CRAFT BREW ALLIANCE, INC. (NASDAQ:BREW) Files An 8-K Entry into a Material Definitive Agreement

CRAFT BREW ALLIANCE, INC. (NASDAQ:BREW) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01

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Entry into a Material Definitive Agreement.

On January 30, 2018, Craft Brew Alliance, Inc. (“CBA” or "we"), entered into a Contract Brewing Agreement (the “Brewing Agreement”) with Anheuser-Busch Companies, LLC (“ABC”), an affiliate of Anheuser-Busch, LLC (“AB”), to which we will brew, package, and palletize certain malt beverage products of AB's craft breweries at CBA's Portland, Oregon, and Portsmouth, New Hampshire, breweries as selected by ABC. Under the terms of the Brewing Agreement, ABC will pay CBA a per barrel fee that varies based on the annual volume of the specified product brewed by CBA, plus (a) our actual incremental costs of brewing the product and (b) certain capital costs and costs of graphics and labeling that we incur in connection with the brewed products.

In addition to the Brewing Agreement, AB distributes our malt beverage products throughout the United States under a Master Distributor Agreement between CBA and AB, as amended August 23, 2016 (the "Master Distributor Agreement"). It has also agreed to brew up to 300,000 barrels of our mutually agreed products annually in its facilities under a separate contract brewing agreement under which brewing began at AB's brewery in Fort Collins, Colorado, during the second quarter of 2017. We also entered into an International Distribution Agreement with an affiliate of AB in August 2016, to which it is serving as the sole and exclusive distributor of our malt beverage products in jurisdictions outside the United States, subject to the terms and conditions of our agreement with our other international distributor, CraftCan Travel LLC, and certain other limitations. AB also has certain contractual rights under an Amended and Restated Exchange and Recapitalization Agreement relating to its ownership of approximately 31.5% of our outstanding shares of common stock, including the right to designate two members of our board of directors and limitations on our ability to take certain actions without AB's prior consent. For additional information regarding our relationship with AB and its affiliates, please see Note17 to our consolidated financial statements included in Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2016.

The Brewing Agreement will expire on December 31, 2018, unless the arrangement is extended at the mutual agreement of the parties. The Brewing Agreement contains specified termination rights, including, among other things, the right of either party to terminate the Brewing Agreement if (i) the other party fails to perform any material obligation under the Brewing Agreement or any other agreement between the parties, subject to certain cure rights, or (ii) the Master Distributor Agreement is terminated.

The foregoing description of the Brewing Agreement does not purport to be complete, and is qualified in its entirety by reference to the full text of the Brewing Agreement, a copy of which is attached hereto as Exhibit10.1 and incorporated herein by reference.

Item 9.01Financial Statements and Exhibits.


Exhibits: The exhibit listed below is filed with this report:

Exhibit 10.1Contract Brewing Agreement between Anheuser-Busch Companies, LLC and Craft Brew Alliance, Inc. dated January 30, 2018 †

† Confidential treatment has been requested with respect to portions of this exhibit. A complete copy of the agreement, including the redacted terms, has been separately filed with the Securities and Exchange Commission.

EX-10.1 2 exhibit101contractbrewinga.htm EXHIBIT 10.1 Exhibit Exhibit 10.1CONTRACT BREWING AGREEMENT This Contract Brewing Agreement (this “Agreement”) is entered into by and between Anheuser-Busch Companies,…
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Craft Brew Alliance, Inc. is a craft brewing company that is engaged in brewing, branding and bringing to market American craft beers. The Company operates through two segments: Beer Related operations, which include the brewing operations and related domestic and international beer and cider sales of its Kona, Widmer Brothers, Redhook and Omission beer brands, and Square Mile cider brand, and Pubs operations, which include its approximately five pubs, over four of which are located adjacent to its Beer Related operations, as well as other merchandise sales, and sales of its beers directly to customers. The Company’s portfolio of brands includes the Kona Brewing Company, Widmer Brothers Brewing, Redhook Brewery, Omission Beer and Square Mile Cider Company brand families, along with partner brands Appalachian Mountain Brewery, Cisco Brewers and Resignation Brewery. Its brews its beers using hops, malted barley, wheat, rye and other natural traditional and nontraditional ingredients.

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