Document:

Exhibit
4.5

 

CHANGE OF CONTROL AGREEMENT

 

This Change of
Control Agreement (the “Agreement”) is dated as of July 23, 2003 (the
“Effective Date”), between Cytyc Corporation, (the “Company”), and [EMPLOYEE]
(the “Employee”), a resident of [STATE].

 

WHEREAS, the
Employee serves as the [TITLE] of the Company, and in that role has been
important in developing and expanding the business and operations of the
Company and possesses valuable knowledge and skills with respect to such
business; and

 

WHEREAS, the Board
of Directors of the Company (the “Board”) believes that it is in the best
interests of the Company to encourage the Employee’s continued employment with
and dedication to the Company, including in the face of potentially distracting
circumstances arising from the possibility of a Change of Control of the
Company; and

 

WHEREAS, upon
recommendation of the Compensation Committee of the Board (the “Compensation
Committee”), the Board has adopted a policy which authorizes the Company to
enter into this Agreement with the Employee; and

 

WHEREAS,
the parties desire to enter into this Agreement setting forth the terms and
conditions for the payment of compensation to the Employee in the event of a
termination of the Employee’s employment during the term of this Agreement;

 

NOW, THEREFORE, in
consideration of the foregoing, the mutual covenants and agreements of the
parties contained herein and other good and valuable consideration, the receipt
of which is hereby acknowledged, the parties hereto agree as follows:

 

1.                                       Term.  The initial term of this Agreement shall be
for a period commencing on July 23, 2003 and ending on December 31, 2006; provided,
that, commencing on January 1, 2006 and each January 1 thereafter, the
term of this Agreement shall automatically be extended for an additional year
unless, not later than sixty (60) days prior to such January 1, the Company
shall have given notice that it does not wish to extend this Agreement; and
provided, further, that notwithstanding any such notice by the Company not to
extend, this Agreement shall continue in effect for a period of twenty four
(24) months beyond the term provided in this Section 1 if a Change in Control
shall have occurred during such term. [This Agreement supersedes and replaces
in its entirety the Change in Control Agreement between the Employee and the
Company dated July 30, 2002.]*

 

*  This
sentence is included in the agreements between the Company and each of Patrick
J. Sullivan, Daniel J. Levangie, Christopher A. Bleck, James Linder, M.D. and A.
Suzanne Meszner-Eltrich.

 

 

2.                                       Termination
of Employment Following a Change of Control Event.  Subject to the terms of this Agreement, the
Employee shall be entitled to receive severance payments from the Company for
services previously rendered to the Company and its affiliates if a Change of
Control Event occurs during the term of this Agreement and the Employee’s
employment is terminated by the Employee for Good Reason or by the Company
other than for Cause during the Change of Control Period.

 

(a)                                  Good
Reason; Other Than for Cause. 
If a Change of Control Event occurs during the term of this Agreement
and if: (i) the Employee terminates employment for Good Reason during the
Change of Control Period, (ii) the Company terminates the Employee’s employment
other than for Cause during the Change of Control Period or (iii) the Company
terminates the Employee’s employment other than for Cause in anticipation of
the Change of Control, as determined in good faith by the Compensation
Committee:

 

(i)                                     the
Company shall pay to the Employee the following amounts:

 

A.                                   the
“Accrued Obligations” in a lump sum in cash within 30 days of the Date of
Termination or at such earlier time as required by applicable statute or
regulation; and

 

B.                                     the
amount equal to the product of (1) [X]** and (2) the sum of  the Employee’s Annual Base Salary and the
Annual Bonus, in a lump sum in cash within 30 days of the Date of Termination;
and

 

(ii)                                  for
the number of years identified in subsection 2(a)(i)(B) above  after the Date of Termination, or such
longer period as may be provided by the terms of the appropriate plan, program,
practice or policy, the Company shall continue benefits, or use its best
efforts to obtain such coverage at commercially reasonable rates, to the
Employee and/or the Employee’s family at least equal to those which would have
been provided to them in accordance with the welfare benefit plans, practices,
policies and programs provided by the Company and its affiliated companies
(including, without limitation, medical, prescription, dental, disability,
employee life, group life, accidental death and travel accident insurance plans
and programs) to the extent applicable generally to other peer employees of the
Company and its affiliated companies and at the same cost applicable to such
employees, as if the Employee’s employment had not been terminated; provided,
however, that if the Employee becomes reemployed with another employer
and is eligible to receive medical or other welfare benefits under another
employer provided plan, the medical and other welfare benefits described herein
shall be secondary to those provided under such other plan during such
applicable period of eligibility.  If
the Company is unable to obtain or provide for the Employee all or any portion
of the welfare benefits required by this subsection, the Company shall the
reimburse the Employee for

 

** 3.0 in the
agreements between the Company and each of Patrick J. Sullivan and Daniel J.
Levangie; 2.0 in the agreement between the Company and Christopher A. Bleck;
and 1.5 in the agreements between the Company and each of the employees not
otherwise mentioned above.

 

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125% of the Company’s
cost for such benefit or benefits with regard to a similarly situated active
employee.

 

(iii)                               the
Company shall, at its sole expense as incurred, provide the Employee with
outplacement services the scope and provider of which shall be at the highest
level provided by the Company to its peer employees; and

 

(iv)                              to the
extent not theretofore paid or provided, the Company shall timely pay or
provide to the Employee all Other Benefits.

 

(b)                                 Cause;
Other than for Good Reason.  If
the Employee’s employment is terminated for Cause during the Change of Control
Period, this Agreement shall terminate without further obligations to the
Employee, other than the obligation to pay to the Employee (i) his Annual Base
Salary through the Date of Termination, (ii) the amount of any compensation
previously deferred by the Employee, and (iii) Other Benefits through the Date
of Termination, in each case to the extent theretofore unpaid.  If the Employee voluntarily terminates
employment during the Change of Control Period, excluding a termination for
Good Reason, this Agreement shall terminate without further obligations to the
Employee, other than for Accrued Obligations and the timely payment or
provision of Other Benefits through the Date of Termination.  In such case, all Accrued Obligations shall
be paid to the Employee in a lump sum in cash within 30 days of the Date of
Termination, or at such earlier time as required by applicable statute or
regulation.

 

3.                                       Certain
Additional Payments by the Company.

 

(a)                                  Notwithstanding
anything in this Agreement to the contrary and except as set forth in this
Section 3, in the event it shall be determined that any payment or distribution
by the Company to or for the benefit of the Employee (whether paid or payable
or distributed or distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payments required
under this Section 3) (a “Payment”) would be subject to the excise tax imposed
by Section 4999 of the Code or any interest or penalties are incurred by the
Employee with respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred to as the
“Excise Tax”), then the Employee shall be entitled to receive an additional
payment (a “Gross-Up Payment”) in an amount such that after payment by the
Employee of all taxes, including, without limitation, any income taxes (and any
interest and penalties imposed with respect thereto) and Excise Tax imposed
upon the Gross-Up Payment, the Employee retains an amount of the Gross-Up
Payment equal to the Excise Tax (including any interest or penalties imposed
with respect to such taxes) imposed upon the Payments.

 

(b)                                 Subject
to the provisions of Section 3(c), all determinations required to be made under
this Section 3, including whether and when a Gross-Up Payment is required and
the amount of such Gross-Up Payment and the assumptions to be utilized in
arriving at such determination, shall be made by Deloitte and Touche  or such other certified public accounting
firm as may be designated by the Employee and reasonably acceptable to the
Company (the “Accounting Firm”) which shall provide detailed supporting
calculations both to the Company and the Employee within 15 business days of
the receipt of notice from the Employee that there

 

3

 

has been a Payment, or such earlier time as is
requested by the Company.  In the event
that the Accounting Firm is serving as accountant or auditor for the
individual, entity or group effecting the Change of Control, the Employee shall
appoint another nationally recognized accounting firm and reasonably acceptable
to the Company to make the determinations required hereunder (which accounting
firm shall then be referred to as the Accounting Firm hereunder).  All fees and expenses of the Accounting Firm
shall be borne solely by the Company. 
Any Gross-Up Payment, as determined pursuant to this Section 3, shall be
paid by the Company to the Employee within five business days of the receipt of
the Accounting Firm’s determination. 
Any determination by the Accounting Firm shall be binding upon the
Company and the Employee.  As a result
of the uncertainty in the application of Section 4999 of the Code at the time
of the initial determination by the Accounting Firm hereunder, it is possible
that Gross-Up Payments which will not have been made by the Company should have
been made (“Underpayment”), consistent with the calculations required to be
made hereunder.  In the event that the
Company exhausts its remedies pursuant to Section 3(c) and the Employee
thereafter is required to make a payment of any Excise Tax, the Accounting Firm
shall determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the benefit of the
Employee.

 

(c)                                  The
Employee shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by the Company
of the Gross-Up Payment.  Such
notification shall be given as soon as practicable but no later than ten
business days after the Employee is informed in writing of such claim and shall
apprise the Company of the nature of such claim and the date on which such
claim is requested to be paid.  The
Employee shall not pay such claim prior to the expiration of the 30-day period
following the date on which it gives such notice to the Company (or such
shorter period ending on the date that any payment of taxes with respect to
such claim is due).  If the Company
notifies the Employee in writing prior to the expiration of such period that it
desires to contest such claim, the Employee shall:

 

(i)                                     give
the Company any information reasonably requested by the Company relating to
such claim,

 

(ii)                                  take
such action in connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by attorneys
reasonably selected by the Company,

 

(iii)                               cooperate
with the Company in good faith in order effectively to contest such claim, and

 

(iv)                              permit
the Company to participate in any proceedings relating to such claim;

 

provided,
however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Employee harmless, on an
after-tax basis, for any Excise Tax or income

 

4

 

tax (including interest
and penalties with respect thereto) imposed as a result of such representation
and payment of costs and expenses. 
Without limitation on the foregoing provisions of this Section 3(c), the
Company shall control all proceedings taken in connection with such contest
and, at its sole option, may pursue or forgo any and all administrative
appeals, proceedings, hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option, either direct the Employee
to pay the tax claimed and sue for a refund or contest the claim in any
permissible manner, and the Employee agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall determine;
provided, however, that if the Company directs the Employee to
pay such claim and sue for a refund, the Company shall advance the amount of
such payment to the Employee, on an interest-free basis and shall indemnify and
hold the Employee harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with respect thereto) imposed with
respect to such advance or with respect to any imputed income with respect to
such advance; and further provided that any extension of the statute of
limitations relating to payment of taxes for the taxable year of the Employee
with respect to which such contested amount is claimed to be due is limited
solely to such contested amount. 
Furthermore, the Company’s control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the Employee shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.

 

(d)                                 If,
after the receipt by the Employee of an amount advanced by the Company pursuant
to Section 3(c), the Employee becomes entitled to receive any refund with
respect to such claim, the Employee shall (subject to the Company’s complying
with the requirements of Section 3(c)) promptly pay to the Company the amount
of such refund (together with any interest paid or credited thereon after taxes
applicable thereto).  If, after the
receipt by the Employee of an amount advanced by the Company pursuant to Section
3(c), a determination is made that the Employee shall not be entitled to any
refund with respect to such claim and the Company does not notify the Employee
in writing of its intent to contest such denial of refund prior to the
expiration of 30 days after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the amount of such advance
shall offset, to the extent thereof, the amount of Gross-Up Payment required to
be paid.

 

4.                                       Conditions of Severance Benefits.  Employee shall receive the severance
benefits set forth in Section 2(a) hereof if Employee: (a) executes a general
release of the Company, in a form and of a scope determined by the Company in
good faith; (b) presents satisfactory evidence to the Company that she/he has
returned all Company property, confidential information and documentation to
the Company; (c) complies with, and does not violate, any provision of the
Employee Non-Disclosure and Developments Agreement (“Confidentiality
Agreement”) or the Employee Non Competition Agreement (“Non Compete Agreement”)
that Employee has entered into with the Company; and (d) provides the Company
with a signed, written resignation of Employee’s status as an officer and/or
director of the Company or any of its affiliates, if applicable.  In the event the Company determines in good
faith that Employee has breached, or has threatened to breach, any material
provision of the Confidentiality Agreement or the Non Compete Agreement, the
Company shall immediately terminate all severance benefits and Employee shall
no longer be entitled to such benefits. 
Such termination of benefits shall be

 

5

 

in addition to any
and all legal and equitable remedies available to the Company, including
injunctive relief.

 

5.                                       Expenses.  The Company shall pay any and all reasonable
legal fees and expenses incurred by the Employee in seeking to obtain or
enforce, by bringing an action against the Company, any right or benefit
provided in this Agreement, if the Employee is successful in whole or in part
in such action.

 

6.                                       Withholding.  Notwithstanding anything in this Agreement
to the contrary, all payments required to be made by the Company hereunder to
the Employee or his estate or beneficiaries shall be subject to the withholding
of such amounts relating to taxes as the Company reasonably may determine it
should withhold pursuant to any applicable law or regulation.  In lieu of withholding such amounts, in
whole or in part, the Company may, in its sole discretion, accept other
provisions for the payment of taxes and any withholdings as required by law,
provided that the Company is satisfied that all requirements of law affecting
its responsibilities to withhold compensation have been satisfied.

 

7.                                       No Duty
to Mitigate.  the
Employee’s payments received hereunder shall be considered severance pay in
consideration of past service, and pay in consideration of continued service
from the date hereof and entitlement thereto shall not be governed by any duty
to mitigate damages by seeking further employment.

 

8.                                       Amendments
or Additions; Action by Board of Directors.  No amendments or additions to this Agreement
shall be binding unless in writing and signed by both parties hereto.  The prior approval by the Company’s Board of
Directors shall be required in order for the Company to authorize any
amendments  to this Agreement.

 

9.                                       Governing
Law.  This Agreement
shall be governed by the laws of United States to the extent applicable and
otherwise by the laws of the Commonwealth of Massachusetts, excluding the
choice of law rules thereof.

 

10.                                 Assignment.  The rights and obligations of the Company
under this Agreement shall be binding upon its successors and assigns and may
be assigned by the Company to the successors in interest of the Company.  The rights and obligations of the Employee
under this Agreement shall be binding upon his heirs, legatees, personal
representatives, executors or administrators. 
This Agreement may not be assigned by the Employee, but any amount owed
to the Employee upon his death or disability resulting in his inability to
manage his affairs shall inure to the benefit of his guardian, heirs, legatees,
personal representatives, executors, or administrators.

 

11.                                 Notice.  For purposes of this Agreement, notices and
all other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when hand delivered, sent by overnight
courier, or mailed by first-class, registered or certified mail, return receipt
requested, postage prepaid, or transmitted by telegram, telecopy, or telex,
addressed as follows:

 

6

 

If to the Company:

 

Cytyc Corporation

85 Swanson Road

Boxborough, MA
01719

 

ATTN:  VP General Counsel

Fax 978-266-3188

C.C. VP Human
Resources

Fax 978-266-3187

 

 

If to the
Employee:

 

[EMPLOYEE]

[ADDRESS]

 

 

or to such other
address as either party may have furnished to the other in writing in
accordance herewith, except that notices of change of address shall be
effective only upon receipt.

 

12.                                 Other
Agreements. This Agreement may not constitute the entire
agreement between the parties hereto providing for severance payments in
connection with a termination of employment; provided, however,
that if the Employee is entitled to severance payments pursuant to this
Agreement and pursuant to any other oral or written agreements, (except as
provided in Section 1 above) commitments or understandings calling for
severance payments in connection with a termination of employment, the
severance payments paid to the Employee by the Company in connection with such
termination of employment shall be limited to the greater of (i) severance
payments provided pursuant to this Agreement or (ii) severance payments provided
by the Company pursuant to such other oral or written agreements, commitments
or understandings.  If the Employee is
entitled to severance payments pursuant to this Agreement and pursuant to any
other oral or written agreements, commitments or understandings calling for
severance payments in connection with a termination of employment, the Employee
shall determine, in the Employee’s sole discretion, by notice given in writing
to the Company, which payments are greater.

 

13.                                 Severability.  If any part of any provision of this
Agreement shall be invalid or unenforceable under applicable law, such part
shall be ineffective to the extent of such invalidity or unenforceability only,
without in any way affecting the remaining parts of such provision or the remaining
provisions of this Agreement.

 

14.                                 Arbitration.  Any dispute, controversy or claim arising out of, or in
connection with this Agreement shall be exclusively subject to arbitration
before the American Arbitration Association (“AAA”).  Such arbitration shall take place in the Commonwealth of

 

7

 

Massachusetts
before a single arbitrator in accordance with AAA’s then current National Rules
for the Resolution of Employment Disputes. 
The Company shall be responsible for the payment of the arbitrator’s
fees.  Judgment upon any arbitration
award may be entered in any court of competent jurisdiction.  All parties shall cooperate in the process
of arbitration for the purpose of expediting discovery and completing the
arbitration proceedings.  Nothing
contained in this Section or elsewhere in this Agreement shall in any way
deprive the Company of its right to obtain injunctive relief in a court of
competent jurisdiction for purposes of enforcing the agreements between the
Company and the Employee listed in Section 4(c) of this Agreement.

 

15.                                 Survival of Obligations and Rights.  The obligations and rights contained herein
shall survive the termination of Employee’s employment for any reason.

 

16.                                 At-Will Employment.  The Employee and the Company acknowledge
that the employment of the Employee by the Company is and will continue to be
“at will” and the Employee’s employment with the Company may be terminated by
the Employee or the Company at any time.

 

17.                                 Defined terms.  For the purpose of this Agreement, the following terms shall
have the meaning provided in this Section 17.

 

“Accrued
Obligations” means the sum of (1) the Employee’s Annual Base
Salary through the Date of Termination to the extent not theretofore paid, (2)
the product of (x) the Annual Bonus and (y) a fraction, the numerator of which
is the number of days in the current fiscal year through the Date of
Termination, and the denominator of which is 365, and (3) any compensation
previously deferred by the Employee (together with any accrued interest or
earnings thereon) and any accrued vacation pay, in each case, to the extent not
theretofore paid.

 

“Annual
Base Salary” means the greater of (a) the Current Annual Base
Salary or (b) the amount equal to twelve times the highest monthly base salary
paid or payable, including any base salary which has been earned but deferred,
to the Employee by the Company and its affiliated companies in respect of the
twelve-month period immediately preceding the month in which the Date of
Termination occurs.

 

“Annual
Bonus” means the greater of (i) the annual bonus that would
be payable to the Employee if all performance targets under the Company’s
Annual Incentive Plan were met for the fiscal year in which the Date of Termination
takes place or  (ii) the Employee’s  annual bonus  received in the fiscal year prior to the Date of Termination.

 

“Cause”
means conduct involving one or more of the following:  (i) the substantial and continuing failure of the employee, after
written notice therof, to render services to the Company in accordance with the
terms or requirements of his or her employment; (ii) disloyalty, gross
negligence, willful misconduct, dishonesty or breach of fiduciary duty to the
Company which results in substantial direct or indirect loss, damage or injury
to the Company; (iii) the commission of a felony; (iv) deliberate disregard of
the rules or policies of the Company which results in substantial direct or
indirect loss, damage or injury to the Company; (v) the

 

8

 

unauthorized
disclosure of trade secrets or confidential information of the Company which
results in substantial direct or indirect loss, damage or injury to the Company
; (vi) the commission of an act which constitutes unfair competition with the
Company or which induces any customer or supplier to breach a material contract
with the Company; or (vii) a violation of federal or state securities laws or
regulations.

 

“Change
of Control” means:

 

(a)                                  The
acquisition by any individual, entity or group (within the meaning of Section
13(d) (3) or 14(d) (2) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of more than 20%  of either (i) the then outstanding shares of
common stock of the Company (the “Outstanding Company Common Stock”) or (ii)
the combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors (the
“Outstanding Company Voting Securities”); provided, however, that
for purposes of this subsection (a), the following acquisitions shall not
constitute a Change of Control: (i) any acquisition by the Company, (ii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company or (iii)
any acquisition by any entity pursuant to a transaction which complies with
clauses (i), (ii) and (iii) of subsection (c); or

 

(b)                                 Individuals
who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease
for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the date
hereof whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than the Board; or

 

(c)                                  Consummation
of a reorganization, merger or consolidation or sale or other disposition of
all or substantially all of the assets of the Company (a “Business Combination”),
in each case, unless, following such Business Combination, (i) all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than  80% of, respectively, the then outstanding shares of common stock
and the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case may be, of
the entity resulting from such Business Combination (including, without
limitation, a corporation which as a result of such transaction owns the
Company or all or substantially all of the Company’s assets either directly or
through one or more subsidiaries) in substantially the same proportions as
their ownership, immediately prior to such Business Combination of the
Outstanding Company Common Stock and Outstanding Company Voting Securities, as
the case may be, and (ii) no Person (excluding any corporation resulting from
such Business Combination or any employee benefit plan (or related trust) of
the Company or such

 

9

 

corporation resulting from
such Business Combination) beneficially owns, directly or indirectly, 20% or
more of, respectively, the then outstanding shares of common stock of the
corporation resulting from such Business Combination or the combined voting
power of the then outstanding voting securities of such corporation except to
the extent that such ownership existed prior to the Business Combination and
(iii) at least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement, or of
the action of the Board, providing for such Business Combination; or

 

(d)                                 Approval
by the shareholders of the Company of a complete liquidation or dissolution of
the Company.

 

“Change
of Control Event” means the earlier of (i) a Change of
Control or (ii) the execution and delivery by the Company of an agreement
providing for a Change of Control.

 

“Change
of Control Period” means the period commencing upon a Change
of Control Event and ending two years after a Change of Control.

 

“Current
Annual Base Salary” means the annual base salary payable to
the Employee by the Company and its affiliates as of the Date of Termination of
employment.

 

“Date
of Termination” means the effective date of termination of
the Employee’s employment.

 

“Good
Reason” means (1) any proposed or actual material reduction
in the Employee’s base salary, fringe benefits or bonus eligibility, except, in
the case of fringe benefits or bonus eligibility, in connection with a
reduction in such compensation generally applicable to peer employees of the
Company; (2) the Employee has his responsibilities or areas of supervision with
the Company substantially reduced in the Employee’s reasonable judgment; (3)
the Employee has his responsibilities or areas of supervision with the Company
substantially increased without an appropriate increase in Employee’s
compensation in the Employee’s reasonable judgment; (4) the Employee is
required to move his office outside the metropolitan area in which the office
of the Employee was located immediately prior to the Change of Control or (5)
[CEO Only] if following the Change of Control Event, the Employee does not
continue as the Chief Executive Officer of the most senior resulting entity.

 

“Other
Benefits” means any other amounts or benefits required to be
paid or provided or which the Employee is eligible to receive under any plan,
program, policy or practice or contract or agreement of the Company and its
affiliated companies.

 

10

 

IN WITNESS
WHEREOF, the parties have executed and delivered this Agreement, or have caused
this Agreement to be executed and delivered, to be effective as of July 23,
2003.

 

 

 

	
  Date:

  	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  A. Suzanne
  Meszner-Eltrich

  
	
   

  	
   

  	
  Title:

  	
  Vice President, General
  Counsel & Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EMPLOYEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

  
							

 

11Exhibit
10.20

 

 

SUPPLY AGREEMENT

 

 

By and Between

 

 

ROCKY MOUNTAIN BOTTLE COMPANY, L.L.C.

 

 

and

 

 

COORS BREWING COMPANY

 

 

Effective Date: 
August 1, 2003

 

 

SUPPLY AGREEMENT

 

CONTENTS

 

	
  ARTICLE 1.

  	
  TERM

  
	
   

  	
   

  
	
  ARTICLE 2.

  	
  SUPPLIER
  PRODUCT OBLIGATIONS

  
	
   

  	
   

  
	
   

  	
  2.1

  	
  Product
  Specifications.

  
	
   

  	
   

  	
   

  
	
   

  	
  2.2

  	
  New Products.

  
	
   

  	
   

  	
   

  
	
   

  	
  2.3

  	
  Product Delivery
  and Sourcing.

  
	
   

  	
   

  	
   

  
	
   

  	
  2.4

  	
  Alternate
  Sourcing.

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3.

  	
  COORS
  PRODUCT OBLIGATIONS

  
	
   

  	
   

  
	
   

  	
  3.1

  	
  Product Volume.

  
	
   

  	
   

  	
   

  
	
   

  	
  3.2

  	
  COORS
  Volume Authorization.

  
	
   

  	
   

  	
   

  
	
   

  	
  3.3

  	
  COORS
  Failure to Purchase Calculated Plant Capacity.

  
	
   

  	
   

  	
   

  
	
   

  	
  3.4

  	
  Estimates.

  
	
   

  	
   

  	
   

  
	
   

  	
  3.5

  	
  Product
  Inventory.

  
	
   

  	
   

  	
   

  
	
   

  	
  3.6

  	
  [*****]

  
	
   

  	
   

  
	
  ARTICLE 4.

  	
  REPRESENTATIONS,
  WARRANTIES AND COVENANTS

  
	
   

  	
   

  
	
  Article 5.

  	
  QUALITY
  AND SERVICE

  
	
   

  	
   

  
	
  ARTICLE 6.

  	
  CONSIDERATION

  
	
   

  	
   

  
	
   

  	
  6.1

  	
  Contract Price.

  
	
   

  	
   

  	
   

  
	
   

  	
  6.2

  	
  Payment Terms and
  Invoices.

  
	
   

  	
   

  	
   

  
	
   

  	
  6.3

  	
  Agreement
  Binding on Subcontractors.

  
	
   

  	
   

  	
   

  
	
   

  	
  6.4

  	
  [*****]

  
						

 

ii

 

	
  ARTICLE 7.

  	
  COMPLIANCE

  
	
   

  	
   

  
	
   

  	
  7.1

  	
  Government
  Regulations.

  
	
   

  	
   

  	
   

  
	
   

  	
  7.2

  	
  General
  Laws and Permits.

  
	
   

  	
   

  	
   

  
	
   

  	
  7.3

  	
  Diverse
  Suppliers (Minority or Women-Owned Business Enterprises).

  
	
   

  	
   

  	
   

  
	
   

  	
  7.4

  	
  WHAM Training.

  
	
   

  	
   

  
	
  ARTICLE 8.

  	
  INTELLECTUAL
  PROPERTY

  
	
   

  	
   

  
	
   

  	
  8.1

  	
  Technology
  Agreement.

  
	
   

  	
   

  	
   

  
	
   

  	
  8.2

  	
  Product Design.

  
	
   

  	
   

  	
   

  
	
   

  	
  8.3

  	
  COORS
  Property.

  
	
   

  	
   

  	
   

  
	
   

  	
  8.4

  	
  SUPPLIER
  Property.

  
	
   

  	
   

  	
   

  
	
   

  	
  8.5

  	
  Return
  of Documents and Things.

  
	
   

  	
   

  	
   

  
	
   

  	
  8.6

  	
  No
  Reservation of Rights.

  
	
   

  	
   

  	
   

  
	
   

  	
  8.7

  	
  Overruns and
  Second-Quality Goods.

  
	
   

  	
   

  	
   

  
	
   

  	
  8.8

  	
  Definitions.

  
	
   

  	
   

  	
   

  
	
   

  	
  8.9

  	
  Covenant of
  Confidentiality.

  
	
   

  	
   

  	
   

  
	
   

  	
  8.10

  	
  Exclusions.

  
	
   

  	
   

  	
   

  
	
   

  	
  8.11

  	
  Breach of
  Confidentiality.

  
	
   

  	
   

  
	
  ARTICLE 9.

  	
  INSURANCE

  
	
   

  	
   

  
	
  ARTICLE 10.

  	
  BREACH,
  FORCE MAJEURE, REMEDIES AND TERMINATION

  
	
   

  	
   

  
	
   

  	
  10.1

  	
  Breach.

  
	
   

  	
   

  	
   

  
	
   

  	
  10.2

  	
  Force Majeure.

  
	
   

  	
   

  	
   

  
	
   

  	
  10.3

  	
  Remedies.

  
					

 

iii

 

	
   

  	
  10.4

  	
  Termination.

  
	
   

  	
   

  	
   

  
	
   

  	
  10.5

  	
  [*****]

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11.

  	
  DISPUTE
  RESOLUTION PROCEDURES

  
	
   

  	
   

  
	
   

  	
  11.1

  	
  Negotiation.

  
	
   

  	
   

  	
   

  
	
   

  	
  11.2

  	
  Mediation.

  
	
   

  	
   

  	
   

  
	
   

  	
  11.3

  	
  Submission to
  Arbitration.

  
	
   

  	
   

  	
   

  
	
   

  	
  11.4

  	
  The Federal
  Arbitration Act Applies.

  
	
   

  	
   

  	
   

  
	
   

  	
  11.5

  	
  Selection
  of Arbitrator(s).

  
	
   

  	
   

  	
   

  
	
   

  	
  11.6

  	
  Discovery In
  Arbitration.

  
	
   

  	
   

  	
   

  
	
   

  	
  11.7

  	
  The
  Arbitration Award.

  
	
   

  	
   

  	
   

  
	
   

  	
  11.8

  	
  [*****]

  
	
   

  	
   

  	
   

  
	
   

  	
  11.9

  	
  Confidentiality.

  
	
   

  	
   

  
	
  ARTICLE 12.

  	
  NOTICES

  
	
   

  	
   

  
	
  ARTICLE 13.

  	
  MISCELLANEOUS

  
	
   

  	
   

  
	
   

  	
  13.1

  	
  Authority.

  
	
   

  	
   

  	
   

  
	
   

  	
  13.2

  	
  Survival.

  
	
   

  	
   

  	
   

  
	
   

  	
  13.3

  	
  Enforceability.

  
	
   

  	
   

  	
   

  
	
   

  	
  13.4

  	
  Amendments.

  
	
   

  	
   

  	
   

  
	
   

  	
  13.5

  	
  Assignment.

  
	
   

  	
   

  	
   

  
	
   

  	
  13.6

  	
  Severability.

  
	
   

  	
   

  	
   

  
	
   

  	
  13.7

  	
  Complete Agreement.

  
	
   

  	
   

  	
   

  
	
   

  	
  13.8

  	
  Counterparts.

  
	
   

  	
   

  	
   

  
	
   

  	
  13.9

  	
  Headings.

  
					

 

iv

 

	
   

  	
  13.10

  	
  Jurisdiction
  And Venue; Choice Of Law.

  

 

v

 

SUPPLY
AGREEMENT

 

This Supply Agreement (“Agreement”) is made effective as of
August 1, 2003, (the “Effective Date”) by and between ROCKY MOUNTAIN
BOTTLE COMPANY, LLC, a Colorado limited liability company (“SUPPLIER”), and
COORS BREWING COMPANY, a Colorado corporation (“COORS”); COORS and SUPPLIER may
sometimes be referred to individually as a “Party” or collectively as the
“Parties”.

 

NOW, THEREFORE, in consideration of the premises, the mutual promises,
and the representations, warranties and covenants herein contained, the
sufficiency of which is hereby mutually acknowledged, the Parties agree as
follows:

 

ARTICLE 1.  TERM

 

This Agreement shall be effective as of the Effective Date and shall
remain in effect [*****]

 

ARTICLE 2.  SUPPLIER PRODUCT OBLIGATIONS

 

2.1                               Product Specifications.

SUPPLIER agrees to sell to COORS and COORS agrees to purchase from
SUPPLIER, the products described on Exhibit A attached hereto (the “Products”)
conforming to the specifications described on Exhibit B attached hereto
(the “Specifications”).  Products
include those glass beverage containers that substitute for or replace the
Products described on Exhibit A. 
For Specification changes requested by COORS for Products, COORS and
SUPPLIER shall agree on the implementation of such changes,[*****] due to the Specification
change.  Subject to the limitations set
forth in Section 3.6, in the event of a Specification change or
modification, COORS shall purchase and pay for, at the then-effective Contract
Price, all the Products manufactured to the previous Specifications.

 

2.2                               New Products.

[*****]. If the
Parties agree to add any New Products, Exhibits A, B and C shall be amended in
writing accordingly.

 

 

6

 

2.3                               Product
Delivery and Sourcing.

SUPPLIER agrees to deliver, or cause to be delivered, the Products to
COORS at designated destinations as identified on Exhibit A.  [*****]

 

2.4                               Alternate Sourcing.

[*****]

 

ARTICLE 3.  COORS PRODUCT OBLIGATIONS

 

3.1                               Product
Volume.

Commencing on the Effective Date, SUPPLIER shall sell to COORS and
COORS shall purchase from SUPPLIER in each calendar year, [*****], which shall be calculated as set
forth on Exhibit
E.

 

3.2                               COORS
Volume Authorization.

COORS authorizes SUPPLIER to maintain [*****]
of Products to meet COORS’ forecasts (“Authorized Inventory Levels”).  [*****]

 

3.3                               COORS Failure to Purchase [*****].

COORS is obligated to purchase [*****]  [*****]

 

7

 

[*****]

 

3.4                               Estimates.

On approximately [*****],
COORS shall provide SUPPLIER with COORS’ best estimate of COORS’ anticipated
requirements for Products during the immediately [*****]

 

3.5                               Product
Inventory.

SUPPLIER is expected to maintain a sufficient inventory of Products to
meet COORS’ requirements in the COORS [*****]
that COORS will provide to SUPPLIER [*****]

 

3.6                               [*****]

 

 

8

 

[*****]

 

ARTICLE 4.  REPRESENTATIONS, WARRANTIES AND COVENANTS

 

SUPPLIER hereby agrees, represents and warrants to COORS that:

 

4.1           SUPPLIER
shall furnish Products that:  (a) are
free from defects in workmanship and materials, (b) conform to the
Specifications, (c) conform in quality and (d) will be fit for the purpose for
which they are intended (i.e. that they shall be commercially acceptable
containers for COORS’ products);

 

4.2           SUPPLIER
shall convey good title to the Products and that the Products shall be
delivered free of any lien or encumbrance;

 

4.3           The
Products delivered hereunder shall be free of any chemical or residues of
chemicals in excess of the permissible tolerance, if any, under any law or
regulation of the Environmental Protection Agency (EPA), the Federal Food &
Drug Administration (FDA), the U.S. Department of Agriculture (USDA), or any
other local, state or federal governmental body having jurisdiction over
packaging materials for foods and beverages for human consumption and that the
Products delivered hereunder shall be free of all materials, substances or
chemicals for which no tolerances have been established or permitted; and

 

4.4           [*****]

 

Article 5.  QUALITY AND SERVICE

 

5.1           SUPPLIER
shall comply with the service and quality performance requirements as specified
on Exhibits
F and G attached hereto (“Service Requirements”) for SUPPLIER
performance ratings.  [*****]

 

5.2           If
SUPPLIER identifies Products that do not meet the requirements in
Section 4.1 during its manufacturing process, SUPPLIER shall not ship such
Products to COORS, [*****]

 

5.3           SUPPLIER
shall not deliver any Products that have been previously returned as not being
in conformance with Section 4.1  [*****]

 

9

 

 [*****] COORS reserves the right to reject Products if the
Products fail to comply with Section 4.1.

 

ARTICLE 6.  CONSIDERATION

 

6.1                               Contract Price.

COORS shall pay to SUPPLIER a sum of money determined in accordance
with the schedule attached hereto as Exhibit C1 (the “Contract Price”). [*****]

 

6.2                               Payment Terms and Invoices.

[*****] Statements
shall be mailed to:  Coors Brewing
Company, Disbursements Department, PO Box 889, CE346, Golden, CO 80402-0889.

 

6.3                               Agreement Binding on Subcontractors.

Any SUPPLIER subcontractors for the manufacture of Products under this
Agreement shall agree to be bound by all applicable provisions of this
Agreement.  SUPPLIER shall ensure that
any approved agent, representative, assign or subcontractor has executed an
appropriate agreement prior to the commencement of work.

 

6.4                               [*****]

[*****]

 

10

 

ARTICLE 7.  COMPLIANCE

 

7.1                               Government Regulations.

Unless otherwise exempt and to the extent applicable:

 

(a)           the
clauses required to be incorporated into government contracts under 41 C.F.R.
Sections 60-1.4, 60-250.5(a), 60-741.5(a), 48 C.F.R. 22.810, 48 C.F.R. 22.1308,
and 48 C.F.R. 22.1408 are incorporated into this Agreement by reference.

 

(b)           SUPPLIER
shall comply with all requirements of (i) Executive Order 11246, as
amended, and the regulations issued thereunder, (ii) the requirements of
Section 503 of the Rehabilitation Act of 1973 as amended, and the regulations
issued thereunder, (iii) the requirements of Section 503 of the
Vietnam Era Veterans’ Readjustment Assistance Act of 1972, as amended, 38
U.S.C.§ 4212, Executive Order 11702, and all regulations thereunder,
(iv) the reporting requirements set forth in 61 C.F.R. 61-250.10 of the
Americans with Disabilities Act of 1990, 42 U.S.C. § 12112; and
(v) the requirements of 41 C.F.R. Chapter 60.

 

With respect to (v) above, SUPPLIER certifies that if it has fifty (50)
or more employees and if it anticipates sales to COORS in connection with
government contracts of $50,000 or greater, it will develop a written
affirmative action compliance program for each of its establishments consistent
with the rules and regulations by the Department of Labor at 41 C.F.R. Chapter
60.

 

7.2          General
Laws and Permits.  With respect to this
Agreement, SUPPLIER shall (i) comply with any and all applicable federal,
state, local or agency laws, regulations, rules, ordinances or other
directives, and (ii) obtain all releases, licenses, permits or other
authorizations required by any governmental body or authority.

 

7.3                               Diverse Suppliers (Minority or Women-Owned Business
Enterprises).

When and if SUPPLIER uses suppliers, including contractors and
subcontractors, to supply goods and services for COORS’ benefit under this
Agreement, SUPPLIER [*****], if
such suppliers are both qualified and competitive.  At any time, COORS may [*****],
consistent with COORS’ diversity goals. 
A diverse supplier is a for-profit enterprise located in the United States
or its trust territories, which is controlled, operated and 51 percent owned by
a minority member or woman.  Minority
members are individuals who are African American, Hispanic American, Native
American, Asian-Pacific American and Asian-Indian American.  SUPPLIER will report [*****] on diverse suppliers on the form
attached hereto as

 

11

 

Exhibit H
each quarter, and report [*****]
at the end of each calendar year.

 

7.4                               WHAM Training.

Upon COORS’ request, SUPPLIER shall require all employees of SUPPLIER
and its subcontractors to attend a Workplace Hazard and Awareness Management
training seminar (“WHAM”) at such time and place designated by COORS prior to
working at or on any of COORS’ facilities or property.

 

ARTICLE 8.  INTELLECTUAL PROPERTY

 

8.1                               Technology Agreement.

 

[*****]

 

8.2                               Product
Design.

All drawings, sketches, photography, renderings, artwork, aesthetic
design and trade dress features (referred to collectively as “Product Design”)
disclosed by COORS shall be COORS Property. 
[*****]

 

8.3                               COORS Property.

All materials, inventions, know-how, trademarks, information, data,
writings and other property in any form whatsoever, which are provided to
SUPPLIER by or on behalf of COORS or which are used by SUPPLIER with respect to
the performance of its obligations hereunder, and which were owned by COORS
prior to being provided to SUPPLIER shall remain the property of COORS (“COORS
Property”).  SUPPLIER shall have the
right to use [*****] any COORS
Property supplied to it to the extent necessary to enable SUPPLIER to perform
its obligations hereunder, but SUPPLIER shall not acquire any other right,
title or interest in the COORS Property.

 

12

 

8.4                               SUPPLIER Property.

All materials, inventions, know-how, trademarks, information, data,
writings and other property, in any form whatsoever, which are provided to
COORS by or on behalf of SUPPLIER, or which were owned by SUPPLIER prior to
being provided to COORS, shall remain the property of SUPPLIER (“SUPPLIER
Property”).  Without limiting the
generality of the foregoing, any intellectual property relating to the method,
apparatus, or manufacturing process shall at all times remain SUPPLIER
Property.  COORS shall acquire no right,
title or interest in SUPPLIER Property [*****].

 

8.5                               Return of Documents and Things.

All COORS Confidential Information and COORS Property, made available
to SUPPLIER by COORS or created or developed by SUPPLIER for COORS in
accordance with paragraph 8.2 shall be delivered to COORS upon written request
by COORS or upon the expiration or earlier termination of this Agreement.

 

8.6                               No Reservation of Rights.

SUPPLIER represents that no rights are reserved to SUPPLIER which would
interfere with (a) COORS’ use of Products purchased hereunder or (b) the use of
Product Designs which are COORS Property or COORS Confidential Information
hereunder.

 

8.7                               Overruns and Second-Quality Goods.

Production overruns, second-quality goods, and any Products rejected or
returned by COORS and bearing any of COORS trademarks, trade names, COORS
Confidential Information, or COORS Property shall not be sold, distributed or
used in any manner by SUPPLIER without the prior written consent of COORS.

 

8.8                               Definitions.

For purposes of this Article 8.

 

(a)           “COORS
Confidential Information” includes trade secrets and other confidential and
proprietary information of COORS, including without limitation, COORS’
formulas, techniques, and methods of manufacture and/or operation; product
designs, drawings, specifications, prototypes and samples and results of
research and development, including abandoned projects; intellectual property
rights and Product Design, (as set forth in this Article 8); computer
programs in source code or object code; costs of products; the prices it
obtains or has obtained or at which it sells or has sold its products or
services, including discounts; customer lists, including name, address,
telephone number, customer contact, sales history and product mix; compensation
paid to employees and other terms of employment; specialized equipment used in
its processes; any other information which SUPPLIER may become privy to by
reason of its relationship with COORS; any oral or written information from
COORS involving the foregoing or other written information marked
“confidential”; the terms and

 

13

 

conditions of this Agreement, the cost of the
Products, all information and work product supplied by COORS to SUPPLIER, and
the Contract Price.

 

(b)           “SUPPLIER
Confidential Information” includes trade secrets and other confidential and
proprietary information of SUPPLIER, including without limitation, SUPPLIER’s
formulas, techniques, and methods of manufacture and/or operation; products
designs, drawings, specifications, prototypes and samples and results of
research and development, including abandoned projects; intellectual property
rights and Product Design, (except as set forth in this Article 8);
computer programs in source code or object code; costs of products; the prices
it obtains or has obtained or at which it sells or has sold its products or
services, including discounts; customer lists, including name, address,
telephone number, customer contact, sales history and product mix; compensation
paid to employees and other terms of employment; specialized equipment used in
its processes; any other information which COORS may become privy to by reason
of its relationship with SUPPLIER; any oral or written information from
SUPPLIER involving the foregoing or other written information marked
“confidential”; the terms and conditions of this Agreement, the cost of the
Products, all information and work product supplied by SUPPLIER to COORS, all
information provided to SUPPLIER by COORS, and the Contract Price.

 

(c) “COORS” in this Article 8 means COORS and its
parents, subsidiaries, divisions, affiliates, subcontractors and each of their
employees, officers and agents.

 

(d)           “SUPPLIER”
in this Article 8 means SUPPLIER and its parents, subsidiaries, divisions,
affiliates, subcontractors and each of their employees, officers and agents.

 

8.9                               Covenant of Confidentiality.

Each Party, and their respective employees, officers, directors,
representatives, subsidiaries, affiliates, assignees, subcontractors and any
and all persons or business entities acting under one or any of them (the
“Disclosees”): (a) shall keep confidential the terms of this Agreement, and (b)
shall treat in confidence and not disclose to others any COORS Confidential
Information or SUPPLIER Confidential Information (as defined here) of the
other, which such Disclosees may have furnished to them by the other Party
hereto or by any third party, or which such Disclosees may have accessed in the
performance of this Agreement.  The
foregoing confidentiality obligation shall not apply to the extent that any
such information is: (i) generally available to the public; (ii) acquired from
a third party rightfully having such information and under no obligation to not
disclose it to the Disclosees, (iii) already lawfully in the Disclosee’s
possession from a source other than the Disclosing Party; (iv) approved by
written authorization by the Disclosing Party for release by the Disclosee; or
(v) developed by a Disclosee independently of any Confidential Information
disclosed to such Party.  [*****]

 

14

 

[*****]

 

8.10                        Exclusions.

“Confidential Information” shall not include (i) information that is in
the public domain through no act, omission or fault of SUPPLIER, (ii)
Confidential Information that SUPPLIER is required to disclose pursuant to a
court order, provided that SUPPLIER informs COORS of the court order and
assists COORS in taking reasonable steps to seek a protective order or other
appropriate action, and (iii) Confidential Information that SUPPLIER in good
faith believes that SUPPLIER is required by law to disclose; provided, SUPPLIER
shall first notify COORS of such good faith belief in writing and shall not
make any such disclosure if COORS provides SUPPLIER with an opinion prepared by
independent counsel for COORS that disclosure is not required by law [*****]

 

8.11                        Breach of Confidentiality.

SUPPLIER acknowledges and agrees that its breach, or alleged breach, of
this Article 8 relating to COORS Confidential Information may result in
irreparable harm to COORS.  [*****] 
Therefore, in the event of a breach, or alleged breach, of the
provisions of this Article 8 by SUPPLIER, [*****]

 

ARTICLE 9.  INSURANCE

 

Insurance requirements specified in Section 6.13 of the Operating
Agreement shall apply, but are not in addition to, this Agreement.  

 

ARTICLE 10.  BREACH, FORCE MAJEURE, REMEDIES AND
TERMINATION

 

10.1                        Breach.

The occurrence of any one or more of the following events shall
constitute an event of default of this Agreement and shall constitute cause for
termination by the other Party:

 

(a)           Failure
by SUPPLIER to observe or perform any of the material obligations, covenants,
conditions, representations or warranties required of SUPPLIER pursuant to this
Agreement, where such failure is not remedied within [*****] after written notice thereof from COORS to SUPPLIER;
or

 

(b)           Failure
by COORS to observe or perform any of the material obligations, covenants,
conditions, representations or warranties required of COORS pursuant to this
Agreement, where such failure is not remedied within [*****] after written notice thereof from SUPPLIER to COORS;
or

 

15

 

(c)           If
a Party is insolvent, the Party seeks protection from creditors, the Party
makes a general assignment for the benefit of creditors, or a person or entity
commences a proceeding against a Party under any bankruptcy or insolvency
statute seeking the adjudication of that Party as bankrupt or insolvent or the
appointment of a trustee or receiver for all or substantially all of the
Party’s assets, which proceeding remains undismissed or undischarged for  [*****]

 

10.2                        Force Majeure.

(a)           The
Events.  Notwithstanding anything
contained in this Agreement to the contrary, 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,  [*****] acts, regulations or other requirements of domestic or
foreign federal, state, county, municipal, or local governments or branches,
subdivisions or agencies thereof (“Force Majeure”), subject to the various
limitations provided in this Section 10.2.

 

(b)           Notice.  Each Party will promptly notify the other
Party of the occurrence of any Force Majeure which may affect its performance
of this Agreement and the anticipated length of the Force Majeure.  [*****]

 

(c)           Rights.

 

[*****]  

 

 

16

 

[*****]

 

[*****]

 

(d)           Termination
Because of Force Majeure.  [*****]

 

10.3                        Remedies.

(a)           In
addition to any remedies available to COORS as provided herein, [*****]

 

(b)           Upon
the occurrence of an event of default by SUPPLIER, COORS shall have the
following remedies:

 

17

 

(i)            [*****]

 

(ii)           [*****]

 

(iii)          [*****]

 

(c)           [*****]

 

(d)           Upon
the occurrence of an event of default by COORS, SUPPLIER shall have [*****]

 

(e)           [*****]

 

10.4                        Termination.

[*****]

 

10.5                        [*****]

[*****]

 

18

 

[*****]

 

ARTICLE 11.  DISPUTE RESOLUTION PROCEDURES

 

11.1                        Negotiation.

In the event of any controversy, claim, question, disagreement or
dispute considered by the RMBC Management Committee established in the
Operating Agreement (collectively the “Dispute”) arising out of or relating to
this Agreement, or the relationship between the Parties, the Parties shall
first use their best efforts to resolve the Dispute through negotiation.  During negotiation, the Parties shall,
without delay, continue to perform their respective obligations under this
Agreement that are not related to the Dispute. 
To invoke the dispute resolution procedures set forth in this Article,
the invoking Party shall give to the other Party written notice of its decision
to negotiate.  The notice shall include
a detailed description of the issues subject to the Dispute and a proposed
resolution thereof.  Within five (5)
business days after the written notice has been received by the other Party,
both Parties shall designate representatives to settle the Dispute.  The designated representatives shall be the chief
corporate executive officers (“CEO”) of their respective corporations or other
individuals holding comparable executive positions with decision-making
authority to settle the Dispute without further ratification by the Parties.  The designated representatives shall consult
and negotiate with each other in good faith and attempt to reach a just and
equitable resolution satisfactory to both Parties within fifteen (15) business
days after the deadline for designation of the representatives.  If those designated representatives do not
timely resolve the Dispute through negotiation, the Dispute may be submitted to
resolution pursuant to Section 11.2.

 

11.2                        Mediation.

If the Dispute is submitted to mediation, the Parties agree that the
mediation will be administered by the American Arbitration Association (“AAA”)
under its Commercial Mediation Rules. 
Mediation shall take place in Denver, Colorado, and any fees and
expenses shall be allocated and paid by the Parties equally.  If the Parties do not resolve the Dispute
through mediation within thirty (30) days from the date the demand is made, the
Dispute shall be submitted to arbitration in accordance with Section 11.3.

 

19

 

11.3                        Submission to Arbitration.

If the Parties do not resolve the Dispute pursuant to Sections 11.1 or
11.2, the Parties hereby agree to submit the Dispute to binding arbitration in
Denver, Colorado, in accordance with the AAA Commercial Arbitration Rules
effective at the time of submission.  This
submission and agreement to arbitrate shall be specifically enforceable in the
U.S. District Court for the District of Colorado or the District Court,
Jefferson County, State of Colorado.  In
the event either Party seeks relief in any court to enforce this Article, that
Party shall be entitled to its reasonable attorneys’ fees and costs incurred
with such enforcement.  Arbitration may
proceed in the absence of either Party if notice of the proceedings has been given
to such Party.

 

11.4                        The Federal Arbitration Act Applies.

This Agreement involves interstate commerce and is subject to the
Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1-16.  The FAA preempts any inconsistent state or
local law, rule or regulation concerning arbitration.

 

11.5                        Selection of Arbitrator(s).

All Disputes shall be resolved by a single arbitrator unless the amount
in controversy is over $500,000, in which case the Dispute shall be decided by
a panel of three arbitrators.  The
Parties shall exchange one or more lists of neutral arbitrators that they
consider suitable and shall mutually agree upon the arbitrator(s).  If the Parties are unable to reach agreement
on the selection of the arbitrator(s) within fifteen (15) days from the date of
the arbitration demand, the AAA shall choose as many arbitrators as necessary.

 

11.6                        Discovery In Arbitration.

Each Party shall have the same discovery rights as afforded under the
Federal Rules of Civil Procedure during arbitration.

 

11.7                        The Arbitration Award.

The arbitrator(s) shall provide a binding decision with limited
findings of fact, basic conclusions of law and a break down of damages to the
Parties in support of any award or decision the arbitrator(s) make(s).  The prevailing Party, as determined by the
arbitrator(s), shall be entitled to all fees and costs associated with the
arbitration.  Costs and fees mean all
reasonable pre-award expenses of the arbitration, including any arbitrator
fees, administrative fees, out-of-pocket expenses such as copying, court costs,
witness fees, and attorneys’ fees. The Parties agree to abide by all awards
rendered in such proceedings and such awards shall be final and binding on all
Parties.  All awards payable to COORS as
a prevailing Party shall be paid in full within thirty (30) days of the date of
the award order.

 

11.8                        Limitation of Liability.

[*****]

 

20

 

11.9                        Confidentiality.

All proceedings pursuant to this Article shall be
confidential.  Any admission or
statement made pursuant to this Article shall not be admissible or used in
any arbitration or judicial proceeding, except to enforce or vacate the
arbitration award pursuant to Section 11.7.

 

ARTICLE 12.  NOTICES

 

Any notice, demand, consent, election, offer, approval, request,
invoice backup documentation or other communication (collectively, a “notice”)
required under or provided pursuant to this Agreement must be in writing and
either delivered personally, sent by overnight delivery courier, or sent by
certified or registered mail, postage prepaid, return receipt requested to the
person designated below (the “Designated Representative”).  Notice shall be deemed given when received.

 

A notice must be addressed as follows:

 

	
  To SUPPLIER:

  	
   

  	
  Rocky Mountain Bottle Company, LLC

  
	
   

  	
   

  	
  Attention: 
  Vice President and General Manager

  
	
   

  	
   

  	
  10619 West 50th Avenue

  
	
   

  	
   

  	
  Wheat Ridge, CO 
  80033

  
	
   

  	
   

  	
  Telephone number: 303-425-7965

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Owens-Brockway Glass Container Inc.

  
	
   

  	
   

  	
  Attention: 
  Legal Department

  
	
   

  	
   

  	
  One SeaGate

  
	
   

  	
   

  	
  Toledo, OH 
  43666

  
	
   

  	
   

  	
  Telephone number: 419-247-5000

  
	
   

  	
   

  	
   

  
	
  To COORS:

  	
   

  	
  Coors Brewing Company

  
	
   

  	
   

  	
  Coors Designated Representative

  
	
   

  	
   

  	
  Attention:   [*****]  

  
	
   

  	
   

  	
  Manager, Strategic Sourcing

  
	
   

  	
   

  	
  17755 West 32nd Avenue, CE240

  
	
   

  	
   

  	
  Golden, CO 
  80401-0030

  
	
   

  	
   

  	
  Telephone number: 303-277-6181

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Coors Brewing Company

  
	
   

  	
   

  	
  Attention: 
  Assistant General Counsel, Operations

  
	
   

  	
   

  	
  311 Tenth Street, NH335

  
	
   

  	
   

  	
  Golden, CO 
  80401-0030

  
	
   

  	
   

  	
  Telephone number: 303-277-3002

  

 

21

 

ARTICLE 13.  MISCELLANEOUS

 

13.1                        Authority.

Each Party warrants that it has the full authority and power to enter
into and perform under this Agreement and to make all representations,
warranties and grants as set forth herein.

 

13.2                        Survival.

All covenants, indemnities, guarantees, representations, and warranties
by a Party arising prior to or upon the expiration or termination of this
Agreement (whether by completion or earlier termination) shall survive such
expiration.

 

13.3                        Enforceability.

Either Party’s failure in any one or more instances to insist upon
strict performance of any of the terms and conditions of this Agreement or to
exercise any right herein conferred shall not be construed as a waiver or
relinquishment of that right or of that Party’s right to assert or rely upon
the terms and conditions of this Agreement. 
Any express waiver of a term of this Agreement shall not be binding and
effective unless made in writing and properly executed by the waiving Party.

 

13.4                        Amendments.

This Agreement, including Exhibits, may not be amended except in
writing properly executed by both Parties. 
Except as specifically amended, this Agreement shall remain in full
force and effect as written.

 

13.5                        Assignment.

SUPPLIER shall not have the right or power to assign its rights or
delegate its obligations hereunder without the express written consent of
COORS.  Any attempt to do so without
such consent shall be null and void and shall permit COORS the right to cancel
and terminate this Agreement.  In the
event this Agreement is properly assigned, the provisions of this Agreement
shall bind and benefit the Parties hereto and their representatives, successors
and assigns.

 

13.6                        Severability.

Any invalid or unenforceable provision shall be deemed severed from
this Agreement to the extent of its invalidity or unenforceability, and the
remainder of this Agreement shall remain in full force and effect.

 

13.7                        Complete Agreement.

With respect to the subject matter hereof, this Agreement, and all
Exhibits thereto, constitute the complete and exclusive agreement between the
Parties.  It supersedes all prior
written and oral statements, conditions, obligations, representations or
warranties.  In the event of any
inconsistency between this Agreement and any Exhibit, the provisions of this
Agreement shall take precedence.

 

22

 

13.8        Counterparts.  This Agreement may be executed simultaneously in two or more
counterparts which, when taken together, shall be deemed an original and
constitute one and the same document.  The
signature of any Party to the counterpart shall be deemed a signature to this
Agreement, and may be appended to, any other counterpart.  Facsimile transmission of executed signature
pages shall be sufficient to bind the executing Party.

 

13.9                        Headings.

The headings to the various sections and paragraphs of this Agreement
are solely for the convenience of the Parties, are not part of this Agreement
and shall not be used for the interpretation of the validity of this Agreement
or any provision hereof.

 

13.10                 Jurisdiction And Venue; Choice Of Law.

This Agreement shall be governed by the laws of the state of
Colorado.  Any arbitration or
enforcement of an arbitration award shall be brought in Jefferson County
District Court, State of Colorado or the U.S. District Court for the District
of Colorado, if appropriate, and each Party submits to the exclusive
jurisdiction of said courts and waives the right to change venue. SUPPLIER
further consents to the exercise of personal jurisdiction by any such court
with respect to any such proceeding.

 

IN WITNESS
WHEREOF, the Parties hereto have caused this Agreement to be executed by their
duly authorized representatives as of the year and day first written above.

 

	
  ROCKY MOUNTAIN BOTTLE

  COMPANY LLC, a Colorado limited

  liability company

  	
  COORS BREWING COMPANY, a

  Colorado corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Lynn Utter

  	
   Robert K. Caseria

  
	
   

  	
   

  
	
  Title:

  	
  Manager

  	
   

  	
  Title:

  	
  Chief Supply Chain Officer

  
	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Date:

  	
   

  
										

 

23

 

*****EXHIBITS A THROUGH H REDACTED

 

24

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