KEG MANAGEMENT AGREEMENT (One-Half Barrel and One-Sixth Barrel)
(One-Half
Barrel and One-Sixth Barrel)
This
KEG MANAGEMENT AGREEMENT
("Agreement") is entered
into between MicroStar Keg Management, L.L.C., a Delaware Limited Liability
Company whose address is ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("MicroStar") and Mendocino
Brewing Company, a California corporation whose address is ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇▇") to be effective the
1st day of September, 2009 ("Effective Date").
RECITALS
1. MicroStar
is engaged in the logistical management of stainless steel Kegs (as defined
below) for the brewing industry and has developed proprietary concepts,
arrangements and systems for the ownership, licensing of the use, tracking,
delivery, and retrieval of Kegs as more specifically described in the Agreement
(the "Keg
Services").
2. ▇▇▇▇▇▇
is engaged in the business of brewing premium and/or special quality beers and
hard cider draft products and desires to more efficiently service existing and
potential new markets.
3. ▇▇▇▇▇▇
desires to obtain, and MicroStar desires to provide, the Keg Services on the
terms and conditions set forth herein.
In
consideration of mutual promises, covenants, consideration, representations and
warranties, the parties agree as follows:
AGREEMENT
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Section
1.
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Definitions
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In this
Agreement the following words and phrases shall have the following
meanings:
"Change of Control" means with
respect to a party: (A) the direct or indirect acquisition of either (i) the
majority of the voting stock of such party or (ii) all or substantially all of
the assets of such party, by another entity in a single transaction or series of
related transactions; or (B) such party is merged with, or into, another
entity.
"Half-Barrel Kegs" means beer
kegs that are straight-sided with a single opening and an American ▇▇▇▇▇▇-type
neck, having a full U.S. Half-Barrel (15.5 gallon) capacity, with chimes
constructed of spring steel, with minimum chime (skirt) thickness of 2.00 mm and
minimum sidewall (body/shell) thickness of 1.32 mm.
"Keg Purchase Quantity" means
the quantity equal to four (4) times the average quantity of MicroStar Kegs
delivered to ▇▇▇▇▇▇ by MicroStar each month during the six (6) month period
immediately preceding the effective date of the termination of this
Agreement.
1
"Kegs" means both Half-Barrel
Kegs and One-Sixth Barrel Kegs, referred to individually as a "Keg".
"Local Wholesaler," "Regional Wholesaler," "Extended Regional Wholesaler,"
"National Wholesaler,"
and "International
Wholesaler" have the meanings set forth in the table in Section 3.1 and
shall each be referred to herein as a "Wholesaler".
"MicroStar Kegs" means Kegs
provided by MicroStar as part of the Keg Services under this
Agreement.
"One-Sixth Barrel Kegs" means
all-stainless-steel one-sixth barrel beer kegs that are straight-sided with a
single opening and an American ▇▇▇▇▇▇-type neck, (approximate capacity of 5.16
gallons) having a minimum chime (skirt) thickness of 1.50 mm and minimum
sidewall (body/shell) thickness of 1.20 mm.
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Section
2.
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Services;
Procurement of Kegs
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2.1
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Services;
Ownership of Kegs; Uses and Prohibited
Uses.
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2.1.1
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Services. Subject
to the terms and conditions herein, including, without limitation,
▇▇▇▇▇▇'▇ payment of all amounts owed to MicroStar under this Agreement,
MicroStar shall provide the Keg Services to
▇▇▇▇▇▇.
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2.1.2
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Title to Kegs;
Liens. ▇▇▇▇▇▇ agrees that: (a) all MicroStar Kegs will
remain at all times the property of and be subject to the exclusive right
of control and disposition of MicroStar; (b) ▇▇▇▇▇▇ will neither take nor
suffer any action to be taken that interferes with or threatens
MicroStar's rights thereto; (c) upon expiration or termination of this
Agreement, ▇▇▇▇▇▇ will return the MicroStar Kegs to MicroStar in
accordance with Section 9.2.2; (d) ▇▇▇▇▇▇ will ensure that any
certificates of title prepared by or caused to be prepared by ▇▇▇▇▇▇ for
the MicroStar Kegs designate MicroStar as owner; and (e) ▇▇▇▇▇▇ will not
permit MicroStar's rights hereunder or in the MicroStar Kegs to be subject
to any lien, charge or encumbrance that may be levied against or imposed
upon the MicroStar Kegs.
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2.1.3
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License. MicroStar
grants ▇▇▇▇▇▇ a non-exclusive, limited, non-transferable,
non-sublicensable, revocable license to use the MicroStar Kegs for
▇▇▇▇▇▇'▇ business purposes subject to ▇▇▇▇▇▇'▇ compliance with the terms
and conditions of this Agreement.
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2.1.4
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Restrictions. ▇▇▇▇▇▇
agrees any MicroStar Kegs may be used only for the packaging, transport
and sale of beer and hard cider draft products. ▇▇▇▇▇▇ shall
not use the MicroStar Kegs for filling, transport or storage of any root
beer, cola, soda, sport drinks, "energy-beverages" or similar beverage
products. ▇▇▇▇▇▇ must request and obtain MicroStar's prior
approval, which may be withheld in MicroStar's sole discretion, of any
proposed use of MicroStar Kegs for purposes of the sale of any
lambic-style beers or other beer or specialty beverage products (or
combinations) which contain fruit, fruit syrups, fruit essence, or similar
ingredients. MicroStar may specify any testing protocols it
deems appropriate as a condition of approval. If ▇▇▇▇▇▇ desires
to use MicroStar Kegs at non-local festivals, ▇▇▇▇▇▇ must obtain
MicroStar's prior written consent for such use, which consent may be given
or withheld in MicroStar's discretion. ▇▇▇▇▇▇ shall not utilize
any MicroStar Kegs in its business operations which are not specifically
subject to this Agreement. ▇▇▇▇▇▇ shall pay MicroStar the Keg
Replacement Cost for each verified occurrence of unauthorized use of
MicroStar Kegs in ▇▇▇▇▇▇'▇ operations which are not specifically subject
to this Agreement.
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2
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2.1.5
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Risk of
Loss. During the term of this Agreement, ▇▇▇▇▇▇ will
bear the risk of loss, damage, theft, requisition, or destruction of the
MicroStar Kegs, partial or complete, from whatever source, regardless of
whether covered by insurance ("Risk of Loss"), while
the MicroStar Kegs are not in MicroStar's or MicroStar's service
providers' possession or control (including while MicroStar kegs are in
the possession or control of Wholesalers). In the case of Kegs
lost while in possession or control of Wholesalers, MicroStar must be able
to demonstrate the specific loss.
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2.2
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Purchase
of Conforming Kegs from
▇▇▇▇▇▇.
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2.2.1
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Purchase of Existing
Inventories of ▇▇▇▇▇▇'▇ Kegs. MicroStar may agree to
acquire from ▇▇▇▇▇▇ any Kegs which ▇▇▇▇▇▇ may now own and desires to make
subject to this Agreement, provided that such Kegs conform to the
definition of "Half-Barrel Kegs" or "One-Sixth Barrel Kegs", as set forth
in this Agreement and are of a condition and quality acceptable to
MicroStar in its sole discretion (the "Purchase
Kegs"). If the parties agree that MicroStar will
purchase Kegs from ▇▇▇▇▇▇, the parties will execute a ▇▇▇▇ of Sale
substantially in the form set forth in Exhibit E ("▇▇▇▇ of
Sale"). The purchase price for the Purchase Kegs shall
be separately agreed upon by the parties in writing after verification of
condition and quality of the Purchase Kegs. The final quantity
of the Purchase Kegs shall be agreed to in writing by authorized
representatives of MicroStar and
▇▇▇▇▇▇.
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2.2.2
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Marking of
Kegs. MicroStar will ▇▇▇▇ all Purchase Kegs with
MicroStar's proprietary markings. Placement of physical
markings shall be performed by MicroStar's field personnel as
expeditiously as possible and shall be initiated no more frequently than
once per month, until all Purchase Kegs so sold by ▇▇▇▇▇▇ to MicroStar
shall have been so marked.
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2.2.3
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Payment. Payment
by MicroStar for the Purchase Kegs purchased from ▇▇▇▇▇▇ shall be based on
the agreed price after deduction of initial use fees or any other then
outstanding charges due to MicroStar pursuant to this
Agreement. Payment by MicroStar for the Purchase Kegs shall be
made to ▇▇▇▇▇▇ after all Purchase Kegs in a Lot (as defined below) have
been physically marked by MicroStar with its proprietary markings which
shall be done at ▇▇▇▇▇▇'▇ facilities in lots no smaller than five hundred
(500) Purchase Kegs (a "Lot") and after
MicroStar has verified that ownership of the Purchase Kegs may be
transferred to MicroStar free of any and all liens and
encumbrances.
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3
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Section
3.
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Fees;
Invoicing; Price Adjustment; Deposit; Delivery
Designation
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3.1
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Fees
Based Upon xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx
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The fees
charged by MicroStar for ▇▇▇▇▇▇'▇ use of MicroStar Kegs are based upon xxx xxx
xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx
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xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx
xxx xxx xxx xxx xxx xxx xxx xxx xxx x xxx xxx
xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx . The xxx fees and
requirements applicable hereunder are set forth in the following
table:
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xxx
xxx x xxx xxx xx
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xxx
xxx xxx xxx xxx x
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Requirements
Applicable to xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx
xxx
xxx xxx
xxx
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4
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xxx
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xxx
xxx xxx xxx xxx x
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Requirements
Applicable to xxx xxx xxx xxx xxx xxx xxx xxx xx
xxx
xxx xxx xxx xxx x
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3.2
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Special
Requirements for xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx
xxx xxx x xxx xxx xxx xxx xxx xxx xxx
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3.2.1
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Requirements for xxx xxx xxx
xxx xxx xxx xxx xxx xxx xxx If applicable, ▇▇▇▇▇▇ may
specify xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx
xxx xx Promptly after the Effective Date, ▇▇▇▇▇▇ must deliver a
letter substantially in the form set forth in Exhibit F ("Letter") to the Local
Wholesalers (and carbon copy MicroStar) which notifies the Local
Wholesaler that Local Wholesaler must: (i) return to MicroStar at the
location designated by MicroStar , which will usually be the ▇▇▇▇▇▇'▇
Delivery Location, but may be other locations as determined by MicroStar,
all MicroStar Kegs originally distributed by Local Wholesaler on behalf of
▇▇▇▇▇▇ at no-charge to MicroStar, and (ii) agree to and honor the timing,
quantities and other arrangements relating to such MicroStar Keg returns
and deliveries, including returned Keg quantities and the required date of
return, as specified or directed by MicroStar. ▇▇▇▇▇▇ will be
responsible for obligating and ensuring Local Wholesalers comply with the
terms and conditions specified in the Letter. In the event
MicroStar must arrange for the return of empty MicroStar Kegs from a given
Local Wholesaler to ▇▇▇▇▇▇, a separate xxx xxx xxx xxx xxx xx shall be
imposed and invoiced to ▇▇▇▇▇▇ in the amount of xxx xxx xxx xxx xxx xxx
xxx xxx xxx xxx xxx x xxx xxx xxx xxx xxx xxx xxx returned by MicroStar to
▇▇▇▇▇▇ from the affected Local Wholesaler's
premises.
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3.2.2
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Consequences of xxx xxx xxx xxx
xxx xxx xxx xxx xxx xxx xxx xxx xxx xx xxx xxx xxx xxx
x In the event that xxx xxx xxx xxx xxx xxx fails to
perform in accordance with the terms and conditions of the Letter on two
(2) or more occasions during a given calendar quarter, then MicroStar
shall have the right to xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx
xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xx of this
Agreement, in which event MicroStar will provide written notice to ▇▇▇▇▇▇
of xxx xxx xxx xxx xxx xxx xxx x Any determination by MicroStar
not to xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx upon the occurrence of
two (2) or more instances of non-compliance with requirements during a
given calendar quarter shall not constitute a waiver of the right to xxx
xxx xxx xxx xxx xxx xxx xxx xxx xxx xx at any time
thereafter.
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5
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3.3
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Price
Adjustment xxx xxx xxx xxx xxx xxx xxx xxx xxx
xx.
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The fees
set forth in Section 3.1 above shall be adjusted xxx xxx xxx xxx xxx xxx xxx xxx
xxx xxx xxx xxx xxx xxx xxx x xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xx
hereunder as described in this Section 3.3. These xxx xxx xxx will be
based on xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx
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a.
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xxx
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b.
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c.
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xxx xxx
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xxxx xxx
xxx xx The xxx xxx price adjustment provided hereunder will take
effect on xxx xxx xxx xxx xxx xxx xxx xxx xxx xx
The
calculation xxx xxx xxx xxx xxx will be determined as follows:
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a.
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xxx
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x
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b.
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xxx
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c.
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6
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3.4
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xxx
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xx
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Should
the ▇▇▇▇▇▇ fail to xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx
xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx x within the
calendar year, or xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx
xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xx
▇▇▇▇▇▇ shall be required to xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx
xxx xxx xxx xxx xx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx x for
MicroStar Kegs, which will be xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx
xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx
xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx
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xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx
xxx xxx xxx xxx xxx xxx xxx requested by MicroStar for inclusion xxx xxx xxx xxx
xxx xxx xxx xx as may be necessary to cause xxx xxx xxx xxx xxx xxx xxx xxx xxx
xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx
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x Upon termination of this Agreement, MicroStar shall xxx xxx xxx xxx
xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx
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x
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3.5
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Forecasts;
Orders; Delivery of Kegs per ▇▇▇▇▇▇'▇
Requirements.
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3.5.1
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Forecasts
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a.
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No
later than five (5) days after the Effective Date, ▇▇▇▇▇▇ shall provide
MicroStar with a requirements forecast of the types and quantities of
MicroStar Kegs required by ▇▇▇▇▇▇ for each month during the period that
begins on the Effective Date and ends at the end the then-current calendar
year ("Initial
Forecast").
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b.
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On
or before September 1st of each year during the term of the Agreement,
▇▇▇▇▇▇ will deliver to MicroStar a requirements forecast of the types and
quantities of MicroStar Kegs required by ▇▇▇▇▇▇ for each month during the
following calendar year ("Annual
Projection").
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c.
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In
the event that the quantity of MicroStar Kegs to be delivered in a
particular calendar month as set forth in Orders (defined below) accepted
by MicroStar exceed the ▇▇▇▇▇▇'▇ most recent forecasted quantity (whether
such forecast was in an Initial Forecast, Annual Projection or Updated
Forecast) for such calendar month, notwithstanding any requested delivery
date in an accepted Order, MicroStar will supply the quantities of
MicroStar Kegs that are in excess of the forecasted amount by the later of
(i) 120 days of MicroStar's receipt of the Order containing the excessive
quantities, or (ii) when MicroStar receives additional Kegs from its
suppliers.
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7
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d.
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In
the event that the quantity of MicroStar Kegs to be delivered in a
particular calendar month as set forth in Orders (defined below) accepted
by MicroStar is less than 90% of the ▇▇▇▇▇▇'▇ most recent forecasted
quantity (whether such forecast was in an Initial Forecast or Annual
Projection) for such calendar month, ▇▇▇▇▇▇ will xxx xxx xxx xxx xxx xxx
xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xx xxx xxx xxx xxx xxx xxx
xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx
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3.5.2
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Orders. ▇▇▇▇▇▇
shall submit orders to MicroStar indicating requested delivery dates and
quantities of MicroStar Kegs needed in lots of one hundred (100) MicroStar
Kegs ("Order"). All
Orders must be received by MicroStar at least thirty (30) days prior to
▇▇▇▇▇▇'▇ requested delivery dates. Orders are subject to
MicroStar's acceptance, and are subject to the terms and conditions of
this Agreement. Preprinted terms and conditions on any Order
are expressly rejected by MicroStar. Orders requesting delivery
in less than thirty (30) days are subject to Section
3.5.4. MicroStar will forward a written confirmation of its
receipt of ▇▇▇▇▇▇'▇ Order by facsimile, or e-mail prior to the close of
the business day following the date of MicroStar's receipt of such
notice. All Orders described in this Section 3.5.2 shall be
made to the designated contact information provided per Section
12.9.
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3.5.3
|
Delivery
Standard. For all Orders accepted by MicroStar,
MicroStar will deliver MicroStar Kegs, at MicroStar's cost, to ▇▇▇▇▇▇ at
the location specified in Exhibit A and in accordance with this Section
3.5.3. MicroStar shall endeavor to deliver the requested
MicroStar Kegs to ▇▇▇▇▇▇ in accordance with ▇▇▇▇▇▇'▇ Orders and this
Agreement. Delivery shall be deemed to conform to the
requirements of the applicable Order and this Agreement if the actual time
of delivery is within seventy-two (72) hours prior or subsequent to the
specifically requested delivery time and the quantities so delivered are
within a ten percent (10%) variance of the specifically requested quantity
of MicroStar Kegs.
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3.5.4
|
Surcharge for Expedited
Deliveries. MicroStar may in its sole discretion,
however, elect to accommodate a request for expedited delivery of
MicroStar Kegs, in which event a surcharge, xxx xxx xxx xxx xxx xxx xxx
xxx xxx xxx xxx xxx xx xxx xxx xxx xx shall apply as follows: a) if the
request is made fifteen (15) or fewer days prior to the requested delivery
date, the surcharge shall be $2.00 per MicroStar Keg; b) if the request is
made more than fifteen (15) but less than thirty (30) days in advance of
the requested delivery date, no surcharge shall be
applied. MicroStar's election to accommodate any given request
for expedited delivery of MicroStar Kegs shall not create or imply any
obligation to provide such expedited delivery on any subsequent
occasions.
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8
|
3.6
|
Surcharge
for Extended Keg Inactivity.
|
▇▇▇▇▇▇
shall use its best efforts to ensure that ▇▇▇▇▇▇'▇ inventory of MicroStar Kegs
does not exceed ▇▇▇▇▇▇'▇ monthly requirements as set forth in any forecast
provided under this Agreement. In the event that MicroStar Kegs
requested to be delivered to ▇▇▇▇▇▇ (or any third-party owned brewing facilities
utilized by ▇▇▇▇▇▇) pursuant to Section 3.5 are not shipped to a Wholesaler or
utilized in relation to other sales contemplated by this Agreement (e.g.,
self-distributed sales or on-site pub operations) within sixty (60) days after
the date on which MicroStar delivers such MicroStar Kegs, MicroStar may assess
and ▇▇▇▇▇▇ will pay xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx
xxx xxx xxx xx for the affected MicroStar Kegs. A further xxx xxx xxx
xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx x will be imposed with
respect to each xxx xxx xxx xxx xxx increment or fraction thereof which elapses
after the initial sixty (60) days until actual shipment to a Wholesaler or other
permissible utilization of such MicroStar Kegs occurs.
|
3.7
|
Reports;
Invoicing.
|
|
3.7.1
|
Reports. During
the term of this Agreement, ▇▇▇▇▇▇ shall maintain accurate and complete
records regarding ▇▇▇▇▇▇'▇ use of MicroStar Kegs, including without
limitation, information regarding: (i) the number of times MicroStar Keg
is "turned" or "filled", (ii) monthly beginning inventory of MicroStar
Kegs, (iii) monthly ending inventory of MicroStar Kegs, (iv) locations of
MicroStar Kegs, (v) verification of deliveries of MicroStar Kegs from
MicroStar to ▇▇▇▇▇▇, and (vi) verification of all deliveries of MicroStar
Kegs to Wholesalers. On a weekly basis, ▇▇▇▇▇▇ will provide
MicroStar with reports summarizing the quantities of empty MicroStar Kegs
delivered to ▇▇▇▇▇▇ during the previous week, the quantities of MicroStar
Kegs shipped out to Wholesalers during the previous week, and, if
applicable, the number of MicroStar Kegs filled for self-distribution or
on-site pub operations during the previous week, as well as copies of all
information and documentation pertaining to any of the
foregoing. On a monthly basis, ▇▇▇▇▇▇ will provide MicroStar
with reports summarizing the information in (ii), (iii), (iv), (v), and
(vi) above. ▇▇▇▇▇▇ agrees to report all requisite information
on such forms as MicroStar may from time-to-time prescribe and furnish for
such purposes. Failure to provide this documentation may result
in delay of Keg Services and, if not cured after thirty (30) days of
receipt of written notice, will result in suspension of Keg Services under
this Agreement. The reports and documentation provided by the
▇▇▇▇▇▇ shall be used by MicroStar to reconcile on a monthly basis,
MicroStar Keg inventory quantities and movements. Should
missing MicroStar Kegs be identified as a result of this reconciliation,
MicroStar may provide ▇▇▇▇▇▇ written notice of the missing MicroStar Kegs
and ▇▇▇▇▇▇ will have ninety (90) days from its receipt of the notice to
locate and return the missing MicroStar Kegs to MicroStar, or MicroStar
will invoice ▇▇▇▇▇▇ the Keg Replacement Cost (defined below) for each
missing MicroStar Keg.
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|
3.7.2
|
Invoices. MicroStar
will invoice ▇▇▇▇▇▇ for all fees and other amounts due under the Agreement
("Fees"). ▇▇▇▇▇▇
will pay monthly invoices within thirty (30) days of the date of the
invoice. Past due invoices will incur late fees at the lesser
of the maximum rate allowed by law or one and one-half percent (1.5%) per
month of the outstanding amount. In the event of a delinquent
payment of any invoice, MicroStar shall have the right to suspend Keg
Services and/or to require future payments to be made prior to delivery of
MicroStar Kegs.
|
9
|
3.7.3
|
Taxes. In
addition to the fees specified in Section 3.1 above, ▇▇▇▇▇▇ shall be
responsible for payment of, and MicroStar will be authorized to collect
any applicable sales, use, customs duties, excise, personal property, or
similar taxes and assessments imposed upon the MicroStar Kegs and services
provided to ▇▇▇▇▇▇ hereunder by any federal, state, local, or foreign
governmental authority, exclusive only of any taxes based on MicroStar's
income or payroll. MicroStar's invoices shall reflect the
amount of taxes to be collected, but any failure or delay of MicroStar in
determining applicability of or in collecting any applicable taxes as
above described shall not waive or preclude MicroStar's later collection
of any such taxes determined to be payable. MicroStar will
provide notice of Property Tax assessed for use of Kegs to be invoiced to
▇▇▇▇▇▇.
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|
3.7.4
|
Keg
Replacement. The "Keg Replacement Cost" is
the cost and expense MicroStar incurs to obtain a new Keg at any given
time. For any MicroStar Keg reported or verified as having been
lost or damaged beyond repair while ▇▇▇▇▇▇ bears the risk of loss for such
MicroStar Keg pursuant to Section 3.1, MicroStar may either (i) withdraw
the amount of the Keg Replacement Cost from the Deposit (as defined in
Section 4.1.2), or (ii) invoice ▇▇▇▇▇▇ the Keg Replacement Cost in which
case ▇▇▇▇▇▇ will pay such amount. In the event a MicroStar Keg
that was presumed to have been lost is later located and returned to
MicroStar and ▇▇▇▇▇▇ has already paid the Keg Replacement Cost, MicroStar
will either credit ▇▇▇▇▇▇ the applicable Keg Replacement Cost on the next
invoice or credit the Deposit the amount of the Keg Replacement
Cost.
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|
Section
4.
|
Arrangements
and Agreements with Wholesalers
|
|
4.1
|
Notification
and Compliance Obligations of
▇▇▇▇▇▇.
|
|
4.1.1
|
Notification. ▇▇▇▇▇▇
and MicroStar acknowledge and agree that MicroStar will notify all
Wholesalers to whom ▇▇▇▇▇▇ delivers product in MicroStar Kegs, and from
whom MicroStar has the right and obligation to collect and retrieve empty
MicroStar Kegs, of the existence of this Agreement and of certain rights
and responsibilities of MicroStar hereunder by delivering a letter to the
Wholesalers in the form attached as Exhibit F ("Notice"). Such
letter will authorize the release of MicroStar Kegs from the Wholesalers
to MicroStar. In addition to any other rights or remedies under
this Agreement, ▇▇▇▇▇▇ will be solely responsible for any cost or expense
incurred by MicroStar as a result of a Wholesalers' failure to release
MicroStar Kegs to MicroStar, after MicroStar provides notice to ▇▇▇▇▇▇ of
Wholesaler's failure to release kegs, should ▇▇▇▇▇▇ continue to ship Kegs
to the Wholesaler..
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10
|
4.1.2
|
Keg
Deposits. Without limitation of such other disclosures
of the arrangements provided for in this Agreement, MicroStar's Notice
shall describe Keg deposits and reports required from
Wholesalers. A Keg deposit in the amount of xxx xxx xxx xxx xxx
xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx (the "Deposit") will be billed
to Wholesaler by MicroStar and shall be payable directly to
MicroStar. In MicroStar's sole discretion and upon written
notice to Wholesaler and ▇▇▇▇▇▇, the amount of the Deposit may be
increased. An increase will be effective immediately upon
delivery of written notice by MicroStar to Wholesaler. The
Deposit shall serve as security to MicroStar against the loss of or damage
to any MicroStar Keg. MicroStar may make periodic withdrawals
from the Deposit for loss or damage to MicroStar
Kegs. Similarly, credit memos will be issued by MicroStar
whenever MicroStar Kegs are returned. Should a Wholesaler in
the ▇▇▇▇▇▇'▇ network refuse to pay a Keg Deposit, MicroStar will notify
the ▇▇▇▇▇▇ of the Wholesaler's failure to comply, and should ▇▇▇▇▇▇
continue to ship Kegs to the Wholesaler, ▇▇▇▇▇▇ will be responsible for
providing the Deposit.
|
|
4.1.3
|
Reports. ▇▇▇▇▇▇
will obligate Wholesaler to report to MicroStar by fax, e-mail and/or
phone on a bi-weekly basis concerning the extent of empty MicroStar Kegs
in Wholesaler's warehouse(s). MicroStar shall be authorized to conduct
periodic inspections and audits of Wholesaler's inventory of MicroStar
Kegs, including Kegs in the retail system. Upon MicroStar's request,
▇▇▇▇▇▇ will be responsible for organizing such inspections and audits and
obtaining access to Wholesaler's premises to conduct such inspections and
audits.
|
|
Section
5.
|
Trademark
License
|
|
5.1
|
▇▇▇▇▇▇
hereby grants MicroStar a nonexclusive, nontransferable, royalty-free
license to use, ▇▇▇▇▇▇'▇ registered and unregistered trademarks, trade
names, slogans, logos, and trade dress for the limited purposes of
producing ▇▇▇▇▇▇/product identification labels and materials, to the
extent that any of these are depicted on the label (the "▇▇▇▇▇▇
Marks"). ▇▇▇▇▇▇ will own all ▇▇▇▇▇▇
Marks. MicroStar may not use ▇▇▇▇▇▇ Marks for purposes other
than the placing labels on the MicroStar Kegs, and MicroStar obtains no
other rights to the ▇▇▇▇▇▇ Marks. Any goodwill arising from
MicroStar's use of the ▇▇▇▇▇▇ Marks will inure to ▇▇▇▇▇▇'▇
benefit. Except as expressly provided, no right, property,
license, permission or interest of any kind in or to the use of any
trademark, trade name, color combination, insignia or device owned or used
by ▇▇▇▇▇▇ is or is intended to be given or transferred to or acquired by
MicroStar by the execution, performance or nonperformance of this
Agreement or any part of it.
|
|
Section
6.
|
Confidentiality
|
|
6.1
|
"Confidential
Information" means (a) any business or technical information of
MicroStar or ▇▇▇▇▇▇, including but not limited to any information relating
to either party's products, services, prices, marketing plans, business
opportunities, customers, or personnel, and (b) any other information of
MicroStar or ▇▇▇▇▇▇ that is specifically designated by the disclosing
party as confidential or proprietary. Confidential Information
shall not include information that (i) is in or enters the public domain
without breach of this Agreement by the receiving party, (ii) was
demonstrably in the possession of the receiving party prior to first
receiving it from the disclosing party without restriction on disclosure,
(iii) the receiving party can demonstrate was developed by the receiving
party independently and without use of or reference to the disclosing
party's Confidential Information, or (iv) the receiving party receives
from a third party without restriction on disclosure and without breach of
a nondisclosure obligation. Each party shall maintain the
Confidential Information of the other party in strict confidence until
such time as the Confidential Information falls under one of the
exceptions listed in items (i) through (iv) above. Each party
shall exercise no less than reasonable care with respect to the handling
and protection of such Confidential Information. Each party
shall use the Confidential Information of the other party only to perform
its obligations under this Agreement, and shall disclose such Confidential
Information only to its employees and independent contractors who are
subject to binding use and disclosure restrictions at least as protective
as those set forth herein and only as is reasonably required in connection
with the exercise of its rights and obligations under this
Agreement. Notwithstanding the above, the receiving party may
disclose Confidential Information of the disclosing party pursuant to a
valid order or requirement of a court or government agency, provided that
the receiving party gives prompt notice to the disclosing party upon
receiving the order or learning of the requirement. Any such
disclosure by the receiving party of the Confidential Information of the
disclosing party, shall, in no way, be deemed to change, affect or
diminish the confidential status of such Confidential
Information.
|
11
|
Section
7.
|
Indemnity;
Limitation of Liability; Disclaimer of
Warrant
|
|
7.1
|
Indemnity.
|
|
7.1.1
|
▇▇▇▇▇▇
will defend, indemnify and hold harmless MicroStar and its officers,
directors, employees and agents from and against all liabilities, damages,
judgments, awards, fines, penalties, costs and expenses (reasonable
attorneys' fees and other expenses incurred by or levied against MicroStar
as a result of such claims) resulting from or based on third-party claims
arising from, resulting from, or based on: (i) ▇▇▇▇▇▇'▇ gross negligence
or intentional misconduct; (ii) ▇▇▇▇▇▇'▇ business, products, services, and
customers, (iii) any unauthorized or illegal use of MicroStar Kegs; (iv)
loss or damage to MicroStar Kegs while not in MicroStar's or its service
providers' possession (in the case of Kegs damaged or lost while in
possession or control of Wholesalers, MicroStar must be able to
demonstrate the specific damage or loss), or (v) ▇▇▇▇▇▇'▇ breach of its
obligations under
Section 10.1.
|
|
7.1.2
|
MicroStar
will defend, indemnify and hold harmless ▇▇▇▇▇▇ and its officers,
directors, employees and agents from and against third-party claims
resulting from or based on personal injury or property damage arising from
MicroStar's gross negligence or intentional misconduct; including payment
by MicroStar of any liabilities, damages, judgments, awards, fines,
penalties, costs and expenses (reasonable attorneys' fees and other
expenses incurred by or levied against ▇▇▇▇▇▇ as a result of such claims)
resulting from or based on such
claim.
|
|
7.1.3
|
The
party entitled to indemnification under this Section 7 ("Indemnified Party") must
notify the other party ("Indemnifying Party")
promptly in writing of any covered action, give the Indemnifying Party
sole control over the defense thereof and any related settlement
negotiations, and cooperate and, at the Indemnifying Party's request and
expense, assist in such defense. The Indemnified Party may also
participate in the defense at its own
expense.
|
|
7.2
|
Limitation
of Liability.
|
EXCEPT
FOR A PARTY'S INDEMNIFICATION OBLIGATIONS, NEITHER PARTY SHALL BE LIABLE TO THE
OTHER PARTY FOR ANY SPECIAL, PUNITIVE, CONSEQUENTIAL OR INDIRECT DAMAGES,
INCLUDING BUT NOT LIMITED TO LOSS OF PROFITS, BUSINESS OPPORTUNITIES, OR ▇▇▇▇▇▇
GOODWILL IN CONNECTION WITH THIS AGREEMENT OR THE SERVICES PROVIDED
HEREUNDER. IN NO EVENT SHALL MICROSTAR' S LIABILITY TO ▇▇▇▇▇▇ FOR
DIRECT DAMAGES EXCEED THE AMOUNT PAID TO MICROSTAR BY ▇▇▇▇▇▇ UNDER THIS
AGREEMENT DURING THE TWELVE MONTHS IMMEDIATELY PRECEDING THE EVENT THAT GAVE
RISE TO THE DAMAGES.
|
7.3
|
Warranties.
|
|
7.3.1
|
MicroStar
warrants to ▇▇▇▇▇▇ that the Keg Services provided under this Agreement
will be provided in a ▇▇▇▇▇▇▇-like manner. ▇▇▇▇▇▇'▇ sole and
exclusive remedy and MicroStar's sole obligation for any breach of this
warranty will be for MicroStar to re-perform any defective Keg Services at
no additional charge to ▇▇▇▇▇▇.
|
|
7.3.2
|
ANY
WARRANTIES OF THE PARTIES EXPRESSLY SET FORTH IN THIS SECTION 7.3 ARE THE
SOLE WARRANTIES MADE BY THE PARTIES AND ARE IN LIEU OF AND EACH PARTY
DISCLAIMS ALL OTHER WARRANTIES, EXPRESS, IMPLIED, OR STATUTORY, INCLUDING
BUT NOT LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, TITLE, AND NON-INFRINGEMENT. IN ANY
JURISDICTION WHICH DOES NOT ALLOW THE EXCLUSION OR LIMITATION OF IMPLIED
WARRANTIES, ANY IMPLIED WARRANTIES , TO THE MAXIMUM EXTENT PERMITTED BY
THE APPLICABLE LAWS OF ANY SUCH JURISDICTION, SHALL BE LIMITED TO THE TERM
OF THIS AGREEMENT. IN ALL INSTANCES, ▇▇▇▇▇▇'▇ SOLE REMEDY FOR
BREACH OF ANY SUCH WARRANTY SHALL BE LIMITED TO THE RE-PERFORMANCE OF THE
SERVICE AT ISSUE.
|
|
Section
8.
|
Insurance
|
|
8.1
|
MicroStar
and ▇▇▇▇▇▇ each must carry and maintain at their own expense and in full
force and effect at all times during the term of this Agreement and for
one (1) year thereafter Commercial General Liability Insurance with a
limit of liability of no less than xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx
xxx xxx xx
|
The
Commercial General Liability Insurance coverage required under this section
must:
|
|
1)
|
include
product liability and contractual liability coverage which specifically
insures the hold harmless and indemnification provisions of Section 6 of
this Agreement;
|
12
|
|
2)
|
be
secured and maintained under an occurrence form policy or coverage form
reasonably acceptable to the other party's insurance
department;
|
|
|
3)
|
be
placed with an insurer of recognized
responsibility;
|
|
|
4)
|
name
the other party and affiliated companies as an "additional
insured";
|
|
|
5)
|
provide
for at least thirty (30) days advance written notice to the other party of
any cancellation or any material change in the coverage;
and
|
Additionally,
▇▇▇▇▇▇ must carry and maintain at its own expense and in full force and effect
at all times during the term of this Agreement and for one (1) year thereafter
transit coverage insurance with a limit of liability of no less than xxx xxx xxx
xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx x which provides coverage for transit
for shipments authorized by ▇▇▇▇▇▇ ("Transit Coverage"), and the
▇▇▇▇ of lading for such shipment will indicate such Transit
Coverage.
Neither
party may cancel any insurance policy maintained pursuant to the requirements of
this paragraph without the prior written consent of the other. Upon
written request, a certificate of insurance will be sent to the requesting
party.
|
Section
9.
|
Term;
Termination; Effect of Termination; Exclusivity of
Agreement
|
|
9.1
|
Term.
|
This
Agreement shall be for an initial term of five (5) years (the "Initial Term"). The
parties hereto may, upon the expiration of the initial term, extend the term of
this Agreement upon execution of a written instrument to that effect by
MicroStar and ▇▇▇▇▇▇ (the "Extended Term").
|
9.2
|
Termination;
Effect of Termination.
|
|
9.2.1
|
Termination for
Breach. In the event of a material breach of a provision
of this Agreement by a party hereto, the other party shall have the right
to terminate the Agreement immediately (i) if such material breach cannot
be cured, or (ii) if such material breach remains uncured after thirty
(30) days of receipt of written notice of such material
breach.
|
|
9.2.2
|
Effect of
Termination. Upon termination of this Agreement for any
reason, MicroStar will cease the Keg Services and ▇▇▇▇▇▇ shall immediately
cease use and distribution of any and all MicroStar
Kegs. ▇▇▇▇▇▇ will promptly return all MicroStar Kegs in
possession of ▇▇▇▇▇▇ to MicroStar at ▇▇▇▇▇▇'▇ cost and
expense. Upon termination of this Agreement, MicroStar shall
have the right, exercisable upon delivery of written notification thereof
to ▇▇▇▇▇▇ within thirty (30) days after the effective date of the
termination of this Agreement, to require ▇▇▇▇▇▇ to purchase the Keg
Purchase Quantity from MicroStar at such time, at the prices set forth in
Exhibit "D" hereto.
|
13
|
9.2.3
|
Survival of
Obligations. Section 2.1.2 (Title to Keg; Liens; UCC
Filings), Section 6 (Confidentiality), Section 7 (Indemnification;
Limitation of Liability; Warranties), Section 9.2.2 (Effect of
Termination), 9.2.3 (Survival of Obligations), Section 12 (Miscellaneous)
shall survive the termination of this Agreement for any
reason.
|
|
Section
10.
|
Cleaning
of Kegs
|
|
10.1
|
Cleaning
Responsibilities of ▇▇▇▇▇▇.
|
▇▇▇▇▇▇
acknowledges that the MicroStar Kegs to be delivered to ▇▇▇▇▇▇ pursuant to this
Agreement will be retrieved and shipped from Wholesaler locations without any
cleaning having been performed. ▇▇▇▇▇▇ agrees to clean all MicroStar
Kegs delivered to ▇▇▇▇▇▇ hereunder to a standard which meets or exceeds all
requirements of any existing or future applicable law or
regulation. Unless a higher standard is demanded by any applicable
law or regulation, the cleaning protocol to be utilized by ▇▇▇▇▇▇ shall include
washing standards for either a sterilizing sequence (steam) or a sanitizing
sequence (oxime) and quality control check requirements that are comparable to
and no less strict than the C.I.P. Sequence set forth in Exhibit "C"
hereto. Upon entering this Agreement, ▇▇▇▇▇▇ shall provide detailed
specifications of its Keg cleaning equipment (to include manufacturer, date of
manufacture, etc.) and current Keg cleaning protocol and sequence times
(collectively with the keg cleaning equipment, the "Keg Cleaning Methodology") and
shall notify MicroStar of any changes to such Keg Cleaning
Methodology.
|
Section
11.
|
Audits;
Accounting
|
|
11.1
|
Audit
Rights of the Parties.
|
During
the term of this Agreement and for a period of two (2) years following any
expiration or termination hereof, ▇▇▇▇▇▇ will maintain accurate records with
respect to its performance under this Agreement. From time to time
upon reasonable notice, or upon a reasonable determination by MicroStar that
▇▇▇▇▇▇ has breached this Agreement, MicroStar may inspect the facilities,
systems, books and records of ▇▇▇▇▇▇ to verify ▇▇▇▇▇▇'▇ compliance with this
Agreement. Such inspection will be conducted during normal business
hours. The costs and expenses incurred by MicroStar in connection
with the inspection will be paid by MicroStar unless the payments to MicroStar
have been less than ninety-eight percent (98%) of the payment owed to MicroStar
during the period covered by the inspection, as determined by the Auditor, in
which case ▇▇▇▇▇▇ will be responsible for payment of the fees of the
inspection. If the audit reveals any underpayment of amounts due
under the Agreement, ▇▇▇▇▇▇ will promptly deliver to MicroStar any such
underpayment. ▇▇▇▇▇▇ shall promptly remedy any violation of any term
of this Agreement and shall certify the same to MicroStar in
writing.
|
11.2
|
Accounting
Procedures.
|
MicroStar
may specify and may periodically supplement or revise basic accounting
procedures to be implemented by the parties in relation to the transactions
contemplated by this Agreement. Such accounting procedures shall not
impose any material obligation on ▇▇▇▇▇▇ that is not set forth in the body of
this Agreement.
14
|
Section
12.
|
Miscellaneous
|
|
12.1
|
Amendment
and Supplementation.
|
This
Agreement may be amended or supplemented only by a written instrument executed
by authorized representatives of MicroStar and ▇▇▇▇▇▇.
|
12.2
|
Independent
Contractor.
|
This
Agreement does not constitute or give rise to a partnership between the
parties. All operations by each party under the terms of this
Agreement are carried on by it as an independent contractor and not as an agent
for the other.
|
12.3
|
Third-Party
Beneficiary Status of MicroStar Under Agreements between ▇▇▇▇▇▇ and
Wholesalers.
|
To the
extent necessary to accord MicroStar the full scope of entitlements, rights and
authorities in relation to ▇▇▇▇▇▇'▇ agreements and arrangements with Wholesalers
as contemplated hereby, MicroStar shall be recognized as a third-party
beneficiary of such agreements and arrangements.
|
12.4
|
Force
Majeure.
|
Except
for a party's payment obligations under this Agreement, any delay in performance
by either party under this Agreement will not be considered a breach of this
Agreement and will be excused to the extent caused by any occurrence that is
beyond the control of such party if such occurrence directly impairs such
party's ability to perform and is in the nature of earthquakes, famines,
epidemics and other natural disasters or acts of God, war, terrorism, riots or
civil unrest; provided, however, that a party unable to perform because of such
events gives prompt notice to the other party and uses its reasonable efforts to
mitigate the effects of such causes. Notwithstanding the foregoing,
neither party's financial condition or inability to pay will be a basis for
excusing performance of any of that party's obligations pursuant to this
Agreement.
|
12.5
|
Producing
▇▇▇▇▇▇/Product Label.
|
▇▇▇▇▇▇
will be responsible for preparing a final label form and requesting and
obtaining a Certificate of Label approval ("COLA") from the Tax and Trade
Bureau. Additionally, ▇▇▇▇▇▇ will be responsible for requesting and
obtaining any and all requisite approvals from the requisite authorities in
states where ▇▇▇▇▇▇'▇ products are distributed in MicroStar
Kegs. Copies of Certificates or other evidence of Federal and State
label approval, as applicable, shall be furnished to MicroStar upon
request. ▇▇▇▇▇▇ shall ensure that the producing ▇▇▇▇▇▇/product
identification materials are attached or affixed in a manner that completely
covers or replaces any prior producer or ▇▇▇▇▇▇ designation and expressly agrees
not to ship its products in any Kegs which reflect the label of a prior
producer/▇▇▇▇▇▇ utilizing such ▇▇▇.
▇▇
|
12.6
|
Exclusivity
of Arrangements.
|
During
the term of the Agreement, ▇▇▇▇▇▇ shall not utilize the services of any company
engaged in performing the same or substantially similar services to those of
MicroStar under this Agreement. Without limitation of the foregoing,
▇▇▇▇▇▇ agrees that during the term of this Agreement, ▇▇▇▇▇▇ shall not conclude
or enter into any agreement or understanding with any third-party regarding the
purchase, lease or licensing of any kegs (whether of the ▇▇▇▇▇▇ type or
otherwise) for use in ▇▇▇▇▇▇'▇ business without written consent from
MicroStar.
|
12.7
|
Choice
of Law; Continental US
Operations.
|
This
Agreement and the performance hereof shall be construed in accordance with, and
governed by the internal laws of the state of Colorado without giving effect to
any conflicts of laws, principles that require the application of the law of a
different jurisdiction. ▇▇▇▇▇▇ agrees not to transport the MicroStar
Kegs to be furnished hereunder to any location outside the contiguous
forty-eight states of the United States of America, unless specific written
approval is given by MicroStar in advance.
|
12.8
|
Use
of Pallets.
|
MicroStar
and ▇▇▇▇▇▇ acknowledge that certain shipments of MicroStar Kegs to and from
Wholesalers may be required to be made on wooden pallets. All pallets
utilized to transport the MicroStar Kegs covered by this Agreement shall have
standard dimensions of 40" x 48", and if required to be supplied by MicroStar
shall be charged to ▇▇▇▇▇▇ at a standard charge of seven dollars ($7.00) per
pallet. MicroStar will either provide a credit to or pay Wholesalers
who furnish pallets for transportation of MicroStar Kegs at the rate of $7.00
per pallet, if the pallets are in good condition and can sufficiently and safely
support full MicroStar Kegs.
|
12.9
|
Notices.
|
Notice
and communications required or permitted hereunder shall be in writing and any
communication hereunder shall be deemed to be duly made if actually delivered,
transmitted by facsimile, or mailed, prepaid to the parties as
follows:
|
MicroStar Keg Management, L.L.C.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇. ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
FAX (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
|
Mendocino Brewing Company
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
FAX: (▇▇▇)▇▇▇-▇▇▇▇
E-mail:
|
A party
may change its address for purposes of this Section 11.10 by giving the other
party written notice of the new address in the manner set forth
above.
16
|
12.10
|
Captions.
|
The
headings and captions in this Agreement are for convenience only and shall not
be considered a part of or affect the construction or interpretation of any
provision of this Agreement.
|
12.11
|
Exhibits.
|
All
Exhibits attached to or referred to in this Agreement are incorporated into and
made a part of this Agreement.
|
12.12
|
Waiver.
|
All
waivers must be in writing. Any waiver or failure to enforce a
provision of this Agreement on one occasion will not be deemed to be a waiver of
any other provision or such provision on any other occasion.
|
12.13
|
Severability.
|
If any
provision of this Agreement is unenforceable, such provision will be deemed
changed and interpreted to accomplish the objectives of such provision to the
greatest extent possible under applicable law and the remaining provisions will
continue in full force and effect.
|
12.14
|
Change
of Control.
|
Should
the ▇▇▇▇▇▇ experience a Change of Control, MicroStar at its sole discretion may:
(i) agree to continue operating under this Agreement, or (ii) may terminate the
Agreement upon providing written notice to ▇▇▇▇▇▇ within 45 days of the
effective date of the Change of Control. Such continuation must be
confirmed in writing after notice of the Change of Control is
received.
|
12.15
|
Assignment.
|
▇▇▇▇▇▇
will not assign or transfer, by operation of law or otherwise, any right or
interest under this Agreement or delegate any of its duties under this Agreement
to any third party without the prior written consent of
MicroStar. ▇▇▇▇▇▇ will be responsible to MicroStar for all work
performed by ▇▇▇▇▇▇'▇ subcontractors including, without limitation, Wholesalers
at any tier. Any attempted assignment or transfer in violation of the
foregoing will be void.
|
12.16
|
Entire
Agreement.
|
This
Agreement and any exhibits attached to this Agreement constitute the final and
entire agreement between the parties with respect to the subject matter thereof
and may not be modified or rescinded except by a writing signed by the ▇▇▇▇▇▇
and MicroStar. Estimates or forecasts furnished by MicroStar will not
constitute commitments. The provisions of this Agreement supersede
all contemporaneous oral agreements and all prior oral and written
communications and understandings of the parties with respect to the subject
matter of this Agreement.
17
|
12.17
|
Counterparts.
|
This
Agreement may be executed in counterparts, each of which will constitute an
original, but all of which together will constitute the same
instrument.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
18
THIS
AGREEMENT is executed on the date set forth below each party's respective
signature.
|
MICROSTAR
KEG MANAGEMENT, L.L.C.
|
MENDOCINO
BREWING COMPANY
|
|||
|
By:
|
By:
|
|||
|
Name:
|
Name:
|
|||
|
Title:
|
Title:
|
|||
|
Date:
|
Date:
|
|||
19
EXHIBIT
"A"
Delivery
Location:
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇
▇▇▇▇▇
A-1
EXHIBIT
"B-1"
TO
ONE-SIXTH AND ONE-HALF BARREL
LIST OF xxx xxx xxx xxx xxx
xx
xxx xxx xxx
x
xxx xxx
xxx xxx xxx xxx x
xxx xxx
xxx xxx xxx xxx xxx xxx xxx xx
B-1
EXHIBIT
"B-2" TO ONE-SIXTH AND ONE-HALF BARREL
LIST OF xxx xxx xxx xxx xxx
xxx xx
xxx xxx xxx
x
xxx xxx
xxx xxx xxx xxx xxx xxx xxx x
xxx xxx
xxx xxx xxx xxx xxx xxx xxx xxx x
xxx xxx
xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx
xxx xxx
xxx xxx x
xxx xxx
xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx
xxx xxx
xxx xxx xxx xxx xxx xxx xxx
xxx xxx
xxx xxx xxx xxx
xxx xxx
xxx xxx xxx xxx xxx xxx
xxx xxx
xxx xxx xxx xxx xxx xxx x
xxx xxx
xxx xxx xxx xxx xxx x
xxx xxx
xxx xxx xxx xxx xxx
xxx xxx
xxx xxx xxx xxx x
xxx xxx
xxx xxx xxx xxx xxx xxx xxx xx
xxx xxx
xxx xxx xxx xxx xxx xxx xxx xxx xx
xxx xxx
xxx xxx xxx xxx xxx xxx xxx xxx xxx x
xxx xxx
xxx xxx xxx xxx xxx xxx xxx xxx xxx
xxx xxx
xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx x
xxx xxx
xxx xxx xxx xxx xxx xxx xxx xxx
xxx xxx
xxx xxx xxx xxx xxx xxx xxx xxx xx
xxx xxx
xxx xxx xxx xxx xxx xxx xxx xxx x
xxx xxx
xxx xxx xxx xxx xxx xxx xxx xx
xxx xxx
xxx xxx
xxx xxx xxx xxx xxx x
xxx xxx xxx
x
xxx xxx
xxx xxx xxx
B-2
EXHIBIT
"B-3" TO ONE-SIXTH AND ONE-HALF BARREL
LIST OF xxx xxx xxx xxx xxx
xxx xxx xxx xxx xx
xxx xxx
x
xxx xxx
xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx
xxx xxx xxx
x
xxx xxx
xxx xxx xxx xxx xxx xxx xxx x
xxx xxx
xx
xxx xxx
xxx xxx xxx xxx x
xxx xx
xxx xxx
xxx xxx xxx xxx xxx xxx xxx xxx x
xxx xxx
xxx xxx xxx xxx xxx xxx xxx xxx xxx
xxx xxx
x
xxx xxx
xxx xxx xxx xxx xxx xxx xxx xxx x
xxx xxx xxx
x
xxx xxx
xxx xxx xxx xxx xxx
xxx xxx
xxx xxx
xxx xxx xxx xxx xxx xxx xxx
xxx xxx xxx
x
xxx xxx
xxx xxx xxx xxx xxx
B-3
EXHIBIT
"B-4" TO ONE-SIXTH AND ONE-HALF BARREL
LIST OF xxx xxx xxx xxx xxx
xxx xx
xxx xxx
xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx
xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx
xxx xxx xxx xxx xxx xxx xxx xxx xx
B-4
EXHIBIT
"B-5" TO ONE-SIXTH AND ONE-HALF BARREL
LIST OF xxx xxx xxx xxx xxx
xxx xxx xxx x
xxx xxx
xxx xxx
xxx xxx xxx xxx xxx xxx xx
B-5
EXHIBIT
"C" TO ONE-HALF AND ONE-SIXTH BARREL
MINERAL WASHING/STERILIZING
SEQUENCE (STEAM)
|
WASH
HEAD
|
|
|
Purge
out ullage beer with air until clear.
|
3
sec.
|
|
Pre-rinse
Keg with fresh or recovered water.
|
8
sec.
|
|
Purge
out ore-rinse water with air.
|
5
sec.
|
|
Hot
caustic or acid wash.
|
12
sec.
|
|
Low
flow hot caustic or acid wash
|
12
sec.
|
|
Purge
out hot caustic or acid to recovery tank with air.
|
6
sec.
|
|
Final
rinse Keg with hot water.
|
12
sec.
|
|
Low
flow hot water rinse.
|
12
sec.
|
|
Purge
out hot water rinse with steam.
|
18
sec.
|
|
Pressurize
to 20 p.s.i.g. with steam.
|
1
sec.
|
|
Release
pressure from process head.
|
1
sec.
|
|
STERILIZE
HOLD STATION
|
|
|
Steam
|
60
sec.
|
|
RACKING
HEAD
|
|
|
Steam
conn. head and Keg neck.
|
5
sec.
|
|
Steam
pressure release from ▇▇▇.
|
▇
▇▇▇.
|
|
▇▇▇
▇▇▇▇▇ ▇▇▇.
|
▇
sec.
|
|
Counter
pressurize to 20 p.s.i.g.
|
2
sec.
|
|
Product
fill.
|
50
sec.
|
|
Spear
out.
|
1
sec.
|
|
Water
scavenge and/or gas scavenge.
|
5
sec.
|
C-1
EXHIBIT
"C" TO ONE-HALF AND ONE-SIXTH BARREL
MINERAL WASHING/SANITIZING
SEQUENCE (OXIME*)
|
WASH
HEAD
|
|
|
Purge
out ullage beer with air until clear.
|
3
sec.
|
|
Pre-rinse
Keg with Oxime water.
|
8
sec.
|
|
Purge
out Oxime water with air.
|
5
sec.
|
|
Hot
caustic or acid wash.
|
12
sec.
|
|
Low
flow hot caustic or acid wash
|
12
sec.
|
|
Purge
out hot caustic or acid to recovery tank with air.
|
6
sec.
|
|
Final
rinse Keg with Oxime water.
|
12
sec.
|
|
Low
flow Oxime water rinse.
|
12
sec.
|
|
Oxime
water fill.
|
18
sec.
|
|
Spear
out.
|
1
sec.
|
|
Purge
head.
|
1
sec.
|
|
SANITIZE
HOLD STATION
|
|
|
Oxime
sanitize hold.
|
60
sec.
|
|
RACKING
HEAD
|
|
|
Gas
purge Oxime water from ▇▇▇.
|
▇▇
sec.
|
|
Gas
counter pressurize to 20 p.s.i.g.
|
2
sec.
|
|
Product
fill.
|
50
sec.
|
|
Spear
out.
|
1
sec.
|
|
Oxime
water scavenge and/or gas scavenge
|
4
sec.
|
*Comparable
chemical products generally recognized as suitable for the Keg cleaning process
may be substituted for the Oxime product.
C-2
EXHIBIT
"C" TO ONE-HALF AND ONE-SIXTH BARREL
KEG
PLANT
QUALITY
CONTROL CHECKS
A. DETERGENT TANK
TITRATION
The
detergent set, detergent tank(s), Quality Control checks should be made before
starting and at least twice during each eight (8) hour operating shift. Adjust
frequency to meet the Quality Control department "comfort level". The acid
titration level (phosphoric) should be in the range of 0.25% to maximum of 0.4%
v/v and alkali titration level (caustic) in the range of 1.5 to 2.0%
v/v.
B. KEG WATER CARRY-OVER AND TITRATION
CHECKS
1) After
the Keg has completed the wash head(s) sequence(s), the Keg must be allowed to
continue through the sterilizing sequence and then rejected (stopped)
immediately prior to commencing the racking head(s) sequence(s). When the Keg is
retrieved at the discharge end of the machine, the Keg can be cooled down by
placing a cold water hose over the outer surfaces (if steam is used). A Quality
Control Keg coupler or funnel coupler (with the C02 and beer check valves
removed) is then used to tap the Keg. The Keg must be inverted to remove the
contents via the C02 port of the coupler by allowing the Keg to drain or forcing
the contents out with air or C02. The condensate or rinse residuals in a 50
liter or 1/2 half barrel Keg normally measures between 40 to 80 ml.. A limit of
100 ml. should be set as a maximum allowable limit. If the levels are in excess
of these amounts then the machine operation must be checked together with that
of the steam quality and relevant steam main condensate traps.
2) The
condensate obtained from the Keg can be titrated to ensure that there is no acid
and/or alkali carry-over from the wash heads.
NOTE 1:
For this check the pH. of the condensate should be a known factor if steam is
used for purging.
NOTE 2:
This check should be carried out once a day for each machine lane and then
reduced to the Quality Control department "comfort level".
3)
Another Keg is used to do a similar check after it has been allowed to complete
the sequences through the racker head(s) up to the point of immediately prior to
commencing the beer filling sequence. Reject the Keg prior to starting the beer
filling sequence and remove the conveyor after discharging from the machine.
When checking for the quantity of condensate present in the Keg, it should be
less than 15 ml.
NOTE: This
check should be carried out once a day for each machine lane and then reduced to
the Quality Control department "comfort level".
C-3
EXHIBIT
"C" TO ONE-HALF AND ONE-SIXTH BARREL
KEG
MANAGEMENT AGREEMENT
C. MICROBIOLOGICAL CHECKS TO THE
KEG
Introduce
a liter of sterile liquid, (preferably beer), into a Keg having completed the
sequence as described in Procedure 3) above, via a sterilized Keg valve and
"funnel" coupler. This allows the Keg to be checked for microbial integrity by
removing 250 ml. of the sterile liquid into a sterile flask. Split the sample
into two, 100 ml. samples via Millipore type membranes, plate and incubate the
membranes on agar suitable for aerobic and anaerobic organisms.
Methods
of doing this vary slightly. The main objective, however, is to ensure that
consistency in sampling is maintained, i.e. having introduced the sterile liquid
into the Keg, each Keg should be rotated a set number of times to ensure all
surfaces have been covered equally before it is extracted. A known quantity
should always go into the Keg and a known quantity should always be extracted,
filtered and plated.
NOTE 1:
This procedure should be carried out at least once every two weeks.
NOTE: 2:
Funnel couplers can be purchased via IDD to suit your Keg valve
type.
D. AFTER A C.I.P.
SEQUENCE
After the
C.I.P. sequence, the process mains, bright beer tank and racker connection
head(s), can be swabbed and checked for visual cleanliness to ensure that the
cleaning operation frequencies are effective and adequate.
NOTE:
This should be carried out at least once a week.
E. BEER STABILITY
SAMPLING
Samples
are taken from the bright beer tank and Keg at a frequency laid down by the
brewery Quality Control department. A suitable stability test is to set aside a
Keg of beer from the leg line after filling and "forcing" the contents by
leaving the Keg in an environment of 70° F. (21 °C). Taste, odor and clarity
tests can then be taken after 72 hours and at regular durations thereafter as
desired to suit the Quality Control department's standards.
SUMMARY
It is
possible to determine the following about the Keg machine function and cleaning
procedures from the aforementioned.
1) The
wash water and detergent is being cleared from the Keg by the final C02 or steam
purge sequence on the final wash head.
2) The
final rinse water on the final wash head is removing the detergent residual from
the Keg.
C-4
EXHIBIT
"C" TO ONE-HALF AND ONE-SIXTH BARREL
KEG
MANAGEMENT AGREEMENT
3) The
C02 purge is removing the condensate trace from the Keg on the racker head prior
to filling with beer.
4) The
microbial integrity, via steam sterilizing or Oxime (C102) sanitizing of the Keg
is being achieved.
5) The
separate plant C.I.P. sequence is effective in removing all traces of beer
protein and other residuals from the Keg plant connection head(s) and piping
system(s).
6) The
cleanliness and microbial integrity is being maintained by the separate plant
C.I.P. regime.
C-5
EXHIBIT
"D" TO ONE-HALF AND ONE-SIXTH BARREL
KEG
MANAGEMENT AGREEMENT
Mendocino
Brewing Company
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇
▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇
RE: Keg
Purchase Terms Pursuant to Section 9.2 of Keg Management Agreement
MicroStar
Keg Management, L.L.C. ("MicroStar") and Mendocino
Brewing Company ("Mendocino") are
parties to a Keg Management Agreement dated effective September 1st , 2009. Kegs
determined to be the Keg Purchase Quantity will be priced at the net book value
plus 15% ("NBV") of the
keg. The following table specifies the prices at which individual Kegs are to be
valued for purchase by Mendocino pursuant to Section 9.2 of the Keg Management
Agreement:
|
AGE
OF KEGS (YEARS)
|
VALUE
|
|||
|
HALF
BARREL
|
ONE-SIXTH
BARREL
|
|||
|
0
TO 1.0
|
▇▇▇
|
▇▇▇
|
||
|
1.1
to 2.0
|
▇▇▇
|
▇▇▇
|
||
|
2.1
to 3.0
|
▇▇▇
|
▇▇▇
|
||
|
3.1
to 4.0
|
▇▇▇
|
▇▇▇
|
||
|
4.1
to 5.0
|
▇▇▇
|
▇▇▇
|
||
|
5.1
to 6.0
|
▇▇▇
|
▇▇▇
|
||
|
6.1
to 7.0
|
▇▇▇
|
▇▇▇
|
||
|
7.1
to 8.0
|
▇▇▇
|
▇▇▇
|
||
|
8.1
to 9.0
|
▇▇▇
|
▇▇▇
|
||
|
9.1
to 10.0
|
▇▇▇
|
▇▇▇
|
||
|
10.1
to 11.0
|
▇▇▇
|
▇▇▇
|
||
|
11.1
to 12.0
|
▇▇▇
|
▇▇▇
|
||
|
12.1
to 13.0
|
▇▇▇
|
▇▇▇
|
||
|
13.1
to 14.0
|
▇▇▇
|
▇▇▇
|
||
|
14.1
to 15.0
|
▇▇▇
|
▇▇▇
|
||
|
Over
15.0
|
▇▇▇
|
▇▇▇
|
||
The
specified values are subject to verification by Mendocino of each Keg's
condition at time of purchase as being in good working order without unusual or
excessive wear and/or unusual or excessive body, neck, valve or chimb damage.
Mendocino may refuse to purchase any Keg that does not conform to the above
conditions.
D-1
The Kegs
to be purchased pursuant to Section 11.6 shall be such Kegs as are then
currently available for disposition by MicroStar Keg Management, L.L.C. and it
is understood by the parties hereto that the age of the Kegs which may then be
available cannot presently be ascertained. The requisite quantities of Kegs
shall be delivered monthly in prorated portions by MicroStar Keg Management,
L.L.C. to Mendocino over an approximate three (3) month period. After
confirmation of delivery of conforming Kegs, a ▇▇▇▇ of Sale will be delivered
assigning title to Mendocino free and clear of any lien or security interest and
Mendocino shall contemporaneously remit payment for all Kegs so
purchased.
This
joint memorandum shall serve to confirm that the foregoing valuations shall
apply in the case of a purchase right/obligation accruing upon
termination.
D-2
EXHIBIT
"E"
▇▇▇▇
OF SALE
Not
applicable.
E-1
EXHIBIT
"F"
FORM
OF LETTER
MicroStar
KEG
MANAGEMENT
Re:
MicroStar Keg Management Program
Dear
Warehouse Manager:
MicroStar
is the owner and provider of stainless steel kegs for brewery draft
products. The purpose of this letter and enclosed material is to
introduce ourselves to you and to describe the processes and requirements we use
to create maximum efficiencies and profitability for wholesalers and brewers
alike.
Breweries
utilize the MicroStar keg management program because it provides numerous
benefits that allow them to focus on the marketing and sale of their products
and eliminates their need to track and retrieve kegs. Wholesalers can
realize the following benefits:
|
|
●
|
The
wholesaler only has to coordinate empty keg pickup with one entity
(MicroStar) instead of each ▇▇▇▇▇▇, thereby reducing your administrative
requirements.
|
|
|
●
|
All
empty MicroStar kegs, regardless of ▇▇▇▇▇▇, can be stored together while
awaiting shipment by MicroStar, thereby reducing the square footage of
warehouse space that you need to allocate to empty
kegs.
|
|
|
●
|
Because
MicroStar has brewers located in close proximity to your warehouse, we are
able to more rapidly assemble and transport empty kegs, providing you with
the more frequent return of your keg deposits and warehouse
space.
|
The keg
deposit charge and refund for each MicroStar keg is $xxx xxx x, invoiced by
MicroStar.
|
|
●
|
▇▇▇▇▇▇
Brothers Brewing utilizes MicroStar kegs, however, the deposits for these
kegs are charged and refunded by ▇▇▇▇▇▇. It is important to
indicate on the keg shipping forms, (enclosed), the number of ▇▇▇▇▇▇ kegs
you are returning. MicroStar will issue credits to ▇▇▇▇▇▇ up to
the number of kegs our records indicate have been shipped from
▇▇▇▇▇▇.
|
MicroStar's
assets are our kegs. We request each wholesaler provide us with
certain information on a regular basis, as described in the enclosed
material. Please discuss this information with all appropriate people
involved, including dock loaders.
F-1
EXHIBIT
"F"
FORM
OF LETTER
We are
always available to discuss any aspect of our program and to evaluate any method
for improving our system. Please review the enclosed list of contact
people to determine who to contact. We look forward to a mutually
beneficial, long term relationship with you.
▇▇▇
▇▇▇▇▇▇
Billing
Manager
303-468-9496
|
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
|
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
|
▇▇▇▇▇▇
▇▇▇▇▇▇
|
|
Phone
Number: ▇▇▇.▇▇▇.▇▇▇▇
|
Fax
Number: ▇▇▇.▇▇▇.▇▇▇▇
|
Toll
Free: 800.245.2200
|
|
▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
|
F-2