Document:

EXHIBIT 10.4

                  SUPPLY, DISTRIBUTION, AND LICENSING AGREEMENT

                                 BY AND BETWEEN

                            CRAFT BRANDS ALLIANCE LLC

                                       AND

                        REDHOOK ALE BREWERY, INCORPORATED

                                  JULY 1, 2004

                                     <PAGE>

REDHOOK SUPPLY, DISTRIBUTION, AND
LICENSING AGREEMENT
                  SUPPLY, DISTRIBUTION, AND LICENSING AGREEMENT

By:               CRAFT BRANDS ALLIANCE LLC, an Oregon limited liability company
                  ("Company")
                  929 N. Russell
                  Portland, Oregon  97227

and:              REDHOOK ALE BREWERY, INCORPORATED, a Washington
                  corporation ("Redhook")
                  14300 NE 145th
                  Woodinville, Washington 98072

Date:             July 1, 2004

                  This   Supply,    Distribution,    and   Licensing   Agreement
("Agreement") is entered into by and between Redhook and Company effective as of
the date first set forth above.

                                   BACKGROUND

                           A.  Widmer  Brothers  Brewing   Company,   an  Oregon
corporation  ("Widmer")  and  Redhook  are  both  manufacturers  of  craft  malt
beverages.  Widmer and Redhook previously each had a distribution agreement with
Anheuser-Busch  Inc. ("ABI") pursuant to which ABI distributed the malt beverage
products   of  Widmer   (collectively,   "Widmer   Products")   and  of  Redhook
(collectively "Redhook Products").

                           B.   Widmer    Products    and    Redhook    Products
(collectively,  "Products") have been distributed in the following common states
pursuant to distribution  agreements between ABI and each of Widmer and Redhook:
Alaska,  Arizona,  California,  Colorado,  Hawaii,  Idaho,  Montana, New Mexico,
Nevada,  Oregon,   Washington,  and  Wyoming.  ABI,  Widmer,  and  Redhook  have
determined  that it would create certain  efficiencies  and synergies for Widmer
and Redhook to consolidate certain marketing,  advertising, sales, distribution,
and related  operations and to jointly  distribute their respective  products in
the "Territory" (as defined in Section 2 below).

                           C. Widmer,  Redhook,  and Company  have  executed and
delivered or are  negotiating  the  following  documents:  a Restated  Operating
Agreement (the "Operating  Agreement") of Company, and other documents described
in the Operating Agreement (collectively, the "Related Agreements"). Pursuant to
the  Operating  Agreement  and  certain of the  Related  Agreements,  Widmer and
Redhook will consolidate their advertising,  marketing,  sales, and distribution
operations for the purpose of allowing Company to advertise,  market,  sell, and
distribute Products in the Territory. One of the Related Agreements is a Supply,
Distribution,  and Licensing  Agreement  between  Company and Widmer pursuant to
which Company advertises, markets, sells, and distributes Widmer Products in the
Territory (the "Widmer Distribution Agreement").

REDHOOK SUPPLY, DISTRIBUTION, AND
LICENSING AGREEMENT

<PAGE>
                           D.   Redhook  and  Company   desire  for  Redhook  to
manufacture  and sell  Redhook  Products  to Company  and for Company to market,
advertise,  sell, and distribute the Redhook Products in the Territory under the
terms  of  the  Distribution   Agreement  between  ABI  and  Company  (the  "ABI
Distribution Agreement").

                           E. Pursuant to a Licensing  Agreement between Redhook
and Widmer dated February 1, 2003 (the "Eastern Distribution Agreement"), Widmer
licensed  Redhook  the  right  to  manufacture,  advertise,  market,  sell,  and
distribute Redhook Products and Widmer Products in the states of Maine, Vermont,
New Hampshire, Massachusetts, Rhode Island, Connecticut, New York, Pennsylvania,
Ohio, Maryland, New Jersey,  Delaware, West Virginia,  Virginia, North Carolina,
South Carolina, Kentucky,  Tennessee,  Georgia, Alabama,  Mississippi,  Florida,
Wisconsin,  Michigan,  Indiana, Illinois, and Washington D.C. The parties do not
intend for the parties  rights and  obligations  under the Eastern  Distribution
Agreement to be modified by the terms of this Agreement.

                                    AGREEMENT

                  Based on the mutual  promises  set forth  below and other good
and  valuable  consideration,  the  receipt and  sufficiency  of which is hereby
acknowledged, Redhook and Company hereby agree as follows:

1. GRANT OF LICENSE.

         1.1 GRANT.

            1.1.1 Upon the terms and conditions  hereinafter set forth,  Redhook
hereby grants to Company,  and Company  hereby  accepts (a) a license to use the
trademarks,   logos,  trade  dress,   copyrights,   promotional  slogans,  color
combinations,  product shapes, and distinctive features in the Redhook Products,
or other  intellectual  property  related  to the  Redhook  Products,  including
(without limitation) the intellectual  property described on EXHIBIT A, attached
hereto (collectively,  the "Intellectual Property"), (b) a non-exclusive license
to  use  the  Intellectual   Property  in  connection  with  the  manufacturing,
packaging,  promotion, sale, and distribution of "Merchandise" in the Territory,
and (c) the right to sublicense the Intellectual Property to others as necessary
or convenient to permit Company to perform its obligations under this Agreement.
The  Intellectual  Property  shall include any  derivative  works related to any
existing  Intellectual Property and any Intellectual Property related to any new
Redhook  Products,  including those Redhook Products added pursuant to Section 3
below.

            1.1.2  Company  shall  not  acquire  any  other  right in any of the
Intellectual  Property  other than as set forth in Section 1.1.1 above.  Redhook
shall have the right to require Company and any sublicensee of Company to submit
representative  samples of any use of such Intellectual  Property to Redhook for
approval,  which  approval  shall be deemed  given if Redhook  does not  provide
Company 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 Company or any sublicensee
of Company will inure to the sole benefit of Redhook. At the request of Redhook,
Company will execute an instrument,  in a form  agreeable to Redhook,  to effect
further  registration,  maintenance,  and renewal of the Intellectual  Property,
and,  where  applicable,   to  record  Redhook  as  a  registered  user  of  the
Intellectual  Property.  Company shall  promptly  notify  Redhook of any and all
infringements of the Intellectual  Property  pertaining to the Products that may
come to  Company's  attention  and shall  assist  Redhook in taking  such action
against said infringements as Redhook, in its sole discretion, may decide.

REDHOOK SUPPLY, DISTRIBUTION, AND
LICENSING AGREEMENT

<PAGE>

            1.1.3  "Merchandise"  means all  non-beverage  products that (a) are
currently  manufactured  or sold by  Redhook,  (b) are  manufactured  or sold by
Redhook in  connection  with its  beverage  business in the  future,  and (c)are
proposed  by  Company  and not  rejected  by  Redhook  within 30 days  following
Company's submission to Redhook;  provided that Redhook may reject such proposed
Merchandise  only if Redhook would be permitted to reject such usage pursuant to
Section 1.3 below.

         1.2 EXCLUSIVITY.

            1.2.1 Except as  specifically  set forth  below,  during the term of
this  Agreement,  Redhook  shall not directly or indirectly in the Territory (as
expanded  as  provided  herein)   manufacture,   advertise,   market,  sell,  or
distribute,  whether for itself or for others,  any Redhook Product or any other
malt  beverage or  alcoholic  beverage  product,  whether now  existing or later
developed (each, a "Restricted  Product").  In the event of a default under this
Section, Company shall be entitled (without limiting any of its other rights and
remedies) to a temporary restraining order,  preliminary  injunction,  and other
injunctive relief, in addition to other available remedies, including damages.

            1.2.2 If the  Restricted  Products are  distributed by Company under
this Agreement, the following shall apply:

                (a) The  restrictions set forth in Section 1.2.1 shall not apply
to Restricted  Products to the extent that (i) the Restricted  Products are sold
directly to consumers,  including (without limitation)  Restricted Products sold
on or from the  premises  of a Redhook  brew-pub  restaurant  (each,  a "Redhook
Brew-Pub")  or (ii) on or from  the  premises  of a  Redhook  facility  at which
Products are manufactured (each, a "Redhook Plant").

            1.2.3 If the  Restricted  Products  are not  distributed  by Company
under this Agreement (each, a "Non-Distributed  Product"),  the restrictions set
forth in Section 1.2.1 shall not apply to the extent that:

                (a) (i) The  Non-Distributed  Products  are (A)  sold  only  for
consumption in or from the premises of a Redhook  Brew-Pub or a Redhook Plant or
(B) sold or distributed in beer competitions,  beer festivals, and similar types
of temporary sales events and (ii) The quantity of such Non-Distributed Products
does not exceed  70,000  Product Case  Equivalents  per calendar year in each of
Redhook's Brew-Pubs and Redhook Plants;

                (b)  As  used  in  this  Agreement,   the  terms  "Product  Case
Equivalents"  or "PCEs"  mean (i) the number of full cases of  Products  sold in
bottles  plus (ii) the number of  barrels  of  Products  purchased  by  Company,
divided by 13.78.

            1.2.4 The parties  acknowledge that in the state of Washington,  (a)
Company will  receive  orders for Redhook  Products  from ABI  Wholesalers,  (b)
Company will assign the orders to Redhook,  and (c) the Redhook Products will be
sold  and  distributed  directly  by  Redhook  to  ABI  Wholesalers  located  in
Washington.  The restrictions set forth in Section 1.2.1 do not apply to Redhook
Products sold to  distributors  authorized to sell Redhook  Products only in the
state of Washington (each, a "Washington Distributor").  Redhook will deliver to
Company  each week (on the  business  day of the week  requested  by  Company) a
written report of each the types and quantities of Redhook  Products sold to and
ordered  by the  Washington  Distributors  as of the  date  of such  report.  As
compensation for the marketing,  advertising,  and related services  provided by
Company with respect to sales made in  Washington,  Redhook  shall pay within 10
days following the end of each calendar  month a marketing fee calculated  using
the formula set forth on Schedule 1.2.4, attached hereto. At Company's election,
Company  may  off-set  such  amount  from any  amount  due  Redhook  under  this
Agreement.

REDHOOK SUPPLY, DISTRIBUTION, AND
LICENSING AGREEMENT

<PAGE>

            1.2.5 Redhook and Company  acknowledge that Redhook will continue to
operate its business  outside the  Territory and such  operations  may result in
Redhook  Products being  incidentally  advertised in the Territory.  The parties
agree that such  operations  do not violate  Redhook's  exclusivity  obligations
under this Agreement.  Such permitted  activities include  maintaining a website
advertising  Redhook's  Products  (fulfilling its obligations  under the Eastern
Distribution  Agreement) and buying radio and print  advertisements that are not
targeted in the Territory, but may be seen or heard in the Territory.

        1.3 QUALITY CONTROL.  The nature and quality of all of Company's uses of
the  Intellectual  Property  shall  conform to  reasonable  standards set out by
Redhook from time to time.  Such standards  shall be consistent  with the nature
and quality of the current  Redhook  Products.  Without  limiting the foregoing,
Redhook may reject any new  Intellectual  Property  proposed by Company  only if
such  proposal  would have a materially  detrimental  effect on the value of the
marks or be wholly  inconsistent  with the  current  nature  and  quality of the
existing Intellectual Property.

        1.4 RIGHT TO PURCHASE MERCHANDISE. Redhook has an option to purchase any
quantity of Merchandise (utilizing Redhook's Intellectual Property) manufactured
by or for Company at a price equal to  Company's  direct  out-of-pocket  cost to
manufacture the Merchandise, plus shipping costs.

2. TERRITORY.

        2.1 INITIAL  TERRITORY.  The "Territory"  means the geographic  areas in
which  Company is authorized to take the actions set forth in Section 1.2 above.
The  initial  Territory  shall be the  states of  Alaska,  Arizona,  California,
Colorado,  Hawaii, Idaho, Montana, New Mexico, Nevada, Oregon,  Washington,  and
Wyoming.

        2.2  EXPANSION OF TERRITORY.  Upon notice to Redhook,  Company may, from
time to time at its election and without paying any amount to Redhook or Widmer,
expand the Territory to include one or more of the following  states:  Arkansas,
Iowa, Kansas, Louisiana,  Minnesota, Missouri, Nebraska, North Dakota, Oklahoma,
South Dakota, and Texas. If Company elects to expand the Territory,  Redhook and
Company will promptly take all actions necessary to complete such inclusion.

REDHOOK SUPPLY, DISTRIBUTION, AND
LICENSING AGREEMENT

<PAGE>

3. REDHOOK PRODUCTS.

        3.1 INITIAL REDHOOK PRODUCTS.  The initial Redhook Products that will be
distributed  by  Company  under this  Agreement  are set forth on  SCHEDULE  3.1
attached hereto.

        3.2 ADDITIONAL REDHOOK PRODUCTS.

            3.2.1 Company may add additional  Redhook  Products if it determines
that it is in the best interests of Company to add a new Redhook Product that is
developed by Company or Redhook.

            3.2.2 If Company elects to add a new Redhook Product,  Company shall
at its  expense  develop  all  Intellectual  Property  related  to such  Redhook
Product.  All such  Intellectual  Property  shall  be the  property  of  Redhook
pursuant  to Section 7.2 of this  Agreement  and  licensed to Company  under the
terms of this Agreement.

        3.3 REMOVAL OF REDHOOK PRODUCTS.  Company may, in accordance with a then
current  Budget and Business Plan (as defined  under the  Operating  Agreement),
elect to discontinue  distributing  one or more of the Redhook Products (each, a
"Discontinued  Redhook  Product") upon notice to Redhook if (a) the total volume
of the Discontinued  Redhook Product in the immediately  preceding calendar year
is less than twenty  percent  (20%) of the total volume of all Redhook  Products
sold in the same calendar  year,  (b) the volume of Redhook  Product sold in the
immediately  preceding calendar year is at least ten percent (10%) less than the
sales for the calendar  year two years  preceding  such calendar  year;  and (c)
Company  determines in good faith that it is in the best long-term  interests of
Company for a Discontinued Redhook Product to be discontinued.  If the volume of
any Discontinued Redhook Product sold in the immediately preceding calendar year
is less than twenty percent (20%), but more than five percent (5%), of the total
volume of all Redhook Products sold in the same calendar year (the "Discontinued
Redhook Product Percentage"),  then Redhook may submit the matter to arbitration
as set forth below:

            3.3.1  If  Redhook   disagrees  with  any  decision  by  Company  to
discontinue a Redhook Product with a Discontinued Product Percentage of at least
five percent (5%),  Redhook shall notify  Company within thirty (30) days of the
date Company notifies  Redhook of its decision to discontinue such  Discontinued
Redhook Product.  If Redhook and Company do not resolve the matter within twenty
(20) days following the written notice by a party to the other party referencing
this Section  3.3,  the parties  will submit the Dispute to binding  arbitration
pursuant to arbitration as provided below:

            3.3.2 The arbitration  shall be conducted before a single arbitrator
located in Portland,  Oregon using a "baseball arbitration" format in accordance
with the rules of the Arbitration Service of Portland,  Inc. and judgment on the
award  rendered  by  the  arbitrator(s)  may be  entered  in  any  court  having
jurisdiction thereof. The arbitrator shall be acceptable to both parties. If the
parties do not agree within 20 days on an arbitrator,  the  arbitrator  shall be
selected  by the  Presiding  Judge of the  Circuit  Court of  Multnomah  County,
Oregon.  The arbitrator must determine whether or not the Company is required to
continue to advertise,  market,  sell, and  distribute the subject  Discontinued
Redhook Product within 15 days following the date the arbitrator is selected. In
making his or her determination, the arbitrator must select the choice which the
arbitrator  determines  to be in the best  long-term  interests of Company.  The
arbitrator may not formulate his or her resolution for the Dispute.

REDHOOK SUPPLY, DISTRIBUTION, AND
LICENSING AGREEMENT

<PAGE>

            3.3.3 The party  whose  proposed  resolution  of the  Dispute is not
selected by the arbitrator shall be responsible for the payment of costs,  fees,
and expenses incurred in connection with such arbitration,  including reasonable
attorneys'  fees and  experts'  fees of both of the parties in  accordance  with
Section 16.11 below.

        3.4  NON-DISTRIBUTED  REDHOOK  PRODUCTS.  If any  Redhook  Products  are
discontinued  pursuant  to Section  3.3  above,  or are  proposed  to Company by
Redhook and not accepted,  pursuant to Section 3.2 above,  for  distribution  by
Company  (collectively,  the  "Non-Distributed  Redhook  Products")  Redhook may
manufacture the  Non-Distributed  Redhook Products and may sell  Non-Distributed
Redhook  Products  in the  Territory  subject to the  restrictions  set forth in
Sections  1.2  and  1.3  above.  From  time  to  time,   Company  may  test  any
Non-Distributed  Product  to  determine  if it is equal to or greater in quality
than the Redhook Products Company then distributes. If Company determines that a
Non-Distributed   Product  is  not  of  such   quality,   Redhook   shall  cease
manufacturing and selling such Non-Distributed  Product until Company reasonably
determines  that such quality  standards  have been met.  Company has determined
that the Redhook Products identified on SCHEDULE 3.4, attached hereto, currently
meet such quality standards.

4. MANUFACTURING RIGHTS OF REDHOOK PRODUCTS AND WIDMER PRODUCTS.

        4.1 EXISTING REDHOOK PRODUCTS.

            4.1.1  Except  as  set  forth  herein,  Redhook  has  the  right  to
manufacture all existing Redhook Products.

            4.1.2 At least  thirty  (30)  days  prior to the  beginning  of each
calendar  quarter,  Company will  provide  Redhook  with a  three-month  rolling
forecast  (each,  a  "Three-Month  Forecast")  of the  quantity of each  Redhook
Product  Company  expects to purchase  during such  three-month  period  (each a
"3-Month Forecasted Quantity"). Within ten (10) days following Redhook's receipt
of each Three-Month Forecast, Redhook will notify Company (i) if it is unwilling
or unable to manufacture at least 110% of the 3-Month  Forecasted  Quantity (the
"Required  Redhook  Quantity")  and (ii) the quantity of Redhook  Products it is
willing  and able to  manufacture  (the  "Promised  Redhook  Quantity")  if such
quantity is less than the  Required  Redhook  Quantity.  If Redhook  does not so
notify  Company,  it will be  presumed  that  Redhook  is  willing  and  able to
manufacture at least the Required Redhook Quantity.  If Redhook notifies Company
that it is unwilling or unable to  manufacture  the Required  Redhook  Quantity,
Company may engage Widmer (pursuant to the Widmer Distribution  Agreement) or if
Widmer is unable or unwilling to manufacture the difference,  may engage another
contract  brewer to  manufacture  the  difference  between the Required  Redhook
Quantity and the Promised Redhook Quantity.

       4.2 EXISTING WIDMER PRODUCTS.

            4.2.1 If,  pursuant  to the Widmer  Distribution  Agreement,  Widmer
notifies  Company  that it is  unwilling  or  unable to  manufacture  all of the
Required  Widmer  Quantity  (as defined in the Widmer  Distribution  Agreement),
Company shall notify Redhook of Company's desire to purchase the difference (the
"Widmer  Quantity  Difference")  between the  Required  Widmer  Quantity and the
Promised Redhook Quantity (as defined in the Widmer Distribution Agreement). For
a period of five business days following the date Redhook  receives such notice,
Redhook shall have the option to accept the obligation to manufacture the Widmer
Quantity  Difference by notifying  Company within such five business day period.
If Redhook  fails to exercise such option,  Company may have any other  contract
brewer manufacture the Widmer Quantity Difference.

REDHOOK SUPPLY, DISTRIBUTION, AND
LICENSING AGREEMENT

<PAGE>

            4.2.2 Under the terms and  conditions  set forth in SCHEDULE  4.2.2,
attached hereto,  Redhook will have an option to manufacture Widmer Products, or
Widmer will have an option to manufacture Redhook Products.

        4.3 NEW REDHOOK  PRODUCTS AND NEW WIDMER  PRODUCTS.  Redhook and Company
acknowledge that (a) under the Widmer Distribution Agreement,  new Widmer Brands
may be added upon terms similar to those in Section 3.2 above, (b) the volume of
Redhook  Products and Widmer Products derived from such new brands (each, a "New
Brand") that will be distributed and sold by Company is speculative, and (c) the
parties under this Agreement and the Widmer  Distribution  Agreement  intend for
the number of New Brands to be apportioned equitably between Redhook and Widmer.
Redhook and Company  agree that with respect to the New Brands to which  Section
4.4 does not  apply,  (x) the first  New Brand  will be  offered  to the  brewer
(Redhook or Widmer) that sold the lower quantity of Products in the  immediately
preceding  calendar year, and (y) each  additional New Brand will  thereafter be
apportioned  alternatively  to each  brewer.  If a New Brand is  apportioned  to
Redhook,  (i) Redhook  shall have the  obligation  to  manufacture  all Products
ordered by Company as provided under this Agreement, (ii) Redhook shall have the
right during this  Agreement  to  manufacture  the Products  even though the New
Brand may be a Widmer brand, and (iii) all Products using such New Brand will be
subject  to the terms  under this  Agreement  as if it were an  original  Brand.
Within ten (10) days following  written notice to Redhook of the assignment of a
New Brand,  Redhook may elect not to accept such New Brand by notifying  Company
within such ten (10) day period. If Redhook elects not to accept such New Brand,
Company may assign the New Brand to Widmer.

        4.4  REINTRODUCED  DISCONTINUED  PRODUCTS.  Redhook  will have the first
opportunity  to  manufacture a New Brand that Company elects to introduce if (a)
such New Brand is in the same "Beer Style" as a Discontinued  Redhook Brand that
Company  discontinued,  pursuant  to  Section  3.3  of  this  Agreement,  in the
immediately  preceding 12-month period and (b) such New Brand is not in the same
Beer Style as a Discontinued Widmer Brand (as defined in the Widmer Distribution
Agreement)  that  Company  discontinued,  pursuant  to Section 3.3 of the Widmer
Distribution Agreement, in the immediately preceding 12-month period. As used in
this Section, a "Beer Style" is one of the following:  porter,  amber, pale ale,
blonde,  fruit beer,  hefeweizen,  lager, and stout, as those terms are commonly
used in the beer industry. In order to exercise its option,  Redhook must notify
Company within ten (10) days following written notice from Company of its intent
to have such New Brand manufactured.

        4.5 AGREEMENT WITH THIRD PARTY CONTRACT BREWERS.  If pursuant to Section
4.1.2 or Section  4.2.1 above (or  pursuant to the  parallel  provisions  in the
Widmer  Distribution  Agreement)  Company  engages a third party contract brewer
(each a "Contract Brewer") to manufacture any Product,  Company may enter into a
contract brewing  agreement (each, a "Brewing  Contract") with a Contract Brewer
on terms and conditions  Company deems  reasonable,  which may include  (without
limitation)  the following:  (a) the term during which Company will be obligated
to purchase  Products from the Contract  Brewer and (b) the minimum  quantity of
Products  that Company will be obligated to purchase  from the Contract  Brewer.
Redhook  agrees that  Company  shall have no liability to Redhook for failure to
purchase any Products from Redhook in order to comply with its obligations under
the Brewing Contract.

REDHOOK SUPPLY, DISTRIBUTION, AND
LICENSING AGREEMENT

<PAGE>

        4.6 PACKAGING CHANGES.  Company may, from time to time and in accordance
with the  restrictions  set forth in Section 1.3 above,  require  changes to the
Intellectual Property or packaging for existing Redhook Products and require new
Intellectual Property or packaging for new Redhook Products upon 180 days' prior
written notice to Redhook.  The direct  out-of-pocket costs for all such changes
or new  Intellectual  Property will be paid by Company.  If Company requires any
changes  to  the  Intellectual  Property  or  packaging  that  requires  capital
expenditures by Redhook,  Company shall reimburse Redhook for such expenditures;
provided  that  Company  may not require  any  changes to the  packaging  or the
Intellectual Property that requires capital improvements  exceeding $100,000.00.
If Company  requires any changes to the packaging or the  Intellectual  Property
that increases  Redhook's variable cost to manufacture and package the Products,
the price for such  Products  shall be  increased by such  estimated  additional
incremental  cost if (a) within  thirty  (30) days  following  the date  Company
requests such change Redhook notifies Company of the increased incremental cost,
providing reasonable supporting documentation, and (b) Company thereafter elects
for Redhook to manufacture  such Products.  Company may, upon notice to Redhook,
audit  Redhook's  books and  records to the  extent  necessary  to confirm  such
increased variable costs.

5. ABI DISTRIBUTION AGREEMENT.

        5.1 The parties  acknowledge  that Company is distributing  the Products
through  ABI  pursuant  to  the  ABI  Distribution  Agreement,  subject  to  the
restrictions, limitations, and conditions set forth therein.

        5.2  Company  shall  notify  Redhook of any  notice of  default  Company
receives  from ABI with  respect  to the ABI  Distribution  Agreement  and shall
comply with the terms and condition of the ABI Distribution Agreement.

        5.3 Redhook has  reviewed  the ABI  Distribution  Agreement  and, to the
extent  relating to Redhook and its Products,  (a) confirms each  representation
and warranty that Company has made under the ABI Distribution  Agreement and (b)
covenants to perform or cooperate  with Company in  performing  all of Company's
obligations under the ABI Distribution Agreement.

        5.4 Neither party shall take any action under this  Agreement that would
be a  violation  or cause  Company  to be in  violation  of the ABI  Distributor
Agreement.

6. ORDERS; PURCHASE PRICE; PAYMENT.

        6.1 OBLIGATION TO MANUFACTURE.  Subject to Section 4.1.2 above,  Redhook
shall  manufacture the Redhook  Products in the packages  ordered by Company and
shall cause the Redhook Products to be bottled, labeled, packaged, and delivered
by the delivery dates set forth in the order.  Company may not require  delivery
less than thirty (30) days following the date of the Order.

REDHOOK SUPPLY, DISTRIBUTION, AND
LICENSING AGREEMENT

<PAGE>

        6.2 REDHOOK PRODUCT SPECIFICATIONS.

            (a)  Each of the  Redhook  Products  manufactured  by  Redhook  will
conform  to  the  specifications,  recipes,  and  quality  control  requirements
attached as SCHEDULE 6.2.

            (b) For each new Redhook  Product,  the Redhook  Products  delivered
will conform to the specifications,  recipe, and quality control requirements as
reasonably determined by the Company.

            (c) Product  specifications  of Redhook Products may be changed only
upon mutual agreement of Redhook and Company.

            (d) In addition to the foregoing,  the Redhook Products shall comply
with the Product requirements as set forth in the ABI Distribution Agreement, as
modified   from  time  to  time,   and  shall  not  (in   Company's   reasonable
determination) be adulterated,  contaminated,  or otherwise of a quality that is
below the average  quality  previously  supplied by Widmer,  which may  include,
without  limitation,  (i) apparent  defects in taste or  appearance in excess of
typical  age-related  changes;  (ii)  microbiological   contamination  or  other
contamination  such  as  carryover  of  cleaning  chemicals  or  foreign  object
inclusions; and (iii) defective primary or secondary packaging.

        6.3 PRICES. The initial purchase prices for the Redhook Products are set
forth on SCHEDULE 6.3,  attached  hereto.  Thereafter,  the purchase  prices for
Redhook  Products  shall be adjusted  effective  each January 1, to be an amount
equal to:

            (a) For draught Redhook Products, the purchase price per barrel will
be equal to (i) the Average  Draught Net Sales  Price  multiplied  times *, plus
(ii) any applicable  Excise Taxes.  "Average  Draught Net Sales Price" means the
product  of (x) the gross  amount  received  by Company  during the  immediately
preceding fiscal year of October 1 through  September 30 (the "Fiscal Year") for
sales of all draught  Redhook  Products and draught  Widmer  Products,  less any
discounting, depletion allowance, promotion, or post-off pricing, divided by (y)
the total  number of barrels of draught  Redhook  Products  and  draught  Widmer
Products  sold by Company  during such Fiscal  Year.  "Excise  Taxes"  means all
federal, state, and local excise taxes.

            (b) For bottled Redhook Products, the purchase price per PCE will be
equal to (i) the Average  Bottle Net Sales Price  multiplied  times *, plus (ii)
any applicable Excise Taxes.  "Average Bottle Net Sales Price" means the product
of (x) the gross amount  received by Company  during the  immediately  preceding
Fiscal  Year for  sales of all  bottled  Redhook  Products  and  bottled  Widmer
Products,  less any discounting,  depletion  allowance,  promotion,  or post-off
pricing, divided by (y) the total number of PCEs of bottled Redhook Products and
bottled Widmer Products sold by Company during such Fiscal Year.

* CONFIDENTIAL TREATMENT REQUESTED

REDHOOK SUPPLY, DISTRIBUTION, AND
LICENSING AGREEMENT

<PAGE>

        6.4 PACIFIC RIDGE.  Notwithstanding the provisions in Section 6.3 above,
the purchase  price for the Pacific Ridge brand Redhook  Products shall be equal
to the  following:  (a) the gross amount  received  (including any freight costs
incurred by Company)  by Company  for sales of all Pacific  Ridge brand  Redhook
Product, minus (b) any discounting,  depletion allowance, promotion, or post-off
pricing.

7. RIGHTS IN INTELLECTUAL PROPERTY.

        7.1  INTELLECTUAL  PROPERTY.  Company  acknowledges  that its use of the
Intellectual  Property shall not create any right,  title,  or interest in or to
the Intellectual  Property in Company.  Company may, however,  sublicense others
the  right  to use the  Intellectual  Property  for the  purpose  of  fulfilling
Company's obligations under this Agreement.  Company shall not apply at any time
anywhere  in  the  world  for  any  trademark  or  other  intellectual  property
protection in its name for any of the Intellectual Property.

        7.2  IMPROVEMENTS;  OWNERSHIP.  Improvements  and  modifications  to the
Intellectual  Property created by either party during the term of this Agreement
shall,  from the time of conception or development,  be the property of Redhook.
Company hereby assigns,  and agrees to take all actions  necessary as reasonably
requested by Redhook to assign all such improvements and modifications.

        7.3 REPRESENTATIONS AND WARRANTIES. Redhook represents and warrants that
(a) it has the right to license the Intellectual Property to Company as provided
under  this  Agreement;  (b)  the  license  of  the  Intellectual  Property  and
distribution  rights under this  Agreement do not conflict  with any  agreement,
judgment,  or  other  obligation  of  Redhook;  and  (c)  Company's  use  of the
Intellectual Property hereunder will not violate the rights of any third person.

8. INFRINGEMENT.

        8.1 CLAIMS AGAINST THIRD PARTIES.  Company shall notify Redhook promptly
in writing of any infringement or unauthorized use of the Intellectual  Property
by third  parties  that may come to its  attention  in  writing.  Redhook  shall
promptly and  diligently  act, or cooperate  with Company who may act, to enjoin
and prevent in the Territory  infringement or threatened  infringement by others
of the Intellectual  Property, and shall take, or cooperate with Company who may
take,  such legal  action as may be  required  to protect  such  rights.  Costs,
expenses and recoveries of prosecuting  infringement actions shall be handled as
follows:

            8.1.1 If  Redhook  at its own  expense  files and is  successful  in
infringement   litigation  or   settlement,   then  Redhook  shall  be  entitled
exclusively to any amounts recovered.

            8.1.2 If  Company  at its own  expense  files and is  successful  in
infringement   litigation  or   settlement,   then  Company  shall  be  entitled
exclusively to any amounts recovered,  and shall be entitled to a credit against
any amounts  owing  Redhook  under this  Agreement for all costs and expenses of
litigation  in  excess  of the award  for or other  recovery  of such  costs and
expenses.

            8.1.3 If Company and Redhook  jointly  pursue and are  successful in
infringement litigation or settlement,  amounts recovered shall be first applied
to Company's costs and expenses,  then to Redhook's costs and expenses, and then
shared in direct  proportion  to the financial  investment  (costs and expenses)
made in such litigation or settlement.

REDHOOK SUPPLY, DISTRIBUTION, AND
LICENSING AGREEMENT

<PAGE>

        8.2 CLAIMS AGAINST  REDHOOK.  Company shall notify  Redhook  promptly in
writing  of any and all  allegations  or claims by others  which may come to its
attention  in writing  that the use of the  Intellectual  Property  infringes or
violates a trademark of any third party.  In such event,  Redhook  shall procure
for Company the right to continue to use the matter  which is the subject of the
claim,  or to modify the same so that it becomes  non-infringing.  Redhook shall
undertake and conduct the defense of any suit, action, or proceeding arising out
of the use by Company of the  Intellectual  Property  hereunder.  Company  shall
cooperate in such defense provided Redhook shall pay any out-of-pocket  expenses
incurred by Company in connection therewith.  No settlement of any such claim or
suit shall be made without the prior written consent of Redhook.

9.  COMPLIANCE  WITH  LAW.  Both  Redhook  and  Company  shall  comply  with all
applicable  rules and  regulations of the TTB (Alcohol and Tobacco Tax and Trade
Bureau of the Department of the Treasury),  and any other regulatory agency that
has  jurisdiction  over the Redhook  Products.  The parties shall cooperate with
each other to provide and retain any regulatory,  taxation,  or other reports or
information required by TTB, or any other regulatory agency.

10. CONFIDENTIALITY.

        10.1 ACCESS TO INFORMATION.  Each party ("Recipient")  acknowledges that
during the term of this  Agreement it may have access to  nonpublic  information
about the existing or proposed business or products ("Confidential Information")
of the other party (the "Disclosing Party") . Confidential Information includes,
without  limitation,  (i)  information  marked or  otherwise  designated  by the
Disclosing  Party as confidential or proprietary,  (ii)  information that by the
nature of the  circumstances  surrounding  the  disclosure  would  reasonably be
treated as confidential  information by a prudent brewer,  and (iii) information
provided to the  Disclosing  Party by third parties that it is obligated to keep
confidential.  Confidential  Information  may  be  written,  oral,  embodied  in
products  (including  the  Redhook  Product),  or in other  forms.  Confidential
Information  does not include  information  that is or becomes  publicly  known,
other than as a result of Recipient's  actions or failure to prevent disclosure.
The fact that portions of  Confidential  Information  may be publicly  available
shall not affect  Recipient's  obligations with respect to the remaining portion
or with respect to the particular  formulation  or compilation  disclosed by the
Disclosing Party.

        10.2 NON-DISCLOSURE AND NON-USE.  Recipient shall not disclose to others
or use any Confidential  Information of the Disclosing Party, except as required
to  perform  its  obligations  under this  Agreement.  Recipient  may,  however,
disclose  Confidential  Information to its employees and agents who need to know
the  information in connection  with this  Agreement,  who are made aware of its
confidential  nature,  and who are  obligated  to comply  with the  restrictions
imposed by this Section 10. A default by a Recipient's  employee or  independent
contractor of the provisions  set forth under this Agreement  shall be a default
of the Recipient.

REDHOOK SUPPLY, DISTRIBUTION, AND
LICENSING AGREEMENT

<PAGE>

        10.3  RETURN.  Except  as  set  forth  below,  upon  the  expiration  or
termination of this Agreement, Recipient shall promptly destroy or return to the
Disclosing  Party, as the Disclosing  Party may direct,  all tangible  materials
provided  to it by the  Disclosing  Party that embody  Confidential  Information
(other than Redhook  Products)  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  retrieval  device.  Recipient may
retain  one  copy  of  Confidential  Information  for  archival  and  regulatory
purposes.

        10.4  REMEDIES.  In the  event of a  default  under  this  Section,  the
Disclosing Party shall be entitled to a temporary restraining order, preliminary
injunction,  and  other  injunctive  relief,  in  addition  to  other  available
remedies, including damages.

        10.5 DURATION.  The obligations set forth in this Section shall continue
in  effect  beyond  the  term of  this  Agreement  and for so long as  Recipient
possesses Confidential Information.

11. INDEMNIFICATION.

        11.1 OBLIGATION.  Each party (the "Indemnitor") shall indemnify and hold
harmless the other party, its affiliates,  its successors, and assigns, 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
(collectively,   "Costs")  to  the  extent  arising  from,   connected  with  or
attributable to any claim arising out of the negligence,  willful misconduct, or
breach of this  Agreement by the  Indemnitor.  Without  limiting the  foregoing,
Redhook shall indemnify,  defend,  and hold harmless Company and ABI and each of
their  respective  affiliates,  successors,  and  assigns,  and  each  of  their
respective directors, officers, employees, and agents from and against all Costs
arising out of or related to any product  liability  claims except to the extent
such Costs resulted from any negligence or willful misconduct of Company.

        11.2 INDEMNIFICATION PROCEDURE. With respect to claims made by third
parties,  if any party that is entitled to  indemnification  hereunder (each, 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 Indemnitor.  The Indemnitor, by delivery of written notice
to the  Indemnitee  within  twenty (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 (including attorneys fees and costs) incurred from the Indemnitor.  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.

REDHOOK SUPPLY, DISTRIBUTION, AND
LICENSING AGREEMENT

<PAGE>

        11.3 INTENDED  THIRD PARTY  BENEFICIARY.  ABI is an intended third party
beneficiary under this Section 11.

12.  INSURANCE.  Each party  shall keep in force at all times  while any Redhook
Product  is being  offered  for  sale,  general  liability  insurance  with both
"products" and "contractual" coverage for aggregated claim in the minimum amount
of  $3,000,000,  and to  furnish  the  other a  certificate  from a  financially
responsible insurance company evidencing that such insurance is in force, naming
the other party as an additional  insured,  and providing that such coverage may
not be cancelled or materially  changed  without  thirty (30) days prior written
notice to the other party.  Any such policy of insurance  shall contain a waiver
of subrogation.

13. WARRANTIES.

        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 FOR CONSEQUENTIAL DAMAGES CAUSED BY
A BREACH OF THE  CONFIDENTIALITY  AGREEMENTS  IN SECTION  10 ABOVE,  IN NO EVENT
SHALL ANY PARTY BE LIABLE FOR SPECIAL,  INCIDENTAL,  OR CONSEQUENTIAL DAMAGES OR
LOST REVENUES OR PROFITS.

14. TERMINATION.

        14.1 TERM. The term of this  Agreement  shall commence on the date first
set forth above and continue until terminated as set forth herein.

        14.2  TERMINATION  BY EITHER  PARTY.  Either  party may  terminate  this
Agreement upon 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 60 days following written notice thereof by
the nonbreaching party.

            14.2.2  The  other  party  fails  to  perform  any  other   material
obligation under this Agreement and such failure remains uncured for a period of
60 days following written notice thereof by the nonbreaching party.

            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 makes a final decision  invalidating
a substantial 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.

REDHOOK SUPPLY, DISTRIBUTION, AND
LICENSING AGREEMENT

<PAGE>

            14.2.6 The ABI Distribution Agreement terminates for any reason.

            14.2.7 The Operating Agreement terminates for any reason.

        14.3 TERMINATION BY COMPANY.

            14.3.1  Company may upon notice to Redhook  terminate this Agreement
if Redhook  causes  Company to be in  default in its  obligations  under the ABI
Distribution  Agreement  and  Redhook  either  (a)  fails  to take  all  actions
necessary  to cause  Company  to cure such  default in  accordance  with the ABI
Distribution  Agreement  or (b) fails to pay on demand  all  direct or  indirect
Costs (as defined in Section 11.1) arising out of or related to such default.

            14.3.2  Company  may upon  notice  to  Redhook  (a)  terminate  this
Agreement  if (i) an event of default  occurs under  Section 7 of the  Agreement
giving  ABI the right to  terminate  the ABI  Distribution  Agreement  (each,  a
"Default  Event"),  (ii) Redhook  caused such Default  Event,  and (iii) Company
elects to cure such  Default  Event or  attempt  to  rectify  the  damage to the
reputation or image of ABI or the brewing  industry caused by such Default Event
by  terminating  this  Agreement  and  (b)  cease  advertising,   marketing,  or
distributing one or more Redhook Product brands (including Pacific Ridge brands)
if ABI notifies  Company that it will no longer  distribute such Redhook Product
brand or brands under the ABI Distribution Agreement.

        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,  attorneys  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.

        14.5   TERMINATION  OF  OTHER   AGREEMENTS.   Upon   expiration  or  any
termination,  (a) all rights granted to Company with respect to the Intellectual
Property, as appropriate, shall revert to Redhook; thereafter, (b) Company shall
(i) refrain from all further use of the Intellectual  Property, and (ii) Company
shall (at Redhook's direction) either destroy or return to Redhook all copies of
labels,  packaging,  or other  materials  on which a  Trademark  may be affixed,
except  for  Redhook  Products  which  may be  disposed  of in any  commercially
reasonable  manner  and  (c)  unless  it  would  violate  the  terms  of the ABI
Distribution Agreement,  Redhook may purchase the remaining inventory of Redhook
Products at a price agreed upon by the parties; provided however that if Redhook
and  Company  do not  agree on a price  within  ten  (10)  days  following  such
expiration  or  termination,  Company  may  sell  the  Redhook  Products  to any
third-party  at a net price  that is equal to or  greater  than the  price  last
offered by Redhook.

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 (10) days after deposit in the
mails,  if sent  certified or  registered  air mail (if  available)  with return
receipt requested, or five (5) 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 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:

REDHOOK SUPPLY, DISTRIBUTION, AND
LICENSING AGREEMENT

<PAGE>

       If to Redhook, to:                 Redhook Ale Brewery, Incorporated
                                          14300 NE 145th Street, Suite 210
                                          Woodinville, Washington 98072
                                          Attn:  President
                                          Fax:  (425) 485-0761

       If to Company, to:                 Craft Brands Alliance LLC
                                          929 N. Russell
                                          Portland, Oregon  97227
                                          Attn:  President
                                          Fax:  (503) 281-1496

Any party may change its  address  and/or  fax number for the  purposes  of this
Section 15 by written notice  hereunder  given to the other parties at least ten
(10) days prior to the effective  date of such change.  Copies of all notices of
default or any notice under Section 14 under this Agreement shall be sent to:

Widmer Brothers Brewing Company
929 N. Russell
Portland, Oregon  97229
Attn:  President
Fax:  (503) 281-1496

16. MISCELLANEOUS.

        16.1  RELATIONSHIP.  This  Agreement  does not  make  either  party  the
employee,  agent,  or legal  representative  of the other  party for any purpose
whatsoever.  Neither  party is granted  any right or  authority  to assume or to
create any obligation or responsibility,  express or implied, on behalf of or in
the name of the other party.  In  fulfilling  its  obligations  pursuant to this
Agreement each party shall be acting as an independent contractor.

        16.2  ASSIGNMENT.  Except as set forth herein,  neither party shall have
the right to assign, sublicense,  subcontract,  or otherwise transfer its rights
and  obligations  under this Agreement  except with the prior written consent of
the other party.  Redhook does  consent to  Company's  distributing  the Redhook
Product through ABI distributors  within the Territory.  The parties acknowledge
that  the  Redhook   Product  shall  be  distributed   pursuant  to  the  Master
Distribution  Agreement  between  Company  and ABI.  Each of Company and Redhook
agree  that the terms  and  conditions  of the ABI  Distribution  Agreement  (as
amended,  replaced,  or modified  from time to time),  including  the rights and
obligations of ABI, shall apply to the Redhook Products as if they were products
of  Company.  Any  prohibited  assignment  shall be null and void.  The  parties
acknowledge and agree that Redhook may elect to assign all of its assets related
to the Redhook Brew-Pubs to an Affiliate. In this event, the provisions relating
to the Redhook Brew-Pub will apply with respect the Affiliate's restaurants. For
the purposes of this section,  an  "Affiliate"  is a company  controlled  by, in
common control of, or under common ownership with Redhook. Upon an assignment to
an Affiliate, a copy of the assignment agreement will be delivered to Company.

REDHOOK SUPPLY, DISTRIBUTION, AND
LICENSING AGREEMENT

<PAGE>

        16.3 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.

        16.4  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.

        16.5 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.

        16.6 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.

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

        16.8  HEADINGS.  Headings  and  subheadings  in this  Agreement  are not
intended to and do not have any  substantive content whatsoever.

        16.9 MUTUAL NEGOTIATION IN DRAFTING.  The parties acknowledge each party
and its counsel have materially  participated in the drafting of this Agreement.
Consequently, the rule of contract interpretation,  that ambiguities, if any, in
a writing be construed against the drafter, shall not apply.

        16.10  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.

        16.11 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,  attorney  fees  and  costs  (however
incurred,  including 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,
action,  or  arbitration  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  attorney fees and costs (however  incurred,  including at
trial,  on appeal,  and on any petition for  review),  together  with such other
expenses, costs, and disbursements as may be allowed by law.

REDHOOK SUPPLY, DISTRIBUTION, AND
LICENSING AGREEMENT

<PAGE>

        16.12  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.

        16.13  GOVERNING LAW;  ARBITRATION.  This Agreement shall be governed by
the laws of the State of Oregon,  without regards to the principles of conflicts
of laws  thereof.  Any  controversy  or claim arising out of or relating to this
Agreement,  or the breach thereof,  shall be settled by arbitration in Portland,
Oregon in accordance with the rules of the Arbitration Service of Portland, Inc.
and judgment on the award  rendered by the  arbitrator(s)  may be entered in any
court having jurisdiction thereof.

        16.14 COMMENCEMENT OF AGREEMENT.  Neither party shall have any rights or
obligations  under this Agreement and none of its provisions  shall be operative
unless and until all of the following have occurred:

            16.14.1 The Operating Agreement,  this Agreement,  the other Related
Agreements,  and the  transactions  described  therein have been approved by the
respective boards of directors of Redhook and Widmer;

            16.14.2  The  Operating  Agreement  and  each of the  other  Related
Agreements are finalized, executed, and delivered by each party thereto; and

            16.14.3 Company obtains all of the regulatory licenses and approvals
necessary to sell Products in the Initial Territory.

REDHOOK SUPPLY, DISTRIBUTION, AND
LICENSING AGREEMENT

<PAGE>

       The parties have executed  this  Agreement as of the date first set forth
above.

CRAFT BRANDS ALLIANCE LLC                     REDHOOK ALE BREWERY, INCORPORATED

By:/s/ TERRY MICHAELSON                       By: /s/ DAVID MICKELSON
------------------------------                ---------------------------------
Name:  TERRY MICHAELSON                       Name:   DAVID MICKELSON
------------------------------                ---------------------------------
Title:    PRESIDENT                           Title: EXECUTIVE VICE PRESIDENT,
                                                     CHIEF FINANCIAL OFFICER,
                                                     CHIEF OPERATING OFFICER

REDHOOK SUPPLY, DISTRIBUTION, AND
LICENSING AGREEMENT

<PAGE>

<TABLE>
<CAPTION>
<S>               <C>   <C>              <C>        <C>          <C>            <C>                  <C>                  <C>
                                                                                           CHRISTENSEN O'CONNOR JOHNSON KINDNESSPLLC
                                                                                                       1420 Fifth Avenue, Suite 2800
                                                                                                      Seattle, Washington 98101-2347
                                                                                                           Telephone: (206) 682-8100
                                                                                                                 Fax: (206) 224-0779

REDHOOK ALE BREWERY, INCORPORATED                                                                                  ACTIVE TRADEMARKS
JUNE 9, 2004                                                                                                         REGISTERED ONLY

Client Ref./                             Country/
COJK Ref./              Mark/             Int'l     Appl. No./    Reg. No./
Status            Atty  Owner             Class     Date Filed    Reg. Date     Goods and Services   Action               Date
------------------------------------------------------------------------------------------------------------------------------------
IABR-2-0008119    JRU   BALLARD BITTER    Canada      687,267       426,849     Ale and beer.        Renewal Begin        11/06/2008
Registered        JRU                                08/08/91      05/06/94                          Renewal End          05/06/2009
------------------------------------------------------------------------------------------------------------------------------------
IABR-2-0012695    JRU   BALLARD BITTER    Mexico       218818        484957     Ale and beer.        Renewal End          11/30/2004
Registered        JRU                      IC32      11/30/94      03/13/95                          Renewal Begin        05/30/2014
------------------------------------------------------------------------------------------------------------------------------------
IABR-2-0013093    JRU   BALLARD BITTER    USA NH       H TM     VOL. 90, PG     Ale.                 Renewal Begin        08/15/2004
Registered        JRU                      IC48                      26                              Renewal End          02/15/2005
                                                                   02/15/95
------------------------------------------------------------------------------------------------------------------------------------
IABR-2-0001668    JRU   BLACK HOOK         USA        443,637     1,299,809     Ale - namely,        Renewal End          10/09/2004
Registered        JRU                      IC32      09/14/83      10/09/84     porter.              Renewal Begin        10/09/2013
------------------------------------------------------------------------------------------------------------------------------------
IABR-2-0012697    JRU   BLACK HOOK        Mexico       218820        484959     Ale and beer.        Renewal End          11/30/2004
Registered        JRU                      IC32      11/30/94      03/13/95                          Renewal Begin        05/30/2014
------------------------------------------------------------------------------------------------------------------------------------
IABR-2-0013095    JRU   BLACK HOOK        USA NH       H TM      VOL. 90 PG.    Ale.                 Renewal Begin        08/15/2004
Registered        JRU                      IC48                      24                              Renewal End          02/15/2005
                                                                   02/15/95
------------------------------------------------------------------------------------------------------------------------------------
IABR-2-0001667    JRU   BLACK HOOK         USA        443,629     1,296,703     Ale, namely,         Renewal End          09/18/2004
Registered        JRU   PORTER & Design    IC32      09/14/83      09/18/84     porter.              Renewal Begin        09/18/2013
------------------------------------------------------------------------------------------------------------------------------------
IABR-2-0003118    JRU   Design (Ballard    USA        575,704     1,409,762     Ale.                 Renewal Begin        09/16/2005
Registered        JRU    Bitter)           IC32      12/30/85      09/16/86                          Renewal End          09/16/2006
------------------------------------------------------------------------------------------------------------------------------------
IABR-2-0004446    JRU   Design             USA        685,638     1,493,423     Ale.                 Renewal Begin        06/21/2007
Registered        JRU    (Winterhook)      IC32      09/18/87      06/21/88                          Renewal End          06/21/2008
------------------------------------------------------------------------------------------------------------------------------------
IABR-2-0016525    JRU   ESB               Japan   1997-103375       4370896     Ale; other beer.     Renewal Begin        09/30/2009
Registered        JRU                      IC32      04/03/97      03/31/00                          Renewal End          03/31/2010
------------------------------------------------------------------------------------------------------------------------------------
IABR-2-0012699    JRU   FORECASTERS        USA     74/590,218     1,929,789     Restaurant and bar   Renewal Begin        10/24/2004
Registered        JRU                      IC42      10/24/94      10/24/95     services.            Renewal End          10/24/2005
------------------------------------------------------------------------------------------------------------------------------------
IABR-2-0018651    JRU   INDIA PALE ALE     USA     75/479,479     2,262,841     Ale.                 Section 8, 15        07/20/2004
Registered        JRU   RED HOOK "YA       IC32      05/05/98      07/20/99                          Declaration Begin
                        SURE YA BETCHA"
                        ETC. and Design                                                              6 Month Section 8,   01/20/2005
                                                                                                     15 Declaration

                                                                                                     Section 8, 15        07/20/2005
                                                                                                     Declaration End

                                                                                                     Renewal Begin        07/20/2008

                                                                                                     Renewal End          07/20/2009
------------------------------------------------------------------------------------------------------------------------------------

<PAGE>

------------------------------------------------------------------------------------------------------------------------------------
IABR-2-0025094    JRU   RED HOOK        Australia      852882        852882     Beer and ale.        Renewal Begin        04/09/2010
Registered        JRU                      IC32      10/09/00      08/03/01                          Renewal End          10/09/2010
------------------------------------------------------------------------------------------------------------------------------------
IABR-2-0008113    JRU   RED HOOK          Canada      687,394       418,500     Ale and beer.        Renewal Begin        04/22/2008
Registered        JRU                                08/08/91      10/22/93                          Renewal End          10/22/2008
------------------------------------------------------------------------------------------------------------------------------------
IABR-2-0008114    JRU   RED HOOK        Hong Kong     6207/91       2375/93     Ale and beer.        Renewal Begin        02/28/2012
Registered        JRU                      IC32      08/28/91      06/18/93                          Renewal End          08/28/2012
------------------------------------------------------------------------------------------------------------------------------------
IABR-2-0016529    JRU   RED HOOK          Japan   1997-103376       4265307     Restaurant services, Renewal Begin        10/23/2008
Registered        JRU                      IC42      04/03/97      04/23/99     bar services, and    Renewal End          04/23/2009
                                                                                all other services
                                                                                belonging in this
                                                                                class.
------------------------------------------------------------------------------------------------------------------------------------
IABR-2-0008115    JRU   RED HOOK          Japan    1991-85923       2601613     Ale and beer.        Renewal/             04/30/2004
Registered        JRU                      IC32      08/15/91      11/30/93                          Reclassification
                                                                                                     Accepted?
                                                                                                     Renewal Begin        05/30/2013
                                                                                                     Renewal End          11/30/2013
------------------------------------------------------------------------------------------------------------------------------------
IABR-2-0012694    JRU   RED HOOK          Mexico       218821        484960     Ale and beer.        Renewal End          11/30/2004
Registered        JRU                      IC32      11/30/94      03/13/95                          Renewal Begin        05/30/2014
------------------------------------------------------------------------------------------------------------------------------------
IABR-2-0008117    JRU   RED HOOK        Singapore     7563/91       7563/91     Ale and beer.        Renewal Begin        02/13/2011
Registered        JRU                      IC32      08/13/91      08/13/91                          Renewal End          08/13/2011
------------------------------------------------------------------------------------------------------------------------------------
IABR-2-0008116    JRU   RED HOOK          South      91-23412       247,104     (IC36): Ale and      Renewal Begin        02/17/2012
Registered        JRU                      Korea     08/13/91      08/17/92     beer.                Renewal End          08/17/2012
                                           IC32
------------------------------------------------------------------------------------------------------------------------------------
IABR-2-0008118    JRU   RED HOOK          Taiwan    (80)36883       556 831     Wine, ale and        Renewal Begin        10/15/2001
Registered        JRU                      IC17      08/14/91      04/16/92     beer.                Renewal End          04/15/2012
------------------------------------------------------------------------------------------------------------------------------------
IABR-2-0001242    JRU   RED HOOK           USA     73/380,687     1,253,138     Ale.                 Renewal Begin        10/04/2012
Registered        JRU                      IC32      08/19/82      10/04/83                          Renewal End          10/04/2013
------------------------------------------------------------------------------------------------------------------------------------
IABR-2-0001198    JRU   RED HOOK ALE &     USA        382,104     1,332,480     Ale.                 Renewal End          04/23/2005
Registered        JRU   Design             IC32      08/26/82      04/23/85                          Renewal Begin        04/23/2014
------------------------------------------------------------------------------------------------------------------------------------
IABR-2-0015487    JRU   RED HOOK DOUBLE   Japan    1996-76304       4143687     Ale and beer.        Renewal Begin        11/08/2007
Registered        JRU   BLACK              IC32      07/11/96      05/08/98                          Renewal End          05/08/2008
------------------------------------------------------------------------------------------------------------------------------------
IABR-2-0013092    JRU   RED HOOK ESB      USA NH       H TM     VOL. 90, PG     Ale.                 Renewal Begin        08/15/2004
Registered        JRU                      IC48                      25                              Renewal End          02/15/2005
                                                                   02/15/95
------------------------------------------------------------------------------------------------------------------------------------
IABR-2-0012592    JRU   RED HOOK ESB and   USA     74/597,335     1,940,873     (IC25) Men's,        Renewal Begin        12/12/2004
Registered        JRU   Design             IC25      11/10/94      12/12/95     women's and          Renewal End          12/12/2005
                                           IC30                                 children's
                                           IC32                                 clothing, namely,
                                                                                shirts, Tshirts,
                                                                                sweatshirts, polo
                                                                                shirts, and hats;
                                                                                (IC30) bread;
                                                                                (IC32) ale.
------------------------------------------------------------------------------------------------------------------------------------

<PAGE>

------------------------------------------------------------------------------------------------------------------------------------
IABR-2-0016079    JRU   Red Hook Logo   Community      440996        440966     Ale and beer.        Renewal Begin        06/11/2006
Registered        JRU                      IC32      12/11/96      10/23/98                          Renewal End          12/11/2006
------------------------------------------------------------------------------------------------------------------------------------
IABR-2-0029334    JRU   SUNRYE             USA     78/232,950     2,819,966     Ale.                 Section 8, 15        03/02/2009
Registered        JRU                      IC32      04/02/03      03/02/04                          Declaration
                        Redhook Ale                                                                  Begin
                        Brewery,
                        Incorporated                                                                 6 Month Section 8,   09/02/2009
                                                                                                     15 Declaration

                                                                                                     Section 8, 15        03/02/2010
                                                                                                     Declaration End

                                                                                                     Renewal Begin        03/02/2013

                                                                                                     Renewal End          03/02/2014
------------------------------------------------------------------------------------------------------------------------------------
IABR-2-0012698    JRU   TROLLEYMAN         USA     74/590,217     1,929,788     Restaurant and bar   Renewal Begin        10/24/2004
Registered        JRU                      IC42      10/24/94      10/24/95     services.            Renewal End          10/24/2005
------------------------------------------------------------------------------------------------------------------------------------
IABR-2-0008121    JRU   WHEAT HOOK        Canada      687,268       413,666     Wheat brewed ale.    Renewal Begin        12/18/2007
Registered        JRU                                08/08/91      06/18/93                          Renewal End          06/18/2008
------------------------------------------------------------------------------------------------------------------------------------
IABR-2-0012696    JRU   WHEAT HOOK        Mexico       218819        484958     Ale and beer.        Renewal End          11/30/2004
Registered        JRU                      IC32      11/30/94      03/13/95                          Renewal Begin        05/30/2004
------------------------------------------------------------------------------------------------------------------------------------
IABR-2-0013094    JRU   WHEAT HOOK        USA NH       H TM     VOL. 90, PG     Wheat brewed ale.    Renewal Begin        08/15/2004
Registered        JRU                      IC48                      27                              Renewal End          02/15/2005
                                                                    2/15/95
------------------------------------------------------------------------------------------------------------------------------------
IABR-2-0004444    JRU   WINTERHOOK         USA        684,962     1,490,430     Ale.                 Renewal Begin        05/31/2007
Registered        JRU                      IC32      09/18/87      05/31/88                          Renewal End          05/31/2008
------------------------------------------------------------------------------------------------------------------------------------
IABR-2-0013096    JRU   WINTERHOOK        USA NH       H TM                     Beer and ale.        Renewal Begin        09/20/2005
                  JRU                      IC48                    03/20/96                          Renewal End          03/20/2006
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

The information  contained in this status report is privileged and  confidential
information intended only for the use of Redhook Ale Brewery, Incorporated. This
information  is  continually  updated  in the  records at  Christensen  O'Connor
Johnson Kindness and may be subject to change at any time.  Comments,  questions
or changes should be directed to Christensen O'Connor Johnson Kindness.

<PAGE>

                                 SCHEDULE 1.2.4

                        WASHINGTON MARKETING FEE FORMULA

1.  FORMULA:  The Washington  Marketing Fee shall be equal to (a) the price paid
    to CBA for the Products,  minus (b) the price paid to Redhook by CBA for the
    Redhook  Products.   The  Washington   Marketing  Fee  shall  be  calculated
    separately for each package type.

2.  EXAMPLE.

*

* CONFIDENTIAL TREATMENT REQUESTED

REDHOOK SUPPLY, DISTRIBUTION, AND
LICENSING AGREEMENT

<PAGE>

REDHOOK SUPPLY, DISTRIBUTION, AND
LICENSING AGREEMENT

                                  SCHEDULE 3.1

                            INITIAL REDHOOK PRODUCTS

ESB
IPA
Sunrye
Nut Brown Ale
Chinook Copper
Pacific Ridge
Blackhook Porter
Winterhook
Hoptoberfest
Blonde

REDHOOK SUPPLY, DISTRIBUTION, AND
LICENSING AGREEMENT

<PAGE>

                                  SCHEDULE 3.4

                        NON-DISTRIBUTED REDHOOK PRODUCTS

None.

REDHOOK SUPPLY, DISTRIBUTION, AND
LICENSING AGREEMENT

<PAGE>

REDHOOK SUPPLY, DISTRIBUTION, AND
LICENSING AGREEMENT

                                 SCHEDULE 4.2.2

                              OPTION TO MANUFACTURE

1. If, over any calendar year (the "Base Year") both (a) and (b) are true:

                  (a) The total  quantity  (in PCEs) of the Products of a brewer
(the  "Increasing  Brewer")  sold in the  Territory  is  greater  than the total
quantity (in PCEs) of Products of the Increasing Brewer sold in the Territory in
the  immediately  preceding  calendar year (the difference is referred to as the
"Product Volume Increase"), and

                  (b) The total  quantity (in PCEs) of the Products of the other
brewer (the  "Decreasing  Brewer")  sold in the Territory is less than the total
quantity (in PCEs) of Products of the Decreasing Brewer sold in the Territory in
the  immediately  preceding  calendar year (the difference is referred to as the
"Product Volume Decrease");

then

                  (x) In the  immediately  following  calendar year (the "Option
Year"),  the  Decreasing  Brewer shall have the option (the  "Decreasing  Brewer
Option")  to  manufacture  a  quantity  of  Products  equal to the  lower of the
following (the "Option Quantity"):

                  (i) the Product Volume Increase, and

                  (ii) the Product Volume Decrease.

2.  Notwithstanding  the  foregoing,  if the  Decreasing  Brewer  is not able to
manufacture the Products in each type of packaging that was  manufactured by the
Increasing  Brewer in the Base Year,  (a) the  Decreasing  Brewer  Option  shall
include only those Products the packaging of which the Decreasing Brewer is able
to  manufacture  and (b) the  Decreasing  Brewer  Option shall  include only the
percentage of the Option  Quantity equal to the percentage  manufactured  by the
Increasing  Brewer using such  packaging in the Base Year.  For example,  if the
Option  Quantity  for all types of  packaging  is 1,000 PCEs and the  Increasing
Brewer  manufactured 40 percent  long-neck  bottle Products and 60 percent draft
Products,  and  the  Decreasing  Brewer  is not  able to  manufacture  long-neck
bottles,  then  the  Option  Quantity  shall  be  reduced  to 600  PCEs of draft
Products.  The  Decreasing  Brewer may not substitute 400 PCEs of draft Products
for the 400 PCEs of long-neck bottled Product.

     3. The Decreasing  Brewer must exercise the Decreasing Brewer Option, if at
all,  within ten (10) days following  written notice from Company of such right.
The Decreasing  Brewer may exercise the Decreasing Brewer Option with respect to
all or any portion of the Option  Quantity.  The brands of Product (which may be
either Redhook  Products or Widmer  Products)  that make up the Option  Quantity
shall be those  brands  selected by  Company;  provided,  however,  that (i) the
Company  shall  endeavor  to select no more  than two  brands of the  Increasing
Brewer and only those brands that had the highest  sales volume in the Base Year
and (ii) if the  Decreasing  Brewer will (under  provisions of its  distribution
agreement with Company) be  manufacturing  Products of the Increasing  Brewer in
the Option Year, the Company shall endeavor to reassign brands, in equal volumes
and package types, to the Increasing  Brewer and the Decreasing  Brewer so as to
permit each Brewer to manufacture its own Product.

REDHOOK SUPPLY, DISTRIBUTION, AND
LICENSING AGREEMENT

<PAGE>

     4. EXAMPLE.

              See below.

<TABLE>
<CAPTION>
----------- ---------- -------- ---------- ---------- ------------ ----------- ------------
                         WID %                WID %
                          OF      WIDMER      TOTAL      REDHOOK     RH % OF
  BASE       WIDMER     TOTAL     BBLS        BBLS       BARRELS      TOTAL      REDHOOK
   YEAR     BBLS SOLD    BUS      MANUF       MANUF       SOLD         BUS      BBLS MANUF
----------- ---------- -------- ---------- ---------- ------------ ----------- ------------
<S>           <C>          <C>    <C>            <C>      <C>             <C>      <C>
   2005       170,000      52%    170,000        52%      160,000         48%      160,000
----------- ---------- -------- ---------- ---------- ------------ ----------- ------------
   2006       150,000      45%    150,000        45%      185,000         55%      185,000
----------- ---------- -------- ---------- ---------- ------------ ----------- ------------
   2007       160,000      47%    180,000        53%      180,000         53%      160,000
----------- ---------- -------- ---------- ---------- ------------ ----------- ------------
   2008       170,000      49%    165,000        48%      175,000         51%      180,000
----------- ---------- -------- ---------- ---------- ------------ ----------- ------------
   2009       140,000      44%    135,000        42%      180,000         56%      185,000
----------- ---------- -------- ---------- ---------- ------------ ----------- ------------
   2010       130,000      41%    135,000        43%      185,000         59%      180,000
----------- ---------- -------- ---------- ---------- ------------ ----------- ------------
   2011       100,000      33%    105,000        35%      200,000         67%      195,000
----------- ---------- -------- ---------- ---------- ------------ ----------- ------------
   2012       120,000      39%    135,000        44%      190,000         61%      175,000
----------- ---------- -------- ---------- ---------- ------------ ----------- ------------
   2013       150,000      45%    140,000        42%      185,000         55%      195,000
----------- ---------- -------- ---------- ---------- ------------ ----------- ------------
   2014       170,000      50%    165,000        49%      170,000         50%      175,000
----------- ---------- -------- ---------- ---------- ------------ ----------- ------------

----------- ---------- -------- ---------- ---------- ------------ ----------- ------------
10 yr Avg     146,000      45%    148,000        45%      181,000         55%      179,000
----------- ---------- -------- ---------- ---------- ------------ ----------- ------------

<CAPTION>
-----------  --------- ----------------------- ----------------------- -------------------------
                RH %                                                    DECLINING BREWER OPTION
               TOTAL            WIDMER                 REDHOOK           (DURING OPTION YEAR)
  BASE         BBLS    ----------------------  ----------------------  -------------------------
   YEAR        MANUF      +/(-)        BASE       +/(-)       BASE       WIDMER*      REDHOOK*
-----------  --------- ----------- ----------- ---------- ------------ ----------- -------------
<S>           <C>          <C>    <C>            <C>      <C>             <C>      <C>
  2005            48%
-----------  --------- ----------- ----------- ---------- ------------ ----------- -------------
   2006           55%    (20,000)     170,000     25,000      160,000      20,000
-----------  --------- ----------- ----------- ---------- ------------ ----------- -------------
   2007           47%      10,000     150,000    (5,000)      185,000                     5,000
-----------  --------- ----------- ----------- ---------- ------------ ----------- -------------
   2008           52%      10,000     160,000    (5,000)      180,000                     5,000
-----------  --------- ----------- ----------- ---------- ------------ ----------- -------------
   2009           58%    (30,000)     170,000      5,000      175,000       5,000
-----------  --------- ----------- ----------- ---------- ------------ ----------- -------------
   2010           57%    (10,000)     140,000      5,000      180,000       5,000
-----------  --------- ----------- ----------- ---------- ------------ ----------- -------------
   2011           65%    (30,000)     130,000     15,000      185,000      15,000
-----------  --------- ----------- ----------- ---------- ------------ ----------- -------------
   2012           56%      20,000     100,000   (10,000)      200,000                    10,000
-----------  --------- ----------- ----------- ---------- ------------ ----------- -------------
   2013           58%      30,000     120,000    (5,000)      190,000                     5,000
-----------  --------- ----------- ----------- ---------- ------------ ----------- -------------
   2014           51%      20,000     150,000   (15,000)      185,000                    15,000
-----------  --------- ----------- ----------- ---------- ------------ ----------- -------------

-----------  --------- ----------- ----------- ---------- ------------ ----------- -------------
10 yr Avg         55%                                                      45,000        40,000
-----------  --------- ----------- ----------- ---------- ------------ ----------- -------------
</TABLE>

ASSUMPTIONS:

1.  The Declining  Brewer is able to  manufacture  all types of packaging of the
    Increasing Brewer.

2.  The Declining  Brewer  exercises the Declining Brewer Option each time it is
    available.

3.  Company always assigns the Option Quantity Products of the Increasing Brewer
    to the Declining Brewer.

REDHOOK SUPPLY, DISTRIBUTION, AND
LICENSING AGREEMENT

<PAGE>

                                  SCHEDULE 6.2

                         REDHOOK PRODUCT SPECIFICATIONS

                                  SEE ATTACHED.

REDHOOK SUPPLY, DISTRIBUTION, AND
LICENSING AGREEMENT

<PAGE>

REDHOOK SUPPLY, DISTRIBUTION, AND
LICENSING AGREEMENT
REDHOOK PRODUCT PROFILE FOR SALES/MARKETING 10/13/03

<TABLE>
<CAPTION>
-------------------------- ------------ ------------- ---------------------- ------------- -------------
          BRAND              ALCOHOL      ALCOHOL           ORIGINAL             RDF          IBU'S
                              (wt%)        (vol%)            GRAVITY
-------------------------- ------------ ------------- ---------------------- ------------- -------------
<S>                           <C>           <C>          <C>                     <C>           <C>
         BLONDE               4.24          5.41         12.57 (1.05077)         66.6          18.3
                           (4.20-4.29)  (5.35-5.48)       (12.41-12.79)      (66.1-67.4)   (16.7-19.6)
           BHP                4.10          5.23         12.34 (1.04980)         65.7          32.6
                           (4.03-4.23)  (5.15-5.39)       (12.09-12.63)      (63.6-67.3)   (28.4-36.6)
           ESB                4.52          5.77         13.46 (1.05454)         66.2          24.3
                           (4.41-4.64)  (5.64-5.92)       (13.26-13.57)      (64.6-68.0)   (19.4-27.3)
           IPA                5.11          6.51         14.21 (1.05773)         70.5          38.5
                           (4.97-5.33)  (6.34-6.79)       (13.85-14.40)      (68.1-73.0)   (34.0-41.0)
         CHINOOK              4.46          5.70         13.52 (1.05479)         65.1          28.1
       COPPER ALE          (4.41-4.50)  (5.64-5.75)       (13.30-13.72)      (64.6-65.4)   (23.2-32.2)
         SUNRYE               3.66          4.65          9.76 (1.03905)         74.7          20.0

        NUT BROWN             4.36          5.57         13.54 (1.05487)         63.5          21.2
                           (4.18-4.53)  (5.35-5.79)       (13.32-13.76)      (62.1-64.9)   (18.8-23.6)
         WH '03               4.67          5.98         14.19 (1.05765)         64.8          45.4

-------------------------- ------------ ------------- ---------------------- ------------- -------------

<CAPTION>

-------------------------- ------------ -------------- ----------------------- --------------
          BRAND               COLOR       CALORIES         CARBOHYDRATES          PROTEIN
                              (SRM)       / 12 oz.            (g/12oz)           (g/12oz)
-------------------------- ------------ -------------- ----------------------- --------------
<S>                           <C>           <C>          <C>                     <C>
         BLONDE                7.0          166.4              13.13               2.19
                            (6.7-7.3)     (164-169)        (12.59-13.58)        (2.02-2.44)
           BHP                47.0          163.2              12.92               2.53
                           (41.5-52.4)    (159-168)        (12.12-14.34)        (2.22-2.89)
           ESB                13.2          179.0              14.15               2.58
                           (11.9-13.9)    (176-181)        (13.45-14.62)        (2.35-2.94)
           IPA                 8.4          188.1              12.66               2.78
                            (7.7-9.6)     (182-191)        (10.68-13.80)        (2.39-3.09)
         CHINOOK              12.0           180               14.63               2.46
       COPPER ALE          (10.7-13.3)    (177-183)        (14.36-14.90)        (2.40-2.51)
         SUNRYE                4.6           125                7.12               1.65

        NUT BROWN             31.9          181.0              16.02               2.54
                           (30.2-33.5)    (178-184)
         WH '03               34.1           190               15.54               2.90

-------------------------- ------------ -------------- ----------------------- --------------
</TABLE>

IBU's (International Bitterness Units)
RDF (Real Degree of Fermentation)
SRM (Standard Reference Method)

These numbers are provided by Redhook Quality Control, Woodinville Brewery. They
are  presented as average  (minimum - maximum)  based on the results of WDV beer
analyzed by A-B Brewing Technical  Services during year 2000 to 2003. This info.
may be used by the Redhook Sales Force and their distributors.

REDHOOK SUPPLY, DISTRIBUTION, AND
LICENSING AGREEMENT

<PAGE>

<TABLE>
<CAPTION>
                                  SCHEDULE 6.3

                         INITIAL REDHOOK PRODUCT PRICES

---------------------------------------- ------------------------------------------- ---------------------------------
            2004 Net Sales                                Draught                       Bottle Per Case Equivalent
---------------------------------------- ------------------------------------------- ---------------------------------
<S>                                       <C>                                        <C>
Widmer                                                       *                                      *
---------------------------------------- ------------------------------------------- ---------------------------------
Redhook                                                      *                                      *
---------------------------------------- ------------------------------------------- ---------------------------------
Total                                                        *                                      *
                                                             =                                      =
---------------------------------------- ------------------------------------------- ---------------------------------
Average/2                                                    *                                      *
---------------------------------------- ------------------------------------------- ---------------------------------
Average Price @ 59%                                          *                                      *
---------------------------------------- ------------------------------------------- ---------------------------------
Plus Base Excise Tax                                         *                                      *
---------------------------------------- ------------------------------------------- ---------------------------------
2005 Transfer Price                                          *                                      *
---------------------------------------- ------------------------------------------- ---------------------------------
</TABLE>

* CONFIDENTIAL TREATMENT REQUESTED

REDHOOK SUPPLY, DISTRIBUTION, AND
LICENSING AGREEMENTEXHIBIT 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).

                                       2
<PAGE>

         "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

                                       3
<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

                                       4
<PAGE>

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

                                       5
<PAGE>

         "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.

                                       6
<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.

                                       7
<PAGE>

         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.

                                       8
<PAGE>

                  (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.

                                       9
<PAGE>

         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.

                                       10
<PAGE>

                                   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.

                                       11
<PAGE>

                                   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;

                                       12
<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:

                                       13
<PAGE>

                                  (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>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00068-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00068-of-00352.parquet"}]]