family of Bottles or replace an existing bottle type with a new
bottle (a “New Bottle”), the Base Price for such New Bottle shall
be [ * ].


(c) Without
limiting any of its other obligations specified in this Agreement, Anchor
agrees to continually investigate ways in which to improve and update the
processes and technologies it utilizes to manufacture, package, inspect, and
deliver high quality Bottles to Boston Beer.


[ * ]


3.6. Packaging
Materials.


(a) Boston Beer
shall communicate to Anchor in accordance with the terms of Section 2.2
what amount of each Brewery’s requirements should be filled with Packed
Bottles and what amount of each Brewery’s requirements should be filled
with Bulk Bottles, and Anchor shall fulfill such requirements accordingly. [ *
] Notwithstanding the foregoing, Anchor will use commercially reasonable
efforts to fulfill Boston Beer requests for additional Packed Bottles. If
additional investment in equipment or other costs are required by Anchor in
order to fulfill such requests for additional Packed Bottles, Anchor shall
notify Boston Beer of such extra costs and provide Boston Beer with the option
to pay for some or all of such costs and, if agreed, the Selling Price for
those additional Packed Bottles shall be adjusted accordingly. Alternatively,
Boston Beer may obtain an alternative supply for such additional Packed Bottles.


(b) Anchor shall
purchase its inventory of Packaging Components from a supplier designated by
Boston Beer at a price designated by Boston Beer. Anchor shall charge Boston
Beer for Packaging Components, as delivered to Boston Beer with a Bottle
shipment, at a price not greater than the price originally paid by Anchor to
purchase such Packaging Components in accordance with the terms of the
preceding sentence, and as adjusted for the actual loss ratios for such
Packaging Components. In producing Packed Bottles, acceptable loss ratios for
Packaging Components losses shall not exceed those set forth in Attachment 3.6.
The loss ratios set forth in Attachment 3.6 will be reviewed by Boston Beer
after the first six (6) months of the Term and shall be adjusted to
reflect the actual loss ratios experienced by Anchor during such period,
provided such actual loss ratios are less than those set forth in Attachment
3.6. After the date of this Agreement, Anchor agrees to meet with Boston Beer
from time to time to discuss any cost neutral changes to the procedures set
forth in this Section 3.6(b) including, without limitation, Anchor’s
purchase of such Packaging Components from Boston Beer and loss ratios
experienced and how to improve them.


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


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(c) Boston Beer
shall pay Anchor for the handling, assembly and insertion of the Packaging
Components in accordance with the schedule of permitted charges for such
services set forth in Attachment 3.1. Anchor shall inspect all Packaging
Components upon Anchor’s receipt of the same and shall promptly notify
both the applicable supplier and Boston Beer upon discovery of any defective
Packaging Components.


3.7. Molds.
Anchor shall purchase on behalf of Boston Beer such molds to manufacture the
Bottles in accordance with the Specifications, provided that Boston Beer has
given its prior consent to such purchase, which consent shall not be
unreasonably withheld or delayed. Boston Beer will have title to all molds for
the Bottles throughout the Term. Upon early termination by Boston Beer as a
result of a material breach of the Agreement by Anchor, Anchor shall deliver to
Boston Beer all such molds at no cost to Boston Beer. Upon early termination of
this Agreement by Anchor as a result of a material breach of this Agreement by
Boston Beer or expiration of this Agreement or in the event of the cessation of
the use of a mold as a result of a change in Specification by Boston Beer,
Boston Beer shall reimburse Anchor for the unamortized value of the useful life
such mold(s) (which is currently the production of [ * ] gross bottles) and
Anchor shall make such mold(s) available to Boston Beer at its Plant for
pick-up.


4. WARRANTIES.


4.1. Express
Warranties. Notwithstanding any independent investigation by Boston Beer,
Anchor represents and warrants to Boston Beer that each Bottle manufactured by
Anchor for Boston Beer: (a) will be merchantable and fit for the purpose
intended, which is a commercially acceptable glass container for beverages;
(b) will be manufactured in accordance with the Specifications and all
function and taste requirements specified therein; (c) will conform to
samples previously delivered to and approved by Boston Beer; (d) along
with any and all Packaging Components, pallets, and other related articles
included with each shipment of Bottles, will be delivered free from any
security interest, lien or other encumbrance; and (e) the substances and
materials used to produce such Bottles will be free from defects in materials
and workmanship and are permissible for use in glass container manufacturing
under applicable Federal and State laws and regulations.


4.2. FDA
Compliance. Anchor represents and warrants that each Bottle manufactured by
Anchor for Boston Beer and each related article contained in and comprising
each shipment or other delivery to Boston Beer and all information and
ingredient lists furnished for use by Boston Beer in labeling such articles for
resale, is (a) not adulterated or misbranded within the meaning of the
Federal Food, Drug and Cosmetic Act, as amended, and not an article which may
not be introduced into interstate commerce, (b) in compliance with all
requirements of the Federal Food, Drug and Cosmetic Act, as amended, for food
contact substances to be used as intended by Boston Beer, (c) not banned
or misbranded within the meaning of the terms of the Federal Hazardous
Substances Act, and (d) not an article which cannot be legally transported
or sold under the provisions of any Federal, State or local law.


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


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4.3. Fair Labor
Standards. To the extent work is performed in the United States in
connection with the performance of Anchor’s obligations under this
Agreement, Anchor represents that all such work will be performed in compliance
with the requirements of the Fair Labor Standards Act of 1938, as amended.
Anchor further represents that all work performed in meeting its obligations
under this Agreement complies with the provisions of Executive Order No. 11246.


4.4.
Indemnification.


(a) Boston Beer
shall have all rights and remedies of a buyer under the UCC. Any purchases of
Bottles under the “cover” provision of the UCC codified in
Section 2-712 of the UCC (or any successor provision) shall be applied in
satisfaction of Boston Beer’s Requirements under this Agreement Anchor
shall, in addition, indemnify and hold harmless Boston Beer, its parent,
subsidiaries and affiliates and their respective directors, officers,
employees, agents and other representatives, from and against any and all
losses, liabilities, damages, claims, judgments or out-of-pocket costs and
expenses, including without limitation court costs, attorneys’ fees and
other legal expenses resulting from any alleged or actual breach by Anchor of
any representation or warranty set forth herein or the failure by Anchor to
perform in a timely manner any of its obligations hereunder. The obligations of
Anchor under this Section 4.4 include the obligation to pay all of Boston
Beer’s reasonable attorneys and professional fees associated with all
aspects of any bankruptcy, reorganization, receivership or other insolvency
proceeding of Anchor (including without limitation: review of court papers;
attendance and participation in hearings, litigation or negotiation in
connection with any claim, motion or plan of reorganization; preparation,
filing and defense of any claims; and participation in any contested matters).
Anchor’s obligations under the terms of the immediately preceding
sentence shall survive the expiration or earlier termination of this Agreement.


(b) Anchor
shall have all rights and remedies of a seller under the UCC. Anchor shall
have the right to allocate in the event of a Force Majeure. Boston Beer shall,
in addition, indemnify and hold harmless Anchor, its subsidiaries and
affiliates and their respective directors, officers, employees, agents and
other representatives, from and against any and all losses, liabilities,
damages, claims, judgments or out-of-pocket costs and expenses, including
without limitation court costs, attorneys’ fees and other legal expenses
resulting from any alleged or actual breach by Boston Beer of any
representation or warranty set forth herein or arising out of actions,
activities or products sold by Boston Beer.


4.5. Pricing.
Anchor warrants that the pricing provided to Boston Beer under this Agreement,
including but not limited to each Selling Price, is lawful.


5. FREIGHT AND
DELIVERY.


5.1. Delivery
Terms. Anchor shall in accordance with the Specifications: (a) package
each Bottle shipment in accordance with whether the applicable Bottles are Bulk
Bottles or Packed Bottles, (b) load the packaged Bottles for shipment, and
(c) deliver the Bottles F.O.B. the applicable Brewery. Boston Beer shall
be responsible for unloading all Packed Bottles at the applicable Brewery, at
which time title to and risk of loss pertaining to such Bottles shall pass to
Boston Beer.


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


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5.2. Freight
Costs.


(a) Boston Beer
shall reimburse Anchor for Anchor’s actual freight costs for Bottle
deliveries from the particular Plant to a Brewery, which costs shall be shown
separately on each invoice for delivered Bottles and shall be based on freight
rates that have been previously approved by Boston Beer. Boston Beer may elect
to have Anchor contract directly with carriers on Boston Beer’s behalf in
order to secure favorable fixed freight rates upon terms and conditions that
are mutually acceptable to both parties. Notwithstanding the foregoing, Boston
Beer may, upon thirty (30) days notice to Anchor, select the freight
carriers to be used for all or a portion of the shipments of Bottles from a
Plant or to a Brewery provided that such action does not violate the terms of
any freight contract that Anchor has entered into on behalf of Boston Beer.


(b) Anchor shall
be responsible for scheduling and managing the logistics of Bottle delivery to
each of the Breweries utilizing carriers and rates approved by Boston Beer.
Anchor and Boston Beer shall meet once a quarter to review carrier performance
and rates available to ensure that Boston Beer is receiving efficient,
effective and cost competitive freight services on Bottle and return items
deliveries.


5.3. Shipping
Materials.


(a) [ * ]


(b) [ * ].


(c) Anchor shall
be responsible for the pick-up and return to the applicable Plant of all
non-disposable Shipping Materials and shall bear the cost of the freight and
other logistics costs related to such returns.


(d) [ * ]. In the
event that all pallets have been converted to plastic pallets, Boston Beer
shall return any wooden pallets belonging to Anchor that are in its possession
within sixty (60) days of the completion of the transition. If Boston Beer
and Anchor are using a mixture of wood and plastic pallets, Boston Beer shall
be responsible for returning within 180 days those outstanding wood
pallets that exceed the highest number of wood pallet usage in a month during
the previous six (6) months. Any pallets not returned pursuant to this
Section 5.3(d) shall be billed at the rates specified in
Section 5.3(b). At the expiration or earlier termination of the Term
Anchor shall return all plastic pallets in its possession to Boston Beer and
Boston Beer shall reimburse Anchor for the unamortized portion of the pallet
purchase price paid for by Anchor based on a straight-line twelve-year
amortization schedule.


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


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6. PAYMENTS.


6.1. Payment Due
Date. Boston Beer shall pay Anchor for all Bottles purchased hereunder,
based on the date of invoice, which date shall not be prior to delivery to the
applicable Brewery. Terms of payment shall be payment in full within thirty
(30) days after Boston Beer the invoice date. [ * ]. Any amounts payable
by either party under any provision of this Agreement which are due on a
Saturday, a Sunday, or a public holiday generally recognized in the United
States, shall instead be due and payable on the first business day thereafter.


6.2. Purchase
Orders. Boston Beer and Anchor may exchange standard form documents (such
as purchase orders) for administrative and informational purposes, but, under
no circumstances, shall the terms and conditions stated thereon shall neither
modify, amend or supplement the terms and conditions stated in this Agreement.


6.3. Withholding
Disputed Amounts. In the event of a dispute as to an amount due, only the
disputed amount may be withheld. In the event of such a dispute, Anchor and
Boston Beer agree to reasonably cooperate with each other to resolve such
dispute within thirty (30) days of the date on which such disputed amount
was withheld. If such dispute cannot be resolved within such 30-day period,
then the dispute shall be subject to the dispute resolution provisions
contained in Section 18 of this Agreement.


7. FORCE
MAJEURE.


7.1. The Events.


(a) Each party
shall be relieved of its obligation to perform any part of this Agreement to
the extent its performance is prevented or rendered impracticable by events
beyond its reasonable control, which events may include, without limitation,
fire, storm, flood, earthquake, and other Acts of God, and explosion, accident,
acts of the public enemy, riots and other civil disturbances, sabotage, court
injunctions (other than any injunction imposed as a result of the party’s
actual or alleged breach of any agreement), transportation embargoes, shortages
of materials, strikes, lockouts, work stoppages and other labor disputes, acts,
regulations or other requirements of domestic or foreign federal, state,
county, municipal, or local governments or branches, subdivisions or agencies
thereof, including, without limitation, any such acts, regulations or other
governmental requirements making it unlawful (such as by an outright ban) or
commercially impractical (such as by the imposition or increase of deposit
requirements or other action directly or indirectly affecting beer or its
packaging) to manufacture glass containers or package beer in bottles, or to
sell or distribute beer in packaging of any type or requiring plant shut-downs
(each such event, a “Force Majeure Event”), subject to the various
limitations provided in this Section 7. Force Majeure Events shall further
include, without limitation, any imposition or increase of any excise tax or
similar charge by any governmental authority on the manufacture, packaging,
possession, storage, sale or distribution of glass or beer, and Boston
Beer’s or Anchor’s obligations to purchase or supply, as the case
may be, shall be deemed to have been rendered impracticable thereby, without
any direct proof of causation, to the extent that there is any decrease in the
demand for beer manufactured, sold or distributed by Boston Beer after such
Force Majeure event occurs.


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


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(b) Notwithstanding the foregoing, Anchor acknowledges that a
strike, lockout, work stoppage or other labor dispute affecting some but not
all of the Plants will not constitute a Force Majeure Event. In the event of
such a labor dispute at any such Plant, Anchor will use its commercially
reasonable efforts to satisfy Boston Beer’s requirements either by
operating such affected Plant(s) with management or other personnel or to
transfer production to one or more Alternate Plant.


(c) Anchor agrees
that if picketing, a work stoppage, a strike or any refusal to work of or by
any of Boston Beer’s employees or any employees of any Boston Beer
contractor occurs at one or more of the Breweries, Anchor shall use
commercially reasonable efforts to cause deliveries of Bottles to continue to
such Breweries as otherwise required hereunder, but if any of the carriers
transporting the Bottles to the affected Breweries express concern to Boston
Beer about the safety of their drivers or their equipment at the affected
Breweries during any such Boston Beer labor dispute, Boston Beer shall take all
actions reasonably necessary to insure the safety of such drivers and equipment
once they reach the affected Breweries.


7.2. Notice.


(a) Each party
will immediately notify the other party of the occurrence of any Force Majeure
Event which may affect its performance of this Agreement.


(b) If any Force
Majeure Event occurs affecting one or more Plants or deliveries, Anchor will:


(i) use
commercially reasonable efforts to operate the affected Plants prior to any
other Anchor bottle plant, so long as such actions by Anchor are not in
violation of any agreements Anchor is a party to as of the date of this
Agreement;


(ii) use
commercially reasonable efforts to provide Bottles to Boston Beer from the
affected Plants;


(iii) use
commercially reasonable efforts to provide Bottles to Boston Beer which Anchor
is not able to supply from Plants affected by the Force Majeure Event from
Plants and/or Alternate Plants not affected by the Force Majeure Event; and


(iv) give Boston
Beer priority of production from each of the Plants and Alternate Plants and
their respective equipment and furnaces in the same proportion as Boston
Beer’s business is to Anchor’s total U.S. business for bottles
similar to the Bottles.


(c) With respect
to Bottles supplied by Plants unaffected by the Force Majeure Event pursuant to
subsection (b)(iii) above, Anchor will use commercially reasonable efforts to
ship such Bottles from Plants, Alternate Plants or such other bottle production
facilities that will minimize freight charges.


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


11








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7.3. Rights. If
Anchor ‘s performance hereunder is suspended due to a Force Majeure
Event, then Boston Beer shall have, in addition to such other rights which it
may have as a buyer under the UCC or otherwise, the right to procure
alternative sources of Bottle supply on commercially reasonable terms with
respect to all Bottles not delivered by Anchor because of the Force Majeure
Event, which may require an alternative Bottle purchase commitment by Boston
Beer for a period of time which extends beyond the Force Majeure Event
affecting Anchor. Any such alternative purchases of Bottles by Boston Beer
shall be applied to its obligation to purchase the quantity of Bottles as set
forth in Section 2.2.


7.4. Termination
Because of Force Majeure Events. If all or a substantial part of either
party’s performance hereunder is prevented or suspended by reason of a
Force Majeure Event for more than ninety (90) consecutive days at any one time,
or more than one hundred eighty (180) days in the aggregate during the
Term, then the other party shall have the right to immediately terminate this
Agreement (upon notice to the party affected by the Force Majeure Event). Such
termination shall be without liability with respect to the obligations so
terminated.


8. TERM AND
TERMINATION.


8.1. Term.
Unless terminated earlier in accordance with the terms of this Agreement, the
initial term of this Agreement shall be for a period commencing as of [ * ] and
ending at the close of business on [ * ], unless extended by Boston Beer for a
[ * ] period ending [ * ] by the delivery of a written notice of extension to
Anchor at least [ * ] prior to the end of the initial term (the
“Term”).


8.2. Rights of
Termination.


(a) Subject to
the terms of Section 8.3 and in addition to any right of termination
granted elsewhere in this Agreement, either party shall have the right at any
time to terminate this Agreement, without prejudice to any other legal rights
to which such terminating party may be entitled, upon the occurrence of any one
or more of the following:


(i) Material
breach by the other party in the performance of any of the provisions of this
Agreement, which breach is not cured within thirty (30) days following
written notice of such breach to the defaulting party;


(ii) The making
by the other party of an assignment for the benefit of creditors;


(iii) The
appointment of a trustee or receiver or similar officer of any court for the
other party or for a substantial part of the property of the other party,
whether with or without the consent of the other party;


(iv) The
institution of bankruptcy, reorganization, insolvency or liquidation
proceedings by or against the other party without such proceedings being
dismissed within thirty (30) days from the date of the institution thereof
or, in the alternative, without this Agreement being assumed by a qualified
manufacturer of glass containers able to meet all of the obligations set forth
herein; or


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


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(v) A material
breach by the other party of any of its representations or warranties set forth
herein.


(b) Either party
which exercises a right of termination under the foregoing provisions of
Section 8.2(a) may exercise such right by delivery of a termination notice
which shall provide that such termination is effective not less than ninety
(90) days nor more than twelve (12) months after the date such notice
is issued, at the choice of the party exercising such right of termination.


8.3. Effect of
Termination. Termination of this Agreement for any reason provided herein
shall not relieve either party from its obligation to perform up to the
effective date of such termination or to perform such obligations as may
survive termination. If payments attributable to periods after the termination
of the Agreement have been made before the termination of the Agreement, the
party receiving such payments shall refund the payments so attributable
promptly after the termination of the Agreement. If payments attributable to
periods before the termination remain unpaid upon the termination of the
Agreement, the party required to make such payments shall do so promptly after
the termination of this Agreement. Nothing in this Section shall limit the
rights otherwise available to a party arising from the breach of the provisions
hereof.


9. AUDITS.


9.1. Scope of the
Audits; Auditors. Each party shall have the right to audit information
(i) used to determine the Selling Price and any changes to it and its
constituent components including, without limitation, all information necessary
to determine whether the terms of Section 3 (and each of the sections and
subsections thereunder) have been fully complied with, (ii) pertaining to
improper payments referred to in Section 15.5 below, (iii) pertaining
to the Bottle purchases from other vendors and (iv) provided by the other
party pursuant to the terms of this Agreement in addition to the information
specified in subsections (i), (ii) and (iii) above. All audits shall
be performed by a nationally recognized public accounting firm mutually
acceptable to the parties, or in the absence of other agreement between the
parties, Ernst and Young LLP (the “Auditor”).


9.2. Costs. The
full cost of any audit shall be borne by the requesting party, unless a
“material discrepancy” adverse to the requesting party is uncovered
by the audit and such material discrepancy is caused by the actions of the
other party or the other party’s failure to act; in which case the
audited party shall then bear 100% of the cost of the audit. A “material
discrepancy” shall be any discrepancy or group of discrepancies which, in
the aggregate for any one audit, would result in a payment by one party to the
other of an amount equal to or greater than [ * ] or an adjustment in what one
party owes to the other under this Agreement in an amount equal to or greater
than [ * ].


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


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9.3. Maintenance of
Records. Each party shall maintain records in sufficient detail to permit
an acceptable audit, and, without limiting the foregoing, shall maintain each
such record (i) for one full year after the expiration or earlier
termination of this Agreement and (ii) for so long as any audit pertaining
to such record is pending. The Auditor shall be given access to any and all
records which it deems necessary to conduct the audit.


9.4. Notice of
Intent to Audit. Prior to requesting an audit, the requesting party shall
notify the other party of its intent to exercise its audit rights. The other
party shall then be allowed a reasonable amount of time (not to exceed
30 days) to explain/resolve the question to the satisfaction of the
requesting party, and thus eliminate the need for an audit.


9.5. Audit
Procedures. If the requesting party is not satisfied with the explanation
provided by the other party pursuant to the terms of Section 9.4 and
determines that an audit should be conducted, the parties shall in good faith
make reasonable efforts to mutually agree upon a joint letter of instruction
for the Auditor which shall describe the format and procedure the Auditor shall
undertake and the documents it will examine in the course of its audit. If the
parties are unable to agree on the terms of the letter of instruction, the
Auditor shall make its examination and determination in accordance with written
instructions provided by the requesting party. A copy of said written
instruction shall be provided to the other party no later than five
(5) business days prior to the Auditor commencing its audit; provided
that, prior to commencing such audit, the Auditor shall have agreed to hold in
confidence and not disclose to anyone, including the other party, unless
required by law, any of the information that the parties have designated in
writing as confidential. Each party is obligated to furnish or make available
to the Auditor such information in the party’s possession as is required
in the Auditor’s reasonable opinion to conduct the audit. The Auditor
shall provide both parties with a final written conclusion of compliance or
non-compliance and the amount of the discrepancy, if any, but shall not
otherwise disclose any confidential information of either party. If the Auditor
discovers any discrepancy, the Auditor’s conclusions shall specify the
amount owed to Boston Beer or to Anchor, and, in either event, a general
statement as to the basis for the discrepancy.


9.6. Survival of
Rights. The provisions of this Section 9 shall expressly survive
expiration or termination of this Agreement for a period of three
(3) years.


10. PLANT
VISITS.


Subject to
Section 11 below, Anchor shall allow employees and representatives of
Boston Beer and its Affiliates who have a legitimate and non-competitive
purpose to visit the Production Facilities and each of the warehouses used by
Anchor to store Bottles during normal business hours and upon at least three
(3) business days’ notice; provided, however, where the purpose of
the visit is for health, sanitation or quality control inspections, no notice
need be given to Anchor. Such employees and representatives shall have full
access to all phases of operation but shall not unreasonably interfere with
Anchor’s operations. All such employees and representatives shall abide
by all applicable rules and regulations of the Production Facilities with
respect to visitors.


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


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11. CONFIDENTIALITY.


11.1 For the purposes
of this Agreement the term “Recipients” shall mean: a party to this
Agreement and each of its employees, officers, directors, representatives,
subsidiaries, affiliates, assigns, subcontractors and any and all persons or
business entities acting under it or any of them.


11.2 For the purposes
of this Agreement the term “Confidential Information” shall mean
(a) any information regarding a party’s cost of materials,
production, raw materials, labor and other costs, suppliers, customers or
technology, whether or not labeled or described by such party as
“confidential,” and (b) all other information which is in
writing and clearly marked “Confidential” or which is reduced to
writing and clearly marked “Confidential”; provided, however, that
Confidential Information shall not include any such information which is
(i) generally available to those skilled in the art, (ii) acquired
from a third party rightfully having such information and under no obligation
to not disclose it to the Recipients, (iii) already lawfully in the
Recipient’s possession, or (iv) developed by a Recipient independently of
any confidential information disclosed to such party by, or learned by such
party from, the other party.


11.3. Each of the
Recipients shall treat in confidence and not disclose to others any
Confidential Information of the other party, which such Recipients may have
furnished to them by the other party hereto or by any third party, or which
such Recipients may have accessed in the performance of this Agreement;
provided, however, that the Recipient may disclose Confidential Information in
the event it has a legal obligation to do so pursuant to a subpoena or law. In
such event, the Recipient shall provide the disclosing party notice of its duty
to disclose and an opportunity to seek a protective order.


12. PUBLIC
STATEMENTS.


In the event that
either party is required under applicable law to file this Agreement or any
related document pertaining to this Agreement or its performance with the
Securities and Exchange Commission or any other regulatory authority, the party
shall promptly notify the other party of such requirement and (i) use
reasonable efforts to obtain confidential treatment of any portion of this
Agreement or related document for which such treatment is requested by the
non-disclosing party, (ii) to the extent requested by the non-disclosing
party and permitted by law, delete the most highly confidential elements of
this Agreement submitted for filing, including but not limited to all price and
other financial terms, (iii) promptly notify the non-disclosing party of
any attempt by any party to obtain access to any portion for which confidential
treatment has been requested, and (iv) at the request of the
non-disclosing party, use reasonable efforts to defend against any such
attempt. Prior to including any discussion of this Agreement or any related
document in any document to be filed with the Securities and Exchange
Commission or any other regulatory authority, the disclosing party shall
provide a written description of such discussion to the non-disclosing party
and shall make such changes thereto as may be reasonably requested by
non-disclosing party within five (5) business days after the
non-disclosing party has received a copy of such proposed discussion, except to
the extent that such changes would violate applicable law. The disclosing party
shall be free to file any proposed discussion if the non-disclosing party fails
to request changes within such five-day period. Any other releases to the
general public regarding the Agreement or the relationship between the parties
shall be mutually agreed to by the parties in advance of release.  


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


15








16









 





 


13. NOTICES.


All notices from one
party to the other under the terms of this Agreement, unless otherwise
directed, shall be in writing and shall be hand delivered, sent by fax or
certified mail, or sent by a responsible overnight courier, addressed to the
parties at the addresses indicated below and shall be deemed delivered on the
date of receipt, or the business day next succeeding the date of posting if
mailed:


If to Boston Beer:


Boston Beer
Corporation 

One Design Center Place, Suite 850

Boston, MA 02210


Attention: Vice President of Operations 

Fax Number: 617-368-5500


with a copy to:


Boston Beer
Corporation 

One Design Center Place, Suite 850 

Boston, MA 02210


Attention: Legal Department 

Fax Number: 617-368-5553


If to Anchor:


Anchor Glass Container
Corporation 

3101 Martin Luther King Blvd. 

Suite 301 

Tampa,
Florida 33607 

Attention: General Counsel 

Fax Number: 813-882-7859


with a copy to:


Anchor Glass Container
Corporation 

3101 Martin Luther King Blvd. 

Suite 301 

Tampa,
Florida 33607 

Attention: Chief Financial Officer 

Fax Number:
813-882-7859


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


16








17









 





14. INDEPENDENT CONTRACTOR.


Nothing contained in
this Agreement shall create an association partnership, joint venture or the
relation of principal and agent (except as specifically set forth herein).
Neither of the parties hereto shall have any authority to bind the other in any
way except as stated herein. The parties recognize that during the Term of this
Agreement, there will be employees of either party upon the premises of the
other. It is understood and agreed that on such occasions the employees of each
party shall remain the employees of that party solely, and that party shall be
solely responsible for the wages and benefits for its employees, and any
injuries which are sustained by such employees shall be covered under the
Worker’s Compensation insurance contracts of the respective employers.


15. ADDITIONAL
AGREEMENTS.


15.1. Maintenance
of Corporate Existence. Each party shall at all times maintain its
corporate existence. Each party will do or cause to be done all things
necessary to preserve and keep in full force and effect its rights (charter and
statutory), licenses and franchises.


15.2. [ * ].


15.3. Insurance.


(a) At all times
during the Term, both parties shall have and shall maintain in full force and
effect the following insurance coverage:


(i) Commercial
General and Excess Liability Insurance, including without limitation Products
Liability coverage, with minimum limits per occurrence and in the aggregate of
at least [ * ]. This coverage shall be endorsed to name the other party and
each of its subsidiaries and affiliates as additional insureds, and to evidence
such endorsement.


Anchor will provide a certificate of
insurance from a licensed insurance broker stating the following:


“The following are additional insureds: The Boston Beer
Company, Inc. and its direct and indirect subsidiaries, including any entity
directly or indirectly controlling, controlled by, including, without
limitation, Boston Beer Corporation.”


Boston Beer will provide a certificate
of insurance from a licensed insurance broker stating the following:


“The following are additional insureds: Anchor Glass
Container Corporation and its direct and indirect subsidiaries, including any
entity directly or indirectly controlling, controlled by, including, without
limitation, Anchor Glass Container Corporation.”


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


17








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(ii) Property
Insurance, including fire and extended coverage, for all risks of physical loss
or damage to the buildings and property of the other party, including each of
the Production Facilities and all Bottles stored on all property owned or
leased by the other party. Such insurance coverage shall have a minimum limit
adequate to cover risks on a replacement cost basis.


(iii) Workers
Compensation Insurance, with minimum limits per employee and per event of not
less than [ * ]. Such coverage shall include, where permitted by state law, a
waiver of subrogation applicable to each of the additional insureds identified
in subsection (a) (i) above.


(b) The insurance
described in subsection (a) above shall be provided by one or more
nationally recognized insurance carriers which each has a rating of at least
“A-” or better, Size IX or larger, by the A.M. Best rating service,
or if the Best rating service is no longer available, an equivalent rating by
another nationally recognized insurance rating service. Such insurance shall be
primary and non-contributing with respect to any insurance maintained by the
other party. Such insurance shall contain a “separation of
insureds” endorsement, a “severability of interests”
endorsement, or an equivalent endorsement. To the extent any such coverage is
written on a claims-made basis, it shall have a retroactive date no later than
the start of this Agreement and notwithstanding termination of this Agreement,
shall allow for reporting of claims until at least two (2) years beyond
the expiration of this Agreement, either directly or through “tail”
coverage purchased at the sole cost and expense of the other party.


(c) Within thirty
(30) days after the execution of this Agreement, each party shall provide
the other party with a certificate from its licensed insurance broker
evidencing the foregoing coverages effective as of the start of this Agreement,
and providing that the certificate shall stipulate that the insured shall
endeavor to provide at least thirty (30) days notice of cancellation,
non-renewal or restrictive endorsement with respect to any of the foregoing
coverages. Similar certificates evidencing renewal of such coverage shall be
provided prior to the expiration of any such policies of insurance.


15.4. Efforts to
Minimize Costs.


(a) Anchor shall
at all times use reasonable diligence to seek and procure its requirements of
all materials and equipment at the lowest available prices (taking into account
all relevant factors, including quality and service), and shall likewise
minimize all plant costs in a manner consistent with prudent management
practices, including, without limitation, adherence to total quality management
practices and statistical process control.


(b) [ * ].


15.5. Plant
Maintenance Requirements. Anchor shall ensure that each of the Plants, the
delivery vehicles used to deliver Bottles to any of the Breweries, and each of
the warehouses used to store Bottles are each maintained using the highest
practicable standards for sanitation and housekeeping and are in compliance
will all applicable laws and regulations. Anchor further agrees to ensure that
such delivery vehicles, such warehouses, and each of the Plants are each
maintained so that they present a clean, high quality appearance.


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


18








19









 





 


15.6. [ * ].


15.7. Preparation
for Production. In preparation for the commencement of production of the
Bottles at the commencement of the Term, Anchor will adhere to the schedule set
forth in Attachment 15.7.


15.8. Improper
Payments. Anchor hereby warrants that no payments have been or shall be
made, directly or indirectly, by or on behalf of Anchor to or for the benefit
of any Boston Beer employee or agent who may reasonably be expected to
influence the decision to purchase Bottles. As used herein
“payments” shall include money, property, services and all other
forms of consideration. Boston Beer may verify Anchor’s compliance with
this warranty in accordance with the audit provisions in Section 9 above.


15.9. Cullet.
Anchor shall offer Boston Beer (or its designated Affiliate) the opportunity to
sell cullet to Anchor at delivered market prices, so long as such sales do not
conflict with Anchor’s cullet supply agreements in effect on the date
hereof, or with Anchor’s internal cullet supply system, and so long as
Anchor is then buying cullet.


16. ADDITIONAL
REPRESENTATIONS AND WARRANTIES OF ANCHOR.


Without limiting any
of its warranties specified in Section 4, Anchor covenants, represents and
warrants to Boston Beer as follows:


16.1. Organization
and Existence. Anchor is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware. Anchor has full
corporate power and authority to carry on its business as now conducted and as
currently proposed to be conducted, and to execute, deliver and carry out the
terms of this Agreement. Anchor has all permits and authorizations necessary to
carry on its business as presently conducted, and is duly qualified to do
business as a foreign corporation in good standing in each jurisdiction wherein
the nature of Anchor’s business and operations or the character of the
properties owned or held under lease by Anchor makes such qualification
necessary and in which the failure to so qualify would have a materially
adverse effect on the business, prospects, profits, condition or operations,
financial or otherwise, of Anchor.


16.2.
Authorization; No Legal Bar. The execution, delivery and performance by
Anchor of this Agreement have been duly authorized by all necessary corporate
action on the part of Anchor and do not require any approval of Anchor’s
shareholders or approval or consent of any holder (or trustee of any holder) of
any indebtedness or other obligations of Anchor, except such as have been duly
obtained with certified copies of such approval or consent delivered to Boston
Beer. Neither the execution and delivery nor the performance by Anchor of this
Agreement does or will contravene any law or governmental rule or regulation,
or any judgment or order, applicable to or binding on Anchor or any of its
Affiliates, or Anchor’s charter documents, or result in any breach of or
constitute any default under, or result in the


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


19








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creation of any lien upon any property
of Anchor under, any indenture, mortgage or other agreement or instrument to
which Anchor or any of its Affiliates is a party or by which it or any of its
Affiliates, or any of its or their respective properties, may be bound or
affected. Each of the Production Facilities is in compliance in all material
respects and Anchor shall cause each of the Production Facilities to remain in
compliance in all material respects throughout the Term with all existing
federal, state and local governmental laws and regulations including, without
limitation, all laws and regulations pertaining to air emissions, liquid
effluents, and noise levels.


16.3. Governmental
Approvals. Neither the execution and delivery nor the performance by Anchor
of this Agreement requires any consent or approval of, giving notice to,
registration with, or taking of any other action in respect of, any federal or
state governmental authority or agency.


16.4. Other
Agreements. Anchor is not a party to any agreement or instrument, or
subject to any charter or any corporate restriction, which individually, or in
the aggregate would materially adversely affect Anchor’s financial
condition, business or operations or would adversely affect the ability of
Anchor to perform its obligations under this Agreement.


16.5. Execution,
Delivery and Enforceability. This Agreement and all related documents have
been duly executed and delivered by Anchor. Assuming the due authorization
(corporate and otherwise) and execution and delivery thereof by Boston Beer,
this Agreement constitutes a legal, valid and binding agreement or obligation
of Anchor enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, and similar laws affecting the enforcement
of creditors’ rights generally.



17. REPRESENTATIONS AND WARRANTIES OF BOSTON BEER.


Boston Beer covenants, represents and warrants to Anchor as follows:


17.1. Corporate
Existence and Power. Boston Beer is a corporation duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Massachusetts. Boston Beer has full corporate power and authority to carry on
its business as now conducted and as currently proposed to be conducted, and to
execute, deliver and carry out the terms of this Agreement. Boston Beer has all
permits and authorizations necessary to carry on its business as presently
conducted, and is duly qualified to do business as a foreign corporation in
good standing in each jurisdiction wherein the nature of Boston Beer’s
business and operations or the character of the properties owned or held under
lease by Boston Beer makes such qualification necessary and in which the
failure to so qualify would have a materially adverse effect on the business,
prospects, profits, condition or operations, financial or otherwise, of Boston
Beer.


17.2.
Authorization; No Legal Bar. The execution, delivery and performance by
Boston Beer of this Agreement have been duly authorized by all necessary
corporate action on the part of Boston Beer and do not require any approval of
Boston Beer’s shareholders or approval or consent of any holder (or
trustee for any holder) of any indebtedness or other obligations of Boston
Beer, except such as have been duly obtained with certified copies of such
approval or consent delivered to Anchor. Neither the execution and delivery nor
the performance by Boston Beer of this Agreement does
or will contravene any law or governmental rule or regulation, or any judgment
or order, applicable to or binding on Boston Beer or any of its Affiliates, or
Boston Beer’s charter documents, or result in any breach of or constitute
any default under, or result in the creation of any lien upon any property of
Boston Beer under any indenture, mortgage or other agreement or instrument to
which Boston Beer or any of its Affiliates is a party or by which it or any of
its Affiliates, or any of its or their respective properties, may be bound or
affected.






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


20








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17.3. Governmental
Approvals. Neither the execution and delivery nor the performance by Boston
Beer of this Agreement requires any consent or approval of, giving notice to,
registration with, or taking of any other action in respect of, any federal or
state governmental authority or agency.


17.4. Other
Agreements. Boston Beer is not a party to any agreement or instrument, or
subject to any charter or any corporate restriction, which individually or in
the aggregate would materially adversely affect Boston Beer’s financial
condition, business or operations or would adversely affect the ability of
Boston Beer to perform its obligations under this Agreement.


17.5. Execution,
Delivery and Enforceability. This Agreement and all related documents have
been duly executed and delivered by Boston Beer. Assuming the due authorization
(corporate and otherwise) and execution and delivery thereof by Anchor, this
Agreement constitutes a legal, valid and binding agreement or obligation of
Boston Beer enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, and similar laws affecting the enforcement
of creditors’ rights generally.


18. DISPUTE
RESOLUTION.


18.1. Guiding
Principles. Any dispute arising out of or relating to this Agreement (in
each case a “Dispute”) shall be resolved in accordance with the
procedures specified in this Section 18, which shall be the sole and
exclusive procedures for the resolution of any such Disputes; provided,
however, that a party, without prejudice to the procedures set forth below, may
file a complaint to seek a preliminary injunction or other provisional judicial
relief, if in its sole judgment such action is necessary to avoid irreparable
damage or to preserve the status quo. Despite such action the parties will
continue to participate in good faith using the procedures specified in this
Section 18. All negotiations and proceedings pursuant to this
Section 18, other than litigation, are confidential and shall be treated
as compromise and settlement negotiations for purposes of applicable rules of
evidence. All applicable statutes of limitation and defenses based upon the
passage of time shall be tolled while the procedures specified in this
Section 18 are pending. The parties will take such action, if any,
required to effectuate such tolling. Other than as required or permitted by a
court order, each party will continue to perform its obligations under this
Agreement pending final resolution of any Dispute arising out of or relating to
this Agreement.


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


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18.2.
Procedures.


(a) The parties
shall attempt settlement of each Dispute through good faith consultations. If
no settlement can be reached through such consultations within sixty
(60) days after either party has notified the other party in writing of
the existence of a Dispute, then either party may exercise its right to seek
resolution of the Dispute through mediation pursuant to the terms of
Section 18.2(b).


(b) If either
party seeks resolution of the Dispute through mediation, the matter shall be
submitted to JAMS for mediation. Either party may commence mediation by
providing to JAMS and the other party a written request for mediation, setting
forth the subject of the dispute and the relief requested, within thirty
(30) days after expiration of the aforementioned sixty (60) day
period. The parties will cooperate with JAMS and with one another in selecting
a mediator from JAMS panel of neutrals, and in scheduling the mediation
proceedings. The parties covenant that they will participate in the mediation
in good faith, and that they will share equally in its costs. All offers,
promises, conduct and statements, whether oral or written, made in the course
of the mediation by any of the parties, their agents, employees, experts and
attorneys, and by the mediator and any JAMS employees, are confidential,
privileged and inadmissible for any purpose, including impeachment, in any
litigation or other proceeding involving the parties, provided that evidence
that is otherwise admissible or discoverable shall not be rendered inadmissible
or non-discoverable as a result of its use in the mediation. Either party may
seek equitable relief prior to the mediation to preserve the status quo pending
the completion of that process. Except for such an action to obtain equitable
relief, neither party may commence a civil action with respect to the matters
submitted to mediation until after the completion of the initial mediation
session, or forty-five (45) days after the date of filing the written
request for mediation, whichever occurs first. Mediation may continue after the
commencement of a civil action, if the parties so desire. The provisions of
this Section 18.2(b) may be enforced by any Court of competent
jurisdiction, and the party seeking enforcement shall be to an award of all
costs, fees and expenses, including attorneys’ fees, to be paid by the
party against whom enforcement is ordered.


(c) If the
mediation specified in Section 18.2(b) fails, then either party may pursue
any remedy available to it at law or in equity.


19. MISCELLANEOUS.


19.1.
Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability of any jurisdiction shall not of itself invalidate or render
unenforceable such provision in any other jurisdiction.


19.2. Waivers;
Modifications. No term or provision of this Agreement may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought. The rights and remedies set forth herein are intended
to be cumulative, and unless the specific terms of this Agreement expressly
provide otherwise, the exercise of any right or remedy by either party shall
not preclude or waive its exercise of any other rights or remedies under this
Agreement or pursuant to law or equity.


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


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19.3.
Authorization; Binding Effect; Successors and Assigns. Each of the
individuals executing this Agreement certifies that he or she is duly
authorized to do so. This Agreement is binding upon, and the benefits hereof
inure to, the parties hereto and their respective successors and assigns;
provided that neither this Agreement nor any right or obligation under this
Agreement may be assigned by either party without the written consent of the
other party hereto, except that no consent is necessary for (i) an
assignment by Anchor to an affiliate of Anchor this is owned, directly or
indirectly, 100% by Anchor; or (ii) an assignment by Boston Beer to an
affiliate of Boston Beer that is owned, directly or indirectly, 100% by The
Boston Beer Company, Inc.; in either case, so long as the assigning party gives
prompt written notice of such assignment to the other party. Any attempted
assignment in violation of the provisions of this Section 19.3 will be
void. Any permitted assignee of this Agreement, including but not limited to an
affiliate of Anchor or Boston Beer, shall, prior to such assignment, furnish to
the other party satisfactory evidence of such assignee’s unconditional
assumption of all liabilities and obligations of the applicable assignor;
provided that, notwithstanding such unconditional assumption, no such
assignment shall relieve the assigning party of its financial obligations
hereunder, including its indemnification obligations, if an assignee defaults
in the performance of its assigned obligations.


19.4. Entire
Agreement. This Agreement, including each Attachment referred to in this
Agreement, represents the complete agreement of the parties with respect to the
transactions contemplated hereunder, and supersedes all prior or
contemporaneous agreements, representations, promises or understandings in
connection therewith, whether oral or written. All statements contained in any
certificate or other instrument delivered hereafter by or on behalf of any
party hereto pursuant hereto or in connection with the performance of the
transactions contemplated hereby shall be deemed representations and warranties
by such party hereunder.


19.5. Captions;
References. The captions in this Agreement and in the table of contents are
for convenience of reference only and shall not define or limit any of the
terms or provisions hereof. Reference herein to sections and subsections
without reference to the document in which they are contained are references to
this Agreement.


19.6. Governing
Law. This Agreement is entered into in the Commonwealth of Massachusetts
and shall be governed by the provisions of the UCC. To the extent that there is
to be a delivery or performance of services hereunder, such services shall be
deemed “goods” within the meaning of the UCC. In any event, this
Agreement shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts.


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


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IN WITNESS WHEREOF,
each of the parties has caused this Agreement to be executed by its duly
authorized representative on the day and year first set forth above.






	 	 	 	 	 
	 	 	BOSTON BEER CORPORATION
	 
	 	 	 	 
	 

	 	By
	 	/s/ MARTIN F. ROPER
	 

	 	 	 	 
	 

	 	 	 	Martin F. Roper
	 

	 	 	 	President & CEO
	 
	 	 	 	 
	 	 	ANCHOR GLASS CONTAINER CORPORATION
	 
	 	 	 	 
	 

	 	By
	 	/s/ JAMES J. FREDLAKE
	 

	 	 	 	 
	 

	 	 	 	James J. Fredlake
	 

	 	 	 	Executive Vice President & CFO







 


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


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ATTACHMENT 2.1


[ * ]


 


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


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ATTACHMENT 2.6


Quality Standards


[ * ]


 


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


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ATTACHMENT 3.1


Selling Price


The selling price for each color, size
and shape Bottles shall be the sum of the Base Price for each Bottle as set
forth below, plus the natural gas surcharge/credit, plus the amount Anchor is
entitled to charge Boston Beer for Packaging Components pursuant to the terms
of Section 3.6, plus the amount of freight payable by Boston Beer pursuant
to the terms of Section 5.2, subject to annual adjustment in accordance
with Section 3.3 and any cost savings achieved in accordance with
Sections 3.5 and 15.4.


[ * ]


 


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


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ATTACHMENT 3.2


Natural Gas Surcharge/Credit


A natural gas surcharge / credit
“Surcharge Amount” will be added to or subtracted from, as the case
may be, the Base Price [ * ]. Anchor will notify Boston Beer prior to the first
day of each month what the month’s Surcharge Percentage is.


[ * ]


 


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


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ATTACHMENT 3.3


Annual Base Price
Adjustment


[ * ]


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


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ATTACHMENT 3.6


Acceptable Loss Ratios for
Packaging Components


Packaging Component Loss Percentage not
to exceed*:


[ * ]


* Subject to adjustment by Boston Beer,
based on Anchor’s actual Packing Component Loss Percentage during the
first six (6) months of the first Contract Year.


 


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


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ATTACHMENT 15.2


[ * ]


 


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


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ATTACHMENT 15.7


Pre-Production Schedule 


Anchor shall promptly commence
preparation for the Production of the Bottles upon execution of this Agreement
in order to fulfill its obligations under the Agreement. In no event shall the
completion of each step identified below be later that the date shown:


	 	 	 
	 	 	Completion
Date to be no later than:
	
Print Approval 

	 	[ * ]
	
Unit Molds 

	 	[ * ]
	
Sampling and approval by Boston
Beer 

	 	[ * ]
	
Build Balance of set 

	 	[ * ]
	
Units ready for production and
commence qualification process 

	 	[ * ]
	
Commence Production 

	 	[ * ]





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


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