Sample Business Contracts

Glass Supply Agreement - The Boston Beer Co. and Owens-Brockway Glass Container Inc.

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                            GLASS SUPPLY AGREEMENT


                            THE BOSTON BEER COMPANY



                            GLASS SUPPLY AGREEMENT
                     THE BOSTON BEER COMPANY ("PURCHASER")


     From the date of signing through December 31, ______.


     Prices and related terms (the "Prices") are detailed on Attachment 1 and
are subject to adjustment as provided below in Section 4.


     Subject to Section 6 below, and in the absence of a Force Majeure Event as
described in Section 14 below, Seller agrees to sell and Purchaser agrees to
purchase, during the term of this Agreement, the following quantities of glass

(A)  For 1998, ________________________________________________.

(B)  For the remaining term of the Agreement, ______________________.


(A)  Except to the extent that price reductions result from Strategic
     Initiatives contemplated by Section 12,  prices are firm through December
     31, ____.

(B)  Price for calendar year _________________________________________

a)   Price adjustment cap of _____annually.  Price adjustments are calculated
     from prior year prices.

b)   Prices are effective January 1 of each year.
c)   Price adjustments will be advised by December 1 of the preceding year.

5.  _________________________________________________________


(A)  Purchaser shall provide Seller with Purchaser's best estimates of
     Purchaser's anticipated requirements for glass containers on an annual and
     monthly basis, and Seller will provide on a monthly basis inventory levels
     of Purchaser's glass containers, both of which are to be listed by
     Purchaser's brewery to which glass containers are to be delivered.
     Recognizing that from time to time considerable

     variations will occur in the annual and monthly forecasts, Seller shall use
     its commercially reasonable best efforts to accommodate such delivery
     requirements, but Seller will not be responsible for any substantial
     unanticipated variations in glass container requirements which it is unable
     to accommodate. If Seller is ____________________________________. Supplier
     shall be liable if forecasts, as reasonably provided, are not fulfilled.
     Under such circumstances, The Boston Beer Company ________________________.
     Additionally, the _____________________________. If an event of Force
     Majeure, as described in Section 14 below, continues and prevents Seller
     from producing and or delivering the glass, then, in such event,
     _________________________ during the period of the event of Force Majeure,
     without any breach of this Agreement by Purchaser. If such an event of
     Force Majeure occurs, as aforesaid, then in such an event, Seller shall

(B)  Purchaser authorizes Seller on the basis of the above-noted forecast to
     produce and maintain a reasonable inventory of glass containers (not to
     exceed a current __ day inventory without the consent of both parties).  In
     the event of the expiration or termination of the Agreement for any reason,
     Purchaser shall (upon delivery of such inventory), in addition to any other
     obligations it may have to Seller, ______________ glass containers produced
     to as aforesaid date of termination.

(C)  ___storage for a period of __ days from the date of manufacture or want
     date whichever is the later.  When inventory has reached ___ months of age,
     Purchaser will have the option of (a) having the glass shipped to a
     specified location, (b) having the glass culleted and be invoiced
     __________ such glass, or (c) being invoiced for the ________________..

(D)  If Purchaser elects the option set forth in Section (C)(c) above, then, in
     such event, Seller agrees to store Purchaser's property in a segregated
     area, clearly labeled to designate that it contains Purchaser's products.
     The warehouse where Purchaser's products shall be located will be
     identified to The Boston Beer Company in writing prior to beginning such
     storage.  Seller hereby appoints Purchaser as its agent and grants to
     Purchaser a power-of-attorney, for purposes of this paragraph only, which
     power-of-attorney is irrevocable during the term of this Agreement, with
     authority to sign and deliver such documents, endorsements and instruments,
     including UCC-1 Financing Statements to reflect Purchaser's ownership of
     all right, title and interest in and to Purchaser's property warehoused at
     Seller's location shown above, or elsewhere as agreed to, and to take all
     other such action in the name of Seller as Purchaser may deem necessary or
     advisable to protect and preserve Purchaser's ownership and right to
     possession of Purchaser's property; provided, however, that Purchaser shall
     not have any obligation to do so and its not so doing shall not in any
     manner affect Purchaser's title to Purchaser's property for which it has
     rendered payment to Seller and which is stored, as aforesaid.


(A)  Seller shall ___________ molds used to produce bottles, including any
     replacement parts.  Seller shall ____________ during the term of the
     Agreement.  Seller shall use

     any molds that produce designs proprietary to Purchaser exclusively for the
     manufacture and production of bottles for Purchaser hereunder and for no
     other purpose.

(B)  If Purchaser requests Seller to produce new proprietary design molds during
     the term of the Agreement, and Seller agrees to produce such molds, the
     Parties agree to enter into a written agreement regarding the _________
     such molds.


     All ________ based on current ship-to locations:  _______________________.
Any change in current ship-to locations that exceeds Owens-Brockway's current
freight costs will be negotiated and mutually agreed upon.


     Pallets are memo billed on the face of the glass invoice.  Seller will
review and Purchaser will be advised of pallet activity on a monthly basis.  A
monthly float of pallets outstanding will be permitted to the equivalent of
Purchaser's highest volume month pallet usage over a twelve month period. Pallet
balances exceeding the float limit will be invoiced at the current rate of $____
for 40" x 48" pallets and $___ for 56" x 44" bulk pallets if pallet balance is
not corrected within 30 days of notification.

10.  TERMS



     The Purchaser shall have the option to ____________ this Agreement for an
additional ________ period, provided the Purchaser exercises such option by
notifying Seller no later than ____________.  Selling prices in effect in
Agreement year ____ will be the prices to which the ____________ will be applied
during the first year of the extension.  The _________ (Attachment 2) will be
________________ in Agreement year ______________________. All other terms for
the extension period will be negotiated in good faith.


     The Boston Beer Company and Owens-Brockway mutually agree to establish
teams to develop and actively work on strategic objectives that will focus on
______ improvement initiatives, and _____________ accruing from such


(A)  The parties agree to negotiate in good faith to resolve all other terms and
     conditions which may materially affect their commercial relationship.  If,
     pending such further negotiations, any issues arise between the parties
     which are not expressly dealt with in the Agreement or in any written
     amendment to this Agreement, the parties agree to

     resolve such issues in an equitable manner by mutual good faith
     negotiations. The parties further agree that this procedure shall be the
     exclusive mechanism for resolving open issues, which shall not be affected
     or governed by any other statutory or documentary provision including any
     set forth in purchase orders, order acknowledgment forms, invoices or
     similar documents.

(B)  Notwithstanding the above, if the parties are unable to resolve any issues
     as described above, then, in such event, any controversy or claim arising
     out of or relating to this Agreement, or the breach thereof, shall be
     settled by arbitration in accordance with the Commercial Arbitration Rules
     of the American Arbitration Association, and judgment upon the award
     rendered by the arbitrators may be entered in any court having jurisdiction
     thereof.  Each of Seller and Purchaser shall select one arbitrator, and the
     two arbitrators so selected shall mutually agree to the selection of a
     third arbitrator; or, failing such mutual agreement, the third arbitrator
     shall be selected by the American Arbitration Association.  The arbitration
     shall occur in Boston, Massachusetts, or otherwise as mutually agreed to by
     Seller and Purchaser.

(C)  The Boston Beer Company shall __________________________.


     If either the Seller or the Purchaser is prevented, hindered, or delayed
from or in performing any of its obligations under this Agreement (other than an
obligation to make payment) by a Force Majeure Event then:

     That parties' obligations under this Agreement shall be suspended for so
     long as the Force Majeure Event continues and to the extent that the party
     is so prevented, hindered or delayed;

     As soon as reasonably possible after the commencement of the Force Majeure
     Event that the party shall notify the other party in writing of the
     occurrence of the Force Majeure Event, the date of commencement of the
     Force Majeure Event, the effects of the Force Majeure Event on its ability
     to perform its obligations under this Agreement, and the efforts being made
     or proposed by that party to remove or avoid such Force Majeure Event;

     That party shall use all reasonable efforts to mitigate the effects of the
     Force Majeure Event upon the performance of its obligations under this

     As soon as reasonably possible after the cessation of the Fore Majeure
     Event that party shall notify the other party in writing of the cessation
     of the Force Majeure Event and shall presume performance of its obligations
     under this Agreement. Owens-Brockway will give _____ to The Boston Beer
     Company for glass supply as soon as Seller has production capability, it
     being understood that Seller will use all commercially reasonable efforts
     to expedite attaining production capability.

     For the purposes of this section, "Force Majeure Event" means any event

     beyond the reasonable control of a party and which is unavoidable
     notwithstanding the reasonable care of that party. A Force Majeure event at
     one or more, but not all, of Seller's production facilities shall not
     constitute a Force Majeure Event, unless more than ______________ of
     Seller's aggregate production capacity is affected.


     Both during and after the termination of this Agreement, Seller shall
maintain in strict confidence all confidential information disclosed to it by
Purchaser, including, but not limited to, all operational strategies and plans,
all information regarding contract-brewing arrangements of Purchaser, all price
and marketing information, customer data, technical information and data, and
other similar forms of confidential information relating to the Purchaser's
products and services and the production and distribution thereof, as well as
all other general strategic planning or proprietary business information
identified as such by Purchaser to Seller.  Upon the expiration or termination
of this Agreement, Seller agrees to return to Purchaser all materials then in
the possession of Seller or of any employee or agent of Seller, which contains
confidential information of Purchaser.


     Seller agrees to produce glass containers meeting specifications as set
forth in Attachments 3.1 through 3.3, or as amended and mutually agreed upon
from time to time.


     This Agreement shall be governed by and construed in accordance with, the
laws of the Commonwealth of Massachusetts.


/s/ JIM KOCH                 /s/ WILLIAM M. GARRISON

Brewer                       Vice President, Industry Manager-Beer

4/30/98                      4/29/1998

                                 ATTACHMENT 1

     Location     Mold       Desc.       Cap       Color       Price


     Owens-Brockway may be asked to purchase some or all corrugated components.
Owens-Brockway's purchase price of corrugated components ______ to The Boston
Beer Company and ______________.  Corrugated carton charges will be
___________________.  Owens-Brockway's commercial best efforts will be used in
corrugated _________.  The Boston Beer Company may also choose _______________
Owens-Brockway.  Under this circumstance, the transactions would mirror the
handling of basket carriers.


     Set up charges for the RSC cartons, partitions and basket carriers will be


     The ___________________ for the shipment of bottles by Owens-Brockway to
The ______________.

     Additionally, The Boston Beer Company may choose


     Any new items, or glass containers containing changes in design or
specifications that are developed for and shipped to The Boston Beer Company
during the Agreement Term shall be _____________________.

                                 ATTACHMENT 2
                                ATTACHMENT 3.1

                     (Specifications for 12 oz. Longneck)

                                ATTACHMENT 3.2

                       (Specifications for 12 oz. Stock)

                                ATTACHMENT 3.3

                       (Specifications for 22 oz. Stock)