exv10w38





Exhibit
10.38




Amended and Restated Continental Distribution and Licensing Agreement




	 	 	 
	By:

	 	Craft Brewers Alliance, Inc., a Washington corporation (as successor in

interest by merger to Widmer Brothers Brewing Company, “CBAI”)

929 N. Russell

Portland, Oregon 97227



	and:

	 	Kona Brewery LLC, a Hawaii limited liability company (“Kona”)

75-5629 Kuakini Highway

Kailua Kona, Hawaii 96740



	Effective Date:

	 	March 27, 2009 (“Effective Date”)






     This Amended and Restated Continental Distribution and Licensing Agreement (“Agreement”)
amends and restates the Continental Distribution and Licensing Agreement, dated November 15, 2003,
between Widmer Brothers Brewing Company and Kona Brewery LLC.



BACKGROUND





	A.	 	The Products are manufactured: (i) by Kona directly; (ii) by Kona indirectly through
contract brewing arrangements; or (iii) by brewers other than Kona through license brewing
arrangements.
	 
	B.	 	CBAI is a TTB-licensed wholesaler of malt beverages.
	 
	C.	 	Kona and CBAI desire for CBAI to market and distribute, directly or indirectly through
any affiliate, the Products in the Territory pursuant to the ABI Distributor Agreement.





AGREEMENT




     Kona and CBAI agree as follows:



     1. Definitions.



          1.1 “ABI” means Anheuser-Busch, Incorporated.



          1.2 “ABI Distributor Agreement” means one or more distributor agreements between CBAI and
ABI.”



          1.3 “Kona Merchandise” means, to the extent related to the Products, all point of sale and
similar marketing materials and all non-beverage products that are now or hereafter manufactured or
sold by Kona or CBAI.



          1.4 “Kona Intellectual Property” means the trademarks (including, without limitation, those
trademarks set forth on Exhibit A), logos, trade dress, copyrights, distinctive promotional
slogans, distinctive color combinations, product shapes, and distinctive features in



 









 







the Products, or other intellectual property related to the Products, including, without
limitation, any derivative works related to any existing Kona Intellectual Property and any
intellectual property related to any New Products.



          1.5 “PCEs” or “Product Case Equivalents” means the number of barrels of Product multiplied by
13.78.



          1.6 “Products” means all Kona malt beverage products manufactured for sale in the Territory as
of the Effective Date and all New Products manufactured for sale in the Territory that are added in
accordance with the “Expansion of Products” section, below, but does not include any malt beverage
products the manufacturing and marketing of which Kona discontinues or the distribution of which is
terminated pursuant to this Agreement. As of the Effective Date, the Products include, without
limitation, the products identified in Schedule 1.6.



          1.7 “Territory” means the United States of America, the District of Columbia and all states,
territories and possessions of the United States of America; provided, however,
that the Territory does not include the state of Hawaii.



     2. Kona Intellectual Property.



          2.1 Grant of Licenses. Kona grants to CBAI: (a) an exclusive license, with the right to
sublicense, to use Kona Intellectual Property on and in connection with the marketing and
distribution of Products in the Territory; and (b) a non-exclusive license, with the right to
sublicense, to use Kona Intellectual Property on and in connection with the manufacturing,
marketing, and sale of Kona Merchandise in the Territory.



          2.2 Representative Samples. CBAI will, and CBAI will cause all sublicensees of CBAI to,
submit to Kona for approval representative samples of any use of Kona Intellectual Property or Kona
Merchandise not previously approved by Kona. Kona’s approval is required before any Kona
Merchandise is used or distributed. Kona will use good faith efforts to respond to any request for
approval within 14 days of receipt of the samples.



          2.3 Notice of Infringements. CBAI will promptly notify Kona of any and all infringements of
Kona Intellectual Property pertaining to the Products or Kona Merchandise that may come to CBAI’s
attention and shall exercise its commercially reasonable efforts to assist Kona in taking such
action against said infringements as Kona, in its reasonable discretion, may decide.



          2.4 Use of Kona Intellectual Property. CBAI acknowledges that its use of Kona Intellectual
Property will not create any right, title, or interest in or to Kona Intellectual Property in CBAI.
CBAI may, however, sublicense to others the right to use Kona Intellectual Property for the
purpose of fulfilling CBAI’s obligations under this Agreement. CBAI will not apply at any time
anywhere in the world for any trademark or other intellectual property protection in its name for
any products or merchandise utilizing the Kona Intellectual Property, now existing or hereafter
obtained.



          2.5 Usage and Quality Control. CBAI will use Kona Intellectual Property only in connection
with Products and Kona Merchandise and only in a manner consistent with accepted commercial
practices in the channels of trade for the permitted uses. CBAI will not use Kona Intellectual
Property in a manner that is misleading, that disparages Kona or its products, that



 









 







may be harmful to Kona’s reputation, or that may materially reduce the value of any Kona
Intellectual Property. CBAI will permit representatives of Kona to inspect CBAI’s operations and
products that are connected to the permitted uses upon reasonable advance notice to confirm
compliance with this section.



          2.6 Ownership of Developments. Improvements and modifications to Kona Intellectual Property
created by either party during the term of this Agreement shall, from the time of conception or
development, be the property of Kona. CBAI hereby assigns, and agrees to take all actions
necessary, as reasonably requested by Kona, to assign all such improvements and modifications.
Improvements and modifications to Kona Intellectual Property do not include those portions of
advertising or promotional materials that relate to other malt beverage products manufactured or
distributed by CBAI.



          2.7 Representations and Warranties. Kona represents and warrants that: (a) it has the right
to license Kona Intellectual Property to CBAI as provided under this Agreement; (b) the license of
Kona Intellectual Property and distribution rights under this Agreement do not conflict with any
agreement, judgment, or other obligation of Kona; and (c) CBAI’s use of Kona Intellectual Property
in accordance with this Agreement will not violate the rights of any third person.



     3. Distribution and Marketing.



          3.1 Kona grants to CBAI: (a) the exclusive right to market and distribute the Products in the
Territory; and (b) the non-exclusive right to manufacture, package, and sell or distribute Kona
Merchandise in the Territory. CBAI may delegate any of its obligations under this Agreement to
ABI.



          3.2 CBAI will exercise its commercially reasonable efforts to market and distribute (either
directly or indirectly through any affiliate) the Products in the Territory through ABI
distributors pursuant to the ABI Distributor Agreement.



          3.3 CBAI agrees that it will not distribute, either directly or indirectly through any
affiliate: (i) any malt beverage products manufactured by any brewer, other than Kona, that is
headquartered in the state of Hawaii; or (ii) any brand of malt beverage products, other than the
Products, for which more than 50% of the brand’s aggregate annual sales volume, by volume, is in
the state of Hawaii.



     4. Exclusivity. Except as expressly set forth to the contrary in this Agreement,
during the term of this Agreement, CBAI is the exclusive distributor of Product in the Territory,
with the exception of: (i) sale of Product brewed at a brewpub owned by Kona or an affiliate of
Kona (but not at a brewpub owned or operated by a franchisee of any Kona affiliate) by such brewpub
for on-site consumption; (ii) sale of Product at a restaurant owned or operated by Kona or an
affiliate of Kona (but not at a restaurant owned or operated by a franchisee of any Kona affiliate)
for on-site consumption; (iii) retail sales of kegs or growlers at a brewery, brewpub, or
restaurant owned or operated by Kona or an affiliate of Kona (but not at a brewery, brewpub, or
restaurant owned or operated by a franchisee of any Kona affiliate); and (iv) sale or distribution
of Product by Kona or an affiliate of Kona for use in beer competitions or festivals, excluding
sale or distribution of Product that is sold or re-sold to consumers at any such competition or
festival.



 












 




     5. Expansion of Products. Upon notice by Kona to CBAI, the “Products” shall include
any other existing or new beverages developed by Kona (“New Products”). All New Products must
comply with each of the following:



          5.1 The New Product must be a beer or ale beverage product; and



          5.2 The New Product must be of a quality that is satisfactory to CBAI together with ABI in its
reasonable discretion; provided, however, that the quality will be deemed
satisfactory unless such quality is substantially inferior to the Products then existing under this
Agreement.



     6. Sale of Kona Merchandise. CBAI may only sell Kona Merchandise in connection with
the advertising and sale of Products, including, without limitation, sale of Kona Merchandise to
pubs, taverns, restaurants, and other establishments where the Product is consumed on the premises;
provided, however, that if Kona notifies CBAI in writing that a particular retail
outlet sells more than $1,000 in Kona Merchandise in a calendar year, then within 30 days of CBAI’s
receipt of such notice, CBAI must use commercially reasonable efforts to permit Kona to sell Kona
Merchandise to such retailer or to the distributor that resells Kona Merchandise to such retailer.



     7. Minimum Purchase Obligations.



          7.1 Each calendar year (each, a “Measurement Year”), CBAI will purchase from Kona at least an
amount of Product equal to: (i) 70 percent of the number of PCEs of Product distributed by CBAI in
the Territory during the calendar year prior to the Measurement Year; minus (ii) the number
of PCEs of Product manufactured and distributed by CBAI during the Measurement Year for
distribution in the Territory pursuant to one or more license brewing arrangements with Kona (the
“Minimum Purchase Obligation”).



          7.2 If CBAI does not purchase the Minimum Purchase Obligation, then CBAI must pay Kona $1.00
per PCE for the number of PCEs by which actual purchases during the Measurement Year fell short of
the Minimum Purchase Obligation. The first test of the Minimum Purchase Obligation will be
conducted in January of 2010, for the 2009 Measurement Year.



          7.3 If a period for which the Minimum Purchase Obligation is calculated is less than a full
calendar year, then the Minimum Purchase Obligation for such period shall be prorated based on the
number of days in such period relative to the number of days in such calendar year.



     8. Purchase Price.



          8.1 The initial purchase prices for Products manufactured by Kona (directly, or indirectly
through contract brewing arrangements) are set forth on Exhibit B. On or before November
1, 2009, and each November 1st thereafter, Kona will provide CBAI with any proposed
changes to the Product prices for the following year. If Kona and CBAI cannot agree on the
following year’s purchase price of any Product prior to December 31st of a given year,
or within 30 days of any other proposed price change, then, effective 6 months after the deadline
for agreement, Kona may elect not to manufacture such Product or CBAI may elect not to distribute
such Product; provided, however, that during the six-month wind-down period for
such Product



 









 







the purchase price for such Product will be the purchase price for such Product on the
deadline for agreement. CBAI must pay the purchase price within 30 days following delivery of
Products. Intra-year price changes may be effected by amendment to this Agreement or a
supplemental price schedule executed by CBAI and Kona. No purchase price is payable by CBAI to
Kona for Products manufactured by CBAI pursuant to any license brewing arrangement with Kona.



          8.2 The parties agree to reopen price negotiations upon 30 days’ written notice from Kona to
CBAI that the current price does not cover Kona’s actual cost of the Products (for example, due to
increases in raw material costs, packaging costs, component costs, facility use fees, other
operating expenses, and general administrative expenses). CBAI agrees to engage in good faith
negotiations to increase the price to be paid under this Agreement to not less than Kona’s actual
cost and to implement the new price within 45 days of the written notice from Kona to CBAI to
reopen negotiations. CBAI is not required to approve a price increase if the proposed increase is
not based on factors that generally affect the malt beverage industry.



     9. Compliance with Law. Kona and CBAI agree to comply with all applicable rules and
regulations of the U.S. Department of the Treasury Alcohol and Tobacco Tax and Trade Bureau (“TTB”)
and any other regulatory agency that has jurisdiction over the Products. The parties agree to
cooperate with each other to provide and retain any regulatory, taxation, or other reports or
information required by the TTB or any other regulatory agency.



     10. Confidentiality.



          10.1 No Disclosure. Each party (a “Receiving Party”) agrees that, except as required
by any federal or local governmental agency (including, without limitation, the SEC and the TTB),
during and after the term of this Agreement neither the Receiving Party, nor any person, firm,
corporation or other entity affiliated with, owned in whole or in part by, employed by or otherwise
connected with the Receiving Party, will directly or indirectly, without the express written
consent of the other party (the “Disclosing Party”), divulge, use, sell, exchange, furnish, give
away, or transfer in any way any Confidential Information of the Disclosing Party;
provided, however, that a Receiving party may disclosure Confidential Information
to its professional advisors in connection with the provision of professional services that
reasonably call for such disclosure.



          10.2 Compelled Disclosure. If the Receiving Party is served with any form of process
purporting to require it to disclose any Confidential Information to any third party, the Receiving
Party will immediately notify the Disclosing Party who will, in addition to the Receiving Party
efforts, if any, have the right to seek to quash such process. The Receiving Party will cooperate
with the Disclosing Party in all efforts to quash such process or otherwise to limit the scope of
any required disclosure. In the event that the disclosure of any Confidential Information is
compelled, the Receiving Party will seek an appropriate protective order from the court to limit
access to such information.



          10.3 Confidential Information Defined. The term “Confidential Information” includes,
without limitation: (i) information provided to the Receiving Party by the Disclosing Party that
the Disclosing Party has designated as confidential; (ii) this Agreement (and all amendments
thereto) and all of its terms and conditions and any invoices issued hereunder; (iii) any and all
nonpublic information regarding the existing or proposed business, products, or



 









 







facilities of the Disclosing Party or any of its business partners, including, without
limitation, all financial information, financial projections, business plans, product development
data, manufacturing data, distribution or pricing data, customer and supplier information, and
recipes; and (iv) and all information, whether or not in written form and whether or not designated
as confidential, that the Receiving Party knows is treated as confidential by the Disclosing Party,
provided, however, that Confidential Information does not include: (y) information
obtained independently or from third-party sources without the acquiring party’s knowledge that the
source has violated any fiduciary or other duty not to disclose such information; or (z)
information that becomes generally available to the public through no fault of the Receiving Party.
Confidential Information includes, without limitation, all Product recipes and all Product pricing
data.



          10.4 Destruction/Return of Information. Upon the expiration or termination of this
Agreement or upon the Disclosing Party’s request, the Receiving Party must return all Confidential
Information to the Disclosing Party or at the Disclosing Party’s option, destroy all Confidential
Information; provided, however, that the Receiving Party may keep Confidential
Information in its records consistent with applicable law and its then-applicable record retention
and file management policies.



     11. Indemnification.



          (a) CBAI. CBAI agrees to indemnify, defend, and hold Kona harmless on account of any
legal action or claim brought against Kona by a third party to the extent arising out of CBAI’s
negligence or willful misconduct; provided, however, that CBAI has no
indemnification obligation under this section to the extent that any such legal action or claim
brought against Kona arises out of Kona’s negligence or willful misconduct.



          (b) Kona. Kona agrees to indemnify, defend, and hold CBAI harmless on account of any
legal action or claim brought against CBAI by a third party to the extent arising out of Kona’s
negligence or willful misconduct; provided, however, that Kona has no
indemnification obligation under this section to the extent that any such legal action or claim
brought against CBAI arises out of CBAI’s negligence or willful misconduct.



          (c) Indemnification Procedures. With respect to claims made by third parties, if any
party that is entitled to indemnification hereunder (an “Indemnitee”) is threatened with any claim,
or any claim is presented to or any action or proceeding commenced against the Indemnitee, which
may give rise to the right of indemnification hereunder, the Indemnitee will give prompt written
notice thereof to the other party obligated to indemnify the Indemnitee hereunder (the
“Indemnitor”). The Indemnitor, by delivery of written notice to the Indemnitee within 20 days of
receipt of notice of a claim for indemnification from the Indemnitee, may elect to assume the
defense of any such third party claim at the Indemnitor’s expense. If the Indemnitor assumes the
defense, it shall have the right to settle an indemnifiable matter without the consent of the
Indemnitee unless the settlement would have a material adverse effect on the Indemnitee. If the
Indemnitor does not timely elect to defend an indemnifiable matter, the Indemnitee shall have the
exclusive right to prosecute, defend, compromise, settle, or pay any claim, without prejudice to
the right of the Indemnitee to recover any and all losses and reasonable expenses incurred
(including attorneys’ fees and costs, however incurred including in any bankruptcy proceeding, at
trial, on appeal, and on any petition for review). The Indemnitee shall permit the Indemnitor
reasonable access to the books and records of the Indemnitee and



 









 







shall otherwise cooperate with the Indemnitor in connection with any matter or claim of
indemnification.



     12. Insurance. At all times while any Product is being offered for sale, each party
must maintain general liability insurance policies issued by an insurer with a minimum Best’s
Financial Strength Rating of “A-”, with both “products” and “contractual” coverage of $1,000,000
per occurrence and an additional $2,000,000 in excess liability coverage. Each party must cause
its commercial general liability insurer to name the other party as an additional insured. Upon
request, each party must furnish the other party with an insurance certificate and copies of
relevant policies, declarations, and endorsements evidencing that the required insurance is in
force.



     13. Warranties; Limitation of Liability.



          13.1 Warranty of Authority. Each of the parties hereto warrants and represents to the
other party that: (a) it has the full right, power and authority to enter into this Agreement and
to carry out its obligations hereunder; and (b) that it has no obligations to any other party that
are inconsistent with its obligations under this Agreement.



          13.2 Limitation of Liability. Except with respect to, and to the extent of, damages
arising out of the negligence or willful misconduct of a party to this Agreement, and except with
respect to violations of the confidentiality provisions of this Agreement, in no event is either
party to this Agreement to be liable for special, incidental, or consequential damages or lost
revenues or profits, except to the extent that the damages arise out of or are related to an
occurrence that is covered by any insurance policy maintained by the party from whom damages are
sought or which that party was obligated to maintain under this Agreement.



     14. Termination.



          14.1 Term. The term of this Agreement commences on the date first set forth above and
continue until December 31, 2018 (the “Initial Term”). Following the Initial Term, this Agreement
shall renew automatically for an additional 10-year period, unless either party provides written
notice to the other party on or prior to December 31, 2018 that this Agreement shall not be
renewed.



          14.2 Termination by Either Party. Either party may terminate this Agreement upon 180
days’ written notice given to the other party following the occurrence of any of the following
events:



                    14.2.1 The other party fails to timely make any payment required under this Agreement for a
period of 30 days following written notice thereof by the nonbreaching party.



                    14.2.2 The other party is given notice of a breach more than two times in any twelve month
period (regardless of whether such breach is cured).



                    14.2.3 The other party becomes the subject of insolvency or bankruptcy proceedings, ceases
doing business, makes an assignment of assets for the benefit of creditors, dissolves, or has a
trustee appointed for all or a substantial portion of such party’s assets.



 











 




               14.2.4 Any government authority invalidates any material portion of this Agreement.



               14.2.5 Either party finds that complying with any law or regulation relating to fulfilling its
obligations under this Agreement would be commercially unreasonable and failure to comply with the
law or regulation would subject such party or any of its personnel to a monetary or criminal
penalty.



          14.3 Termination by CBAI. CBAI may terminate or suspend its obligations under this
Agreement upon notice to Kona if: (a) the ABI Distributor Agreement expires or is terminated for
any reason; or (b) ABI refuses or fails to distribute the Products for any reason. Kona may
terminate this Agreement upon 20 days’ written notice sent to CBAI within 30 days following the
occurrence of an event described in clause (a) or (b) of the preceding sentence if CBAI fails to:
(i) promptly following the occurrence of such event take commercially reasonable steps to replace
the distribution of the Product in the Territory; (ii) within 90 days following the occurrence of
such event have distribution for the Product in 50 percent of the states then in the Territory; and
(iii) within 180 days following the occurrence of such event have distribution for the Product in
90 percent of the states then in the Territory.



          14.4 Survival of Rights and Obligations. Termination of this Agreement shall not
prejudice any rights of either party hereto against the other which may have accrued up to the date
of termination. In addition, all covenants respecting indemnification, governing law, attorney
fees, arbitration, confidentiality, warranties, termination, and continuing liability for amounts
payable hereunder shall survive the termination of this Agreement as expressly set forth elsewhere
herein.



     15. Notices. Any notice, request or demand to be given or made under this Agreement
shall be in writing and shall be deemed to have been duly given or made: (i) upon delivery, if
delivered by hand and addressed to the party for whom intended at the address listed below; (ii)
ten days after deposit in the mails, if sent certified or registered air mail (if available) with
return receipt requested, or five days after deposit if deposited for delivery with a reputable
courier service, and in each case addressed to the party for whom intended at the address listed
below (i) or (iii) upon completion of transmission, if sent by facsimile transmission to the party
for whom intended at the fax number listed below, provided that a copy of the facsimile
transmission is promptly deposited for delivery by one of the methods listed in (i) or (ii) above:



	 	 	 	 	 
	 

	 	If to Kona, to:	 	 
	 

	 	 
	 	Kona Brewery, LLC

75-5629 Kuakini Highway

Kailua Kona, Hawaii 96740

Attn: Mattson Davis

Fax: (808) 334-1884
	 

	 	 	 	 
	 

	 	If to CBAI, to:	 	 
	 

	 	 	 	Craft Brewers Alliance, Inc.

929 N. Russell

Portland, Oregon 97227






 









 






	 	 	 	 	 
	 

	 	 	 	Attn: Terry Michaelson

Fax: (503) 281-1496






     Any party may change its address or fax number for the purposes of this section by written notice
to the other parties at least ten days prior to the effective date of such change.



     16. Miscellaneous.



          16.1 Assignment; Sublicense. Except as set forth herein, neither party shall have the
right to assign, encumber, or otherwise transfer its rights and obligations under this Agreement
except with the prior written consent of the other party. Any prohibited assignment or transfer is
voidable in the sole discretion of the non-assigning party.



          16.2 Entire Agreement. THIS AGREEMENT, INCLUDING ALL ATTACHMENTS HERETO, CONSTITUTES
THE ENTIRE AGREEMENT OF THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF, AND SUPERSEDES ALL
PREVIOUS AGREEMENTS BY AND BETWEEN THE PARTIES AS WELL AS ALL PROPOSALS, ORAL OR WRITTEN, AND ALL
NEGOTIATIONS, CONVERSATIONS, OR DISCUSSIONS HERETOFORE HAD BETWEEN THE PARTIES RELATED TO THIS
AGREEMENT.



          16.3 Amendment. This Agreement shall not be deemed or construed to be modified,
amended, rescinded, canceled, or waived, in whole or in part, except by written amendment signed by
the parties hereto.



          16.4 Severability. In the event that any of the terms of this Agreement are in
conflict with any rule of law or statutory provision or are otherwise unenforceable under the laws
or regulations of any government or subdivision thereof, such terms shall be deemed stricken from
this Agreement, but such invalidity or unenforceability shall not invalidate any of the other terms
of this Agreement and this Agreement shall continue in force, unless the invalidity or
unenforceability of any such provisions hereof does substantial harm to, or where the invalid or
unenforceable provisions comprise an integral part of, or are otherwise inseparable from, the
remainder of this Agreement.



          16.5 Consent. Unless otherwise expressly stated in this Agreement, if any action is
conditioned upon the consent of either party: (a) such consent may not be unreasonably withheld,
delayed, or conditioned; and (b) consent shall be deemed granted unless the consenting party
notifies the other party in writing of the reasons why such consent is not granted within 15 days
following receipt of the written request for consent.



          16.6 Counterparts. This Agreement may be executed in two or more counterparts, and
each such counterpart shall be deemed an original hereof.



          16.7 Waiver. No failure by either party to take any action or assert any right
hereunder shall be deemed to be a waiver of such right in the event of the continuation or
repetition of the circumstances giving rise to such right.



          16.8 Attorney Fees. In the event of a default under this Agreement, the defaulting
party shall reimburse the non-defaulting party for all costs and expenses reasonably incurred by
the non-defaulting party in connection with the default, including, without limitation, attorneys’



 









 







fees and costs (however incurred, including in any bankruptcy proceeding, at trial, on appeal,
and on any petition for review). An event of “default” is a breach by either party of this
Agreement that is not cured within an applicable cure period. Additionally, in the event any suit
or action is brought to enforce or interpret any of the terms of this Agreement, the prevailing
party shall be entitled to recover from the other party all reasonable attorneys’ fees and costs
(however incurred, including in any bankruptcy proceeding, at trial, on appeal, and on any petition
for review), together with such other expenses, costs, and disbursements as may be allowed by law.



          16.9 Force Majeure. Neither party shall be liable for any delay or default in
performing its obligations if such default or delay is caused by any event beyond the reasonable
control of such party, including, but not limited to, acts of nature, terrorism, war, or
insurrection, civil commotion, destruction of production facilities or materials by earthquake,
fire, storm, or flood, labor disturbances or strikes, epidemic, materials shortages, equipment
malfunction, failure of ABI distributors, or other similar event. The party suffering such cause
shall immediately notify the other party of the cause and the expected duration of such cause. If
either party’s performance is delayed by more than 90 days pursuant to this section, the other
party may immediately terminate this Agreement by written notice given before the affected party
resumes performance.



          16.10 Governing Law. This Agreement shall be governed by the laws of the State of
Oregon, without regards to the principles of conflicts of laws thereof.



          16.11 Arbitration. Any claim or dispute arising out of, or related to, this Agreement
will be subject to arbitration which, unless Widmer and Kona agree otherwise in writing, will be in
accordance with the rules of the Arbitration Service of Portland, Inc. as such rules are in effect
at the time such claim or dispute is submitted to arbitration. Any demand for arbitration must be
filed in writing with the other party to this Agreement and with the Arbitration Service of
Portland, Inc. The exclusive venue of any hearing on the merits of a dispute is Multnomah County,
Oregon. Any demand for arbitration must be delivered in writing to the other party within a
reasonable time after the claim or dispute has arisen; provided, however, that in
no event may such demand be made after the date when institution of legal or equitable proceedings
based on such claim or dispute would be barred by the applicable statute of limitations. The
foregoing agreement to arbitrate is specifically enforceable in accordance with applicable law in
any court having adequate jurisdiction. The award rendered by the arbitrator will be final, and
judgment may be entered upon such award in accordance with applicable law in any court having
adequate jurisdiction. The parties may endeavor to resolve disputes by mediation at any time and
as they may agree, provided, however, that resolution of disputes by mediation is
not be required prior to resolution of disputes by arbitration.



 










 




     The duly authorized representatives of the undersigned parties have executed and delivered
this Amended and Restated Continental Distribution and Licensing Agreement as of the Effective
Date.



	 	 	 	 	 	 	 	 
	 	CRAFT BREWERS ALLIANCE, INC. 

 	KONA BREWERY, LLC 

 
	 	By:  	/s/ Mark Moreland 	 	 	By:  	/s/ Mattson Davis
 	 
	 	 	Mark Moreland 	 	 	Mattson Davis 	 
	 	 	Chief Financial Officer 	 	 	President