                                 CODE OF VIRGINIA

SALE OF BREWERY (§ 4.1-504)

A. Except for discontinuance of a brand or for good cause as provided in &#xA7;
4.1-505, the purchaser of a brewery shall become obligated to all of the terms
and conditions of the selling brewery&#8217;s agreements with distributors in
effect on the date of purchase. The purchaser of a brand from a brewery shall
become obligated to all of the terms and conditions of the selling
brewery&#8217;s agreement with distributors concerning that brand. Whenever such
a purchase of a brand results in the creation of a dual distributorship, the
provisions of subdivisions 1 and 2 of subsection B will determine the
distribution rights to such brand or any extension thereof. For the limited
purpose of making such determination, the brewery selling such brand shall be a
nonsurviving brewery and the purchaser shall be a surviving brewery.

B. For purposes of this section, when a purchase of a brewery by or on behalf of
another brewery causes the selling brewery to cease to exist as an independent
legal entity, the selling brewery shall be regarded as a nonsurviving brewery
and the brewery on whose behalf the purchase was made shall be regarded as a
surviving brewery. The following rules shall apply in order to determine (i) the
distribution rights to any brands which are first marketed in the Commonwealth
by the surviving brewery on or after July 1, 1985, with respect to a dual
distributorship created prior to July 1, 1985, and (ii) the distribution rights
to any brands, regardless of when they were first marketed in the Commonwealth,
with respect to a dual distributorship created on or after July 1, 1985:

   1. If the surviving brewery distributes in the Commonwealth any brand or
   brands of the nonsurviving brewery which that brewery marketed in the
   Commonwealth at any time during the one-year period ending on the day the
   purchase agreement was made, these brands shall be distributed through those
   beer wholesalers who were distributors in the Commonwealth for the
   nonsurviving brewery. Any brands which the surviving brewery had marketed in
   the Commonwealth prior to the purchase shall be distributed through those beer
   wholesalers who were wholesalers of the surviving brewery prior to the
   purchase.

   2. If the surviving brewery decides to market in the Commonwealth a new brand
   which is clearly an extension of a brand already assigned to beer wholesalers
   in the Commonwealth, the new brand shall be distributed through those
   wholesalers who distribute the brand of which the new brand is an extension.

   3. If the surviving brewery decides to introduce in the Commonwealth a new
   brand which was not marketed in the Commonwealth at any time during the
   one-year period ending on the date the purchase agreement was made and which
   is not a brand extension, the surviving brewery shall market the new brand
   either through a distributor of the nonsurviving brewery or through a
   distributor who was a distributor of the surviving brewery prior to the
   purchase, as the brewery may see fit in any territory.

C. Subsection B shall not apply to determine distributorship rights to any
brands or brand extensions which were marketed in the Commonwealth prior to July
1, 1985, with respect to any dual distributorship created prior to July 1, 1985.

HISTORY: 1985, c. 549, § 4-118.6:1; 1993, c. 866.