Sample Business Contracts


Purchasing Agreement - Redhook Ale Brewery Inc. and Anheuser-Busch Inc.


                              PURCHASING AGREEMENT

      This Purchasing Agreement ("Agreement") is executed between Redhook Ale
Brewery, Incorporated ("Redhook") and Anheuser-Busch, Incorporated ("ABI") as of
November 21, 2002. In consideration of the covenants hereinafter set forth and
intending to be legally bound hereby, Redhook and ABI agree as follows:

      1.    For purposes of this Agreement, (a) "Distribution Agreement" shall
mean the Master Distributor Agreement between ABI and Redhook dated October 18,
1994 as amended to the date hereof and as it may be amended from time to time;
(b) "Packaging Materials" shall mean glass bottles and corrugated boxes, trays,
solid fiber boxes, chipboard or corrugated partitions and carrier inserts used
to package the glass bottles; (c) "Requirements" shall mean the total amount of
each Packaging Material used by Redhook in all products manufactured by Redhook
in its brewery located in Portsmouth, New Hampshire; (d) "Supplier" shall mean
Owens Illinois; and (e) "Supply Agreement" shall mean the agreement between ABI
and Supplier pursuant to which the Packaging Materials that are the subject
hereof will be purchased and sold, as amended to the date hereof and as it may
be amended from time to time.

      2.    Except as provided for below, ABI agrees to source, supply and sell
to Redhook, and Redhook agrees to purchase from ABI, all of Redhook's
Requirements for Packaging Materials, such purchases and sales to commence on
December 2, 2002 (in the event Redhook has legally binding orders for Packaging
Materials placed prior to the date hereof, the purchases by Redhook pursuant to
such orders shall be deemed to reduce Redhook's Requirements hereunder).

      3.    Notwithstanding the provisions of Section 2 hereof, Redhook shall
have the right to purchase up to 50% of its annual Requirements (measured by the
purchase price paid by Redhook for the Packaging Materials) from an alternative
source if (i) Redhook obtains a commitment from a supplier to provide Redhook
with substantially equivalent Packaging Materials at a per unit price at least
five percent lower than that available hereunder, with respect to which
commitment ABI does not exercise the right of first refusal created by this
Section 3 or (ii) after consultation with ABI and Supplier, Redhook determines
that there is a substantial possibility that Supplier will be unable to provide
Redhook with a supply of Packaging Materials adequate for its operations (such
determination to be made in good faith and on a commercially reasonably basis).
Prior to the exercise by Redhook of the right described in Section 3(i) hereof,
Redhook shall provide ABI and Supplier with at least 30 days' advance written
notice (such 30 day period to begin no sooner than upon the expiration of ABI's
right of first refusal
<PAGE>
described below), such notice to indicate the quantities of Packaging Materials
to be purchased by Redhook from the alternative source.

            Nothing in this section shall prohibit Redhook from receiving
unsolicited proposals from suppliers or from soliciting proposals for the
purchase and sale of Packaging Materials but Redhook shall not disclose to any
supplier the unit pricing paid by Redhook hereunder. Redhook shall not accept
any commitment from any supplier for the purchase and sale of Packaging
Materials for use in its Portsmouth operations pursuant to the right described
in Section 3(i) hereof without providing ABI in writing a 30 day right of first
refusal.

      4.    Supplier shall be the source for all Packaging Materials to be
purchased and sold pursuant to this Agreement. Redhook shall place all orders
for Packaging Materials directly with Supplier in a format agreed upon between
Redhook and Supplier and shall instruct Supplier to deliver all Packaging
Materials to Redhook's premises at Portsmouth, New Hampshire. Contemporaneously
with placing each order with Supplier, Redhook shall notify ABI in writing of
such order, the quantities of Packaging Materials to be purchased and sold
pursuant to such order and the expected date of delivery of such Packaging
Materials. On or before November 30 of each year during the term of this
Agreement, Redhook shall provide Supplier and ABI with Redhook's best estimate
of Redhook's anticipated Requirements for Packaging Materials for the next
succeeding calendar year in a format satisfactory to each of Redhook and
Supplier. On or before the last business day of each month, Redhook shall
provide Supplier and ABI with a rolling three month forecast of Redhook's
anticipated Requirements for Packaging Materials in a format satisfactory to
each of Redhook and Supplier. On or before the last business day of each week,
Redhook shall provide Supplier and ABI with its estimated requirements for the
next succeeding week in a format satisfactory to each of Redhook and Supplier.

      5.    The initial purchase price to be paid by Redhook for Packaging
Materials shall be as previously specified in writing to Redhook. Redhook shall
pay to ABI the purchase price for any delivery of Packaging Materials within 10
calendar days of Redhook's acceptance of such delivery. At the option of ABI,
ABI may obtain payment of the purchase price, in whole or in part, by reducing
the amounts otherwise payable by ABI to Redhook pursuant to the Distribution
Agreement. If ABI elects to obtain payment by such method, ABI shall provide
Redhook with reasonable detail concerning the amounts owed by Redhook, and ABI
shall make such offset only against amounts due to be paid by ABI on or after
the date on which Redhook's payment for the Purchasing Materials would otherwise
have been due. In the event that with respect to any delivery of Packaging
Materials, ABI determines to obtain payment of any portion of the purchase price
therefor other than by means of such reduction, ABI shall provide to Redhook
written notice of such determination and Redhook shall pay to ABI such portion
of the purchase price by wire transfer of immediately available funds to an
account specified in writing by ABI (or by such other means as may be agreed
upon between ABI and Redhook) on or prior to the later of (i) 10 calendar days
after Redhook's receipt and acceptance of such delivery and (ii) five calendar
days after such notification.


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<PAGE>
      6.    ABI shall have no responsibility or liability for any of the
conditions, properties, deliveries or specifications of the Packaging Materials.
With respect to any order or delivery of Packaging Materials, Supplier's
compliance with its obligations under the terms of the Supply Agreement shall be
deemed to satisfy the rights of Redhook hereunder. At the request of Redhook,
ABI shall assign to Redhook all rights that ABI has against Supplier with
respect to any Packaging Materials that are delivered or were to be delivered to
Redhook hereunder. In the event that Redhook and Supplier are engaged in a
dispute concerning any delivery or order of Packaging Materials, Redhook shall
not withhold payment of any portion of the purchase price therefor unless (i)
under the circumstances such action is permitted to a purchaser under applicable
law or under the rights ABI has under the terms of the Supply Agreement and (ii)
Redhook has notified ABI in writing at least three business days prior to the
date payment of the purchase price would otherwise be required that it intends
to withhold payment of the purchase price. In the event of a dispute between
Redhook and Supplier, ABI shall use commercially reasonable best efforts to
assist Redhook to resolve such dispute equitably and shall provide Redhook with
information in reasonable detail concerning the provisions of the Supply
Agreement pertinent to such dispute. In the event that Redhook satisfies the
requirements of this section and duly and timely notifies ABI that it shall not
pay the purchase price for any delivery or order, then ABI shall not seek
payment for such delivery or order from Redhook until the earlier of such time
(a) as Redhook instructs ABI that it is willing to pay the purchase price or (b)
as Redhook no longer satisfies the criteria set forth in this section for
withholding payment.

      7.    (a) Except as otherwise provided in this Section 7, the obligations
of ABI and Redhook to purchase and sell Packaging Materials shall continue until
such time as the Supply Agreement is no longer in force.

                  (i)   In the event that the Supply Agreement terminates,
expires or is modified or supplemented for any reason and the parties do not
agree pursuant to Section 9 on the terms and conditions pursuant to which AB
shall continue to source, supply and sell Packaging Materials to Redhook, then
the purchase and sale obligations of Redhook and ABI under this Agreement shall
terminate on the date of termination, expiration, modification or supplement.
ABI shall provide Redhook reasonable advance notice prior to any expiration,
termination, modification or supplement of or to the Supply Agreement, to the
extent reasonably practicable.

            (b)   Either party shall have the right to terminate the purchase
and sale obligations of Redhook and ABI under this Agreement, without prejudice
to any other legal rights to which such terminating party may be entitled, upon
the occurrence of any one or more of the following:

                  (i)   any default by the other party in the performance of any
of the provisions of this Agreement or by the Supplier in the performance of its
obligations


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<PAGE>
under the Supply Agreement, which default is not cured within 30 days after
written notice of such default;

                  (ii)  the Distribution Agreement is duly terminated;

                  (iii) an assignment by the other party for the benefit of
creditors; or the commencement by the other party of a voluntary case or
proceeding or the consent to or the acquiescence by the other party in the entry
of an order for relief against it in an involuntary case or proceeding under any
bankruptcy, reorganization, insolvency or similar law;

                  (iv)  the appointment of a trustee or receiver or similar
officer of any court for the other party or for a substantial part of the
property of the other party, whether with or without the consent of the other
party, which is not terminated within 60 days from the date of appointment;

                  (v)   the institution of bankruptcy, reorganization,
insolvency or liquidation proceedings against the other party without such
proceedings being dismissed within 60 days from the date of the institution
thereof.

            (c)   In the event that the orders and deliveries of Packaging
Materials made by Supplier to Redhook have failed in respects material to
Redhook's Portsmouth operations to comply with the terms of the Supply Agreement
and Redhook determines (such determination to be made in good faith and on a
commercially reasonable basis) that such failures are likely to continue,
Redhook may terminate the purchase and sale obligations of Redhook and ABI under
this Agreement upon 30 days written notice to ABI and Supplier.

            (d)   In the sole judgment of Redhook, Redhook may terminate the
purchase and sale obligations of Redhook and ABI under this Agreement by written
notice to ABI and Supplier delivered on or prior to October 31, such termination
to be effective on the next succeeding January 1.

            (e)   In the event that ABI determines (such determination to be
made in good faith and on a commercially reasonable basis) that Supplier is
likely to be unable to supply Packaging Materials to Redhook without reducing
the amount of Packaging Materials that it would otherwise deliver to ABI, at the
option of ABI, ABI may suspend deliveries of Packaging Materials hereunder to
Redhook upon 30 days' written notice to Redhook to the extent necessary to
assure that Supplier is able to satisfy ABI's operational requirements for
Packaging Materials as determined by ABI (the determination by ABI of such
operational requirements to be made in good faith and on a commercially
reasonable basis). Deliveries of Packaging Materials to Redhook will promptly
resume upon ABI receiving assurances that it determines to be reasonable (such
determination to be made in good faith and on a commercially reasonable basis)
that Supplier's delivery of Packaging Materials to Redhook will not reduce the
amount of


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<PAGE>
Packaging Materials that Supplier would otherwise deliver to ABI. If any such
suspension occurs and would be reasonably expected to have a material adverse
effect on Redhook's operations, Redhook may terminate the purchase and sale of
obligations of Redhook and ABI under this Agreement upon 30 days' advance
written notice to ABI and Supplier.

            (f)   In the event of any termination of the purchase and sale of
obligations of Redhook and ABI under this Agreement for any reason, at the
option of ABI, Redhook shall purchase from Supplier any inventory of Packaging
Materials produced or purchased by Supplier prior to the date of termination in
contemplation of the sale by Supplier of such Packaging Materials to Redhook.
Such purchases shall be made in the ordinary course of business at the pricing
previously provided for under this Agreement, and on a delivery and payment
schedule that would have been applicable if the Agreement had not been
terminated.

      8.    Redhook shall, and Redhook shall cause its officers, directors,
employees, agents and other representatives to, treat in confidence and not
disclose to others any of the material terms of this Agreement including the
unit pricing paid for Packaging Materials, or any other information disclosed to
Redhook by ABI pursuant to this Agreement, except to the extent that (A) any
such information is generally available to the public, (B) is acquired from a
third party rightfully having such information, (C) is already in their
possession prior to disclosure hereunder or is acquired by such party
independently from any disclosures pursuant to this Agreement or (D) as required
by applicable law or regulation. With respect to the foregoing confidentiality
obligations, ABI acknowledges that Redhook is likely to be required to file this
Agreement with the Securities and Exchange Commission as a material contract and
will be required to disclose the existence of this Agreement. Redhook agrees
that any such disclosure shall be limited in scope and detail to the maximum
extent permitted under the applicable securities laws.

      With respect to the foregoing confidentiality obligations, Redhook
acknowledges that it has been informed that an unauthorized disclosure of the
terms of the purchasing agreements and arrangements between ABI and Supplier
could result in the termination of such agreements and arrangements and the
supply of Packaging Materials thereunder, or the loss of substantial commercial
benefits to ABI thereunder. In addition to other remedies available to ABI, in
the event of Redhook's breach of its foregoing confidentiality obligations, ABI
shall be entitled to injunctive and other equitable relief against Redhook to
prevent any such breach and, to the extent that any breach by Redhook of its
confidentiality obligations hereunder causes or contributes to the termination
of any purchasing agreements or arrangements between ABI and Supplier, Redhook
shall be liable to such extent for any harm or damages resulting to ABI from
such termination.

      9.    In the event that the Supply Agreement terminates, expires or is
modified or supplemented, AB and Redhook shall discuss whether AB shall continue
to source,

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<PAGE>
supply and sell to Redhook the Packaging Materials, the price therefor and any
additional terms and conditions applicable to the source, supply and sale. If
the parties agree that AB shall continue to do so, and on the pricing therefore,
they shall execute a written instrument specifying the pricing therefor and any
other terms and conditions not provided thereby. Thereafter the Packaging
Materials shall be deemed to continue to be purchased and sold pursuant to the
terms hereof, as supplemented by such instrument.

      10.   Redhook represents, warrants and covenants that all Packaging
Materials purchased by Redhook hereunder shall be used by Redhook in its
manufacture and packaging of malt beverage products and that Redhook shall not
resell any Packaging Materials prior to such materials being used by Redhook in
the manufacturing and packaging of malt beverage products.

      11.   (a) Redhook shall indemnify, protect, defend and hold harmless each
of ABI, Anheuser-Busch Companies, Inc. ("A-BC"), other direct and indirect
subsidiaries of A-BC, and each of their respective directors, officers,
employees and agents, from and against all claims, liabilities, losses, damages,
injuries, demands, actions, causes of action, suits, proceedings, judgments and
reasonable expenses, including without limitation attorneys' fees, court costs
and other legal expenses arising from, connected with or attributable to (a) a
violation or breach or alleged violation or breach of any other agreements or
obligations to which Redhook is a party or by which it or its assets are bound
arising out of Redhook's execution and delivery of, or performance of its
obligations under, this Agreement and (b) Redhook's violation of its obligations
hereunder. In the event that Redhook fails to comply with any of its obligations
under this Agreement, at the option of ABI, ABI may perform such obligations on
behalf of Redhook and Redhook shall immediately reimburse ABI for all costs
incurred by ABI thereby.

            (b)   ABI shall indemnify, protect, defend and hold harmless each of
Redhook, its direct and indirect subsidiaries and each of their respective
directors, officers, employees and agents, from and against all claims,
liabilities, losses, damages, injuries, demands, actions, causes of action,
suits, proceedings, judgments and reasonable expenses, including without
limitation attorneys' fees, court costs and other legal expenses arising from,
connected with or attributable to (a) a violation or breach or alleged violation
or breach of any other agreements or obligations to which ABI is a party or by
which it or its assets are bound arising out of ABI's execution and delivery of,
or performance of its obligations under, this Agreement and (b) ABI's violation
of its obligations hereunder. In the event that ABI fails to comply with any of
its obligations under this Agreement, at the option of Redhook, Redhook may
perform such obligations on behalf of ABI and ABI shall immediately reimburse
Redhook for all costs incurred by Redhook thereby.


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<PAGE>
      12.   All notices from one party to the other under the terms of this
Agreement, unless otherwise directed, shall be delivered by hand or by a
responsible overnight courier providing reasonable proof of delivery, addressed
to the parties at the addresses indicated below, and shall be deemed delivered
on the date of receipt if by hand delivery or the first business day succeeding
the date of posting, if sent by overnight courier:

      If to Redhook:

      Redhook Ale Brewery, Incorporated
      14300 NE 145th Street
      Woodinville, Washington  98072
      Attn:  Chief Financial Officer

      If to ABI:

      Anheuser-Busch Companies, Inc.
      One Busch Place
      St. Louis, Missouri  63118
      Attention:  Vice President, Corporate Purchasing

      and

      Anheuser-Busch, Incorporated
      One Busch Place
      St. Louis, Missouri 63118
      Attention:  Vice President, Business Development
                  and Wholesaler Development

      13.   This Agreement is not assignable or transferable, in whole or in
part, by Redhook without the prior written consent of ABI.

      14.   In the event that the purchase and sale obligations of Redhook and
ABI under this Agreement are terminated pursuant to Section 7(a) hereof, ABI
shall discuss with Redhook and negotiate in good faith with Redhook concerning
means by which ABI can assist Redhook in purchasing Packaging Materials at
prices lower than those otherwise available to it.

      15.   (a) No term or provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
preceding or succeeding breach, and no failure by either party to exercise any
right or privilege hereunder shall be deemed a waiver of such party's rights or
privileges hereunder or shall be deemed a waiver of such party's rights to
exercise the same at any subsequent time or times hereunder.


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<PAGE>
            (b)   This Agreement shall be deemed to have been made and entered
into in the State of Missouri and shall be governed by the laws of Missouri,
without regard to the principles thereof regarding conflicts of laws.

            (c)   This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original and all of which together shall
be deemed to be one and the same instrument.

            (d)   This Agreement constitutes the entire agreement among the
parties hereto and supersede any prior understandings, agreements or
representations by or among the parties hereto, written or oral, to the extent
they are related in any way to the subject matter hereof.

            (e)   ABI hereby represents and warrants that it has no knowledge of
the existence of any occurrence or development that would reasonably be expected
to result in the termination of the Supply Agreement (other than its expiration
pursuant to its terms).

      IN WITNESS WHEREOF, this Agreement is executed on behalf of the parties
hereto by their duly authorized officers as of the day and year first above
written.

                                    ANHEUSER-BUSCH, INCORPORATED


                                    By /s/ Anthony J. Short
                                       --------------------
                                    Anthony J. Short
                                    Vice President
                                    Business and Wholesaler Development



                                    REDHOOK ALE BREWERY, INCORPORATED


                                    By /s/ David J. Mickelson
                                       ----------------------
                                    David Mickelson
                                    Executive Vice President & CFO/COO




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