EXHIBIT 10.5












                          MASTER DISTRIBUTOR AGREEMENT



                                     BETWEEN



                            CRAFT BRANDS ALLIANCE LLC


                                       AND


                          ANHEUSER-BUSCH, INCORPORATED





<PAGE>



                          MASTER DISTRIBUTOR AGREEMENT


         THIS MASTER DISTRIBUTOR  AGREEMENT (the "Agreement") is made as of July
1, 2004 by and between CRAFT BRANDS  ALLIANCE LLC having its principal  place of
business   at  929  North   Russell,   Portland,   Oregon   97227   ("CBA")  and
ANHEUSER-BUSCH, INCORPORATED having its principal place of business at One Busch
Place,  St.  Louis,  MO 63118  (referred  to herein  interchangeably  as "Master
Distributor" or "ABI").

         WHEREAS,  CBA acquires products from Redhook Ale Brewery,  Incorporated
and Widmer  Brothers  Brewing Company and markets the Products in certain states
west of the Mississippi River.

         WHEREAS,  ABI and CBA desire to have ABI serve as Master Distributor of
the  Products  and to  coordinate  the  delivery of the  Products to  designated
wholesalers in the ABI wholesaler network; and

         WHEREAS,  ABI and CBA desire CBA to have  responsibility for developing
and implementing programs that create demand for, market,  promote and advertise
the Products in the Territory (as defined herein);

         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  source  brewery,
warehouse,  WSC,  third-party  warehouse or other suitable  location  reasonably
designated by ABI from which ABI will ship Product to Alliance Wholesalers.

<PAGE>


         "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. For the purpose of this definition,
"control" of a Person shall mean the possession,  directly or indirectly, of the
power to direct or cause the direction of its  management  or policies,  whether
through the  ownership of voting  securities,  by contract or  otherwise.  Kona,
Redhook, Widmer shall be considered to be Affiliates of CBA.

         "AFFILIATED  WHOLESALER"  shall  mean  any  wholesaler  of the  alcohol
beverage  products of ABI that  distributes  the  Products in any portion of the
Territory  pursuant to a distribution  agreement  between CBA, Redhook or Widmer
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.

         "BARREL" shall be equal to 31 United States gallons.

         "COMMENCEMENT DATE" shall mean July 1, 2004.

         "CONFIDENTIAL  INFORMATION"  shall have the  meaning  assigned to it in
Section 18.01(a).


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         "COOPERAGE  HANDLING  CHARGE"  shall mean * per  Pallet  Lift for draft
Product during 2004; ATTACHMENT A attached hereto describes the methodology used
to modify Cooperage Handling Charge for 2005 and future years.

         "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.

         "INCREMENTAL  MARGIN" shall mean during 2004, * per case-equivalent (of
288 fluid  ounces per case) for packaged or draft  Product.  For 2005 and future
years,  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.

         "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"  shall have the meaning  assigned to it in Section
11.10.

         "INVENTORY MANAGER FEE" shall mean the Inventory  Manager's annual cash
compensation.

         "INVOICING COSTS" shall mean * per Pallet Lift for Product during 2004.
For 2005  and  future  years,  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.

* CONFIDENTIAL TREATMENT REQUESTED


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<PAGE>

         "KONA" shall mean Kona Brewery LLC.

         "MARGIN"  shall mean  during 2004 * per  case-equivalent  (of 288 fluid
ounces per case) for packaged or draft Product.

         For 2005 and future years,  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.

         "MASTER  DISTRIBUTOR"  shall mean ABI in its capacity as a  distributor
under this Distribution Agreement.

         "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, Redhook or Widmer has granted distribution rights for any of the Product in
the  Territory  as of the  date  of this  Agreement  and  which  are  listed  as
"WHOLESALER" on ATTACHMENT D attached  hereto,  as the same may be modified from
time to time pursuant to the terms and conditions of this  Agreement,  but shall
not include Affiliated Wholesalers.

         "OFFER  EXPIRATION  DATE"  shall  have the  meaning  assigned  to it in
Section 11.04(a).

         "OFFER  NOTICE"  shall  have  the  meaning  assigned  to it in  Section
11.04(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

* CONFIDENTIAL TREATMENT REQUESTED


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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 as of
the Commencement Date and any malt beverage products for which ABI agrees to act
as master distributor pursuant to Section 11.03 hereof 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.

         "PURCHASE  PRICE" shall have the meaning assigned to it in Section 4.01
hereof.

         "RECORDS" shall have the meaning assigned in Article XVII (a).

         "REDHOOK" shall mean Redhook Ale Brewery, Incorporated.

         "SCHEDULED PRICE" shall mean the purchase price for Product.

         "STAGING COSTS" shall mean * per Pallet Lift for packaged Product,  and
* per Pallet Lift for draught Product,  during 2004.  ATTACHMENT A describes the
methodology  used to  modify  Staging  Costs for 2005 and  future  years and the
assumptions and activities involved in Staging Costs.

         "STOCKHOLDERS  AGREEMENT" shall mean the letter agreement dated July 1,
2004 between Kurt and Robert Widmer, Widmer and ABI.

         "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 Alaska, Arizona,  California,  Colorado, Hawaii,
Idaho,  Montana, New Mexico,  Nevada, Oregon and Wyoming, and shall also include
any other  jurisdiction  included within the scope of this Agreement pursuant to
Section 11.11 hereof.

* CONFIDENTIAL TREATMENT REQUESTED


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         "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.

         "WIDMER" shall mean Widmer Brothers Brewing Company.

         "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.

                                   ARTICLE II
                          GRANT OF DISTRIBUTION RIGHTS


         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 Section.  ABI shall not, without the prior written consent of CBA, sell the
Product outside the Territory or to any party other than an Alliance Wholesaler.
CBA agrees to not sell any Product to any other  Person in the  Territory  other
than ABI, Affiliated Wholesalers and Non-Alliance Wholesalers.  At the option of
ABI and the respective  Affiliated  Wholesaler,  any  Affiliated  Wholesaler may
become an Alliance Wholesaler, and CBA shall, and shall cause Redhook and Widmer
to,  execute  any  documents  or  instruments  reasonably  requested  by  ABI to
effectuate this.

                                   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.


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<PAGE>


                                   ARTICLE IV
                               PRICING OF PRODUCTS


         4.01 The price for all Product sold by CBA to ABI for Products  shipped
to ABI breweries or  distribution  centers shall equal:  (a) the Scheduled Price
minus as  applicable,  (b) (i) the Staging  Costs,  (ii) the Cooperage  Handling
Charge,  and/or  (iii)  Taxes.  The price for all Product sold by CBA to ABI for
Products  shipped to a WSC shall  equal  (a)(i)  the  Scheduled  Price  minus as
applicable,  (b)(i) the  Invoicing  Costs,  (ii) the Cooperage  Handling  Charge
and/or  (iii)  Taxes.  The price for all Product  sold by CBA to ABI for Product
shipped  directly by CBA to Alliance  Wholesalers  shall equal (a) the Scheduled
Price  minus as  applicable,  (b)(i) the  Invoicing  Costs,  (ii) the  Cooperage
Handling  Charge  and/or  (iii) Taxes.  With  respect to any Product,  howsoever
shipped,  the difference between the respective (a) and (b) shall be referred to
as the "Purchase Price").

         CBA shall  establish the initial  Scheduled Price for each Product sold
by CBA to ABI.  CBA shall have the right at any time in its sole  discretion  to
modify  such  Scheduled  Price,  such new  pricing to become  effective  for all
deliveries  to ABI not less than 30 days after date of written  notice to ABI of
such price modifications.

         4.02 Within 30 days after the end of each calendar  quarter  during the
Term, ABI shall pay to CBA any Additional  Price Component which is due CBA with
respect to sales of Product by ABI to Alliance  Wholesalers during such calendar
quarter.

         4.03 CBA may, from time to time,  suggest Product resale prices to ABI,
and ABI will consider  such  suggestions.  However,  ABI shall have the right to
re-sell 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 E
attached hereto.



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         4.04 ABI  shall  remit  payment  of the  Purchase  Price to CBA for all
Product purchased  hereunder,  contemporaneously  with its receipt of funds from
the Alliance  Wholesalers with respect to such purchases.  ABI shall be entitled
to set off against such payments any amounts owed to ABI for defective  Products
(including  without  limitation,  any  costs  of  disposing  of  such  defective
Product),  or which  are due ABI  pursuant  to the  terms of this  Agreement  or
otherwise  or which are due ABI from Redhook or Widmer and which  amounts  arose
out of the brewing or sale of Products in the  Territory.  In the event that any
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.

         4.05  Notwithstanding the foregoing  provisions of this Article IV, CBA
and ABI recognize that the laws of certain  States and/or U.S.  federal laws may
preclude the parties from implementing the pricing  mechanisms  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.

         4.06 (a) Within 45 days  after the end of each  calendar  quarter,  CBA
shall  deliver  a  report  setting  forth  the  aggregate   volume,  in  case  -
equivalents,  of Product:  (i) sold by CBA in the  Territory  and by Redhook and
Widmer in the State of  Washington  in such  calendar  quarter  and (ii) sold by
Kona,  Redhook and Widmer in the Territory and in the State of Washington during
the respective calendar quarter in 2003.

                  (b)  Contemporaneously  with the delivery of such report,  CBA
shall  pay to ABI  the  Margin  for  all  Product  sold  by CBA to  Non-Alliance
Wholesalers  or  Affiliated  Wholesalers  and the Margin for all Product sold by
Redhook or Widmer in the State of Washington during such calendar quarter.



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                  (c) To the  extent  that  during  any  calendar  quarter,  the
quantity of Products  sold in the  Territory by CBA and by Redhook and Widmer in
the  State of  Washington  exceeds  the  quantity  of  Products  (in  each  case
determined on a case  equivalent  basis) sold by Kona,  Redhook or Widmer in the
respective  calendar  quarter  in  2003  in  the  Territory  and  the  State  of
Washington,  CBA shall pay to ABI the  Incremental  Margin for all such  Product
sold during such calendar quarter. Such payment shall be made  contemporaneously
with the payment set forth in Section 4.06(b).

                  (d) If during any  calendar  year,  the product of the (i) the
Incremental  Margin and (ii) the amount,  if any, by which the aggregate volume,
in  case-equivalents,  of Product sold by CBA in the  Territory  and Redhook and
Widmer in the State of  Washington  in such  calendar year exceeds the aggregate
volume, in  case-equivalents  of Product sold by Kona, Redhook and Widmer during
2003 in the Territory and in the State of Washington  does not equal the amounts
paid by CBA for such calendar year pursuant to Section 4.06(c),  then, within 45
days  after the end of such  calendar  year ABI  shall pay to CBA any  amount by
which the payments  previously  made by CBA pursuant to Section  4.06(c)  exceed
such product or CBA shall pay to ABI any amount by which the payments previously
made by CBA are less than such product.

                  (e) The sales used in computing the Incremental Margin for any
calendar quarter shall be the sales derived from the sales areas included in the
Territory and in the State of Washington for the calendar  quarter for which the
Margin is calculated and those sales derived from those same sales areas and the
State of Washington for the respective calendar quarter in 2003. For purposes of
determining  the Margin,  the parties  agree that  Schedule  4.06 sets forth the
Product  sold by Kona,  Redhook  and  Widmer in the  Territory  and the State of
Washington in each calendar quarter of 2003. The parties agree that for purposes
of determining  Incremental  Margin to be paid by CBA in 2004, the  calculations
set forth in Section  4.06(c)  and (d) shall be applied  only to that  period in
2004 (and the respective period in 2003) occurring after the Commencement Date.



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         4.07 (a) Within 30 days after the end of each calendar month, ABI shall
notify CBA of the WSC Fees payable with respect to the Product  delivered by CBA
for such month,  together with the product  delivered by CBA to each WSC and the
fees  incurred  with  respect to each WSC. CBA shall pay such WSC Fees within 15
days after its receipt of notification.

                  (b) Within 30 days after the end of each  calendar  year,  ABI
shall  notify CBA of the fees  charged by each WSC to which CBA may ship Product
during such calendar year.

                  (c) In the event ABI changes a WSC or renegotiates the fees to
be paid to a WSC, in either case to which CBA may be reasonably expected to ship
Product, ABI shall notify CBA of such change or renegotiated fees.

                                    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 otherwise included in the
calculation   of  Staging  Costs  as  set  forth  in  ATTACHMENT  A,  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.



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                                   ARTICLE VI
                                CBA'S TRADEMARKS


         6.01 ABI shall not acquire any right in any of the CBA, Kona,  Redhook,
or Widmer 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 either  CBA,
Kona, Redhook, or Widmer. 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, Kona,  Redhook,  or Widmer (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.

         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.


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                                   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,  2014 (the
"Initial  Term").  Following  the  Initial  Term,  this  Agreement  shall  renew
automatically  for an  additional  10 year period,  unless ABI provides  written
notice  to CBA on or prior to June 30,  2014  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:

                           (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;



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<PAGE>

                  (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.

         7.03  (a) 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,  Kona,  Redhook  or  Widmer  engage  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) (x) any Person (including any "group" as defined
by Section  13(d)(3) of the  Securities  and Exchange  Act of 1934),  other than
Redhook or Widmer,  acquires or enters into an  agreement  to acquire any equity
securities  issued by CBA or CBA provides such Person the ability to acquire any
equity securities issued by CBA.

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

                           (iii)  Material  default  by Redhook or Widmer in the
performance of any of the  provisions of any agreement  between such parties and
ABI or any material default by CBA,  Redhook or Widmer in any agreement  between
or among such  parties  related to the  establishment  or  operation  of CBA, in
either case, which default is either:


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

                                  (y)   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.

                           (iv) Default by Redhook or Widmer in the  performance
of any of the  provisions of any  agreement  between such parties and ABI or any
default by CBA, Redhook or Widmer in any agreement between or among such parties
related to the  establishment or operation of CBA, in either case, which default
is not  described  in  Section  7.03(a)(iii)  and is not cured  within  180 days
following written notice of such default;

                           (v) The  current  chief  executive  officer of any of
CBA, Redhook or Widmer ceases to function as chief executive  officer and within
six months of such cessation a successor  satisfactory  in the sole,  good faith
discretion of ABI is not appointed; or

                           (vi)   Redhook,   Widmer  or  CBA   shall   merge  or
consolidate  into or with any other  Person or any other  Person  shall merge or
consolidate into or with Redhook, Widmer or CBA;

                           (vii)  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 Redhook or Widmer or any shareholder of Redhook or Widmer as a result of
the equity ownership of ABI or its affiliates in Redhook or Widmer or any equity
transaction  or exchange  between ABI or its  affiliates and Redhook and Widmer,
and Redhook or Widmer, respectively,  do not reimburse and indemnify ABI and its
corporate  affiliates  on demand for the  entire  amount of such  liability  and
expense; or


                                       14
<PAGE>


                           (viii) Kurt or Robert Widmer are in default or breach
of their obligations under the Stockholders Agreement which default or breach is
not cured within 30 days after written notice thereof by ABI.

                  (b) Notwithstanding the foregoing, this Agreement shall not be
subject to termination as a consequence of Incompatible  Conduct if: (i) the act
of  Incompatible  Conduct does not arise out of or relate to the  operations  or
condition of CBA;  (ii) within 90 days after notice of  termination  by ABI, CBA
has  terminated  its sale and  marketing  of the  products of each brewer out of
whose operations or condition the act of Incompatible  Conduct arose or to which
operations  or  condition  the act of  Incompatible  Conduct  related  and  such
products are no longer subject to distribution pursuant to the terms hereof; and
(iii) such  termination  has, in the good faith  judgment of ABI,  rectified the
damage to the reputation or image of ABI or the brewing  industry caused by such
act.

                  (c)  Notwithstanding  the  provisions  set  forth  in  Section
7.03(a)(ii)-(viii),  this  Agreement  shall not be subject to  termination  as a
consequence  of the  circumstances  described  in such  provisions  if:  (i) the
circumstances do not arise out of the operations,  acts,  omissions or condition
of CBA;  and (ii) within 90 days after  notice of  termination  by ABI,  CBA has
terminated  its sale and  marketing  of the products of each brewer out of whose
operations,  acts, omissions,  condition or stockholders the circumstances arose
and such products are no longer  subject to  distribution  pursuant to the terms
hereof. Notwithstanding the provisions set forth in Section 7.03(a)(viii),  this
Agreement  shall  not  be  subject  to  termination  as  a  consequence  of  the
circumstances  described  in such  provisions  if within 90 days after notice of
termination  by ABI,  CBA has  terminated  its sale and  marketing of the Widmer
products.

         7.04 ABI shall have the right and option to terminate this Agreement at
any time upon written notice to CBA in the event:

                           (i) Either  Redhook or Widmer makes an assignment for
the  benefit of  creditors;  or  commences  a voluntary  case or  proceeding  or
consents to or acquiesces  in the entry of an order for relief  against it in an
involuntary case or proceeding under any bankruptcy, reorganization,  insolvency
or similar law;


                                       15
<PAGE>

                           (ii) A trustee or receiver or similar  officer of any
court is  appointed  for  Redhook  or  Widmer or for a  substantial  part of the
property of Redhook or Widmer, whether with or without the consent of Redhook or
Widmer,  which is not  terminated  within 60 days  from the date of  appointment
thereof;

                           (iii) The institution of bankruptcy,  reorganization,
insolvency or liquidation  proceedings  by or against  Redhook or Widmer without
such proceedings being dismissed within 90 days from the date of the institution
thereof;

                           (iv) Any of Kona,  Redhook  or  Widmer  terminate  or
purport  to  terminate  the  right of CBA to  market  and sell the  Products  as
contemplated  hereby or either of Redhook or Widmer  terminate  or  disavow,  or
purport  to  terminate  or  disavow,  the  guaranty  of the  obligations  of CBA
hereunder; or

                           (v)  CBA  dissolves  or  undertakes   proceedings  to
dissolve; or

                           (vi) the master distributor agreement between ABI and
Redhook  or  the  master  distributor   agreement  between  ABI  and  Widmer  is
terminated.

                           (vii)  Notwithstanding  the  provisions  set forth in
Section  7.04(i)-(vi),  this Agreement  shall not be subject to termination as a
consequence  of the  circumstances  described  in such  provisions  (or,  if the
Agreement has been terminated as a result of such  provisions,  shall be subject
to automatic  reinstatement)  if: (i) the  circumstances  do not arise out of or
relate to the operations,  acts,  omissions or condition of CBA; and (ii) within
90 days after  notice of  termination  by ABI, CBA has  terminated  its sale and
marketing  of the  products  of  each  brewer  out of  whose  operations,  acts,
omissions  or  status  the  circumstances  arose or to which  operations,  acts,
omissions, condition or stockholders the circumstances related and such products
are no longer subject to distribution pursuant to the terms hereof.


                                       16
<PAGE>


                                  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.

                                   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 ABI shall  store all  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.


                                       17
<PAGE>

         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.

                                    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 E 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.



                                       18
<PAGE>

         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 Kona,  Redhook  and  Widmer  in the
Territory,  whether such products are  currently  existing or are created in the
future, other than sales by Kona, Redhook or Widmer occurring at their breweries
to retail consumers, sales from the premises of brew-pub restaurants operated by
Kona,  Redhook or Widmer or Redhook or sales made by Kona,  Redhook or Widmer at
beer  competitions,  beer festivals and similar types of temporary sales events.
CBA  covenants  that it shall not  amend,  modify,  terminate,  waive or fail to
enforce any provision of any agreement or instrument  between it, Kona,  Redhook
and Widmer  without the prior written  consent of AB. 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.  Subject  to the  provisions  of the
following  subsections of this Section 11.03, during the Term of this Agreement,
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,  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.


                                       19
<PAGE>


                  (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  F).  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  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 CBA Products for the preceding 12
months;  and (iii)  all such New  Products  otherwise  comply  with the  quality
standards set forth in this Agreement.


                                       20
<PAGE>

                  (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  and shall be added to ATTACHMENT D. In the event ABI is able to
identify  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.



                                       21
<PAGE>

         11.06 At CBA's  request,  ABI shall  instruct  Alliance  Wholesalers to
return cooperage to the ABI Distribution  Facility  designated by ABI or, at the
option of CBA, any  cooperage  used by a designated  brewer,  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 With the consent of ABI (which ABI may  withdraw or modify at any
time upon 60 days'  advance  notice to CBA),  CBA shall be  permitted to deliver
Product directly to Alliance Wholesalers. With respect to any such delivery,


                                       22
<PAGE>

                (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;

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

                (c)     Invoicing  Costs shall be substituted  for Staging Costs
                        for all purposes under this Agreement.

If ABI does not consent to any request by CBA to deliver Product  directly to an
Alliance Wholesaler, at the request of CBA from time to time (but not more often
than  annually) ABI shall review the costs and benefits  incurred or realized by
CBA and the Alliance  Wholesaler  that would result from such direct delivery by
CBA and  discuss  such  costs  and  benefits  with  CBA.  Within  30 days  after
completion  of the review,  ABI shall  inform CBA whether and to what extent ABI
shall  consent  to  CBA's  requests  to  deliver   directly  to  such  Allliance
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,  Redhook or Widmer have
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,  Redhook or Widmer,
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.


                                       23
<PAGE>


         11.09 CBA shall ship to ABI at 220 Taste  Room,  One Busch  Place,  St.
Louis, Missouri 63118, Attention: Director - Brewing Education (or to such other
address or  location as may be  specified  from time to time in writing by ABI):
(a) one (1) case of each packaged Product during each calendar quarter;  and (b)
from  time to time  upon  request  by ABI,  one (1) keg of the  draught  Product
specified by AB.

         11.10 ABI shall maintain in its employ a corporate inventory management
employee   (the   "Inventory   Manager"),   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 calendar
quarter of 2004,  CBA shall pay to ABI 16.25% of the  annual  Inventory  Manager
Fee. ABI shall pay the Inventory  Manager cash  compensation  not exceeding that
generally paid to other ABI employees with similar experience,  training,  skill
level and performance.  Annually,  ABI and CBA will review the time spent by the
Inventory  Manager with  respect to the products  sold by CBA as compared to the
time spent on other  matters for the  preceding  year,  and annually ABI and CBA
shall adjust the percentage  specified in this paragraph so that CBA pays to ABI
an amount that  reasonably  compensates  ABI for the time spent by the Inventory
Manager in the preceding year on matters relating to products sold by CBA..

         11.11 Upon written  agreement by the parties hereto,  the Territory may
be  expanded to include  states or portions of the United  States of America (or
other  countries  in  the  world)  not  included  in  the  Territory  as of  the
Commencement Date.

         11.12 CBA shall not acquire any alcohol or  non-alcohol  malt  beverage
brand or the  assets  or equity  securities  of any  producer  of  alcohol  malt
beverages  unless CBA delivers to ABI a written plan providing for the exclusive
distribution of such malt beverages by ABI that is satisfactory to ABI.

         11.13 If Kona  exercises  any right  available to it to have any Person
other than Widmer,  ABI or CBA to distribute  its products in any portion of the
United States,  CBA shall,  upon learning  thereof,  promptly notify ABI. At the
option of ABI,  upon 90 days  notice to CBA,  ABI may notify  CBA that  products
brewed by Kona or bearing  Kona  trade  names or  trademarks  shall no longer be
distributed  pursuant  to this  Agreement,  such  termination  to occur  without
liability by either party hereto.


                                       24
<PAGE>

                                   ARTICLE XII
                REPRESENTATIONS, WARRANTIES AND COVENANTS OF CBA


         CBA represents, warrants and covenants to ABI as follows:

         12.01 CBA is a limited  liability  corporation duly organized,  validly
existing and in good  standing  under the laws of the State of Oregon,  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.



                                       25
<PAGE>


         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.

         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  Except as set forth in  ATTACHMENT  D, CBA,  Kona,  Redhook  and
Widmer have 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 date hereof,  the list of Non-Alliance  Wholesalers set
forth in ATTACHMENT D is accurate, full and complete.

         12.07    All Products:

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

                  (b) shall be produced  exclusively  in the  breweries of Kona,
Redhook, Widmer 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


                                       26
<PAGE>

                  (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.

                  (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 an 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.


                                       27
<PAGE>

         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.

         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



                                       28
<PAGE>


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.
Additionally,  to the extent  permitted  by law, CBA shall  indemnify,  protect,
defend and hold harmless ABI and any employee or designee of ABI on the board of
directors  of CBA from  all  claims,  liabilities,  losses,  damages,  injuries,
demands, actions, causes of action, suits, proceedings,  judgments and expenses,
including without limitation, reasonable attorneys' fees, courts costs and other
legal expenses arising from, connected with or attributable to the status of any
employee or designee of ABI as a director of CBA.  Expiration or  termination of
this Agreement  shall not affect the continuing  obligations of CBA to indemnify
ABI under this Section 14.01.

         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


                                       29
<PAGE>


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 such  settlement  or  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.


                                       30
<PAGE>

                                   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 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 Product owned by CBA.  Coverage shall be
on an occurrence  rather than a 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



                                       31
<PAGE>

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.

         16.02  The  response  to an act of  Force  Majeure  resulting  from  an
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.


                                       32
<PAGE>

                  (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  LLP,  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.

                                  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;


                                       33
<PAGE>

                           (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

                           (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.


                                       34
<PAGE>

                                   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  Companies,  Inc., or to any entity which succeeds
through any transaction to the business of ABI  substantially as a whole, but no
such  assignment  shall  release  ABI from its  obligations  as primary  obligor
hereunder  without  CBA's prior written  consent,  and ABI shall retain the sole
right to provide any consents or waivers under this Agreement.

                                   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)765 -9167

If to CBA:                 Craft Brands Alliance LLC
                           929 North Russell
                           Portland, Oregon 97227
                           Attn: Chief Executive Officer
                           Facsimile Number:  (503) 281-1496


                                       35
<PAGE>

                           with copies to:

                           Redhook Ale Brewery, Incorporated
                           14300 NE 145th Street
                           Woodinville, Washington  98072
                           Attention:  President
                           Telecopy Number: (425) 492-6976

                           Widmer Brothers Brewing Company
                           929 North Russell
                           Portland, Oregon  97227
                           Attention:  President
                           Telecopy 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.

                                   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.


                                       36
<PAGE>

                                  ARTICLE XXII
                                  MISCELLANEOUS

         22.01  In  exercising  their  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(a)(i) or (b); and (d) ABI's decision whether to provide approval
as contemplated pursuant to Section 7.03(a)(v) above; 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.

         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



                                       37
<PAGE>

the United States District Court in Multonomah 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.

         22.08 CBA acknowledges  that ABI is reviewing changes to the procedures
by which Affiliated  Wholesalers and Alliance  Wholesalers generate and transmit
orders for  Products.  ABI may request from CBA  reimbursement  of out of pocket
costs  incurred to analyze or implement  such change,  and CBA shall  reasonably
consider such requests.  CBA and ABI acknowledge that  implementing such changes
may require an amendment  hereto and each party shall  reasonably  consider such
amendment.


                                       38
<PAGE>






         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 BRANDS ALLIANCE LLC


By:/s/ JAMES F. HOFFMEISTER                   By: /s/ TERRY MICHAELSON
   ------------------------                   ----------------------------
       James F. Hoffmeister                           Terry Michaelson
       Vice President - Administration                Chief Executive
                                                      Officer and President


         Redhook and Widmer hereby jointly and severally  irrevocably  guarantee
the performance by CBA of its obligations hereunder.  Each of Redhook and Widmer
agree that this is a guaranty  of  performance  and not of payment and waive any
defense that may be available  to it with  respect to this  guaranty  other than
performance.  In the event ABI is required  to return any payment  made to it by
CBA, this guaranty shall be reinstated with respect to such payment.


                          REDHOOK ALE BREWERY, INCORPORATED

                          By:/s/ PAUL SHIPMAN
                          --------------------------------------------------
                          Title: PRESIDENT AND CHIEF EXECUTIVE OFFICER





                          WIDMER BROTHERS BREWING COMPANY


                          By: /s/ KURT WIDMER
                          --------------------------------------------------
                          Title: PRESIDENT AND CHIEF EXECUTIVE OFFICER




<PAGE>



2
211010.6/TDL
211010.6/TDL
                                  ATTACHMENT A

             STAGING COSTS AND COOPERAGE HANDLING COST MODIFICATION

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

                                                         *
where:

*       =       the  Staging  Costs  or  the  Cooperage   Handling   Costs,   as
                applicable, in effect for the prior calendar year

*      =       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.

         EXAMPLE:
2004 Package Staging Cost  *

Budgeted Avg. Fully Loaded Labor Rate

2004                           *
2005                           *
     % change                  *

2005 Package Staging Cost      *                                  *

2004 Cooperage Handling Cost                                      *

Budgeted Avg. Fully Loaded Labor Rate

2004                           *
2005                           *
     % change                  *

2005 Cooperage Handling Cost   *                                  *

* CONFIDENTIAL TREATMENT REQUESTED


<PAGE>



                                  ATTACHMENT B

                              INCOMPATIBLE CONDUCT



A. Examples of activities that constitute Incompatible Conduct:

(1)     Advertising  by CBA,  Kona,  Redhook  or  Widmer  directed  at  underage
        drinkers;

(2)     Production by Kona,  Redhook or Widmer 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, Kona,  Redhook or Widmer based upon the high alcohol
        content of its beer;

(4)     Statements by CBA, Kona, Redhook or Widmer defaming ABI or its products;

(5)     Criminal   activities  by  Kona,  Redhook  or  Widmer  or  their  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, Kona, Redhook or Widmer;

(2)     Poor   performance  of  CBA,  Kona,   Redhook  or  Widmer   products  or
        unsuccessful product introduction by CBA, Kona, Redhook or Widmer;

(3)     Introduction  by CBA,  Kona,  Redhook  or  Widmer 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 Redhook or Widmer or the value of ABI's distribution
        rights of CBA products; and

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



<PAGE>



                                                                     PAGE 1 0F 2
                                  ATTACHMENT C

                       METHODOLOGY TO ANNUALLY MODIFY THE
                          INCREMENTAL MARGIN, MARGIN,
                             AND THE INVOICING COSTS

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

                                        *
where:

*       =       the  Incremental  Margin,  Margin  or the  Invoicing  Costs,  as
                applicable, in effect for the prior calendar year

*       =       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).

EXAMPLE:
Assume the October 2004 issue of REVIEW OF THE U.S. ECONOMY, shows the Inflation
Summary table as follows:
                                                       Years
                                            -----------------------------
                                            2001     2002     2003   2004
                                            -----------------------------
GDP Deflator (Implicit) ................... 1.6      1.7      2.1      2.0

The 2005 Base Margin would be calculated by multiplying the 2004 Base Margin

*
*
*

The  2005  Incremental  Margin  would  be  calculated  by  multiplying  the 2004
Incremental Margin

*
*
*

* CONFIDENTIAL TREATMENT REQUESTED


<PAGE>

                                                                     PAGE 2 OF 2


The 2005 Invoicing  Costs would be calculated by multiplying  the 2004 Invoicing
Costs (* per Pallet Lift) by 1.020

*






* CONFIDENTIAL TREATMENT REQUESTED


                                       2

<PAGE>



                                  ATTACHMENT D

                            NON-ALLIANCE WHOLESALERS


Kelson Distributing
214 W. Morton
Moscow, Idaho  83843
(Redhook products only)

<PAGE>



                                  ATTACHMENT E
                     PROCEDURES RELATING TO PRICING MATTERS

         1.  *

         2.  *

         3.  *

         4.  *

         5.  *


* CONFIDENTIAL TREATMENT REQUESTED



<PAGE>



                                  ATTACHMENT F
                     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


<PAGE>