**EXHIBIT 10.54****MANUFACTURING AND LICENSING AGREEMENT**   By: Widmer Brothers Brewing Company, an Oregon corporation (“Widmer”)  929 N. Russell  Portland, Oregon 97227 and:            Redhook Ale Brewery Incorporated, a Washington corporation (“Redhook”)  14300 NE 145th Street  Woodinville, Washington 98072 Date:            August 28, 2006     This Manufacturing and Licensing Agreement (the “Agreement”) is entered into by and betweenWidmer and Redhook as of the date first set forth above.BACKGROUND          A. Widmer is in the business of manufacturing, advertising, marketing, selling, anddistributing Widmer brand products set forth in Exhibit A (“Widmer Products”).          B. Redhook has a manufacturing facility in Woodinville, Washington (the “Redhook Facility”)and is in the business of manufacturing, bottling, and packaging beer products at the RedhookFacility.          C. Widmer and Redhook desire for Redhook to manufacture, bottle, and package certain WidmerProducts at the Redhook Facility.          D. In order for Redhook to manufacture, bottle, and package Widmer Products at the RedhookFacility, Redhook must amend its federal brewers notice with the Alcohol and Tobacco Tax and TradeBureau of the Department of the Treasury (the “TTB”) and register in the state of Washington as atradename Widmer’s tradename: WIDMER BROTHERS BREWING COMPANY.          E. This Agreement is not intended to modify the rights and obligations of the parties underthat certain Licensing Agreement between Redhook and Widmer dated February 1, 2003, or the Supply,Distribution and Licensing Agreement between Redhook and Craft Brands Alliance, LLC dated July 1,2004 (the “CBA Agreement”).     AGREEMENT               Based on the mutual promises set forth below and other good and valuable consideration, thereceipt and sufficiency of which is hereby acknowledged, Widmer and Redhook hereby agree asfollows:     1. Right to Manufacture.     1.1 Subject to the terms and conditions of this Agreement, Widmer hereby grants Redhook theright to manufacture, bottle, and package Widmer Products at the Redhook Facility. Redhook agreesto manufacture, bottle, and package Widmer Products of the brands identified on Exhibit A and inthe volumes requested by Widmer. Except as set forth herein, Redhook’s right to manufacture WidmerProducts does not limit or extinguish Widmer’s right to manufacture any and all Widmer Products,either now existing or produced in the future.     1.2 Widmer shall reimburse Redhook for all capital expenditures necessary for Redhook tomanufacture, bottle, and package Widmer Products at the Redhook Facility, but only to the extentthe types and amounts of such capital expenditures are previously approved by Widmer in writing.     1.3 Widmer may add to now existing Widmer Products and may request Redhook to manufacture suchproducts at the Redhook Facility. If Widmer elects to add a new Widmer Product, Widmer shall atits expense develop all Intellectual Property related to such Widmer Product. All suchIntellectual Property shall be the property of Widmer pursuant to Section 4.2 of this Agreement andlicensed to Redhook under the terms of this Agreement.     1.4 At least thirty (30) days prior to the beginning of each calendar quarter, Widmer willprovide Redhook with a three-month rolling forecast (each, a “Three-Month Forecast”) of thequantity and type of each Widmer Product Widmer expects to purchase during such three-month period(each a “3-Month Forecasted Quantity”). Within ten (10) days following Redhook’s receipt of eachThree-Month Forecast, Redhook will notify Widmer (i) if it is unwilling or unable to manufacture atleast 110% of the 3-Month
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Forecasted Quantity (the “Required Redhook Quantity”) and (ii) the quantity of Widmer Productsit is willing and able to manufacture (the “Promised Redhook Quantity”) if such quantity is lessthan the Required Widmer Quantity. If Redhook does not so notify Widmer, it will be presumed thatRedhook is willing and able to manufacture at least the Required Redhook Quantity.     1.5 Widmer may, from time to time require changes to Intellectual Property, packaging, or anyother change in connection with Widmer Products upon 180 days’ prior written notice to Redhook.The direct out-of-pocket costs for all such changes will be paid by Widmer. If Widmer requires anychange to the Intellectual Property or packaging that requires capital expenditures by Redhook,Widmer shall reimburse Redhook for such expenditures.     1.6 If Widmer requires any change to Widmer Products that increases Redhook’s variable cost tomanufacture, bottle, or package Widmer Products, the price for such Widmer Products shall beincreased by such estimated additional incremental cost if (a) within thirty (30) days followingthe date Widmer requests such change Redhook notifies Widmer of the increased incremental cost,providing reasonable supporting documentation, and (b) Widmer thereafter elects for Redhook tomanufacture such Widmer Products. Widmer may, upon notice to Redhook, audit Redhook’s books andrecords to the extent necessary to confirm such increased variable costs.     1.7 The price for the Widmer products shall be as set forth on Exhibit B, attached hereto.Prices will be F.O.B. Redhook Facility. Widmer shall pay for all Widmer Products ordered hereunderwithin 30 days following Widmer’s receipt of Redhook’s invoice describing the Widmer Productsdelivered.     1.8 This Agreement does not amend or modify the CBA Agreement, including, without limitation,Redhook’s option to manufacture Widmer Products pursuant to Section 4.2.2 of the CBA Agreement.Any Widmer Products manufactured by Redhook pursuant to its option under Section 4.2.2 of the CBAAgreement shall continue to be governed by the terms of the CBA Agreement.     2. Grant of License. Upon the terms and conditions hereinafter set forth, Widmer herebygrants to Redhook, and Redhook hereby accepts a non-exclusive, non-transferable license to use theintellectual property set forth on Exhibit C, in addition to any other trade secret, trademark,tradedress, copyright, patent, or other distinctive feature in or related to Widmer Products(collectively, the “Intellectual Property”), solely for the purposes of manufacturing, bottling,and packaging Widmer Products at the Redhook Facility. Redhook shall not use Intellectual Propertyin connection with any other purpose other than those listed without Widmer’s prior writtenconsent. Without limiting the foregoing, Widmer grants Redhook a license to place the phrase“Widmer Brothers Brewing Company – Portland, OR – Woodinville, WA” on the label of Widmer Products.     3. Quality Control.     3.1 The objective of Section 3 is to ensure Redhook recognizes and maintains the value of thegoodwill associated with the Intellectual Property licensed and agrees that any use of IntellectualProperty shall inure to the benefit of Widmer.     3.2 Each of the Widmer Products manufactured by Redhook will conform to the specification,recipe, and quality control requirements attached on Schedule 3.2. For any new Widmer Product,Redhook shall conform to the specification, recipe, and quality control requirements as reasonablydetermined and provided to Redhook by Widmer.     3.3 Widmer Products manufactured, bottled, and packaged by Redhook at the Redhook Facilityshall not be adulterated, contaminated, or otherwise of a quality that is below average quality ofWidmer Products manufactured, bottled, and packaged by Widmer in its Portland, Oregon facility,which may include, without limitation, (i) apparent defects in taste or appearance in excess oftypical age-related changes; (ii) microbiological contamination or other contamination such ascarryover of cleaning chemicals or foreign object inclusions; and (iii) defective bottling orpackaging.     3.4 Information regarding the process conditions, quality control procedures, equipment andmaterials required to manufacture, bottle, or package Widmer Products will be provided by Widmer toRedhook (the “Formula”). Redhook understands and agrees that changes in the Formula may berequired by Widmer from time to time. Redhook shall use all necessary ability, know-how, methods,and means to brew, handle, package, and store Widmer Products strictly in accordance with theFormula. No change in the Formula shall be made by Redhook without Widmer’s prior written consent.     3.5 Widmer shall have the right to inspect and approve the Redhook Facility and equipment usedby Redhook to brew, handle, package, and store Widmer Products, as well as any ingredients,processing aids, and containers used in brewing or packaging Widmer Products; and to taste samplesof Widmer Products at the Redhook Facility. At Widmer’s request, Redhook shall provide to Widmerat the address set forth above, at Redhook’s cost, samples of (a) Widmer Products manufactured orpackaged by Redhook and (b) brewing and packaging materials. Redhook shall bear the cost ofshipment for said samples. If at any point during the term of this Agreement, Widmer determinesquality of Widmer Products manufactured, bottled, or packaged at the Redhook Facility is belowaverage quality of Widmer Products manufactured, bottled, or packaged by Widmer in its Portland,Oregon facility, Widmer may terminate this Agreement upon 30 days written notice to Redhook,provided that, during the 30-day period, Redhook fails to cure such deficiency.     4. Rights in Intellectual Property.     4.1 Intellectual Property. Redhook acknowledges that its use of the Intellectual Propertyshall not create any right, title, or interest in or to the Intellectual Property of Widmer.Redhook may, however, sublicense others the right to use the Intellectual Property solely for thepurpose of fulfilling Redhook’s obligations under this Agreement. Redhook shall not apply at anytime anywhere in the world for any trademark or other intellectual property protection in its name,other than expressly provided herein, without Widmer’s prior written consent.
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     4.2 Improvements; Ownership. Improvements and modifications to the Intellectual Propertycreated by either party during the term of this Agreement shall, from the time of conception ordevelopment, be the property of Widmer. Improvements and modifications to the Redhook Facility (tothe extent they do not include Intellectual Property) for the purpose of manufacturing, bottling,and packaging Widmer Products shall remain the property of Redhook.     4.3 Representations and Warranties. Widmer represents and warrants that (a) it has the rightto license the Intellectual Property to Redhook as provided under this Agreement; (b) the licenseof the Intellectual Property and distribution rights under this Agreement do not conflict with anyagreement, judgment, or other obligation of Widmer; and (c) Redhook’s use of the IntellectualProperty hereunder will not violate the rights of any third person. Widmer shall indemnify andhold Redhook and its affiliates, successors, and assigns harmless from and against any and allcharges, actions, and proceedings (including investigations) resulting from Widmer’s breach of suchrepresentations and warranties.     4.4 Notices. Redhook agrees that Widmer Products and Intellectual Property shall bearappropriate proprietary legends or notices as specified by Widmer from time to time.     5. Infringement.     5.1 Infringement By Third Parties. Redhook shall notify Widmer promptly in writing of anysuspected infringement or unauthorized use of the Intellectual Property by third parties that maycome to its attention. If Widmer shall elect, in its sole discretion to enjoin or prevent suchinfringement or unauthorized use, Redhook shall cooperate with Widmer, provided Widmer shall payany out-of-pocket expenses incurred by Redhook in connection therewith. If Widmer at its ownexpense files and is successful in infringement litigation or settlement, then Widmer shall beentitled exclusively to any amounts recovered.     5.2 Infringement By Redhook. Redhook shall notify Widmer promptly in writing of any and allallegations or claims by others which may come to its attention that the use of the IntellectualProperty infringes or violates a patent, copyright, trademark, or trade secret, or otherproprietary right of any third party, or violates or is contrary to any applicable law, regulation,order, consent, or the like. Widmer may, but is not obligated to, procure for Redhook the right tocontinue to use the matter which is the subject of the claim, or to modify the same so that itbecomes non-infringing. If Widmer shall elect, in its sole discretion, to undertake and conductthe defense of any suit, action, or proceeding arising out of the use by Redhook of theIntellectual Property, Redhook shall cooperate in such defense provided Widmer shall pay anyout-of-pocket expenses incurred by Redhook in connection therewith. No settlement of any suchclaim or suit shall be made without the prior written consent of Widmer.     6. Compliance with Law.     6.1 Operations. Both Widmer and Redhook shall comply with all applicable rules andregulations of the TTB, and any other regulatory agency that has jurisdiction over Widmer Productsor the Redhook Facility. The parties shall cooperate with each other to provide and retain anyregulatory, taxation, or other reports or information required by TTB, or any other regulatoryagency.     6.2 Facility. Redhook represents and warrants that the Redhook Facility and manufacturingpractices comply with, and will continue to comply with all applicable laws, ordinances,regulations, and health and safety standards of all applicable regulatory bodies. Widmerrepresents and warrants that any processing instructions, product formula, and packaginginstructions furnished by it will comply with applicable federal, state, and local laws,ordinances, regulations, and health and safety standards.     7. Confidentiality.     7.1 Access to Information. Each party acknowledges that during the term of this Agreement itmay have access to nonpublic information about the existing or proposed business or products(“Confidential Information”) of the other party (the “Disclosing Party”) . ConfidentialInformation includes, without limitation, (i) information marked or otherwise designated by theDisclosing Party as confidential, (ii) information that the Disclosing Party does not designate aspublic information, and (iii) information provided to the Disclosing Party by third parties that itis obligated to keep confidential. Confidential Information may be written, oral, embodied inproducts (including Widmer Products), or in other forms. Confidential Information does not includeinformation that is or becomes publicly known, other than as a result of each party’s actions orfailure to prevent disclosure. The fact that portions of Confidential Information may be publiclyavailable shall not affect each party’s obligations with respect to the remaining portion or withrespect to the particular formulation or compilation disclosed by the Disclosing Party.     7.2 Non-Disclosure and Non-Use. Neither party shall disclose to others or use anyConfidential Information of the Disclosing Party, except as required to perform its obligationsunder this Agreement. Either party may, however, disclose Confidential Information to its employeesand agents who need to know the information in connection with this Agreement, who are made awareof its confidential nature, and who are obligated to comply with the restrictions imposed by thisSection 7. A default by a Recipient’s employee or independent contractor of the provisions setforth under this Agreement will be a default of the Recipient. Each such employee of Redhook givenaccess to Widmer’s confidential information shall execute and deliver to Widmer a form of theconfidentiality and non-disclosure agreement attached hereto as Exhibit D.     7.3 Return. Except as set forth below, upon the expiration or termination of this Agreement,the parties shall promptly destroy or return to the Disclosing Party, as the Disclosing Party maydirect, all tangible materials provided to it by the Disclosing Party that embody ConfidentialInformation and shall erase or delete all such Confidential Information embodied in any magnetic,optical, or similar medium or stored or maintained on any information storage and/or retrievaldevice. Each party may retain one copy of Confidential Information for archival and regulatorypurposes.     7.4 Remedies. In the event of a default under this Section, the Disclosing Party shall beentitled to a temporary restraining order, preliminary injunction, and other injunctive relief, inaddition to other available remedies, including damages.
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     7.5 Duration. The obligations set forth in this Section shall continue in effect beyond theterm of this Agreement and for so long as each party possesses Confidential Information.     8. Indemnification. Each party (the “Indemnifying Party”) shall indemnify and hold the otherparty, its affiliates and its successors and assigns (as to each, an “Indemnified Party”) harmlessfrom and against any and all charges, actions, and proceedings (including investigations) arisingout of negligence, willful misconduct, or breach of this Agreement by the Indemnifying Party,including (without limitation) product liability claims against the Indemnified Party, includingall reasonable expenses (including attorney fees) incurred by such Indemnified Party as a resultthereof.     9. Insurance. Each party shall keep in force at all times while any Widmer Product is beingmanufactured by Redhook at the Redhook Facility, general liability insurance with both “products”and “contractual” coverage for aggregated claim in the minimum amount of $5,000,000, and to furnishthe other a certificate from a financially responsible insurance company evidencing that suchinsurance is in force, naming the other party as an additional insured, and providing that suchcoverage may not be cancelled or materially changed without thirty (30) days prior written noticeto the other party. Any such policy of insurance shall contain a waiver of subrogation.     10. Warranties.     10.1 Warranty of Authority. Each of the parties hereto warrants and represents to the otherparty that (a) it has the full right, power and authority to enter into this Agreement and to carryout its obligations hereunder and (b) that it has no obligations to any other party that isinconsistent with its obligations under this Agreement.     10.2 DISCLAIMER OF WARRANTY. EXCEPT AS PROVIDED IN SECTIONS, 4.3, 6.1, 6.2 AND 10.1 ABOVE:(A) NO PARTY MAKES ANY WARRANTIES OR REPRESENTATIONS WHATSOEVER, WHETHER EXPRESS OR IMPLIED,HEREUNDER AND, WITHOUT LIMITATION, NO PARTY MAKES ANY WARRANTY OF TITLE, FITNESS FOR A PARTICULARPURPOSE, OR MERCHANTABILITY; AND (B) NO PARTY MAKES ANY REPRESENTATION OR WARRANTY THAT THEMANUFACTURE OR SALE OF WIDMER PRODUCTS HEREUNDER BY ANY PERSON OR ENTITY WILL NOT CONSTITUTE ANINFRINGEMENT OF THE PATENT, TRADEMARK OR OTHER INTELLECTUAL PROPERTY RIGHTS OF OTHERS. IN NO EVENTSHALL ANY PARTY BE LIABLE FOR SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES OR LOST REVENUES ORPROFITS.     11. Termination.     11.1 Term. The term of this Agreement shall commence on the date first set forth above andcontinue until December 31, 2006 unless earlier terminated as set forth herein or unless renewed inwriting on terms and conditions acceptable to both parties.     11.2 Termination for Cause. Either party may terminate this Agreement upon written noticegiven to the other party following the occurrence of any of the following events:     11.2.1 The other party fails to timely make any payment required under this Agreement for aperiod of 30 days following written notice thereof by the nonbreaching party.     11.2.2 The other party fails to perform any other obligation under this Agreement and suchfailure remains uncured for a period of 30 days following written notice thereof by thenonbreaching party.     11.2.3 The other party is given notice of a breach more than two times during the term of thisAgreement (regardless of whether such breach is cured).     11.2.4 The other party becomes the subject of insolvency or bankruptcy proceedings, ceasesdoing business, makes an assignment of assets for the benefit of creditors, dissolves, or has atrustee appointed for all or a substantial portion of such party’s assets.     11.2.5 Any government authority invalidates any substantial portion of this Agreement.     11.2.6 Either party finds that complying with any law or regulation relating to production ofWidmer Products would be commercially unreasonable and failure to comply with the law or regulationwould subject such party or any of its personnel to a monetary or criminal penalty.     11.2.7 An event of termination occurs as expressly provided elsewhere in this Agreement.     11.3 Repurchase upon Termination. Upon termination of this Agreement for any reason, Widmershall purchase from Redhook all Redhook inventory of Widmer Product, including any Widmer Productin process at the time of termination, at the prices set forth on Exhibit B; provided that all suchWidmer Product must be timely delivered and be manufactured in compliance with the terms of thisAgreement. If Widmer terminates this Agreement without cause or Redhook terminates this Agreementfor cause as defined in Section 11.2, Widmer shall also purchase from Redhook at Redhook’s directout of pocket costs, the raw materials inventory that is intended to be used by Redhook tomanufacture, bottle, or package Widmer Products and is purchased by Redhook prior to the date thenotice of termination was delivered; provided that the quantity of raw materials is reasonable andshall not exceed the amount reasonably necessary to manufacture the quantity of Widmer Productsreasonably expected to be manufactured by Redhook over the 180 day period immediately followingsuch termination. If this Agreement expires or is terminated for any other reason, no such rawmaterial purchase obligation shall exist.     11.4 License Termination. Upon expiration or any termination, (a) all rights granted toRedhook with respect to Intellectual Property, as appropriate, shall revert to Widmer; thereafter,(b) Redhook shall (i) refrain from all further use of Intellectual Property and (ii) take any andall action that Widmer may request to confirm termination of its license to use IntellectualProperty; and (c) Redhook shall (at Widmer’s direction) either destroy or return to Widmer allcopies of labels,
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packaging, or othermaterials on which Intellectual Property may be used or affixed. The foregoing shall notprevent Redhook from filling orders of Widmer Product received prior to the effective date of suchexpiration or termination.     11.5 Survival of Rights and Obligations. Termination of this Agreement shall not prejudiceany rights of either party hereto against the other which may have accrued up to the date oftermination. In addition, all covenants respecting indemnification, governing law, attorneys fees,arbitration, confidentiality, warranties, termination, and continuing liability for amounts payablehereunder shall survive the termination of this Agreement as expressly set forth elsewhere herein.     12. Notices. Any notice, request or demand to be given or made under this Agreement shall bein writing and shall be deemed to have been duly given or made (i) upon delivery, if delivered byhand and addressed to the party for whom intended at the address listed below, (ii) ten (10) daysafter deposit in the mails, if sent certified or registered air mail (if available) with returnreceipt requested, or five (5) days after deposit if deposited for delivery with a reputablecourier service, and in each case addressed to the party for whom intended at the address listedbelow or (iii) upon completion of transmission, if sent by facsimile transmission to the party forwhom intended at the fax number listed below, provided that a copy of the facsimile transmission ispromptly deposited for delivery by one of the methods listed in (i) or (ii) above:If to Widmer, to: