Document:

exv10w4

Exhibit 10.4

			
	
	 	LOAN MODIFICATION

AGREEMENT

 

     This Second Loan Modification Agreement (“Second Modification”) modifies the Loan
Agreement dated July 1, 2008 (as amended, the “Agreement”), regarding a revolving line of credit in
the maximum principal amount of $15,000,000 and a term loan in the original principal amount of
$13,500,000 (the “Facilities”), executed by CRAFT BREWERS ALLIANCE, INC. (“Borrower”) and BANK OF
AMERICA, N.A. (“Bank”). Terms used in this Second Modification and defined in the Agreement shall
have the meaning given to such terms in the Agreement. For mutual consideration, Borrower and Bank
agree to amend the Agreement as follows:

     1. Pricing Grid in Applicable Rate Definition. The pricing grid in Section 1.6 of the
Agreement is amended as follows (with no other changes being made to Section 1.6):

	 	 	 	 	 	 	 
	 	 	 	 	Applicable Rate
	 	 	 	 	(in percentage points per annum)
	Pricing Level	 	Funded Debt to EBITDA	 	LIBOR/IBOR +	 	Fee Margin:
	1
	 	3 3.0 to 1
	 	2.25
	 	0.350
	2
	 	< 3.0 to 1 but 3 2.0 to 1
	 	1.50
	 	0.225
	3
	 	< 2.0 to 1
	 	1.25
	 	0.200

     2. Quarterly Reporting. Section 9.2(b) of the Agreement is amended to read as
follows:

     (b) Within 45 days of the period’s end (including the last period in each fiscal year),
quarterly financial statements of the Borrower, certified and dated by an authorized
financial officer. These financial statements may be company-prepared. The statements
shall be prepared on a consolidated and consolidating basis.

     3. Compliance Certificates. The first phrase of Section 9.2(c) of the Agreement,
which was revised to read “With each of the financial statements required under (a) above and with
each of the financial statements required (b) above that coincide with a fiscal quarter end,...” is
changed to read “Within the period(s) provided in (a) and (b) above,...”

     4. Asset Coverage Ratio. Section 9.4B (Asset Coverage Ratio) is deleted in its
entirety.

     5. Investments. Subsection (d) of Section 9.11 of the Agreement is reinstated and
added as follows:

     (d) Minority interests in other craft brewers up to $5,000,000 in the aggregate,
provided that after the closing of any such investment the amount available to be drawn
under the Line of Credit must exceed $2,500,000.

     6. Modification Fee. Borrower shall pay to Bank a modification fee of $5,000 upon
execution of this Second Modification.

     7. Representations and Warranties. When Borrower signs this Second Modification,
Borrower represents and warrants to Bank that: (a) there is no event that is, or with notice or
lapse of time or both would be, an event of default under the Agreement except those events, if
any, that have been disclosed in writing to Bank or waived in writing by Bank, (b) the
representations and warranties in the Agreement are true as of the date of this Second Modification
as if made on the date of this Second Modification, (c) this Second Modification does not conflict
with any law, agreement, or obligation by which Borrower is bound, and (d) this Second Modification
is within Borrower’s powers, has been duly authorized, and does not conflict with any of Borrower’s
organizational papers.

					
	 
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     8. Conditions. This Second Modification will be effective when Bank receives the
following items, in form and content acceptable to Bank:

     (a) If required by Bank, evidence that the execution, delivery, and performance by
Borrower of this Second Modification and any instrument or agreement required under this
Second Modification have been duly authorized.

     (b) Payment by Borrower of the modification fee referenced in Section 6.

     (c) Payment by Borrower of all costs, expenses, and attorneys’ fees (including
allocated costs for in-house legal services) incurred by Bank in connection with this Second
Modification.

     9. Other Terms. Except as specifically amended by this Second Modification or any
prior amendment, all other terms, conditions, and definitions of the Agreement, and all other
documents, instruments, or agreements entered into with regard to the Facilities, shall remain in
full force and effect.

     10. FINAL AGREEMENT. BY SIGNING THIS DOCUMENT EACH PARTY REPRESENTS AND AGREES THAT:
(A) THIS DOCUMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT
MATTER HEREOF, (B) THIS DOCUMENT SUPERSEDES ANY COMMITMENT LETTER, TERM SHEET, OR OTHER WRITTEN
OUTLINE OF TERMS AND CONDITIONS RELATING TO THE SUBJECT MATTER HEREOF, UNLESS SUCH COMMITMENT
LETTER, TERM SHEET, OR OTHER WRITTEN OUTLINE OF TERMS AND CONDITIONS EXPRESSLY PROVIDES TO THE
CONTRARY, (C) THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES, AND (D) THIS DOCUMENT MAY
NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR
UNDERSTANDINGS OF THE PARTIES.

     11. STATUTORY NOTICE. UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS
MADE BY THE BANK CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY OR
HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE BORROWER’S RESIDENCE MUST BE IN WRITING, EXPRESS
CONSIDERATION AND BE SIGNED BY US TO BE ENFORCEABLE.

     DATED as of June 8, 2010.

	 	 	 	 	 	 	 	 	 

	Bank:	 	 	 	Borrower:
	 
	 	 	 	 	 	 	 	 
	BANK OF AMERICA, N.A.	 	 	 	CRAFT BREWERS ALLIANCE, INC.
	 
	 	 	 	 	 	 	 	 
	By

	 	/s/ Michael Snook
	 	 	 	By
	 	/s/ Terry E. Michaelson
	 

	 	 
	 	 	 	 	 	 
	 

	 	Michael Snook, Senior Vice President
	 	 	 	 	 	Terry Michaelson, Chief Executive Officer

					
	SECOND MODIFICATION
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	 	lr/01-0071/cbaiexv10w5

Exhibit 10.5

Second Amendment to Master Distributor Agreement

     This Second Amendment to Master Distributor Agreement (this “Amendment”), dated August 6, 2010
(“Effective Date”), between Craft Brewers Alliance, Inc., as successor by merger to Redhook Ale
Brewery, Incorporated (“CBAI”), and Anheuser-Busch, Incorporated (“ABI”), amends the Master
Distributor Agreement, dated July 1, 2004, between ABI and Redhook Ale Brewery, Incorporated, as
amended by the Consent and Amendment, dated July 1, 2008, between Redhook Ale Brewery,
Incorporated, Widmer Brothers Brewing Company, Craft Brands Alliance LLC, and ABI (as so amended,
the “Master Distributor Agreement”).

Agreement

     CBAI and ABI agree as follows:

1. Amendments to Master Distributor Agreement. From and after the Effective Date, the
Master Distributor Agreement continues in full force and effect but is amended as follows. Except
as provided below, all other provisions of the Master Distributor Agreement will remain in full
force and effect.

     1.1 Article I of the Master Distributor Agreement is amended to add the following definitions

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

     1.2 Section 4.04 is deleted in its entirety and replaced as follows:

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

     (b) Notwithstanding Section 4.04(a), (i) within thirty days after the end of
each calendar quarter beginning with the calendar quarter ended December 31, 2010
and ending with the calendar quarter ended September 30, 2013, ABI shall reimburse
to CBA the entire Margin retained by ABI for Product sold in the Eastern Territory
during such calendar quarter; (ii) within thirty days after the end of each calendar
quarter beginning with the calendar quarter ended December 31, 2013 and ending with
the calendar quarter ended September 30, 2014, ABI shall reimburse to CBA 66.7% of
the Margin retained by ABI for Product sold in the

 

 

Eastern Territory during such calendar quarter; and (iii) within thirty days
after the end of each calendar quarter beginning with the calendar quarter ended
December 31, 2014 and ending with the calendar quarter ended September 30, 2015, ABI
shall reimburse to CBA 33.3% of the Margin retained by ABI for Product sold in the
Eastern Territory during such calendar. Thereafter, ABI shall have no
reimbursement obligations with respect to Margin.

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

     1.3 Section 4.06 is deleted in its entirety and replaced as follows:

4.06 (a) Within 45 days after the end of each calendar quarter, Redhook
shall pay to ABI the product of (x) the Incremental Margin and (y) the
amount, if any, by which the aggregate volume (in case-equivalents of
Products) sold by Redhook to ABI or any wholesaler in such calendar quarter
in the Territory exceeds the amount of Product sold by Redhook and Widmer in
the Territory in the respective calendar quarter in 2003.

     (b) Notwithstanding the foregoing, for purposes of Section 4.06(a)
the aggregate volume will be calculated to exclude: (i) for sales of
Product in the fourth calendar quarter of 2010 through the third calendar
quarter of 2013, 100% of the aggregate volume of Products sold in the
Eastern Territory; (ii) for sales of Product effected in the fourth calendar
quarter of 2013 through the third calendar quarter of 2014, 66.7% of the
aggregate volume of Products sold in the Eastern Territory; and (iii) for
sales effected in the fourth calendar quarter of 2014 through the third
calendar quarter of 2015, 33.3% of the aggregate volume of Products sold in
the Eastern Territory. Thereafter, this provision shall be given no effect
in calculating Incremental Margin.

     (c) The provisions of Section 4.06(b) shall apply only so long as
Redhook continues to operate its Portsmouth, New Hampshire brewery and
maintains production capacity and output therein substantially at or above
the levels existing on the Effective Date. Should Redhook cease to do so,
on the date of such cessation the provisions of Section 4.06(b) shall be of
no further force and effect.

     (d) For purposes of determining the Incremental Margin, the parties
agree that Schedule 4.06 sets forth the quantity of Product sold by Redhook
and Widmer in each calendar quarter of 2003 and Redhook represents that such
quantities do not include sales by any Brewpub or at any beer festival. If
during any calendar year, the product of the

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(i) Incremental Margin and (ii) the amount by which the aggregate volume (in
case-equivalents of Product) sold in the Territory (as adjusted by the
exclusions provided for in Section 4.06(b)) exceeded the aggregate volume of
Product sold by Redhook and Widmer in the Territory during 2003 does not
equal the amounts paid by Redhook for such calendar year pursuant to this
section, then, within 45 days after the end of such calendar year ABI shall
pay to Redhook any amount by which the payments previously made by Redhook
for such calendar year exceed such product or Redhook shall pay to ABI any
amount by which the payments previously made by Redhook for such calendar
year are less than such product.

     1.4 The following is added as Section 4.08:

4.08 For each of the periods from October 1, 2010 through December 31,
2010; from January 1, 2011 through December 31, 2011; from January 1, 2012
through December 31, 2012; from January 1, 2013 through December 31, 2013;
from January 1, 2014 through December 31, 2014; and from January 1, 2015
through September 30, 2015, Redhook’s out of pocket expenses incurred in
the sales and marketing of its products for the Eastern Territory shall be
no less than the sum of (i) the amount incurred therefor in the same
calendar period in 2009 for the Eastern Territory, as increased by the
cumulative change in the Consumer Price Index from December 31, 2009; plus
(ii) the reimbursements to be paid by ABI for Margin relating to such
period resulting from the provisions of Section 4.04(b) and the decrease in
the aggregate amounts of Incremental Margin resulting from the provisions
of Section 4.06(b).

2. Effect of Agreement. This Amendment is binding on and inures to the benefit of CBAI,
ABI, and their respective successors and permitted assigns.

3. Choice of Law. This Amendment shall be governed by and construed in accordance with the
law of the State of Washington, without regard to the principles thereof regarding conflicts of
laws.

     The duly authorized representatives of the undersigned have executed and delivered this Second
Amendment to Master Distributor Agreement as of the Effective Date.

	 	 	 	 	 
	 	Craft Brewers Alliance, Inc.

 	 
	 	By:  	/s/ Terry E. Michaelson
 	 
	 	 	Terry Michaelson 	 
	 	 	Chief Executive Officer 	 

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	 	Anheuser-Busch, Incorporated

 	 
	 	By:  	/s/ Anthony J. Short
 	 
	 	 	Printed Name:  	 Anthony J. Short 	 
	 	 	Printed Title:  	 Vice President, Business and

Wholesaler Development 	 
	 

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