MASTER DISTRIBUTOR AGREEMENT

Distribution Agreement

You are currently viewing:

This Distribution Agreement involves

REDHOOK ALE BREWERY INC

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.

Title: MASTER DISTRIBUTOR AGREEMENT
Governing Law: Washington Date: 7/2/2004
Industry: Beverages (Alcoholic) Sector: Consumer/Non-Cyclical

EXHIBIT 10.2

MASTER DISTRIBUTOR AGREEMENT

BETWEEN

REDHOOK ALE BREWERY, INCORPORATED

AND

ANHEUSER-BUSCH, INCORPORATED

<PAGE>

MASTER DISTRIBUTOR AGREEMENT

THIS MASTER DISTRIBUTOR AGREEMENT (the "Agreement") is made as of July

1, 2004 by and between REDHOOK ALE BREWERY, INCORPORATED having its principal

place of business at 14300 NE 145th Street, Suite 210, Woodinville, Washington

98072-9045 ("Redhook") 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, Redhook brews and markets products in the United States, with

the exception of eleven states in which its products are marketed by an

affiliate, Craft Brands Alliance LLC.

WHEREAS, ABI and Redhook 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 Redhook desire Redhook 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, Redhook 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).

<PAGE>

"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.

"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.

"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 Redhook 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).

"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:

* CONFIDENTIAL TREATMENT REQUESTED

<PAGE>

(a) the Scheduled Price for such Product; plus

(b) the Margin.

"INCOMPATIBLE CONDUCT" shall mean any act or omission of Redhook 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.

"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.

* CONFIDENTIAL TREATMENT REQUESTED

<PAGE>

"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 Redhook 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

Redhook 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 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 Redhook 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 Redhook 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.

<PAGE>

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

"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.

"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 all states and territories in the United States

of America other than Alaska, Arizona, California, Colorado, Hawaii, Idaho,

Montana, New Mexico, Nevada, Oregon and Wyoming, and shall exclude any

jurisdiction subsequently excluded from the scope of this Agreement pursuant to

Section 11.11 hereof.

"WHOLESALER SUPPORT CENTER COSTS" or "WSC COSTS" with respect to any

Product shipped by Redhook 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

Redhook hereby grants to ABI and ABI hereby accepts from Redhook 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

* CONFIDENTIAL TREATMENT REQUESTED

<PAGE>

this Section. ABI shall not, without the prior written consent of Redhook, sell

any Product acquired hereunder outside the Territory or to any party other than

an Alliance Wholesaler. Redhook agrees to not sell any Product to any other

Person in the Territory other than ABI, Affiliated Wholesalers and Non-Alliance

Wholesalers except at any brew pub situated at a Redhook brewery. At the option

of ABI and the respective Affiliated Wholesaler, any Affiliated Wholesaler may

become an Alliance Wholesaler, and Redhook shall execute any documents or

instruments reasonably requested by ABI to effectuate this.

ARTICLE III

PURCHASE AND SALE OF PRODUCTS

Redhook agrees to sell to ABI, and ABI agrees to purchase from Redhook

and re-sell to the Alliance Wholesalers, the quantities of Products ordered by

ABI from time to time hereunder. Redhook 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 Redhook assumes full responsibility for

creating demand for the Products. Except for Product shipped directly by Redhook

as set forth in Section 11.07, (i) all purchases of Product by ABI from Redhook

shall be on an F.O.B. ABI Distribution Facility, freight prepaid basis, and (ii)

Redhook 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.

ARTICLE IV

PRICING OF PRODUCTS

4.01 The price for all Product sold by Redhook 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 Redhook

to ABI for Products shipped to a WSC shall equal (a) 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 Redhook to ABI for Product

shipped directly by Redhook to Alliance Wholesalers shall equal (a)(i) 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").

<PAGE>

Redhook shall establish the initial Scheduled Price for each Product

sold by Redhook to ABI. Redhook 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 Redhook any Additional Price Component which is due

Redhook with respect to sales of Product by ABI to Alliance Wholesalers during

such calendar quarter.

4.03 Redhook 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 Redhook

shall be implemented in strict accordance with the procedures set forth in

ATTACHMENT E attached hereto.

4.04 ABI shall remit payment of the Purchase Price to Redhook 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 from Redhook pursuant to the terms of this

Agreement or otherwise. 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

Redhook, ABI shall assign all of its rights to Redhook against such Alliance

Wholesaler relating to the purchase price for such Products.

<PAGE>

4.05 Notwithstanding the foregoing provisions of this Article IV,

Redhook 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, Redhook 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 Redhook and ABI would

have received had the above pricing mechanisms been in effect. In particular,

the parties agree that notwithstanding the other provisions in this Agreement,

in the State of Washington, AB shall acquire no title to any Product to be sold

and Redhook shall sell Product directly to wholesalers pursuant to agreements

between such wholesalers and Redhook at prices and on terms determined by

Redhook and such wholesalers.

4.06 (a) Within 45 days after the end of each calendar quarter, Redhook

shall deliver a report setting forth the aggregate volume, in case -

equivalents, of Product: (i) sold by Redhook in the Territory; and (ii) sold by

Redhook in the Territory during the respective calendar quarter in 2003.

(b) Contemporaneously with the delivery of such report,

Redhook shall pay to ABI the Margin for all Product sold by Redhook to

Non-Alliance Wholesalers or Affiliated Wholesalers during such calendar quarter.

quantity of Products sold in the Territory by Redhook exceeds the quantity of

Products (in each case determined on a case equivalent basis) sold by Redhook in

the respective calendar quarter in 2003 in the Territory, Redhook shall pay to

ABI the Incremental Margin for all Product sold by Redhook 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 Redhook in the Territory in such

calendar year exceeds the

<PAGE>

aggregate volume, in case-equivalents of Product sold by Redhook in the

Territory during 2003 does not equal the amounts paid by Redhook 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 Redhook any amount by which the payments

previously made by Redhook pursuant to Section 4.06(c) exceed such product or

Redhook shall pay to ABI any amount by which the payments previously made by

Redhook 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 for the calendar quarter for which the Margin is calculated and those

sales derived from those same sales areas 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 Redhook in the Territory in each calendar

quarter of 2003 (excluding the State of Washington). The parties agree that for

purposes of determining Incremental Margin to be paid by Redhook 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.

(f) For purposes of Section 4.06, sales by Redhook in the

State of Washington shall not affect the computation of Margin or Incremental

Margin, and Redhook is not required to deliver any reports reflecting sales in

the State of Washington.

4.07 (a) Within 30 days after the end of each calendar month, ABI shall

notify Redhook of the WSC Fees payable with respect to the Product delivered by

Redhook for such month, and also the product delivered by Redhook to each WSC

and the fees incurred with respect to each WSC. Redhook shall pay such WSC Fees

within15 days after its receipt of notification.

(b) Within 45 days after the end of each calendar year, ABI shall

notify Redhook of the fees charged by each WSC to which Redhook may ship Product

during such calendar year.

<PAGE>

be paid to a WSC, in either case to which Redhook may be reasonably expected to

ship Product, ABI shall notify Redhook 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 Redhook 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 Redhook 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. Redhook 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 Redhook, provided, however, that such determination shall be

subject to the audit provisions of Article XVII below.

ARTICLE VI

REDHOOK'S TRADEMARKS

6.01 ABI shall not acquire any right in any of the Redhook 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

<PAGE>

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 Redhook

shall have the right to require ABI and the Alliance Wholesalers 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 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 Redhook. The foregoing sentence does not affect ABI's rights in other marks

it may use or adopt. At the request of Redhook, ABI will execute an instrument,

in a form agreeable to Redhook and ABI, 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. Redhook

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 Redhook of any and all infringements of

the Intellectual Property pertaining to the Products that may come to ABI's

attention and shall assist Redhook in taking such action against said

infringements as Redhook, in its sole discretion, may decide. All expenses and

costs of such legal action, including those of ABI, shall be paid by Redhook.

<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 Redhook 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;

<PAGE>

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.

(g) The Master Distributor Agreement between Craft Brands

Alliance LLC and ABI dated the date hereof is terminated or the distribution

thereunder of the products of Redhook is terminated pursuant to its terms.

7.03 ABI shall have the right and option to terminate this Agreement at

any time upon six months' prior written notice to Redhook, in the event:

(i) Redhook engages 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 Redhook;

(ii) any ABI Competitor or Affiliate thereof acquires

10% or more of the outstanding equity securities in Redhook, and one or more

officers, designees or agents of such Person becomes a member of the Board of

Directors of Redhook;

(iii) The current chief executive officer of Redhook

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

<PAGE>

(iv) Redhook shall merge or consolidate into or with

any other Person or any other Person shall merge or consolidate into or with

Redhook; or

(v) 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 any shareholder of Redhook as a result of the equity

ownership of ABI or its affiliates in Redhook or any equity transaction or

exchange between ABI or its affiliates and Redhook, and Redhook does not

reimburse and indemnify ABI and its corporate affiliates on demand for the

entire amount of such liability and expense.

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 Redhook 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.

<PAGE>

9.03 Except for deliveries made by Redhook 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 Redhook 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.

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 REDHOOK

10.01 Redhook 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

Redhook, the parties understand that Redhook 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 Redhook inventory at Alliance Wholesalers becoming available to ABI, ABI

shall provide such information to Redhook.

10.02 Redhook 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.

<PAGE>

10.03 Redhook shall, or shall cause its Affiliates to, secure and

maintain label registrations in all states in the Territory where Product is

sold.

10.04 Redhook 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, Redhook 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.

10.05 As between Redhook and ABI, Redhook 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 Redhook shall use commercially reasonable efforts to obtain and

maintain all licenses, permits and other authorizations that are necessary for

Redhook to sell and distribute the Products in the Territory.

ARTICLE XI

ADDITIONAL AGREEMENTS

11.01 Redhook shall at all times maintain its corporate existence, and

will do or cause to be done all things necessary to prese

SITE SEARCH

AGREEMENTS / CONTRACTS

CLAUSES

Search Contract Clauses >>

Browse Contract Clause Library>>

Get Email Updates