Boston Beer Co. Contracts
Sample Business Contracts
Glass Supply Agreement - The Boston Beer Co. and Owens-Brockway Glass Container Inc.
GLASS SUPPLY AGREEMENT
BETWEEN
THE BOSTON BEER COMPANY
AND
OWENS-BROCKWAY GLASS CONTAINER INC.
<PAGE>
GLASS SUPPLY AGREEMENT
BETWEEN
THE BOSTON BEER COMPANY ("PURCHASER")
AND
OWERNS-BROCKWAY GLASS CONTAINER INC. ("SELLER")
1. AGREEMENT TERM
From the date of signing through December 31, ______.
2. PRICES
Prices and related terms (the "Prices") are detailed on Attachment 1 and
are subject to adjustment as provided below in Section 4.
3. VOLUME
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
containers.
(A) For 1998, ________________________________________________.
(B) For the remaining term of the Agreement, ______________________.
4. PRICE ADJUSTMENTS
(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. _________________________________________________________
6. RESPONSIBILITY TO PURCHASE AND INVENTORIES
(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
<PAGE>
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.
7. MOLD EQUIPMENT
(A) Seller shall ___________ molds used to produce bottles, including any
replacement parts. Seller shall ____________ during the term of the
Agreement. Seller shall use
<PAGE>
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.
8. FREIGHT
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.
9. PALLETS
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
______________________
11. AGREEMENT _____ OPTION
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.
12. STRATEGIC OBJECTIVES
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
initiatives.
13. OTHER TERMS AND CONDITIONS
(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
<PAGE>
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 __________________________.
14. FORCE MAJEURE
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
Agreement;
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
<PAGE>
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.
15. CONFIDENTIALITY
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.
16. QUALITY AND SERVICE
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.
17. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with, the
laws of the Commonwealth of Massachusetts.
THE BOSTON BEER COMPANY OWENS-BROCKWAY GLASS CONTAINER INC.
/s/ JIM KOCH /s/ WILLIAM M. GARRISON
Brewer Vice President, Industry Manager-Beer
4/30/98 4/29/1998
<PAGE>
ATTACHMENT 1
Location Mold Desc. Cap Color Price
CORRUGATED COMPONENTS
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
Set up charges for the RSC cartons, partitions and basket carriers will be
____________.
BASKET CARRIERS
The ___________________ for the shipment of bottles by Owens-Brockway to
The ______________.
Additionally, The Boston Beer Company may choose
_____________________________________________.
NEW ITEMS
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 _____________________.
<PAGE>
ATTACHMENT 2
ATTACHMENT 3.1
(Specifications for 12 oz. Longneck)
<PAGE>
ATTACHMENT 3.2
(Specifications for 12 oz. Stock)
<PAGE>
ATTACHMENT 3.3
(Specifications for 22 oz. Stock)