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Exhibit 10.2

AMENDED AND RESTATED
MASTER DISTRIBUTOR AGREEMENT

BETWEEN

CRAFT BREWERS ALLIANCE, INC.,

AND

ANHEUSER-BUSCH, INCORPORATED
 
 
 

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AMENDED AND RESTATED
MASTER DISTRIBUTOR AGREEMENT

THIS AMENDED AND RESTATED MASTER DISTRIBUTOR AGREEMENT (the "Agreement") is made
as of May 1, 2011 by and between CRAFT BREWERS ALLIANCE, INC., having its
principal place of business at 929 North Russell Street, Portland, Oregon 97227
(“CBA”) and ANHEUSER-BUSCH, INCORPORATED having its principal place of business
at One Busch Place, St. Louis, MO 63118 ("ABI").

WHEREAS, ABI and CBA are parties to a Master Distributor Agreement dated as of
July 1, 2004 (as amended and supplemented to the date hereof, the “Original
Agreement”) which governs certain rights and obligations of ABI and CBA.

WHEREAS, in connection with CBA’s sale of its interest in Fulton Street Brewery,
LLC, the parties have agreed to amend and restate the Original Agreement.

NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, CBA and ABI agree as follows:

ARTICLE I
DEFINITIONS

For purposes of this Agreement, capitalized terms not otherwise defined herein
shall have the following meanings ascribed thereto:

“ABI Competitor” shall mean any Person that, together with the Affiliates of
such Person, has annual alcohol beverage sales of $100,000,000 or more in North
America (such number to be adjusted annually in proportion to changes in the
Consumer Price Index from the date hereof).

“ABI Distribution Facility” shall mean the ABI warehouse, WSC, third-party
warehouse or other suitable location reasonably designated by ABI from which ABI
will ship Product to Alliance Wholesalers.

 
 

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"Additional Price Component" shall mean 90% of the difference between the price
actually charged to an Alliance Wholesaler by ABI for a Product, and the Fully
Loaded Cost for such Product.

"Affiliate" shall mean, with respect to any Person, (i) each Person that,
directly or indirectly, owns or controls, whether beneficially, or as a trustee,
guardian or other fiduciary, 50% or more of the equity securities having
ordinary voting power in the election of directors of such Person, or (ii) each
Person that controls, is controlled by or is under common control with such
Person or any Affiliate of such Person.

“Affiliated Wholesaler” shall mean any wholesaler of the alcohol beverage
products of ABI (pursuant to the Wholesaler Equity Agreement with ABI) that
distributes the Products in any portion of the Territory pursuant to a
distribution agreement between CBA and such wholesaler.

"Alliance Wholesalers" shall mean those malt beverage wholesalers of ABI,
including without limitation, ABI branches, which have agreed to purchase the
Products from ABI and to distribute the Products in the Territory pursuant to
the Wholesaler Equity Agreement.

“Barrel” shall be equal to 31 United States gallons.

“Brewpub” shall mean any restaurant operated by CBA, or CBA Affiliate serving
Product brewed on the premises.

"Commencement Date" shall mean May 1, 2011.

“Confidential Information” shall have the meaning assigned to it in Section
18.01(a).

"Cooperage Handling Charge" shall mean $5.00 per Pallet Lift for draft Product
during 2011; Attachment A attached hereto describes the methodology used to
modify Cooperage Handling Charge for 2012 and future years.

“Eastern Territory” means:  Alabama, Arkansas, Connecticut, the District of
Columbia, Delaware, Florida, Georgia, Louisiana, Massachusetts, Maryland, Maine,
Mississippi, North Carolina, New Hampshire, New Jersey, New York, Pennsylvania,
Rhode Island, South Carolina, Tennessee, Virginia, Vermont, West Virginia, Iowa,
Illinois, Indiana, Kansas, Kentucky, Michigan, Minnesota, Missouri, North
Dakota, Nebraska, Ohio, South Dakota, and Wisconsin.

 
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“Force Majeure” shall have the meaning assigned to it in Section 16.01.

"Fully Loaded Cost" shall mean for a Product, the sum of:

(a)           the Scheduled Price for such Product; plus

(b)           the Margin.

"Incompatible Conduct" shall mean any act or omission of CBA or its Affiliates
that, in the sole determination of ABI, damages either the reputation or image
of ABI or of the brewing industry.  Attachment B attached hereto sets forth
examples of the nature and gravity of acts and omissions constituting
Incompatible Conduct and not constituting Incompatible Conduct; such examples
shall not limit the nature of acts that could be construed as Incompatible
Conduct.

““Initial Term” shall have the meaning assigned to it in Section 7.01 hereof.

”Intellectual Property” shall have the meaning assigned to it in Section 6.01.

“Inventory Manager Fee” shall mean $200,000 for 2011.  For each subsequent year,
such amount shall be the amount effective for the preceding calendar year,
increased by GDP as defined and calculated pursuant to the methodology set forth
on Attachment C;

"Invoicing Costs" shall mean $.875 per Pallet Lift for Product during 2011.  For
each subsequent year, the applicable amount described above in this definition
shall increase or decrease for each calendar year pursuant to the methodology
set forth in Attachment C attached hereto.

“Kona” shall mean Kona Brewery LLC.

"Margin" shall mean (i) from the Commencement Date until December 31,
2018   $0.25 per case-equivalent (of 288 fluid ounces per case) for packaged or
draft Product and (ii) on and after January 1, 2019 $0.75 per case-equivalent
(of 288 fluid ounces per case) for packaged or draft Product.

 
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“Modified Product” shall have the meaning set forth in Section 11.08 of this
Agreement.

“New Product” shall mean new malt beverage(s) that CBA wishes to add, through
development or acquisition, to its beverage product line existing as of the
Commencement Date.

“Non-Alliance Wholesalers" shall mean those beer wholesalers to which CBA has
granted distribution rights for any of the Product in the Territory as of the
date of this Agreement and which are not Alliance Wholesalers or Affiliated
Wholesalers.

“Offer Expiration Date” shall have the meaning assigned to it in Section
11.03(a).

“Offer Notice” shall have the meaning assigned to it in Section 11.03(a).

"Pallet Lift" shall mean a pallet of draft or packaged Product or cooperage
that, in each case, is prepared in such a manner that ABI may deliver or move
such Pallet in accordance with its customary practices in one operation.

“Person” shall mean any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation,
institution, public benefit corporation, entity or government (whether federal,
state, county, city, municipal or otherwise, including, without limitation, any
instrumentality, division, agency, body or department thereof).

"Products" shall mean all malt beverage products marketed by CBA or its
Affiliates for which ABI has agreed to act as master distributor either prior to
the Commencement Date or thereafter pursuant to Section 11.03 (but shall not
include any malt beverage products the marketing of which CBA discontinues or
the distribution of which is terminated pursuant to this Agreement).  Any malt
beverage product to which CBA has made the election described in Section 2.02
shall not be considered to be a “Product” hereunder.

“Records” shall have the meaning assigned in Article XVII (a).

 
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"Scheduled Price" shall mean the purchase price for Product.

“Stock” shall mean all shares, options, warrants, general or limited partnership
interests, rights, participations or other equivalents (regardless of how
designated) of or in a corporation, partnership or equivalent entity whether
voting or nonvoting, including, without limitation, common stock, preferred
stock, or any other "equity security" (as such term is defined in Rule 3a11-1 of
the General Rules and Regulations promulgated by the Securities and Exchange
Commission under the Securities Exchange Act).

“Taxes” shall mean all applicable national, federal, state and local excise and
other brewing related taxes and any applicable duties and import tariffs and
fees (including without limitation liquor and consumption taxes) paid or
incurred by ABI in connection with this Agreement.

“Term” shall have the meaning assigned to it in Section 7.01 hereof.

"Territory" shall mean the United States of America, the District of Columbia
and all states, territories and possessions of the United States of America;
provided, however, that except for Products brewed by Kona or bearing the
trademarks of Kona, “Territory” shall also include all United States military,
diplomatic and governmental installations, whether or not located in the
territories or possessions of the United States.

“Wholesaler Support Center Costs” or “WSC Costs” with respect to any Product
shipped by CBA to a WSC shall mean the fee paid by ABI to the operator of the
WSC for its services with respect to such Product.

“WSC” shall mean the regional wholesaler support centers or distribution centers
established by ABI for the receipt of products designated by ABI and the
palletizing and preparation for pick up of such products by the adjoining
wholesalers.

 
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ARTICLE II
GRANT OF DISTRIBUTION RIGHTS

2.01         CBA hereby grants to ABI and ABI hereby accepts from CBA the
exclusive right to serve as the master distributor to distribute the Products in
the Territory commencing on the Commencement Date, except as otherwise described
in this Article.  ABI shall not, without the prior written consent of CBA, sell
any Product acquired hereunder outside its respective Territory or to any party
other than an Alliance Wholesaler.  CBA agrees not to sell any Product to any
other Person in the Territory other than ABI, Affiliated Wholesalers and
Non-Affiliated Wholesalers.  Additionally, CBA may sell at Brewpubs draught
Product brewed on the premises; may sell to consumers packaged Product brewed on
the premises at retail sites associated with Brewpubs in accordance with its
current practices; may sell to consumers draught Product brewed on the premises
in so-called dock sales in accordance with its current practices not to exceed
50,000 case equivalents in any calendar year.  Nothing herein shall be deemed to
waive or modify any agreements relating to the Kona products with the
Anheuser-Busch Hawaiian wholesaler operation.  At the option of ABI and the
respective Affiliated Wholesaler, any Affiliated Wholesaler may become an
Alliance Wholesaler, and CBA shall execute any documents or instruments
reasonably requested by ABI to effectuate this.

2.02          Notwithstanding the foregoing, if CBA acquires any malt alcohol
beverage brand not previously owned by CBA or the Stock of any producer of any
such malt alcohol beverage brand (together, an “Acquisition”), CBA may elect, in
writing delivered to ABI no later than 30 days prior to the date of the
Acquisition,  that such malt beverages shall be not be distributed pursuant to
this Agreement  and in such case the terms and conditions of this
Agreement,  including the obligations of CBA thereto with respect to Margin and
the provisions of Section 11.03, shall not be applicable thereto.   CBA shall
not otherwise make any Acquisition unless it delivers to ABI a written plan
providing a schedule by which ABI would become the exclusive distributor for
such malt beverages by ABI, such schedule to be satisfactory to ABI.

 
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ARTICLE III
PURCHASE AND SALE OF PRODUCTS

CBA agrees to sell to ABI, and ABI agrees to purchase from CBA and re-sell to
the Alliance Wholesalers, the quantities of Products ordered by ABI from time to
time hereunder.  CBA acknowledges that ABI is not guaranteeing any level of
Product sales; and that ABI's obligations under this Agreement are limited to
making the Products available to the Alliance Wholesalers, it being understood
that CBA assumes full responsibility for creating demand for the
Products.  Except for Product shipped directly by CBA as set forth in Section
11.07, (i) all purchases of Product by ABI from CBA shall be on an F.O.B. ABI
Distribution Facility, freight prepaid basis, and (ii) CBA shall ship Products
to be delivered to an Alliance Wholesaler to the ABI Distribution Facility
designated from time to time by ABI for such Alliance Wholesaler.
 
ARTICLE IV
PRICING OF PRODUCTS

4.01         ABI shall pay to CBA the Scheduled Price for each Product purchased
by ABI hereunder.  At the option of CBA, CBA may change the Scheduled Price at
any time upon at least 30 days written notice to ABI (or, in connection with the
sale of Products in a state requiring advance posting of prices, any longer
period of time reasonably requested by ABI in order to satisfy such price
posting obligations).

4.02         CBA may, from time to time, suggest Product resale prices to ABI,
and ABI shall consider such suggestions.  However, ABI shall have the right to
resell the Product to Alliance Wholesalers at such prices and on such terms and
conditions as ABI may, in its sole discretion, determine from time to time.  Any
and all price promotions to be offered to Alliance Wholesalers by CBA shall be
implemented in strict accordance with the procedures set forth in Attachment D
attached hereto.  Within 30 days after the end of each calendar quarter during
the Term, ABI shall pay to CBA any Additional Price Component that is due CBA
with respect to sales of Product by ABI to Alliance Wholesalers during such
calendar quarter.

4.03          Promptly after receipt of funds from the Alliance Wholesalers with
respect to any delivery of Product (but not later than 15 days thereafter), ABI
shall pay the Scheduled Price thereof to CBA.  ABI shall ensure that its wholly
owned Alliance Wholesalers promptly remit payment for Product to ABI.  If any
non-AB owned Alliance Wholesaler does not pay to ABI the purchase price with
respect to any Products purchased by such Alliance Wholesaler within 60 days
after delivery thereof, at the option of CBA, ABI shall assign all of its rights
to CBA against such Alliance Wholesaler relating to the purchase price for such
Products.

 
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4.04          (a)           ABI shall reduce the payment required by Section
4.03 by the Margin for such Products; the Invoicing Costs; and
Taxes.  Additionally, ABI shall be entitled to setoff against such payment any
amounts owed to ABI for defective Products (including without limitation, any
costs of disposing such defective Product), or which are due ABI from CBA
pursuant to the terms of this Agreement or otherwise.

(b)           Notwithstanding Section 4.04(a), within thirty days after the end
of each calendar quarter commencing with the calendar quarter ended June 30,
2011 and ending with the calendar quarter ended September 30, 2013, ABI shall
reimburse to CBAI the entire Margin retained by ABI for Product sold in the
Eastern Territory during such calendar quarter.  Thereafter, ABI shall have no
reimbursement obligations with respect to Margin.

(c)           The provisions of Section 4.04(b) shall apply only so long as CBA
continues to operate its Portsmouth, New Hampshire brewery and maintains
production capacity and output therein substantially at or above the levels
existing on the Effective Date.   Should CBA cease to do so, on the date of such
cessation the provisions of Section 4.04(b) shall be of no further force and
effect.

4.05         (a)           Within 15 days after receipt of invoice, CBA shall
pay the following amounts to ABI:

(i)            the Cooperage Handling Charge for all Products sold to ABI
hereunder during such calendar quarter; and

(ii)           all fees paid or payable by ABI to WSCs or ABI distribution
centers resulting from sales of Products to ABI during the respective calendar
quarter.

 
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(b)           ABI shall compute the amounts to be paid by CBA pursuant to
Section 4.05(a)(i) and (ii) above and shall be required to inform CBA of such
amounts no later than 30 days after the end of the respective calendar quarter
and shall provide CBA with such additional detail or verification as CBA may
reasonably request.

4.06         (a)           Notwithstanding the foregoing provisions, CBA and ABI
acknowledge that the laws of certain states and/or U.S. federal laws may
preclude the parties from implementing the pricing mechanisms and costs, taxes
and other fees described above.  Under such circumstances, it is the intention
of the parties to comply with the requirements of such laws, without such
compliance being a breach of this Agreement.  Under such circumstances, CBA and
ABI shall in good faith negotiate a periodic adjustment to the purchase price,
other affected provisions hereof and the procedures set forth herein where it is
permissible to do so, in an amount necessary to restore the same economic
benefits CBA and ABI would have received had the above pricing mechanisms been
in effect.  In particular, the parties agree that notwithstanding the other
provisions in this Agreement, in the State of Washington, ABI shall acquire no
title or possession to any Product to be sold and CBA shall sell Product
directly to wholesalers pursuant to agreements between such wholesalers and CBA
at prices and on terms determined by CBA and such wholesalers.

(b)           Within 15 days after the end of each month, CBA shall pay to ABI
the Margin for all Products sold by CBA in the State of Washington during the
preceding month.  Contemporaneously with such payment, CBA shall deliver to ABI
a report describing such sales and providing such other information concerning
such sales as ABI may from time to time reasonably request.

4.07         For the period from  January 1, 2011 through December 31,
2011,  CBA’s out of pocket expenses incurred in the sales and marketing of its
products for the Eastern Territory shall be no less than the sum of (i)
$3,828,000, as increased by the cumulative change in the Consumer Price Index
from December 31, 2009, plus (ii) $1,744,000;   for the period from January 1,
2012 through December 31, 2012, CBA’s out of pocket expenses incurred in the
sales and marketing of its products for the Eastern Territory shall be no less
than the sum of (i) $3,828,000, as increased by the cumulative change in the
Consumer Price Index from December 31, 2009, plus (ii) $1,972,000;  for the
period from January 1, 2013 through December 31, 2013, CBA’s out of pocket
expenses incurred in the sales and marketing of its products for the Eastern
Territory shall be no less than the sum of (i) $3,828,000, as increased by the
cumulative change in the Consumer Price Index from December 31, 2009, plus (ii)
$2,049,000; for the period from January 1, 2014 through December 31, 2014, CBA’s
out of pocket expenses incurred in the sales and marketing of its products for
the Eastern Territory shall be no less than the sum of (i) $3,828,000, as
increased by the cumulative change in the Consumer Price Index from December 31,
2009, plus (ii) $1,441,000; and for the period from January 1, 2015 through
December 31, 2015, CBA’s out of pocket expense incurred in the sales and
marketing of its products for the Eastern Territory shall be no less than the
sum of (i) $3,828,000, as increased by the cumulative change in the Consumer
Price Index from December 31, 2009, plus (ii) $648,000.

 
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4.08         Within 30 days after the Commencement Date, CBA shall pay to ABI
the product of (x) the amount by which the number of case equivalents of
Products sold by CBA in the Territory in the month of April, 2011 (excluding any
sales in the Eastern Territory) exceeds 472,380 and (y) $.572.

4.09         Within 60 days after the end of each calendar quarter, ABI shall
pay to CBA all amounts ABI has collected from Alliance Wholesalers during such
calendar quarter for delivery and freight costs, to the extent such amounts
relate to products shipped by CBA directly to such wholesalers.

 
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ARTICLE V
DELIVERY OF PRODUCTS AND RISK OF LOSS

5.01         Except as set forth in Section 11.07, title to the Product and its
risk of loss or destruction shall pass from CBA to ABI upon delivery of the
Product to the ABI Distribution Facility designated by ABI to be used for the
respective Alliance Wholesaler.
 
5.02         CBA shall insure that Product shall be packaged, palletized and
prepared for shipment in accordance with ABI's instructions in effect from time
to time for ABI's malt beverage products.  CBA shall reimburse ABI for any costs
incurred by ABI in handling Products which are not properly palletized and/or
prepared for shipment, or which are palletized and/or prepared for shipment in a
manner which causes ABI to incur handling expenses not contemplated hereby, and
ABI's determination of such costs, absent material error, shall be binding on
each of ABI and CBA, provided, however, that such determination shall be subject
to the audit provisions of Article XVII below.
ARTICLE VI
CBA’S TRADEMARKS

6.01         ABI shall not acquire any right in any of the CBA trademarks, trade
dress, copyrights, promotional slogans, trade names, designs, labels, get-ups,
color combinations, product shapes, and other distinctive features in the
Products, or the promotional goods, advertisements and promotional activities
used during the term of this Agreement in conjunction with the advertising,
promotion, distribution, and sale of the Products (collectively, "Intellectual
Property’).  ABI is hereby granted the right during the Term to use the
Intellectual Property in advertising, promotion, distribution, and sale of the
Products in the Territory, which right ABI may sub-license to the Alliance
Wholesalers; provided, however, that CBA shall have the right to require ABI and
the Alliance Wholesalers to submit representative samples of any use of such
Intellectual Property to CBA for approval, which approval shall be deemed given
if CBA does not provide ABI with written notice of reasonable objection within
10 days of receipt of such samples. Any and all rights that may be acquired in
the Intellectual Property by the use of the Intellectual Property by ABI or any
Alliance Wholesaler will inure to the sole benefit of the owner of the
Intellectual Property, which will be CBA. The foregoing sentence does not affect
ABI's rights in other marks it may use or adopt.  At the request of CBA, ABI
will execute an instrument, in a form agreeable to CBA and ABI,  to effect
further registration, maintenance, and renewal of the Intellectual Property,
and, where applicable, to record CBA (as the case may be) as a registered user
of the Intellectual Property.   CBA represents and warrants that it has the
right and authority to provide ABI and the Alliance Wholesalers with the rights
provided in this Section.

 
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6.02         ABI shall promptly notify CBA of any and all infringements of the
Intellectual Property pertaining to the Products that may come to ABI's
attention and shall assist CBA in taking such action against said infringements
as CBA, in its sole discretion, may decide.  All expenses and costs of such
legal action, including those of ABI, shall be paid by CBA.
 
ARTICLE VII
TERM AND TERMINATION

7.01         The term of this Agreement (the “Term”) shall become effective at
the Commencement Date and, unless sooner terminated pursuant to the provisions
of this Agreement, shall continue in effect until December 31, 2018 (the
“Initial Term”).  Following the Initial Term, this Agreement shall renew
automatically for a 10 year period, unless ABI provides written notice to CBA on
or prior to June 30, 2018 that the Agreement shall not be renewed.

7.02         Either party shall have the right at any time to terminate this
Agreement immediately, without prejudice to any other legal rights to which such
terminating party may be entitled, upon the occurrence and during the
continuance of any one or more of the following:

(a)            material default by the other party in the performance of any of
the provisions of this Agreement or any other agreement between the parties,
which default is either:

 
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(i)
curable within 30 days, but is not cured within 30 days following written notice
of default; or

 
(ii)
not curable within 30 days and either:

 
(A)
the defaulting party fails to take reasonable steps to cure as soon as
reasonably possible following written notice of such default; or

 
(B)
such default is not cured within 90 days following written notice of such
default;

(b)           default by the other party in the performance of any of the
provisions of this Agreement or any other agreement between the parties, which
default is not described in Section 7.02(a) and which is not cured within 180
days following written notice of such default;

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

(d)           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 thereof;

(e)           the institution of bankruptcy, reorganization, insolvency or
liquidation proceedings by or against the other party without such proceedings
being dismissed within 90 days from the date of the institution thereof; or

(f)            Any representation or warranty made by the other party hereunder
or in the course of performance of this Agreement shall be false in material
respects.

 
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7.03         ABI shall have the right and option to terminate this Agreement at
any time upon six months’ prior written notice to CBA, in the event:

(i)            CBA engages in any Incompatible Conduct which is not curable or
is not cured to ABI's satisfaction (in ABI’s sole opinion) within 30 days
following written notice from ABI to CBA;

                (ii)           any ABI Competitor or Affiliate thereof acquires
10% or more of the outstanding equity securities in  CBA, and one or more
officers, designees or agents of such Person becomes a member of the Board of
Directors of CBA;

(iii)           The chief executive officer of CBA (Terry Michaelson) ceases to
function as chief executive officer and within six months of such cessation an
individual serving as chief executive officer satisfactory in the sole, good
faith discretion of ABI is not serving as chief executive officer of CBA;

(iv)           CBA shall merge or consolidate into or with any other Person or
any other Person shall merge or consolidate into or with CBA; or

(v)           ABI or its corporate affiliates incur any liability or expense as
a result of any claim asserted against them by or in the name of CBA or any
shareholder of CBA as a result of the equity ownership of ABI or its affiliates
in CBA or any equity transaction or exchange between ABI or its affiliates and
CBA, and CBA does not reimburse and indemnify ABI and its corporate affiliates
on demand for the entire amount of such liability and expense.

ARTICLE VIII
REMEDIES

If either party commits a breach or a default of this Agreement, no remedy
herein conferred upon or reserved to either party is exclusive of any other
available remedy or remedies, but each and every such remedy shall be cumulative
and shall be in addition to every other remedy given under this Agreement or now
or hereafter existing at law or in equity or by statute.  No delay or omission
to exercise any right or power accruing upon any breach or default shall impair
any such right or power or shall be construed to be a waiver thereof, but any
such right and power may be exercised from time to time and as often as may be
deemed expedient.

 
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ARTICLE IX
DUTIES OF ABI

9.01         Except as set forth in Section 11.07, ABI shall have responsibility
and authority for coordinating delivery of the Product to the Alliance
Wholesalers.  ABI shall specify the brand, package and quantity of Product
ordered and shall designate the ABI Distribution Facility to which the Product
shall be shipped (and ABI may change such designation from time to time).  The
costs charged to CBA shall vary depending on which ABI Distribution Facility is
designated.

9.02         If ABI is storing any Product, ABI shall store such Product as it
stores its own products, and shall handle all Product with the same degree of
care as it handles its own products.

9.03         Except for deliveries made by CBA directly to Alliance Wholesalers
as set forth herein, ABI shall promptly and correctly fill each Alliance
Wholesaler's order, or shall instruct the WSC to promptly and correctly fill
each Alliance Wholesaler’s order and to load all Products on the trucks or other
means of conveyance to the Alliance Wholesalers.

9.04         ABI may, in its sole discretion, add the Products to Exhibit 1 of
the existing Wholesaler Equity Agreement that ABI has with any Alliance
Wholesaler.  At the option of ABI, in the event ABI acquires the distribution
rights to the Products in any sales area, ABI may direct CBA and an ABI
wholesaler servicing such sales area to enter into a transitional distribution
agreement in a form satisfactory to ABI in lieu of adding the Products to
Exhibit 1 of the Wholesaler Equity Agreement between ABI and such wholesaler.

9.05         ABI shall use its best efforts (to the extent commercially
reasonable) to maintain all licenses, permits and other authorizations that are
necessary for ABI to distribute the Products in the Territory where there are
Alliance Wholesalers.

 
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9.06         ABI agrees that during the 2011 calendar year, ABI shall include
one CBA representative on no less than six occasions, and during each subsequent
calendar year thereafter shall include one CBA representative on no less than
ten occasions, in the sales meetings between ABI and national or regional
retailers, the identity of such retailers to be mutually determined by ABI and
CBA.

ARTICLE X
DUTIES OF CBA

10.01         CBA shall have sole responsibility for developing a market
presence, creating demand for the Products in the Territory, generating
marketing activity in each sales area of the Territory and developing and
distributing promotional programs and promotional literature.  As between ABI
and CBA, the parties understand that CBA has full responsibility and discretion
with respect to the marketing, advertising and promotion of the
Products.  Appropriate procedures with regard to independent pricing of Product
are set forth in Attachment D attached hereto.  Promptly upon depletion reports
on CBA inventory at Alliance Wholesalers becoming available to ABI, ABI shall
provide such information to CBA.

10.02       CBA shall bear risk of loss and transportation costs for the
Products until delivery of Products to the ABI Distribution Facility designated
by ABI for such Alliance Wholesaler as set forth in Article V hereof.

10.03       CBA shall, or shall cause its Affiliates to, secure and maintain
label registrations in all states in the Territory where Product is sold.

10.04       CBA shall use commercially reasonable efforts to market and promote
Product throughout the Territory in the markets where Products is sold, with a
view towards maximizing sales of Products in accordance with its marketing and
sales plan.  In addition, CBA shall use commercially reasonable efforts (to the
extent permitted by law) to prohibit the Non-Alliance Wholesalers from knowingly
selling Products to retailers in the sales areas serviced by the Alliance
Wholesalers or the Affiliated Wholesalers.

 
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10.05       As between CBA and ABI, CBA shall be responsible for, and shall
indemnify ABI on an after-tax basis from, all Taxes levied on, against or in
connection with the sale, distribution, possession, marketing or promotion of
the Products in the Territory, except for Taxes levied on ABI's net income.

10.06       CBA shall use commercially reasonable efforts to obtain and maintain
all licenses, permits and other authorizations that are necessary for CBA to
sell and distribute the Products in the Territory.

ARTICLE XI
ADDITIONAL AGREEMENTS

11.01       CBA shall at all times maintain its corporate existence, and will do
or cause to be done all things necessary to preserve and keep in full force and
effect all rights (charter and statutory), licenses and franchises necessary for
it to perform its obligations hereunder.

11.02        During the Term of this Agreement, CBA shall not, without ABI's
prior written consent, sell, license, transfer, convey, encumber, or place any
restrictions upon, any of the Intellectual Property, except for licenses of the
Intellectual Property to Affiliated Wholesalers or Non-Alliance Wholesalers for
use solely in connection with sales of Product by such Affiliated Wholesalers or
Non-Alliance Wholesalers.

11.03       CBA represents, warrants and covenants that it has the exclusive
right to market and sell all products of CBA in the Territory, whether such
products are currently existing or are created in the future.  Except as set
forth to the contrary herein, during the Term of this Agreement, ABI will be the
exclusive distributor of Product in the Territory, with the exception of (i) the
rights of the Brewpubs to sell Products brewed at such Brewpubs for
on-site  consumption;  (ii) sale or distribution of the Product  for use in beer
competitions or festivals (excluding sale or distribution of Product that is
sold or re-sold to consumers at any such competition or festival), not to exceed
25,000 case-equivalents per calendar year; and (iii) sales by CBA to Affiliated
Wholesalers and Non-Affiliated Wholesalers as permitted by this
Agreement.    Nothing herein shall be deemed to waive or modify any agreement
relating to the Kona products with the Anheuser-Busch Hawaiian wholesaler
operation.  Subject to the provisions of the following subsections of this
Section 11.03, CBA reserves the right to add New Products for distribution in
the Territory.  In the event CBA elects to distribute such New Product in the
Territory and does not make the election described in Section 2.02, CBA shall
first offer to ABI in the manner described below, the right to distribute such
New Product and to have such New Product be deemed a Product for all purposes of
this Agreement.

 
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(a)           If CBA or any of its Affiliates desires to distribute a New
Product in the Territory, CBA shall notify (the “Offer Notice”) ABI of such
intention and offer ABI the right to distribute such New Product.  Within 10
days of ABI's receipt of the Offer Notice, ABI shall advise CBA of the
information required by ABI to make an evaluation of such New Product (which
shall include, but may not be limited to, the factors described on Attachment
E).  Within 45 days of ABI's receipt of all such information (the “Offer
Expiration Date”), ABI shall advise CBA of ABI's decision to accept or not
accept such New Product as a Product under this Agreement.  If ABI declines to
accept such New Product or fails to accept such New Product by the Offer
Expiration Date, CBA shall be free to otherwise distribute such New Product as
it deems appropriate; provided that CBA enters into a binding agreement with
another Person for the distribution of such New Product within 365 days of the
earlier of (Y) ABI's notice not to accept, or (Z) the Offer Expiration Date.  If
CBA does not enter into such binding agreement within such time period, or if
CBA then fails to commence distribution under such binding agreement or
interrupts such distribution thereafter for 365 consecutive days or more or
decides to terminate its binding agreement with such Person, CBA shall be
required to comply with the preceding provisions in this section again before
permitting any other Person to distribute the New Product.  If ABI exercises its
option to distribute the New Product, such New Product shall be distributed by
ABI in accordance with the terms and conditions set forth in this
Agreement.  Notwithstanding the above, CBA may test market New Products without
ABI’s prior approval; provided that: (i) the duration of all such test marketing
on any and all New Products in any single calendar year shall not exceed six
months; (ii) the aggregate volume of all such test marketing on any single New
Product in any single calendar year shall not exceed one percent of the sales
volume for all Products for the preceding 12 months; (iii) all such New Products
otherwise comply with the quality standards set forth in this Agreement; and
(iv) all such test marketing be done at Brewpubs or through Alliance
Wholesalers.

 
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(b)           For purposes of this Section 11.03, New Products that are accepted
by ABI are deemed Products and if CBA desires to then modify such Product, such
modifications shall be handled as set forth in Section 11.08.

(c)           Before making a New Product available to any Non-Alliance
Wholesaler, CBA shall, to the extent allowed by law and permitted by the terms
of any contract between CBA and the Non-Alliance Wholesaler holding the relevant
distribution rights, first make such New Product available for distribution by
ABI.  Within 90 days of ABI's receipt of CBA's notice that it wishes such New
Product distributed in the sales area of such Non-Alliance Wholesaler, ABI shall
advise CBA of ABI's decision to accept distribution rights for such New Product
in the sales area, in which event the ABI wholesaler distributing the product in
the sales area shall be deemed an Affiliated Wholesaler or an Alliance
Wholesaler for such New Product.

11.04       CBA shall comply with every commercially reasonable request made by
ABI to terminate the distribution rights of any Non-Alliance Wholesaler and to
cause the CBA Products to be distributed in the sales area of such Non-Alliance
Wholesaler pursuant to this Agreement.  This section shall not obligate CBA to
undertake any action inconsistent with applicable law, except that at the
written direction of ABI, ABI may obligate CBA to undertake an action that may
give rise solely to civil liabilities to private parties and any such written
direction shall obligate ABI to undertake the indemnification obligations with
respect to such action as set forth in Section 14.02.

11.05       If CBA wishes to have Products distributed in a sales area where ABI
is unable to provide an Affiliated Wholesaler or an Alliance Wholesaler who will
agree to carry or fill orders for Products which have been procured by CBA or
the Affiliated Wholesaler or the Alliance Wholesaler provided by ABI has refused
repeatedly to reasonably cooperate with CBA and has failed to adhere to the
provisions of the Wholesaler Equity Agreement between ABI and such Affiliated or
Alliance Wholesaler with regard to the Products,  CBA may, to the extent
permitted by applicable law,  terminate the distribution rights of the
Affiliated Wholesaler or the Alliance Wholesaler, select another Person
reasonably acceptable to ABI and upon written terms and conditions consistent
with the intent of this Agreement to make ABI the exclusive distributor of
Product in the Territory, to distribute the Product in such sales area, and if
selected, such Person shall be deemed a Non-Alliance Wholesaler for purposes of
this Agreement.  If ABI subsequently identifies a wholesaler for such sales area
different from the wholesaler previously distributing the Products in such sales
area, CBA’s obligations with respect to the Non-Alliance Wholesaler shall be as
set forth in Section 11.04.

 
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11.06       At CBA’s request, ABI shall instruct Alliance Wholesalers to return
cooperage to the ABI Distribution Facility designated by ABI, and ABI shall make
available for pick-up by CBA all such cooperage.  CBA shall pay ABI the
Cooperage Handling Charge for all cooperage received by ABI.   ABI shall not be
liable for the costs of any cooperage lost or damaged by such Alliance
Wholesaler, and ABI assigns to CBA all of ABI's rights, if any, to seek
reimbursement from the Alliance Wholesaler for lost or damaged cooperage.  CBA
shall reimburse ABI for any costs incurred by ABI in handling cooperage that is
not properly segregated from other cooperage by the Alliance Wholesalers or is
returned in any other manner that causes ABI to incur costs not included in the
calculation of Cooperage Handling Charges and ABI assigns to CBA all of ABI’s
rights, if any, to seek reimbursement from those Alliance Wholesalers that cause
CBA to incur such additional costs.  ABI's determination of such costs, absent
manifest error, shall be binding, on each of ABI and CBA; provided, however,
that such determination shall be subject to the audit provisions of Section
Article XVII.  ABI and CBA shall develop, from time to time, procedures for the
collection and redemption of cooperage and cooperage deposit fees satisfactory
to each party in its reasonable judgment.  Such procedures shall provide for the
prompt delivery of cooperage among ABI, CBA and the Alliance Wholesalers and the
payment and return of cooperage deposit fees promptly upon acceptance and return
of the respective cooperage.

11.07       If CBA desires to deliver Product directly to any Alliance
Wholesaler, it shall provide to ABI 30 days advance notice thereof, and unless
ABI indicates during such period that such delivery will create unreasonable
difficulties for ABI, CBA shall be permitted to do so.   With respect to any
such delivery by CBA to an Alliance Wholesaler,

 
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(a)
such deliveries shall still be deemed: (i) sales by CBA to ABI, and (ii)
re-sales by ABI to such Alliance Wholesaler for purposes of this Agreement; and

 
(b)
title to and risk of loss of such Products shall remain with CBA until delivery
to such Alliance Wholesaler.

11.08           In order to modify an existing Product for the purposes of
replacing the Product (rather than for the purposes of creating a New Product),
CBA may change, alter, modify or adjust the formula, taste profile, alcohol
content, ingredients, brand name or trade dress of any Product (a "Modified
Product"), if and only if CBA has given ABI at least 30 days’ notice of such
change, alteration, modification or adjustment.  ABI shall have the right and
option, in its sole discretion, during such 30 day period to terminate
distribution of such Modified Product under this Agreement, in which event such
Modified Product shall no longer be deemed a Product for purposes of this
Agreement.  Prior to execution of this Agreement, CBA has delivered to ABI, in
writing, descriptions setting forth for each Product the exact ingredients (by
types and origin) and product characteristics for such Product, including
applicable tolerances and a description of the primary and secondary packaging
for each Product.  Other than minor changes in trade dress, any changes or
deviations  in primary or secondary packaging, ingredients (additions or
deletions), hops or malt type or supplier of other key raw material in any
Product from that earlier specified by CBA, such changes shall cause such
Product to be a Modified Product.  In addition, if ABI’s examination of any
Product indicates a deviation greater than the tolerance previously indicated
for such Product in three or more tests, such Product shall be deemed to be a
Modified Product.

11.09       CBA agrees to ship product samples to ABI for sensory analyses and
AB agrees to perform periodical technical analyses for CBA.  AB will make
available to CBA the results of these tests, but shall be subject to no
liability to CBA on account of such tests.

 
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(a)           At CBA's request, A-B agrees to perform periodic technical
analysis on CBA Products not to exceed four (4) Products per quarter.  CBA
should ship, at CBA's expense, twelve (12) bottles of each Product to ABI at (or
to such other address or location as may be specified from time to time in
writing by ABI):

Anheuser-Busch, Inc
Attn:  Craft Partner Analytical Analysis/Mike Garcia
1200 Arsenal St
St. Louis, MO 63118

(b)           CBA is required to ship Product to AB for the purposes of
conducting sensory analyses on a schedule defined by AB, but not to exceed more
than twelve bottles of each Product per month and from time to time upon request
by AB, one keg of the draught Product.  Product will be shipped at AB's expense
to (or to such other address or location as may be specified from time to time
in writing by ABI):

Anheuser-Busch, Inc
Attn:  Craft Partner Taste Samples/Mike Garcia
1200 Arsenal St
St. Louis, MO 63118

11.10       ABI shall maintain in its employ at least one and one-half  full
time equivalent corporate inventory management employees, a substantial portion
of the responsibilities of whom shall be to coordinate and administer logistics
of Product distribution to Alliance Wholesalers.  Within fifteen (15) days of
the end of each calendar quarter during the Term, beginning with the second
quarter of 2011, CBA shall pay to ABI 25% of the annual Inventory Manager
Fee.  Beginning in 2012 and on a biennial basis thereafter, the parties shall
conduct good faith discussions as to whether the Inventory Manager Fee should be
increased or decreased in order to provide reasonable compensation to AB for the
services provided by it hereunder.

11.11       Upon written agreement by the parties hereto, the Territory may be
reduced to exclude states or portions of the United States of America.
 
 
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ARTICLE XII
REPRESENTATIONS, WARRANTIES AND COVENANTS OF CBA

CBA represents, warrants and covenants to ABI as follows:

12.01       CBA is a corporation duly organized, validly existing and in good
standing under the laws of the State of Washington, has full corporate or other
power and authority to carry on its business as now conducted and as currently
proposed to be conducted, and to execute, deliver and carry out the terms of
this Agreement, has all permits and authorizations necessary to carry on its
business as presently conducted, and is, or shall be if required, duly qualified
to do business as a foreign corporation in good standing in each jurisdiction
wherein the nature of CBA's business and operations or the character of the
properties owned or held under lease by CBA makes such qualification necessary
and in which the failure to so qualify would have a materially adverse effect on
the business, prospects, profits, condition or operations, financial or
otherwise, of CBA.

12.02       This Agreement and all related documents have been duly authorized,
executed and delivered by CBA and constitute legal, valid and binding agreements
or obligations of CBA enforceable against it in accordance with their terms,
subject to applicable bankruptcy, insolvency, and similar laws affecting the
enforcement of creditors' rights generally.  Neither the execution and delivery
nor the performance by CBA of this Agreement will contravene any law or
governmental rule or regulation, or any judgment or order, applicable to or
binding on CBA, or CBA's charter documents, or result in any breach of or
constitute any default under, or result in the creation of any lien upon any
property of CBA under, any indenture, mortgage or other agreement or instrument
to which CBA is a party or by which it, or any of its properties may be bound or
affected.

12.03       Neither the execution and delivery nor the performance by CBA of
this Agreement requires any consent or approval of, giving notice to,
registration with, or taking of any other action in respect of, any federal or
state governmental authority or agency which has not been obtained prior to the
date hereof.

 
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12.04       ABI’s purchase or resale of Products or other goods hereunder in the
form furnished to ABI by CBA and ABI's use of the Intellectual Property in
accordance with the terms of authorization by the CBA of ABI’s use pursuant to
the this Agreement shall not infringe any valid United States or foreign patent
right, right of privacy or publicity, or any rights with respect to trademarks,
trade dress, copyrights, promotional slogans, trade names, designs, labels,
get-ups, color combinations, product shapes, or other trademarks rights.

12.05       CBA has no contract, agreement or understanding, whether oral or
written, with any Person for the distribution of Product in the Territory.

12.06       As of the Commencement Date, CBA has no Non-Alliance Wholesalers.

12.07       All Products:

(a)  shall be merchantable and fit for their intended purpose;

(b)  shall be produced exclusively in the breweries of CBA, its Affiliates or in
other breweries approved by ABI;

(c) shall be free from defects in materials and workmanship and in compliance
with applicable federal and state laws and regulations;

(d) shall be delivered free from any lawful security interest, lien or other
encumbrance;

(e)  shall not be adulterated or misbranded within the meaning of the Federal
Food, Drug and Cosmetic Act, as amended, and shall comply with the applicable
provisions of the Code of Federal Regulations; and

(f)   shall be produced in compliance with the requirements of the Fair Labor
Standards Act of 1938, as amended, and Executive Order No. 11246 and of the
rules, regulations and relevant orders of the Secretary of Labor, if applicable.

12.08       (a)           In order to ensure the freshness quality of Product
when consumed by the public, all Products shall be delivered by CBA to the
designated ABI Distribution Facility, or to the Alliance Wholesalers, Affiliated
Wholesalers and Non-Alliance Wholesalers: (i) for packaged Product, at least 80
days; and (ii) for draft Product, at least 32 days, prior to the time when such
Product would no longer be salable to or consumable by the public, based on
criteria developed by CBA and reasonably acceptable to ABI, by which CBA judges
the freshness of its malt and non-malt beverage products.

 
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(b)            If ABI changes from time to time its standards with respect to
the remaining shelf life as applied generally to its products sold in the United
States, CBA agrees that within six months of the effective date of such change,
CBA shall conform its shipment practices to the current ABI standard.

(c)            To the extent any Product is shipped to a WSC, ABI may change the
standards described in Section 12.08(a) to provide assurances, satisfactory in
the reasonable judgment of ABI, that the Product will continue to be delivered
to retailers with a remaining shelf life consistent with the standards generally
used by ABI

12.09       CBA shall comply in material respects with all applicable
governmental laws, regulations and orders covering the production, sale,
packaging, marketing and delivering of the Products.

ARTICLE XIII
REPRESENTATIONS, WARRANTIES AND COVENANTS OF ABI

ABI represents, warrants and covenants to CBA as follows:

13.01       ABI is a corporation duly organized, validly existing and in good
standing under the laws of the State of Missouri, has full corporate power and
authority to carry on its business as now conducted and as currently proposed to
be conducted, and to execute, deliver and carry out the terms of this Agreement
and has all permits and authorizations necessary to carry on its business as
presently conducted.

13.02       This Agreement and all related documents have been duly authorized,
executed and delivered by ABI and constitute legal, valid and binding agreements
or obligations of ABI enforceable against it in accordance with their terms,
subject to applicable bankruptcy, insolvency, and similar laws affecting the
enforcement of creditors' rights generally.  Neither the execution and delivery
nor the performance by ABI of this Agreement will contravene any law or
governmental rule or regulation, or any judgment or order, applicable to or
binding on ABI, or ABI's charter documents, or result in any breach of or
constitute any default under, or result in the creation of any lien upon any
property of ABI under, any indenture, mortgage or other agreement or instrument
to which ABI is a party or by which it, or any of its properties may be bound or
affected.

 
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13.03       Neither the execution and delivery nor the performance by ABI of
this Agreement requires any consent or approval of, giving notice to,
registration with, or taking of any other action in respect of, any federal or
state governmental authority or agency, which has not been obtained prior to the
date hereof.

13.04       ABI shall comply in material respects with all governmental laws,
regulations and orders covering the re-sale and distribution of the Products.

ARTICLE XIV
INDEMNIFICATION

14.01       In addition to any other indemnities set forth in this Agreement,
CBA will indemnify, protect, defend and hold harmless each of ABI, its
Affiliates, wholesalers 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
expenses, including, without limitation, reasonable attorneys' fees, court costs
and other legal expenses arising from, connected with or attributable to: (a)
the Products; (b) the breach by CBA of any provision hereof; (c)  ABI’s use of
the Intellectual Property in conjunction with the distribution and sale of the
Products in accordance with the terms hereof; (d) the inaccuracy of any warranty
or representation made by CBA herein or in connection herewith; or (e) the
termination of the distribution rights of any Affiliated Wholesaler or Alliance
Wholesaler pursuant to Section 11.05.  None of the above indemnities shall
require CBA to indemnify, protect, defend or hold harmless any indemnitee with
respect to any claim to the extent such claim arises from, is connected with or
is attributable to the negligence or willful misconduct of such ABI
Indemnitee.  Expiration or termination of this Agreement shall not affect the
continuing obligations of CBA to indemnify ABI under this Section 14.01.

 
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14.02       In addition to other indemnities set forth in this Agreement, ABI
will indemnify, protect, defend and hold harmless each of CBA, its Affiliates
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 expenses, including, without
limitation, reasonable attorneys' fees, court costs and other legal expenses
arising from, connected with or attributable to: (a) the breach by ABI of any
provision hereof; (b) the inaccuracy of any warranty or representation made by
ABI herein or in connection herewith; or (c) any action taken by CBA at the
written direction of ABI pursuant to Section 11.04.  Expiration or termination
of this Agreement shall not affect the continuing obligations of ABI to
indemnify CBA under this Section 14.02.  Nothing herein shall require ABI to
indemnify, protect, defend or hold harmless any indemnitee with respect to any
claim to the extent such claim arises from, is connected with or is attributable
to the negligence or willful misconduct of such indemnitee or the actions of any
Non-Alliance Wholesalers.

14.03       If a claim by a third party is made against a party indemnified
pursuant to this Article XIV, and if such indemnified party intends to seek
indemnity with respect thereto under this Article XIV, the indemnified party
shall promptly (and in any case within 30 days of such claim being made) notify
the indemnifying party of such claim; provided, however, that any failure of the
indemnified party to promptly notify the indemnifying party of such claim shall
not relieve the indemnifying party of its obligations pursuant to this Section
14.03 except to the extent that the indemnifying party would be responsible for
the payment of any additional amounts or be actually prejudiced in any other way
as a result of such failure.  The indemnifying party shall have the right (but
not the obligation) to undertake, conduct and control, through counsel of its
own choosing and at the indemnifying party's expense, the settlement or defense
thereof, provided the indemnifying party proceeds in good faith, expeditiously
and diligently. If the indemnifying party does not notify the indemnified party
in writing that it will defend  any matter within 20 business days after receipt
of notice from the indemnified party of the existence of such matter, or if the
indemnifying party disputes that it is liable to the indemnified party for any
sum pursuant to this Section 14.03, the indemnifying party shall have no right
to defend such matter, and the indemnified party shall have full right and power
to defend or otherwise deal with and dispose of the matter and shall be
indemnified for the fees and expenses of counsel retained for such purpose.  The
indemnified party shall cooperate with the indemnifying party in connection with
any defense by the indemnifying party of a claim, but the indemnifying party
shall permit the indemnified party to participate in such settlement or defense
through counsel chosen by the indemnified party and the fees and expenses of
such counsel shall be borne by the indemnified party.  Without the prior written
consent of the indemnified party, the indemnifying party will not enter into any
settlement of any such claim which would lead to liability or create any
financial or other obligation on the part of the indemnified party, and the
indemnifying party shall after any such settlement or the resolution of any
claim promptly reimburse the indemnified party for the full amount of any loss
resulting from such claim not theretofore paid by the indemnifying party.  The
indemnified party will not enter into any settlement or pay (except pursuant to
a judgment) any such claim without the prior written consent of the indemnifying
party, which consent shall not unreasonably be withheld or
delayed.  Notwithstanding the foregoing, the indemnified party shall have the
right to pay or settle any such claim, in the event the indemnified party has
not assumed or is not pursuing the defense of any claim or is in breach of its
indemnification obligations hereunder.  The indemnification required by this
Section 14.03 shall be made by periodic payments of the amount thereof as losses
are incurred and as and when bills are received.

 
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ARTICLE XV
INSURANCE

CBA shall procure and maintain from qualified and licensed insurers with Best’s
Ratings of at least A-: (i) a comprehensive or commercial general liability
insurance policy with at least $10,000,000 in coverage for each occurrence,
including liquor and product liability; (ii) a worker’s compensation policy with
at least $2,000,000 in coverage for each occurrence; and (iii) a property
insurance policy covering damage to the Products owned by CBA.  Coverage shall
be on an occurrence rather than claims made basis. The policy shall name ABI as
an additional insured and shall include coverage for CBA’s indemnification
obligations under this Agreement.  The policy shall provide that ABI will be
notified of the cancellation or any restrictive amendment of the policy at least
15 days prior to the effective date of such cancellation or amendment.  CBA
shall not violate, or permit to be violated, any conditions of such insurance
policies, and CBA shall at all times satisfy the requirements of the insurance
carrier writing said policy.

From time to time at the request of ABI, CBA shall provide ABI with a
certificate from such insurer certifying that the insurance policy described in
this section is in force and the evidence of coverage shall specifically state
that coverage as it pertains to ABI shall be primary regardless of any other
coverage that may be available to ABI.  Failure to procure and maintain the
insurance coverage specified herein shall be deemed a material breach of this
Agreement

ARTICLE XVI
FORCE MAJEURE

16.01       If by reason of Force Majeure either party is unable in whole or in
part to carry out any of its agreements contained herein, such party shall not
be deemed in default during the continuance of such inability.  The term "Force
Majeure" as used herein shall mean, without limitation, the following:  acts of
God; strikes, lockouts or other industrial disturbances; acts of public enemies;
orders or restraints of any kind from any government of the United States of
America or from a state or from any of their departments, agencies or officials
(except when such governmental action results from a party's failure or refusal
to comply with any applicable law, rule or regulation), or of any civil or
military authority; insurrections; riots; landslides; earthquakes; fires;
storms; droughts, floods, explosions; and any other cause or event not
reasonably within the control of the respective parties.  Each party agrees,
however, to remedy with all reasonable dispatch the cause or causes preventing
it from carrying out the Agreement, provided that the settlement of strikes,
lockouts and other course is in its judgment unfavorable to it.

 
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16.02       The response to an act of Force Majeure resulting from industrial
disturbance shall be entirely within the discretion of the affected party, and
the affected party shall not be required to make settlement of strikes, lockouts
and other industrial disturbances by acceding to the demands of the opposing
party or parties.
ARTICLE XVII
AUDIT AND INSPECTION RIGHTS

(a)            During the Term and for a period of at least two years following
the termination of this Agreement, each party shall maintain such books and
records (collectively, "Records") in accordance with generally accepted
accounting principles consistently applied as are necessary to substantiate
that:

(i)            All invoices and other charges submitted to the other for payment
hereunder were valid and proper;

(ii)           No payments have been made, directly or indirectly, by or on
behalf of either party to or for the benefit of any employee or agent of the
other party who may reasonably be expected to influence such other party's
decision to enter into this Agreement, or the amount to be paid by such other
party pursuant hereto (as used herein, "payment" shall include money, property,
services, and all other forms of consideration); and

(iii)           Such party has conformed to the provisions of this Agreement.

(b)            Each party and/or its representative shall have the right at any
time during normal business hours, upon five business days’ notice, to have
PricewaterhouseCoopers LLC, or such other internationally recognized accounting
firm as agreed to by the parties, audit the Records of the other in a manner
which does not create unreasonable disruption to the audited party's normal
conduct of business.

 
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ARTICLE XVIII
CONFIDENTIALITY

18.01       (a)             During and subsequent to the Term of this Agreement,
each party shall treat and shall cause its respective employees, officers,
directors, advisors, representatives, subsidiaries, Affiliates, assigns,
subcontractors and any and all persons or business entities acting under one or
any of them, to treat, as confidential property and not disclose to any other
Person or use in any manner, except as is necessary to perform this Agreement
(and then only on a confidential basis satisfactory to both parties), any
information regarding the other party's prices, plans, programs, processes,
products, costs, equipment, operations or customers (including without
limitation information received by ABI with respect to Product formula and
ingredient and information by CBA received regarding the distribution and
logistics programs used by ABI) (“Confidential Information”) which may come
within the knowledge of such party, its officers, employees or advisors in the
performance of this Agreement, without in each instance securing the prior
written consent of the other party; nor shall ABI use such Confidential
Information to produce a beer whose formula duplicates any of the Product
formulas.

(b)           Nothing above, however, shall prevent either ABI or CBA from
disclosing to any other Person or using in any manner, information that such
party can show:

(i)             has been published or has become part of the public domain
without any breach of this Agreement other than by acts, omissions or fault of
such party or its employees or agents;

(ii)            has been furnished or has been made known to such party by third
parties (other than those acting directly or indirectly for or on behalf of the
disclosing party) as a matter of legal right without restrictions on its
disclosure;

(iii)           was in such party's lawful possession prior to the disclosure
thereof by the other party;

(iv)           is later independently developed by the receiving party; or

 
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(v)           has been required to be disclosed by law, court order, or
government order or regulation.

(c)           If any party is required by law, court order or government order
or regulation to disclose Confidential Information, such party shall provide
notice thereof to the other party and undertake reasonable steps to provide the
other party with an opportunity to object to such disclosure.

(d)           Except as required by law, neither party shall release, or cause
or allow the release of, information to the communications media or to any other
third party concerning the specific terms of this Agreement or any amendment or
modification thereto without the prior written consent of the other party;
provided, however, that if in the reasonable opinion of the disclosing party's
counsel, the failure to disclose any such information would create a reasonable
risk of non-compliance with applicable securities laws, then such disclosing
party may so disclose such information provided it gives the other party as much
advance notice as is reasonably possible.

18.02        Neither party shall make any Confidential Information available to
anyone other than those of its respective employees and advisors who need such
Confidential Information to enable them to perform this Agreement.

18.03       These secrecy obligations with respect to the Confidential
Information shall survive the termination or expiration of this Agreement.

ARTICLE XIX
ASSIGNMENT

19.01        This Agreement will be binding upon, and will inure to the benefit
of, the parties hereto and their respective successors and permitted assigns.

19.02        CBA may not assign this Agreement to any Person without the prior
written consent of ABI.

19.03        Provided that such assignment does not deny CBA the practical
benefits of this Agreement, ABI may assign this Agreement to any entity
controlled by Anheuser-Busch InBev nv/sa.

 
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ARTICLE XX
NOTICES

All notices required or permitted hereunder shall be in writing and shall be
deemed duly given if either personally delivered, sent by electronic facsimile
or sent by overnight courier service or certified mail, return receipt
requested, addressed to the parties as follows:
 
If to ABI:
Anheuser-Busch, Incorporated
One Busch Place
St. Louis, Missouri 63118
Attn:     Vice President - Business and
              Wholesaler System Development
              Facsimile Number:  (314) 445-3456

             

If to CBA:
Craft Brewers Alliance, Inc.
929 North Russell Street
Portland, Oregon  97227-1733
Attn:     Chief Executive Officer
   Facsimile Number:  (503) 281-1496

 
or to such other address, facsimile number or attention as either party shall
provide to the other in accordance herewith.  Notices delivered in person, by
overnight courier or by facsimile shall be effective when received.  Notices
given by certified mail shall be effective on the third business day after
mailing unless sooner received, in which case they shall be effective upon
receipt.

 
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ARTICLE XXI
INDEPENDENT CONTRACTORS

The parties shall be and act as independent contractors and under no
circumstances shall this Agreement be construed to create any agency,
partnership, joint venture or employment relationship between the
parties.  Neither party has any authority to bind the other in any way except as
may be otherwise expressly stated in this Agreement.  The parties recognize that
during the period of this Agreement, there will be employees of one party upon
the premises of the other.  It is understood and agreed that on such occasions
the employees of each party shall remain the employees of that party solely, and
that each party shall be solely responsible for the wages and benefits for its
employees, and that any injury which may be sustained by an employee shall be
covered under the worker's compensation insurance of the party by which he is
employed.

ARTICLE XXII
MISCELLANEOUS

22.01        In exercising its respective rights (including, without limitation,
the making of any determinations under this Agreement, discretionary or
otherwise) and performing their respective obligations hereunder, each of the
parties shall act in good faith and in a commercially reasonable manner; except
that with respect to (a) the determination of Incompatible Conduct or the cure
thereof by ABI, (b) ABI’s decision to terminate distribution of a Modified
Product (as described in Section 11.08 above), (c) ABI’s judgment made pursuant
to Section 7.03(i) or determination made pursuant to Section 7.03(iii); ABI
shall only be required to act in good faith and need not act in a commercially
reasonable manner.

22.02        If any provision of this Agreement shall be determined to be
illegal and unenforceable by any court of law or any competent governmental or
other authority, the remaining provisions shall be severable and enforceable in
accordance with their terms so long as this Agreement without such terms or
provisions does not fail in its essential commercial purpose or purposes.  The
parties will negotiate in good faith to replace any such illegal or
unenforceable provision or provisions with suitable substitute provisions that
will maintain the economic purposes and intentions of this Agreement.

 
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22.03        Failure by either party to insist on strict performance by the
other of any term, condition or obligation set forth in this Agreement shall not
be deemed a waiver of the same or any similar breach, and no waiver of any
provision hereof shall be effective unless in writing, specifying the provision
to be waived.

22.04       This Agreement is entered into in the State of Missouri and will be
governed by and construed under the laws of Missouri, including the Uniform
Commercial Code as in effect in the State.  The parties agree that any legal or
equitable action or proceeding with respect to this Agreement shall be brought
in the United States District Court for the Eastern District of Missouri (or if
such court does not have jurisdiction, in any court of general jurisdiction in
the County of St. Louis, Missouri) or in the United States District Court for
Multnomah County,   Oregon (or if such court does not have jurisdiction, in any
court of general jurisdiction in Oregon).

22.05       This Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof and supersedes all prior or
contemporaneous agreements in regard thereto.  This Agreement cannot be altered
or modified except by an agreement in writing signed by authorized
representatives of both parties and specifically referring to this
Agreement.  The section headings are inserted for convenience only and are in no
way intended to define or limit the scope, extent or intent of any provision of
this Agreement.

22.06       Nothing in this Agreement, express or implied, is intended or shall
be construed to give any Person other than the parties to this Agreement, and
the indemnitees specified in Article XIV or their respective successors or
assigns any legal or equitable right, remedy or claim under or in respect of any
agreement or any provision contained herein.

22.07       This Agreement may be executed in one or more counterparts and shall
be the valid and binding agreement of the parties when the counterparts of this
Agreement have been duly executed and delivered by each party hereto.

 
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22.08       The parties agree that upon the execution and delivery hereof, the
Original Agreement shall be of no further force and effect, but any rights and
obligations accruing prior to such execution and delivery shall survive.

22.09       CBA agrees that neither (i) any termination by ABI of its WSCs or
any other AB Distribution Facility nor (ii) any changes to the exclusivity
provisions of the wholesaler equity agreement shall be breach or default by ABI
of its obligations hereunder (but (ii) shall not limit or abridge ABI’s
obligations of good faith and fair dealing hereunder as they may relate to such
changes).

IN WITNESS WHEREOF, this Agreement is executed on behalf of the parties by their
duly authorized representatives as of the day and year first above written.
 
ANHEUSER-BUSCH, INCORPORATED
 
CRAFT BREWERS ALLIANCE, INC.
                   
By:
/s/   Michael R. Taylor
 
By:
/s/   Terry E. Michaelson
Name:
Michael R. Taylor  
Name:
Terry E. Michaelson
Title:
Vice President, Corporate Real Estate
Title:
Chief Executive Officer          
By:
/s/   Thomas Larson      
Name:
Thomas Larson      
Title:
Assistant Secretary      

 
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ATTACHMENT A

COOPERAGE HANDLING COST MODIFICATION

For each calendar year during the Term, the Cooperage Handling Costs shall each
be recalculated each January to be an amount equal to:

Cy-1 x    [[1 + DL]]

where:

 
Cy-1
=
the Cooperage Handling Costs in effect for the prior calendar year

 
DL
=
the percentage change (in decimal fraction form) in the Average Budgeted Hourly
Fully Loaded Labor Rate for beer packaging and shipping laborers, budgeted for
the calendar year for which the calculation is made, as compared to the amount
which had been budgeted for the prior calendar year.

The Average Budgeted Hourly Fully Loaded Labor Rate for each calendar year shall
be determined by taking the arithmetic average of the Budgeted Hourly Fully
Loaded Labor Rates for the subject year (as set forth in the annual budget in
the CMS/SAP system) in effect on December 31 preceding the subject year for all
ABI breweries in the Territory.

 
 

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ATTACHMENT B

INCOMPATIBLE CONDUCT

A.
Examples of activities that constitute Incompatible Conduct:

(1)
Advertising by CBA directed at underage drinkers;

(2)
Production by CBA of a high alcohol beer; provided that high alcohol beer shall
not include production of a beer whose alcohol content does not exceed the
alcohol content of (a) a similar Product currently distributed hereunder or (b)
a product that is made or distributed currently by ABI;

(3)
Advertising by CBA based upon the high alcohol content of its beer;

(4)
Statements by CBA defaming ABI or its products;

(5)
Criminal activities by CBA or its senior executives; and

(6)
Quality and wholesomeness of Product is materially affected, taking into account
the permitted tolerances and Product specifications.

B.
Examples of activities that do not constitute Incompatible Conduct:

(1)
Poor operating results by CBA;

(2)
Poor performance of CBA or unsuccessful product introduction by CBA;

(3)
Introduction by CBA of products directly competitive with ABI products;

(4)
Any activity the sole effect of which on ABI is to decrease the value of ABI's
investment in CBA or the value of ABI's distribution rights of CBA products; and

(5)
Isolated, non-repetitive, inadvertent minor regulatory infractions.

 
 

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ATTACHMENT C

METHODOLOGY TO ANNUALLY MODIFY THE
THE INVOICING COSTS AND INVENTORY MANAGER FEE

For each calendar year during the Term, the Invoicing Costs and Inventory
Manager Fee  shall each be recalculated (rounding to the nearest one
one-hundredth of a cent) each January to be an amount equal to:

M y-1 X (1 + GDP)
where:

 
M y-1
=
the Invoicing Costs and Inventory Manager Fee in effect for the prior calendar
year

 
GDP
=
the forecasted annual rate of change (in per cent) in the "GDP Deflator
(Implicit)" for the subject calendar year, as published by DRI/McGraw Hill
division of Standard & Poor's Corporation in the "Inflation Summary" table in
the October issue in the preceding year of Review of the U.S. Economy (or such
other index or publication as may be reasonably acceptable to CBA and ABI if
such index or publication is no longer published).

 
 

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ATTACHMENT D
PROCEDURES RELATING TO PRICING MATTERS

1.  Taking into account CBA’s marketing program and strategy ABI is solely
responsible for determining the prices at which ABI sells CBA Product to
Alliance Wholesalers and for making suggestions to Alliance Wholesalers
concerning the prices-to-retailers (“PTRs”) at which Alliance Wholesalers may
wish to resell CBA Product.  This applies to both front-line pricing and
proposed price promotions.

2.  CBA recommendations concerning price promotions by ABI to Alliance
Wholesalers and concerning suggested PTRs for Product should be discussed by CBA
personnel with ABI field personnel with responsibility for the relevant
geographic area (“ABI Personnel”).  The ABI Personnel ordinarily should be the
Pricing Administrator in each Region, who will discuss the matter, as necessary,
with the ABI Sales Director and ABI Regional Vice President.

These procedures apply to both front-line pricing and proposed price
promotions.  CBA personnel should NOT discuss these matters directly with
Alliance Wholesalers without the involvement and prior approval of ABI
Personnel.

3.  If the ABI Personnel decides, after reasonable consideration of CBA’s
recommendations, to pursue a CBA pricing recommendation, ABI Personnel will be
responsible for: (a) communicating with the affected Alliance Wholesalers, and
(b) submitting a request to ABI Price Operations Department in St. Louis.  ABI
Price Operations will review and approve or disapprove the request in a manner
consistent with ABI’s normal procedures.

4.  CBA pricing recommendations should be discussed with ABI Personnel
sufficiently in advance of proposed implementation dates to permit processing
through ABI Price Operations in St. Louis and compliance with state price
posting and other requirements.

5.  These procedures are regarding pricing matters only.  Nothing herein shall
limit any other CBA marketing efforts set forth in this Agreement.

 
 

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ATTACHMENT E
FACTORS NEEDED TO EVALUATE NEW PRODUCTS

CBA must provide at least the following information to ABI in order for ABI to
make an evaluation of New Product:

1.             Proposed Name of New Product

2.             Proposed New Product Packages

3.             Proposed New Product Label

4.             Proposed Ingredients and Proposed Suppliers

5.             Alcohol Content

6.             Beginning Gravity

7.             IBU

8.             Comprehensive Marketing Plan

9.             Consumer Research

 

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