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Sample Business Contracts

Production Agreement - Boston Beer Corp. and High Falls Brewing Co. LLC

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                           SECOND AMENDED AND RESTATED
                                AGREEMENT BETWEEN
                             BOSTON BEER CORPORATION
                                       AND
                         HIGH FALLS BREWING COMPANY, LLC



      THIS AGREEMENT ("Agreement"), effective as of the 15th day of April, 2002
(the "Effective Date"), by and between BOSTON BEER CORPORATION, a Massachusetts
corporation with its principal place of business at 75 Arlington Street, Boston,
MA 02116 ("Boston Beer"), and HIGH FALLS BREWING COMPANY, LLC, a New York
limited liability company with its principal place of business at 445 St. Paul
Street, Rochester, NY 14605 ("High Falls"), shall modify, amend and restate the
Amended and Restated Agreement entered into on the 30th day April, 1997, by and
between BOSTON BREWING COMPANY, INC., d/b/a THE BOSTON BEER COMPANY, a
Massachusetts corporation ("Boston Brewing"), for itself and as the sole general
partner of Boston Beer Company Limited Partnership, a Massachusetts limited
partnership ("BBCLP"), and THE GENESEE BREWING COMPANY, INC., a New York
corporation ("Genesee").

      WHEREAS, as of July 25, 1995, Boston Brewing, for itself and as the sole
general partner of BBCLP, and Genesee entered into a production agreement under
which Genesee agreed to brew, package and sell Products for Boston Brewing and
BBCLP, which agreement was amended and restated by instrument dated April 30,
1997 (the "Prior Agreement");

      WHEREAS, as of December 15, 2000, Genesee assigned the Prior Agreement to
High Falls;

      WHEREAS, on December 31, 2000, BBCLP transferred all of its assets and
liabilities to Boston Beer and consequently Boston Beer assumed the rights and
obligations of BBCLP and Boston Brewing under the Prior Agreement; and



[*] 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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Boston Beer Agreement
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      WHEREAS, Boston Beer and High Falls (sometimes hereinafter referred to as
the "Parties" or either of them as a "Party") wish to further amend the terms
and conditions of the Prior Agreement as set forth below.

      ACCORDINGLY, for and in consideration of the mutual agreements contained
herein, the Parties, intending to be legally bound, hereby agree as follows:

      1.    SCOPE OF AGREEMENT

            (a) During the term of this Agreement as set forth in Paragraph 4
      hereof and in accordance with the terms set forth herein, High Falls
      agrees to brew, package and sell the Products to Boston Beer and Boston
      Beer agrees to purchase the Products from High Falls. High Falls and
      Boston Beer acknowledge that they both wish to develop a mutually
      beneficial, long-term relationship under this Agreement. The Parties agree
      to act in good faith and to use their best efforts to resolve differences
      arising during the course of their relationship in a mutually agreeable
      manner. The Parties acknowledge that future needs may require one or both
      of the Parties to make capital investments in High Falls' plant and
      equipment and that in the event any such investment is contemplated by
      Boston Beer, the Parties will negotiate in good faith and use their best
      efforts to agree upon any amendments to this Agreement that may be
      required to facilitate the long-term relationship contemplated by the
      Parties.

            (b) CORE PRODUCT. For purposes of this Agreement, "Core Product"
      shall mean: (i) *, in each case packaged in cases of 4/6, 2/12 packs in a
      tray, or 24 loose twelve ounce bottles and 12 twenty-two ounce bottles, in
      half barrel or quarter barrel kegs, and any other package types or
      configurations that the parties mutually agree to use for packaging such
      products, or (ii) any other Boston Beer * product(s) that the parties
      mutually agree in writing shall replace one or more of such products as
      the Core Product.

            (c) OTHER PRODUCTS. High Falls acknowledges that Boston Beer has
      requested that High Falls evaluate the feasibility of producing other
      Boston Beer products, recognizing limitations that may exist due to
      storage of multiple ingredients and yeast varieties, the



[*] 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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Boston Beer Agreement
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      availability and capacity of brewing vessels and storage tanks and the
      like. It is the intention of the Parties that High Falls shall brew,
      package and sell to Boston Beer other Boston Beer products upon terms
      mutually agreed to in writing by High Falls and Boston Beer. For purposes
      of this Agreement, "Other Products" shall mean any Boston Beer brand or
      brands other than the Core Product, whether currently offered or developed
      in the future, which the parties mutually agree to add to this Agreement
      during any calendar year in accordance with the following procedure: By
      November 1st in each calendar year, Boston Beer shall provide High Falls
      with an annual forecast for the following calendar year, showing Boston
      Beer's monthly projections by package for the Core Product and any Other
      Products. At least *% of the projected volume in each calendar year shall
      be the Core Product. In the event that the annual forecast includes any
      proposed Other Products, Boston Beer will furnish High Falls with the
      brewing formula and procedures and product specifications for the proposed
      Other Products. High Falls shall: (i) review the specifications and
      brewing formula for any proposed Other Products; (ii) propose a Fixed Cost
      for each of the proposed Other Products; and (iii) propose to Boston Beer
      the minimum order size, tank usage and other production and capacity
      parameters. Boston Beer may accept or reject High Falls' proposal with
      respect to each of the proposed Other Products. If Boston Beer accepts the
      High Falls proposal for a proposed Other Product, such Other Product shall
      be deemed to be added to this Agreement only for the calendar year covered
      by the annual forecast. If in any annual forecast, Boston Beer proposes an
      Other Product that was produced by High Falls in a prior year, and: (x)
      the specifications, brewing formula and procedures, Brewing Ingredients,
      Packaging Materials and the timing and volume of production for such Other
      Product have not changed, and (y) the capacity utilization required for
      High Falls' own products and, from and after * (if applicable), other
      contract products, are substantially the same; then High Falls shall not
      unreasonably refuse to produce such Other Product and the Fixed Charge
      proposed by High Falls for such Other Product shall be the Fixed Charge
      paid by Boston Beer for such Other Product in the most recent prior year,
      increased by the annual adjustment factor for the Core Product set forth
      in Subparagraph 2(b) hereof.

            (d) The Fixed Charge proposed by High Falls for any Other Products,
      and for the Core Product in any package size or type other than those
      identified in Subparagraph





[*] 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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Boston Beer Agreement
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      1(b) hereof, shall be based on the expected incremental cost differences,
      when compared with Samuel Adams Boston Lager, associated with the brewing
      and/or packaging formulations and processes required in the production of
      such Other Products or package. If High Falls determines during the trial
      brews or initial production of any Other Product that the brewing formula,
      procedures or product specifications furnished by Boston Beer are
      materially inaccurate, then High Falls shall notify Boston Beer in writing
      and High Falls may cease production of such Other Product (after
      completion of any production in progress) until the parties mutually agree
      on adjustment of the brewing formula, procedures or product specifications
      and/or the Fixed Charge for such Other Product.

            (e) PRODUCTS. For purposes of this Agreement, the Core Product and
      all Other Products produced during any calendar year shall be collectively
      referred to as the "Products".

            (f) BARREL. For purposes of this Agreement, the term "barrel" shall
      mean 31 U.S. gallons (3,968 ounces). The following calculation shall be
      used to measure barrels of the Products packaged in containers other than
      Kegs:

CONTAINER VOLUME IN OUNCES X CONTAINERS PER CASE UNIT X NO. OF CASE UNITS

Barrel Volume in Ounces

      2.    PRICE AND MANNER OF PAYMENT

            (a) Except as otherwise provided in the following subparagraphs of
      this Paragraph 2, Boston Beer shall pay High Falls for the Products an
      amount (the "Unit Price") equal to: (i) a "Fixed Charge" as determined in
      accordance with Subparagraphs 1(c) and 1(d) hereof or as set forth in
      Subparagraph 2(b) hereof, plus (ii) except as otherwise provided in
      Subparagraph 3(a)(iv), the net cost to High Falls of all Brewing
      Ingredients [as defined in Paragraph 3(a)] purchased by High Falls and
      used in producing the Products; all federal, state and local excise taxes
      attributable to the Products that are paid by High Falls; and deposit
      charges of $* per Keg, $* per bottle pallet and $* per draft pallet, or
      such other



[*] 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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Boston Beer Agreement
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      amounts as the parties mutually agree. For this purpose, "net cost to High
      Falls" shall include purchase discounts, but not discounts resulting from
      credit terms.

            (b) The Fixed Charge for Samuel Adams Boston Lager packaged in
      bottles, shall be $* per unit of twenty-four loose 12-ounce bottles, 4/6
      12-ounce bottles, 2/12 12 ounce bottles in a tray or twelve 22-ounce
      bottles (in each instance, a "Case Unit;" it being the intent that the
      Fixed Charge for other 22 ounce package configurations produced by High
      Falls be prorated) plus an amount per Case Unit to be agreed upon from
      time to time which reflects the savings inuring to the benefit of Boston
      Beer (currently $* per case) if High Falls should elect, in its sole
      discretion, to utilize in its production process bulk glass as opposed to
      set-up glass used as of the date hereof by High Falls. The Fixed Charge
      for Samuel Adams Boston Lager packaged in one-half barrel (15.5 U.S.
      gallons) or one-quarter barrel (7.75 U.S. gallons) kegs (individually
      referred to as a "Keg" and collectively referred to as "Kegs") shall be $*
      per Keg. Commencing on January 1, * and on each January 1 thereafter
      during the term of this Agreement through and including January 1, *, the
      Fixed Charge component of the Unit Price for the Products shall be
      increased by *%. If the term of this Agreement has been extended by Boston
      Beer pursuant to Subparagraph 4(b), then, effective January 1, *, the
      Fixed Charge component of the Unit Price for the Products shall be
      increased by an amount equal to * percent (*%) of the increase in the
      Consumer Price Index - All Urban Consumers as published by the United
      States Department of Commerce - Bureau of Labor Statistics (the "CPI
      Increase") for the previous 12-month period. If the term of this Agreement
      has been extended by Boston Beer pursuant to Subparagraph 4(b), on *, the
      Fixed Charge for all Products shall be increased by $* per barrel, or $*
      per Case Unit (the "Fixed Charge Adjustment"). On January 1, *, the Fixed
      Charge component of the Unit Price for the Products shall be increased by
      an amount equal to (i) * percent (*%) of the CPI Increase applied to the
      Fixed Charge in effect on * (the "Fixed Charge Component Increase"), plus
      (ii) the difference between *% of the CPI Increase less *% applied to the
      Fixed Charge Adjustment (i.e., the $* referred to above) (the "Fixed
      Charge Adjustment Increase"), except that if the calculation pursuant to
      this clause (ii) results in a negative number, the Fixed Charge Adjustment
      Increase shall be zero. For example, if the Fixed


[*] 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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Boston Beer Agreement
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      Charge effective January 1, * were $* per Case Unit and the CPI Increase
      for calendar year * were *%, then the Fixed Charge effective January 1, *
      would be calculated as follows:

         CALCULATION OF FIXED CHARGE COMPONENT INCREASE:


                  Fixed Charge at *                   $*
                  times *% of CPI Increase (*%)                 X  .*
                                                                ------
                  Fixed Charge Component Increase  =          = $*





[*] 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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Boston Beer Agreement
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         CALCULATION OF FIXED CHARGE ADJUSTMENT INCREASE:
         -----------------------------------------------

                  Fixed Charge Adjustment (per Case Unit)     $*
                  times *% of CPI Increase  (*%)
                           minus *% (*%--*%=*%)               X  .*
                                                              -----
                  Fixed Charge Adjustment Increase          = $*

         CALCULATION OF FIXED CHARGE EFFECTIVE JANUARY 1, *:
         --------------------------------------------------

                  Fixed Charge at *                            $*
                  plus Fixed Charge Component Increase         +*
                  plus Fixed Charge Adjustment                 +*
                  plus Fixed Charge Adjustment Increase        +*
                                                             ----
                  Fixed Charge effective 1/1/*               = $*

Effective January 1 of each calendar year during the remainder of the term of
this Agreement, with the first adjustment to be effective January 1, *, the
Fixed Charge component of the Unit Price for the Products shall be increased by
an amount equal to * percent (*%) of the increase of the CPI for the previous
12-month period. High Falls must notify Boston Beer of any adjustments pursuant
to this Subparagraph 2(b) no later than March 31 of each year (or, if later, the
date that is 30 days after the Department of Commerce publishes the Consumer
Price Index covering the relevant period), with appropriate documentation
supporting any change in such Fixed Charge.

            (c) Until and including *, notwithstanding Paragraph 2(b) above: (i)
      if volume of all bottled Products during any calendar year exceeds in the
      aggregate * barrels, the then current Fixed Charge components of the Unit
      Price on all such excess volume of bottled Products during such calendar
      year shall be reduced by $* per Case Unit; and (ii) if volume of all
      Products packaged in the Sankey Keg during any calendar year exceeds in
      the aggregate * barrels, the then current Fixed Charge components of the
      Unit Price on all Products packaged in the Sankey Keg in excess of *
      barrels during such calendar year shall be reduced by $.* per Keg. The
      foregoing reductions in the Fixed Charge shall apply only if the Core
      Product comprises at least *% of all Products purchased by Boston Beer
      during such calendar year, and are subject to the provisions of
      Subparagraph 4(e) below. If the term of this Agreement is extended by
      Boston Beer pursuant to Subparagraph 4(b), this Subparagraph 2(c) shall no
      longer apply, effective as of *.



[*] 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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Boston Beer Agreement
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            (d) Boston Beer and High Falls (or their predecessors in interest)
      have undertaken improvements and modifications to * and Boston Beer
      contributed an agreed upon amount to the capital cost of such improvements
      and modifications. In consideration thereof, High Falls will pay to Boston
      Beer an annual fee (or ratable portion thereof) for each calendar year or
      portion thereof during the term of this Agreement through and including *,
      based on the volume of Products packaged in bottles during each calendar
      year under this Agreement. The obligation to pay this fee under this
      Agreement shall commence as of * and shall terminate * and is subject to
      the provisions of Subparagraph 4(e) below. The fee shall be paid within
      thirty (30) days after the end of each calendar year and shall be
      calculated as follows:

                           Volume of
                           Products Produced in Bottles
                           During Calendar Year                   Annual Fee
                           --------------------                   ----------

                           Less than * bbls                       $*
                           * up to * bbls                         $*
                           * up to * bbls                         $*
                           More than * bbls                       $*

If the term of this Agreement is extended by Boston Beer pursuant to
Subparagraph 4(b), this Subparagraph 2(d) shall no longer apply, effective as of
*.

            (e) Unit Prices are F.O.B. the carrier's trucks at High Falls' docks
      (i.e., the Unit Price includes the cost and risk of loading trucks at High
      Falls' dock) and include High Falls' labor costs, overhead, profit and
      other costs incurred in the brewing and packaging of the Product.

            (f) On the date the Products are shipped, High Falls will invoice
      Boston Beer for the Fixed Charge, all federal, state and local excise
      taxes attributable to the Products that are paid by High Falls and the Keg
      and pallet deposit charges. High Falls will invoice Boston Beer for all
      Brewing Ingredients purchased by High Falls at High Falls' standard cost
      when the Products are shipped (with monthly reconciliation to reflect High
      Falls' actual



[*] 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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Boston Beer Agreement
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      cost). High Falls may periodically adjust its standard cost for Brewing
      Ingredients to more accurately reflect its actual costs. High Falls shall
      notify Boston Beer in writing of any adjustment in its standard cost at
      least ten (10) days prior to the date such adjustment will take effect.
      All invoices will be sent to Boston Beer by telecopier and Boston Beer
      will pay each Friday by electronic funds transfer all invoices that relate
      to shipments of the Products made by High Falls during the previous week.
      If High Falls should elect, in its sole discretion, to utilize electronic
      invoicing, Boston Beer will pay on each Wednesday all invoices that relate
      to shipments made during the previous week.

            (g) On the later of the Effective Date or the date upon which both
      Parties have executed this Agreement, Boston Beer will pay to High Falls
      the sum of $*. In addition, Boston Beer will pay to High Falls * percent
      (*%) of the amount that Genesee or its affiliates pays to Boston Beer,
      directly or indirectly, in consideration of its release of the guaranty of
      Genesee of High Falls' obligations to Boston Beer as set forth in the
      Guaranty executed by Genesee on December 15, 2000 (the "Genesee
      Guaranty"). Boston Beer's release of the Genesee Guaranty is contingent on
      its receipt of High Falls' audited financial statements for 2001 and
      current pro-formas that reflect positive cash flow, results of operations
      and debt coverage at levels reasonably acceptable to Boston Beer.

      3.    BREWING INGREDIENTS, PACKAGING MATERIALS AND BREWING SUPPLIES

            (a) For purposes of this Agreement, "Brewing Ingredients" shall be
      defined as all * used to produce the Products. Brewing Ingredients shall
      be purchased and supplied as follows:

            (i) All * used in the brewing of the Products shall be purchased by
Boston Beer or High Falls (at Boston Beer's cost) directly from High Falls'
commercial * suppliers. High Falls and Boston Beer will use their best efforts
to agree upon * specifications for * that will allow High Falls to commingle
storage of * used to produce the Products with * used to produce High Falls' own
products. If High Falls and Boston Beer cannot agree upon




[*] 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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Boston Beer Agreement
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standard * specifications, the Fixed Charge shall be increased to reflect any
additional cost incurred by High Falls for separate handling and storage of *
used in the Products.

            (ii) All * used in the brewing of the Products shall be purchased by
High Falls from Boston Beer. Delivery of * shall be coordinated between High
Falls and Boston Beer.

            (iii) All * used in the brewing of the Products shall be supplied by
Boston Beer at *. All * supplied by Boston Beer shall remain the property solely
and exclusively of Boston Beer and shall be segregated and identified by High
Falls as such. Delivery of * to High Falls shall be coordinated between High
Falls and Boston Beer.

            (iv) All * used in the brewing and packaging of the Products shall
be purchased by High Falls directly from High Falls' commercial * suppliers.
Commencing on the Effective Date, Boston Beer shall pay * percent (*%) of the
cost of all * used in the brewing and packaging of the Products, and High Falls
shall pay the other * percent (*%).

            (b) For purposes of this Agreement, "Packaging Materials" shall be
      defined as all bottles, crowns, labels, cases, cartons, Kegs, tap covers,
      pallets and dust covers and the like used in the packaging and shipment of
      the Products. Packaging Materials shall be purchased and supplied as
      follows:

            (i) Bottles, crowns, labels, cases, cartons, tap covers and the like
shall be purchased by Boston Beer and supplied to High Falls as needed to meet
the Packaging Schedule for the Products.

            (ii) Unless otherwise mutually agreed, Kegs and pallets in
quantities adequate for the volume of the Products to be packaged under this
Agreement shall be purchased by Boston Beer and supplied to High Falls from time
to time. All such Kegs and pallets shall be returned and reused in accordance
with High Falls' standard policies for Keg and pallet return and reuse. From
time to time during the term of this Agreement, Boston Beer shall purchase and
supply to High Falls additional Kegs and pallets in numbers adequate to replace
Kegs and pallets lost or otherwise rendered unusable. All Kegs and pallets shall
conform to the specifications of




[*] 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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Boston Beer Agreement
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Kegs and pallets used by High Falls in packaging and shipping its own products.
High Falls may reject any Kegs or pallets that are damaged, are unacceptably
dirty or do not otherwise conform to High Falls' specifications. All rejected
Kegs shall be held by High Falls for periodic removal by Boston Beer. All
rejected pallets shall be disposed of by High Falls at no charge to Boston Beer.
Upon each delivery to High Falls of Kegs and pallets purchased by Boston Beer,
High Falls shall issue to Boston Beer a credit of $* per Keg, $* per bottle
pallet and $* per draft pallet. High Falls shall maintain records of all Kegs
and pallets received from Boston Beer and provide a monthly reconciliation
showing Kegs and pallets received, Kegs rejected and returned to Boston Beer,
pallets disposed of by High Falls, Kegs and pallets on hand at High Falls and
Kegs and pallets in the float.

      (iii) * shall purchase and supply at its own cost Lock n' Pop, shrink
wrap, label adhesive, hot melt glue and bungs used in packaging and shipping of
the Products.

            (c) Boston Beer has the right, subject to the approval of High
      Falls, which approval will not be unreasonably withheld, to make changes
      in the Packaging Materials. If the proposed new Packaging Materials can be
      produced without modification or addition to High Falls' existing
      equipment, High Falls shall produce the Products using the new Packaging
      Materials upon mutual agreement by High Falls and Boston Beer to any
      adjustment to the Fixed Charge required to compensate High Falls for any
      difference in production cost compared to the cost to produce the Core
      Product in the comparable bottle package. If the proposed new Packaging
      Material requires any modifications or additions to High Falls' existing
      equipment, then the obligations of the parties with respect to such
      modifications or additions shall be governed by Paragraph 9 of this
      Agreement.

            (d) For purpose of this Agreement, "Brewing Supplies" shall be
      defined as zinc sulfate, gypsum, Diatomaceous Earth, and Chill-Garde. *
      shall purchase and supply at its own cost all Brewing Supplies used in the
      brewing of the Product.

            (e) Boston Beer shall have sole responsibility for the selection and
      approval of all Brewing Ingredients, Packaging Materials and Brewing
      Supplies used to produce the




[*] 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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Boston Beer Agreement
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      Products. Boston Beer shall have sole responsibility for the content and
      design of all labels, tap covers, crowns, cartons, cases and other
      Packaging Materials.

            (f) Upon the termination of this Agreement for any reason: (i)
      Boston Beer will purchase from High Falls (w) all Kegs and pallets
      furnished by Boston Beer that are on hand at High Falls at their
      respective credit amounts set forth in Subparagraph 3(b)(ii) above, (x)
      all finished Products at the Fixed Charge, (y) all inventory of work in
      process of the Products at High Falls' cost, and (z) all inventory of
      Brewing Ingredients, Packaging Materials and Brewing Supplies purchased by
      High Falls that are not reasonably useable by High Falls in its own
      products at High Falls' cost; and (ii) High Falls will make available for
      pick up by Boston Beer at High Falls' dock all finished Products, all
      Brewing Ingredients, Packaging Materials and Brewing Supplies referred to
      in Subparagraph 3(e) hereof, and all Kegs, pallets and dust covers on hand
      at High Falls that were furnished by Boston Beer. In the event sales of
      the Products are substantially less than forecasted by Boston Beer
      resulting in abnormally excess inventories of Brewing Ingredients,
      Packaging Materials and Brewing Supplies purchased by High Falls, Boston
      Beer will purchase such excess from High Falls at High Falls' cost.

      4.    TERM

            (a) The term of this Agreement shall commence on the Effective Date
      and, unless sooner extended by the following provisions of this Paragraph
      4 or terminated pursuant to Paragraph 10 hereof, this Agreement shall
      expire on *.

            (b) Provided that Boston Beer is not then in default under this
      Agreement, Boston Beer may, in its

            (c) sole discretion, extend the term of this Agreement for a period
      of * (*) months (i.e., until *), provided that it gives High Falls written
      notice thereof on or before *.

            (d) If Boston Beer has extended the term of this Agreement pursuant
      to Subparagraph 4(b), then, provided (i) that Boston Beer is not then in
      default under this Agreement, and (ii) the aggregate volume of Products
      produced by High Falls for Boston




[*] 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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Boston Beer Agreement
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      Beer during calendar year * is equal to or greater than * barrels, Boston
      Beer may, in its sole discretion, extend the term of this Agreement for an
      additional * years (i.e., until *), provided that it gives High Falls
      written notice thereof on or before *.

            (e) The Parties acknowledge that Boston Beer' s obligations pursuant
      to this Agreement to make payments to High Falls and the Parties'
      respective rights and obligations under Paragraphs 3(e), 9, 10, 11, 12,
      14, 16, 17 and 26 shall survive the expiration or termination of this
      Agreement.

            (f) If Boston Beer does not elect to extend the term of this
      Agreement pursuant to Subparagraph 4(b), any adjustments based on volume
      for * shall use * of the volume (forecasted or actual, as the case may be)
      in lieu of twelve-month volume.

      5.    MINIMUM ORDERS

            (a)   (i)   Effective *, the Core Product shall comprise at least *%
                        of all the Products produced, and the maximum quantity
                        of the Products that High Falls shall be required to
                        produce under this Agreement in any calendar year shall
                        be * barrels. No * shall be required for * of the
                        Products.

                  (ii)  On or before November 1 of each year, Boston Beer shall
                        provide High Falls with a forecast for its aggregate
                        volume requirements for the following calendar year (the
                        "Annual Forecast"). The Annual Forecast for calendar
                        year * is attached as Schedule 1 hereto. The Annual
                        Forecast shall be no more than * percent (*%) greater
                        nor more than * percent (*%) less than the actual
                        purchases made by Boston Beer in the 12-full-month
                        period immediately preceding such Annual Forecast. For
                        example, if the actual purchases for the 12-month period
                        from November * to October * were * barrels, Boston
                        Beer's Annual Forecast for the calendar year * shall be
                        no greater than * barrels and no less than * barrels.



[*] 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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Boston Beer Agreement
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                        The Annual Forecast shall contain monthly projections by
                        package for each Core Product and any Other Products,
                        with the understanding that Boston Beer may, at any
                        time, through the Production Plan process described in
                        Subparagraph 5(b), substitute one or more of the Core
                        Products for any other Core Product or permitted Other
                        Product for the forecasted Products.

                  (iii) Effective *, if Boston Beer's actual purchases during a
                        calendar year are less than * percent (*%) of the total
                        volume set forth in the Annual Forecast ("Annual Minimum
                        Volume"), Boston Beer shall pay to High Falls a fee of
                        $* per barrel for each barrel below the Annual Minimum
                        Volume (the "Volume Short-Fall Fee"), except that the
                        Volume Short-Fall Fee shall not exceed $* in calendar
                        year *, nor, if the term of this Agreement is not
                        extended by Boston Beer pursuant to Subparagraph 4(b),
                        $* for the first eight months of calendar year *. The
                        Volume Short-Fall Fee, if any, shall be paid on or
                        before January 31 of the following year (or on or before
                        * for the first * months of * if the term of this
                        Agreement is not extended by Boston Beer pursuant to
                        Subparagraph 4(b)).

                  (iv)  Boston Beer may elect to pay High Falls a fee which,
                        when added to its actual Product purchases for the
                        applicable calendar year, will be treated as actual
                        purchases made for the purposes of forecasting and
                        determination of volume obligations, as follows: (a) $*
                        per barrel for the first * barrels, (b) $* per barrel
                        for the next * barrels, and (c) $* per barrel for each
                        barrel thereafter, offset by the Volume Short-Fall Fee,
                        if any, paid by Boston Beer for the same calendar year.
                        Such payment, if elected, shall be made by Boston Beer
                        to High Falls on or before January 31 of the following
                        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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Boston Beer Agreement
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                        For example, if Boston Beer's Annual Forecast for *
                        barrels were * barrels, but it only purchased * barrels,
                        Boston Beer could (after paying the Volume Short-Fall
                        Fee required by Subparagraph 5(a)(iii)) pay a fee,
                        calculated as set forth below, for up to * barrels (*%
                        increase over * forecasted barrels, or * barrels, less
                        actual purchases of *):

                                 $*/bbl for first * bbls  = $   *
                         +       $*/bbl for next * bbls   = $   *
                         +       $*/bbl for next * bbls   = $   *
                                                            -----
                                                          =   $*

                         less $*/bbl Volume Short-Fall Fee of
                         * barrels (amount below *% of
                         * forecasted barrels)            = $  (*)
                                                          ------

                         TOTAL FEE paid by Boston Beer to
                         obtain maximum barrelage for *
                         of *                             =    $  *

            (b) On a weekly basis, Boston Beer shall provide High Falls with a
      twelve (12) week Production Plan for the Products (the "Production Plan").
      The Production Plan shall be a rolling twelve-week schedule setting forth
      brewing and packaging requirements for the Products for each week during
      the twelve weeks covered by the Production Plan. All brewing requirements
      for the Products during the first six weeks of the Production Plan shall
      constitute firm orders by Boston Beer. All brewing requirements for the
      Products during the second six weeks of the Production Plan and all
      packaging requirements set forth in the Production Plan shall be a
      forecast of Boston Beer's best estimate of brewing and packaging
      requirements for the Products and shall be used by High Falls for capacity
      planning purposes. Boston Beer shall update the Production Plan each week
      by providing its best estimate of brewing and packaging requirements for
      the twelfth week and by revising the schedule for brewing and packaging
      requirements in the sixth through eleventh weeks of the Production Plan.
      The brew size that Boston Beer shall utilize in the Production Plan shall
      be High Falls' maximum brew based on High Falls' current brewing vessels,
      currently estimated to yield approximately * * (*) barrels of the Core
      Product (a "Brew"). The minimum brewing requirement that Boston Beer may
      specify



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during any week shall be * (*) Brews. The maximum brewing requirement that
Boston Beer may specify shall not exceed * barrels in any consecutive * (*) week
period. High Falls shall have the right, in its sole discretion, to set the
actual time and date on which each Brew shall be brewed, provided that High
Falls shall use its best efforts to (i) minimize the length of time that the
Products remain in storage prior to packaging, and (ii) meet the shipment dates
specified on the Packaging Schedule.

            (c) Boston Beer shall place all orders for packaging and shipment of

the Product by the eighth business day of each month (the "Packaging Schedule").
The Packaging Schedule shall set forth the quantity of the Products by package
type and the week in which each order shall be shipped in the following month.
Packaging shall be scheduled in increments of * cases for 22 oz. bottles; *
cases for 12 oz. bottles in new glass; and * cases for 12 oz. bottles in
refillable glass. The minimum order for packaging the Products, in Kegs shall be
* (*) Kegs.

      6.    RISK OF LOSS

            Boston Beer shall have sole responsibility for selecting carriers
and making all arrangements for shipment of the Products to its customers.
Boston Beer shall pay for all costs associated with shipment of the Products
from High Falls's facility. High Falls and Boston Beer acknowledge and agree
that, consistent with the F.O.B. pricing terms, the risk of loss in loading the
carrier's trucks shall be borne by High Falls. However, the carrier's driver
shall have the right to inspect each shipment for damage prior to leaving the
loading dock and, accordingly, Boston Beer shall bear the risk of loss on any
shipment of Products, once the carrier's truck leaves the loading dock.

      7.    BREWERY OF RECORD

            (a) High Falls shall provide all Products brewed hereunder under the
name of "The Boston Beer Company," as the Brewery of Record. High Falls shall
secure and maintain any permits, licenses, approvals and the like required by
any federal, state or local governmental agency on behalf of Boston Beer. *
out-of-pocket costs, including, without limitation, legal expenses, incurred in
connection therewith.




[*] 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)   High Falls and Boston Beer shall maintain an alternating
proprietorship whereby the Products are produced at High Falls's facility under
a Brewer's Notice for such premises issued to Boston Beer. High Falls shall
maintain separate records for the Products produced under the Boston Beer
alternating proprietorship and shall file monthly reports and federal excise tax
returns in a timely manner on behalf of the Boston Beer alternating
proprietorship. High Falls shall, to the extent reasonably possible, but subject
to and in compliance with all applicable federal, state or local laws, rules and
regulations, identify Boston, Massachusetts, as the sole label source for the
Product. * out-of-pocket costs, including, without limitation legal expenses,
incurred in connection with maintaining the Boston Beer alternating
proprietorship.

      8.    FORCE MAJEURE

            (a) High Falls shall not be liable to Boston Beer in the event that
High Falls shall delay in or fail to deliver Products to Boston Beer hereunder
for any reason or cause beyond its control, including but not limited to a
slowdown, stoppage or reduction of High Falls's production or delivery due to
strikes, fire, flood, labor stoppage or slowdown, inability to obtain materials
or packages, shortage of energy, acts of God, a limitation or restriction of its
production by action of any military or governmental authority, or any other
such causes.

            (b) In the event of any such slowdown, stoppage or reduction of High
Falls's production or deliveries, High Falls will allocate its remaining
capacity pro rata between High Falls's own products, the Products, and, from and
after *, the other contract products produced by High Falls, provided that
Boston Beer shall use reasonable efforts to move production of the Products to
its other suppliers for the duration of any such slowdown, stoppage or reduction
so as to minimize the amount of the Products that High Falls is required to
produce for Boston Beer during such slowdown, stoppage or reduction. Such pro
rata allocation of High Falls's remaining production capacity shall be based on
the proportionate volume of High Falls's own products, the Products, and other
contract products produced by High Falls during the * (*) month period
immediately preceding the




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Securities and Exchange Commission pursuant to a request for confidential
treatment.
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      month in which occurred the event which gave rise to the slowdown,
      stoppage or reduction of High Falls's production or delivery. In
      allocating the proportionate share of its remaining capacity to be devoted
      to the Products, High Falls shall use its best efforts to accommodate the
      mix of Core Products and Other Products specified by Boston Beer.

      9.    CHANGE PARTS AND BREWERY MODIFICATIONS

            The Parties anticipate that production of Other Products or the use
of new Packaging Materials may require changes or modifications to High Falls's
brewing equipment and facilities, or the installation of new equipment by High
Falls to accommodate Other Products or new Packaging Materials. Subject to the
obligations of Boston Beer and High Falls under Subparagraph 1(a) of this
Agreement, High Falls shall have no obligation to make any modifications to its
equipment or facilities to accommodate the production of the Products unless
agreed to by High Falls in writing. If the change parts, modifications or new
equipment required to produce any Other Products or use any new Packaging
Materials would, in High Falls's reasonable judgment, have a material adverse
impact on High Falls's operations, including without limitation, space
availability, plant capacity, or cost of production, then High Falls shall not
be required to produce any such Other Products or use any such new Packaging
Materials. If High Falls determines that the required changes, modifications or
new equipment would not have a material adverse impact, then the allocation of
cost, ownership and the other terms and conditions relating to such change
parts, modifications or new equipment shall be determined as provided herein:

            (a) Boston Beer will pay for all change parts, brewery,
      modifications or new equipment that are unique to producing the Products
      at High Falls's facility, provided that High Falls notifies Boston Beer in
      advance of making any such expenditures. Boston Beer shall own all change
      parts and brewery modifications paid for by Boston Beer and High Falls
      shall allow Boston Beer to remove all such change parts and brewery
      modifications at the termination or expiration of this Agreement, provided
      that Boston Beer shall restore, or reimburse High Falls for its cost to
      restore, High Falls's equipment or facilities to their



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Securities and Exchange Commission pursuant to a request for confidential
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Page 19


      condition prior to the installation of such change parts or modifications,
      ordinary wear and tear excluded.

            (b) The cost and ownership of any change parts, brewery
      modifications or new equipment that can also be used by High Falls to
      produce its own products shall be allocated between High Falls and Boston
      Beer by prior written agreement based on the following: (i) if High Falls
      determines that the change parts, modifications or new equipment would
      have been purchased by High Falls even without the need to accommodate the
      Products or new Packaging Materials, then High Falls shall pay the entire
      cost of such change parts, modifications or new equipment and High Falls
      shall have exclusive ownership thereof; (ii) if High Falls determines that
      it would benefit from the change parts, modifications or new equipment but
      High Falls would not have purchased them if not for the need to
      accommodate the Products or new Packaging Materials, then the cost and
      ownership of such change parts, modifications or new equipment shall be
      allocated between the Parties as the Parties mutually agree based on the
      relative benefit that each party will derive from such change parts,
      modifications or new equipment.

            (c) With respect to any change parts, modifications or new equipment
      paid for in part by Boston Beer under Subparagraph 9(b)(ii) hereof,
      including the improvements and modifications to * referred to in
      Subparagraph 2(d) hereof, the amount paid by Boston Beer shall be
      amortized based on a mutually agreeable amortization schedule. The
      amortization schedule for the improvements and modifications to * is
      attached as Schedule 2 hereto.

            (i) If Boston Beer elects to extend the term of this Agreement
pursuant to Subparagraph 4(b) hereof, then, if High Falls is not in default
under this Agreement on *, any change parts, modifications or new equipment paid
for in part by Boston Beer under Subparagraph 9(b)(ii) hereof prior to * will no
longer be subject to repayment by High Falls under any circumstances, all right,
title and ownership thereof will automatically transfer to High Falls as of *,
and Boston Beer will have no further interest therein.




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Securities and Exchange Commission pursuant to a request for confidential
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            (ii) Subject to Subparagraph 9(c)(i) hereof, upon expiration of the
amortization schedule with respect to each change part, modification or new
piece of equipment paid for in part by Boston Beer, all right, title and
ownership thereof shall automatically transfer to High Falls and Boston Beer
shall have no further interest therein.

            (iii) Upon: (A) the expiration of this Agreement; or (B) the
termination of this Agreement by Boston Beer under Subparagraphs 10(c) or 10(d)
hereof, High Falls shall reimburse Boston Beer for the unamortized balance of
the cost of any change parts, modifications or new equipment paid for in part by
Boston Beer under Subparagraph 9(b)(ii), provided that the amortization shall
continue during any applicable Notice Period and the unamortized balance shall
be calculated as of and paid on the effective date of any such termination. If
Boston Beer does not extend the term of this Agreement, High Falls'
reimbursement obligations shall include any equipment for which High Falls had a
reimbursement obligations pursuant to Subparagraph 9(b)(ii) (including the *)
under the Prior Agreement. If Boston Beer extends the term of this Agreement,
then, effective *, High Falls' reimbursement obligations shall specifically
exclude any change parts, modifications or new equipment paid for in whole or in
part by Boston Beer prior to * (including the *). Upon payment by High Falls of
the unamortized balance, all right, title and ownership of such change parts,
modifications or new equipment shall automatically transfer to High Falls and
Boston Beer shall have no further interest therein. Notwithstanding the
foregoing, High Falls shall have no obligation to reimburse Boston Beer for the
unamortized balance of the cost of change parts, modifications or new equipment
if, during the twelve (12) calendar months immediately preceding the effective
date of termination: (X) Boston Beer purchased less than * barrels of the
Products; or (Y) Boston Beer failed to purchase at least * percent (*%) of the
volume of the Products that was purchased by Boston Beer during the twelve (12)
calendar months immediately preceding said twelve (12) calendar month period;
and in either such event, all right, title and ownership of such change parts,
modifications or new equipment shall automatically transfer to High Falls on the
effective date of such termination and Boston Beer shall have no further
interest therein.



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Page 21



            (iv) If this Agreement is terminated for any other reason, then High
Falls shall have no obligation to reimburse Boston Beer for the unamortized
balance of the cost of any change parts, modifications or new equipment paid for
in part by Boston Beer under Subparagraph 9(b)(ii) hereof, and all right, title
and ownership of such chance parts, modifications or new equipment shall
automatically transfer to High Falls on the effective date of such termination
and Boston Beer shall have no further interest therein.

            (d) The parties agree to execute appropriate UCC financing
      statements to reflect their respective interests in any change parts,
      brewery modifications or new equipment paid for, in whole or in part, by
      Boston Beer. Boston Beer shall execute and deliver to High Falls UCC
      termination statements, bills of sale and any other documentation
      reasonably requested by High Falls upon the transfer of ownership to High
      Falls of any change parts, modification, or new equipment pursuant to
      Subparagraph 9(c) hereof.

      10.   TERMINATION

            (a) If Boston Beer has extended the term of this Agreement pursuant
      to Subparagraph 4(b) or 4(c) hereof, then Boston Beer may terminate this
      Agreement effective no less than * (*) months after written notice to High
      Falls.

            (b) If Boston Beer has extended the term of this Agreement pursuant
      to Subparagraph 4(b) or 4(c) hereof, High Falls may terminate this
      Agreement, effective no less than * (*) months after written notice to
      Boston Beer, if Boston Beer has failed to purchase or to have been deemed
      to have purchased pursuant to Subparagraph 5(a)(iv) hereof at least *
      barrels of Product in any period of twelve consecutive months.

            (c) In addition to exercising its rights under Paragraph 21 hereof,
      either Party may also terminate this Agreement effective immediately upon
      written notice to the other Party in the event that the other Party is in
      default of any of its obligations under this Agreement, which default
      continues for a period of * (*) calendar days following receipt of written
      notice of such default.




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Securities and Exchange Commission pursuant to a request for confidential
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            (d) Either Party may terminate this Agreement effective immediately
      upon written notice to the other Party in the event that: (i) the other
      Party makes an assignment for the benefit of creditors or files a
      voluntary bankruptcy, insolvency, reorganization or similar petition
      seeking protection from creditors; (ii) the other Party fails to vacate
      any involuntary bankruptcy, insolvency or reorganization petition filed
      against such Party within sixty (60) days after the filing of such
      petition; or (iii) the other Party liquidates, dissolves or ceases to do
      business as a going concern.

            (e) Between the date of receipt of a notice of termination pursuant
      to this Paragraph 10 and the effective date of such termination (such
      period, the "Notice Period"), the volume of Products purchased by Boston
      Beer for the * month period following notice of termination or any
      successive * month period (or such lesser period as may be remaining)
      prior to the effective date of termination shall be not less than *% of
      the volume purchased in the immediately preceding * month period. If
      Boston Beer fails or is unable or unwilling, for any reason, to purchase
      the required volume of the Products during the Notice Period, then Boston
      Beer shall pay a termination fee of $* per barrel for each barrel under
      the amount required to be purchased during the Notice Period. The
      termination fee, if any, shall be paid each January 1, April 1, July 1 and
      October 1 during the Notice Period. The quarterly payment shall be
      calculated by multiplying the $* per barrel termination fee by the
      difference between (x) the number of barrels of the Products that Boston
      Beer would have to purchase during the three calendar months preceding
      each payment date if the volume of the Products that Boston Beer must
      purchase during the entire Notice Period was spread evenly over the entire
      Notice Period (the "Quarterly Volume"), and (y) the actual number of
      barrels of the Products purchased by Boston Beer during the three calendar
      months preceding each payment date, provided that if the amount of the
      Products purchased by Boston Beer in any calendar quarter exceeds the
      Quarterly Volume, then such excess shall be carried forward and applied to
      reduce any termination fee that would otherwise be payable in any
      subsequent calendar quarter.

            (f) Upon termination pursuant to this Paragraph 10, Boston Beer
      shall promptly pay to High Falls all unpaid invoices in full and all
      unpaid costs incurred by High



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      Falls pursuant to this Agreement in the brewing, packaging, shipping and
      storage for the Product. High Falls will use all reasonable efforts to
      minimize such costs upon termination and Boston Beer will have the right
      to review documentation evidencing such costs.

      11.   AGENCY AND INDEMNIFICATION

            High Falls and Boston Beer understand and agree that neither Party
is, by virtue of this Agreement or anything contained herein, including High
Falls affixing to any Product and/or registering the name of "The Boston Beer
Company" or "Boston Beer Company," constituted or appointed the agent of the
other Party for any purpose whatsoever, nor shall anything herein contained be
deemed or construed as granting Boston Beer or High Falls any right or authority
to assume or to create any obligation or responsibility, express or implied, for
or on behalf of or in the name of the other, or to bind the other in any manner
or way whatsoever. Boston Beer shall indemnify and hold harmless High Falls from
and against any and all claims, expenses, causes of action or liabilities of any
nature whatsoever (collectively, "Damages"), to the extent that Damages arise
solely from the independent conduct of Boston Beer; provided that Damages shall
not include any loss, liability, cost or expense incurred by High Falls as a
consequence of the exercise by Boston Beer of any of its rights under this
Agreement.

      12.   PRODUCT LIABILITY

            (a) High Falls and Boston Beer shall each maintain product liability
      insurance coverage in the respective amount of not less than $* per
      occurrence and $* combined single limit, and in the amount of not less
      than $* combined single limit in the aggregate relating to the Products
      produced by High Falls for Boston Beer hereunder.

            (b) High Falls shall indemnify and hold harmless Boston Beer and all
      of its affiliates from and against any and all loss, liability, cost or
      expense of any nature whatsoever, including reasonable attorney's fees
      (collectively, "Product Liability Damages"), arising out of or associated
      with the manufacture and/or packaging of the Products by High Falls,
      regardless of when manufactured or packaged, and whether under this
      Agreement or otherwise, except to the extent that (i) Product Liability
      Damages were



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Securities and Exchange Commission pursuant to a request for confidential
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      caused solely by improper storage, handling or alteration of the Products
      after delivery to Boston Beer, (ii) Product Liability Damages are based on
      or result from a claim that the Products are inherently defective, or
      (iii) Product Liability Damages were caused by Brewing Ingredients,
      Packaging Materials (other than bottles) or Brewing Supplies specified or
      otherwise approved by Boston Beer.

            (c) Boston Beer shall indemnify and hold harmless High Falls and all
      of its affiliates from and against any and all Product Liability Damages
      to the extent arising out of the causes excepted from High Falls's duty to
      indemnify Boston Beer under clauses (i), (ii) and (iii) of subparagraph
      (b) of this Paragraph 12.

            (d) Notwithstanding the provisions of subparagraphs (b) and (c) of
      Paragraph 12, in no event shall either Party be liable to indemnify the
      other Party for consequential damages suffered by the other Party in an
      amount greater than the lesser of (i) $* or (ii) $* plus * (*) times the
      aggregate Fixed Charge paid by Boston Beer for all Products during the *
      (*) months preceding the month in which occurred the event giving rise to
      the claim for indemnification.

      13.   RECIPE AND QUALITY

            (a) High Falls shall produce the Products using the ingredients and
      brewing formula and procedures specified in the Brewing Package provided
      by Boston Beer Company to High Falls on June 8, 1995, as updated from time
      to time. High Falls shall produce any new Core Product or any Other
      Products using the brewing formula and procedures specified in the Brewing
      Package provided by Boston Beer to High Falls for such Core Product or
      Other Products. Boston Beer shall have the right to change ingredients
      and/or brewing formula and procedures upon reasonable prior written
      notice, provided that the cost of any such change shall be borne by Boston
      Beer and, provided further, that the specified ingredients are readily
      available in the necessary timeframe.

            (b) High Falls shall use its best efforts to meet the specifications
      for the Core Product attached hereto as Exhibit A, as amended from time to
      time. High Falls shall use its


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      best efforts to meet the specifications for any new Core Product or any
      Other Products which are furnished in writing by Boston Beer at the time
      the parties agree to add a new Core Product or Other Products to this
      Agreement. Boston Beer has the right to reject batches of the Products
      which it determines to taste materially different from representative
      sample of the Products, such rejection not to be arbitrary or
      unreasonable. Any rejected batches *.

            (c) The Products shall be brewed and packaged according to Boston
      Beer's specifications, including the maintenance of standards and quality
      control programs furnished to High Falls in writing by Boston Beer. Boston
      Beer shall have ultimate responsibility and authority over every detail of
      the production process for the Products, with such responsibility and
      authority as to those parameters affecting beer taste and quality to be
      the same as if Boston Beer were the owner of High Falls's brewing
      facility. Boston Beer shall have the right, at any time, to monitor and
      review the practices and procedures of High Falls in the production and
      packaging of the Products and inspect High Falls's brewing facility. If a
      decision made by Boston Beer in the exercise of its authority under this
      Subparagraph 13(c) results in *, High Falls shall be entitled to *. In
      addition, in the exercise of its authority under this Subparagraph 13(c),
      Boston Beer shall not interfere with High Falls's production process for
      its own proprietary brands or other contract products.

            (d) Consistent with the provisions of Subparagraph 13(c), High Falls
      and Boston Beer will, in any and all public statements or comments,
      recognize that Boston Beer controls the ingredients, recipe, brewing
      processes and procedures and quality parameters for all Products produced
      for Boston Beer by High Falls, and that Boston Beer is the brewer of all
      such Products. Neither Party will make any public statements inconsistent
      with the foregoing.

      14.   TRADEMARKS

            (a) High Falls acknowledges that no trademark or trade name rights
      in SAMUEL ADAMS, SAM ADAMS, "The Boston Beer Company" and any other




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      trademarks, trade names, domain names, service marks, logos or other
      intellectual property of Boston Beer (collectively, the "Trademarks") are
      granted by this Agreement.

            (b) Boston Beer hereby represents, warrants and covenants to High
      Falls that it has and will maintain its right to use the Trademarks and
      will indemnify and hold harmless High Falls from any alleged infringement
      by any Party against High Falls including, but not limited to, High
      Falls's reasonable costs of legal expenses.

      15.   TEST BREWING

            Notwithstanding anything to the contrary in this Agreement, Boston
Beer may, at any time after notice to High Falls engage any other brewer for the
purpose of conducting test production and distribution of the Products in order
to ensure the delivery of the Product following termination of this Agreement.

      16.   COMPETING PRODUCTS

            (a) High Falls will not at anytime use the brewing formula for the
      Products which Boston Beer has supplied to High Falls or any yeast
      supplied to High Falls by Boston Beer to produce a malt beverage product
      for itself (or any of its affiliates) or on behalf of any unaffiliated
      person.

            (b) Boston Beer acknowledges that High Falls is currently in the
      business of brewing craft and specialty malt beverage products, both for
      itself and on behalf of other unaffiliated persons, that are similar to
      and compete with the Products, and Boston Beer agrees that nothing in this
      Agreement shall prevent High Falls from continuing or expanding its craft
      and specialty business or its contract brewing business, provided that
      High Falls shall not intentionally copy the brewing formula for the
      Products or use any yeast supplied to High Falls by Boston Beer to produce
      craft and specialty products for itself, any of its affiliates, or for any
      third parties. Further, High Falls shall use its best efforts to ensure
      that any production, whether for itself, its affiliates, or other
      unaffiliated persons, shall not diminish in any material respect the
      quality or frequency of the brewing, packaging,




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Securities and Exchange Commission pursuant to a request for confidential
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      shipping or other levels of service provided by High Falls to Boston Beer
      prior to the Effective Date.

      17.   RIGHTS OF OFFSET

            The parties acknowledge and agree that, to the extent a Party is at
any time owed money by the other Party, such Party may set off such amount
against any monies owed by such Party from time to time to such other Party,
said set-off to be accomplished by written notice to such other Party effective
upon being sent.

      18.   NOTICES

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

            If to Boston Beer:      Jeffrey D. White, COO, and
                                    Martin F. Roper, President and CEO
                                    Boston Beer Corporation
                                    75 Arlington Street
                                    Boston, MA 02116
                                    Telecopier: (617) 368-5553

            with a copy to:         Frederick H. Grein, Jr., Esq.
                                    Hutchins, Wheeler & Dittmar
                                    101 Federal Street
                                    Boston, Massachusetts 02110
                                    Telecopier: (617) 951-1295

            If to High Falls:       Samuel T. Hubbard, Jr., President and CEO
                                    High Falls Brewing Company, LLC
                                    445 St. Paul Street
                                    Rochester, NY 14605
                                    Telecopier: (585) 235-1964

            with a copy to:         Paul J. Yesawich, III, Esq.
                                    Harris Beach LLP
                                    99 Garnsey Road



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Securities and Exchange Commission pursuant to a request for confidential
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                                    Pittsford, New York  14534
                                    Telecopier: (585) 419-8801

      19.   SUCCESSORS AND ASSIGNS

            This Agreement shall be binding upon and inure to the benefit of the
successors and assigns of the Parties, but shall not be assigned by any Party,
whether by merger, consolidation, reorganization, operation of law or otherwise,
without the prior written consent of the other Party, which consent will not be
unreasonably withheld. Notwithstanding the foregoing, Boston Beer may assign
this Agreement without the consent of High Falls to its successor corporation or
other successor entity in the event of any reorganization, public offering or
change in the form of entity of Boston Beer, provided that *. No failure of a
Party to consent to a proposed assignment of this Agreement by the other Party
shall be deemed unreasonable if such Party believes in good faith that the
proposed assignee is not capable of performing the financial or production
obligations of the Party proposing to assign this Agreement. Permitted
assignment of this Agreement shall relieve the assigning Party of its financial
obligations hereunder, including its indemnification obligations hereunder.

      20.   GOVERNING LAW

            This Agreement shall be interpreted and construed in accordance with
the laws of the State of New York.

      21.   DISPUTE RESOLUTION

            Any disputes arising out of, or relating to the terms of, this
Agreement shall be resolved by arbitration pursuant to the Commercial
Arbitration Rules of the American Arbitration Association. Any arbitration shall
take place in New York City, New York and shall be the Parties' sole and
exclusive remedy and forum for the resolution of any such disputes.

      22.   EXECUTION IN COUNTERPARTS



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            This Agreement may be executed in one or more counterparts each of
which shall be deemed to be an original but all of which together shall
constitute one and the same document.

      23.   AMENDMENTS

            No amendment, change or modification of any of the terms, provisions
or conditions of this Agreement shall be effective unless made in writing and
signed or initialed on behalf of the Parties hereto by their duly authorized
representatives.

      24.   NO THIRD PARTY BENEFICIARIES

            High Falls and Boston Beer agree that this Agreement is solely for
their benefit and it does not nor is it intended to create any rights in favor
of, or obligations owing to, any person not a Party to this Agreement.

      25.   MERGER; SEPARABILITY

            This Agreement terminates and supersedes all prior formal or
informal understandings between the Parties with respect to the subject matter
contained herein. Should any provision or provisions of this Agreement be deemed
ineffective or void for any reason whatsoever, such provision or provisions
shall be deemed separable and shall not effect the validity of any other
provision.

      26.   LIMITATION PERIOD ON CLAIMS

      All claims hereunder must be brought no later than * after such claims
arose or the Party having such claim shall be deemed to have waived and forever
released it; provided that for this purpose, a claim will be deemed to have
arisen at the time the Party asserting the claim first became aware of it.

      IN WITNESS WHEREOF, the parties hereto enter into this Second Amended and
Restated Agreement this ___ day of April, 2002.



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

Boston Beer Agreement
Page 30



Witness:                      BOSTON BEER CORPORATION



                              By:
--------------------------        -----------------------------------------
                                  Martin F. Roper, President and
                                  Chief Executive Officer



Witness:                      HIGH FALLS BREWING COMPANY, LLC.



                              By:
--------------------------        -----------------------------------------
                                  Samuel T. Hubbard, Jr., Chairman and
                                  Chief Executive Officer




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