Contract Brewing Agreement	9 Months Ended
Feb. 28, 2018
Notes to Financial Statements
Contract Brewing Agreement	NOTE 4 - CONTRACT BREWING AGREEMENT On December 2, 2014, Biere Brisset International Inc., a company incorporated under the Canada Business Corporations Act which is a wholly owned subsidiary of the Company, entered into a Manufacturing and Distribution Agreement with a company incorporated in Quebec which does business under the name “Breuvages Blue Spike” (“Blue Spike”). The agreement sets forth minimum quantities which Blue Spike will manufacture for the Company, manufacturing costs and a gross margin upon which the Company will earn its commission. Blue Spike is responsible for brewing, labeling and distributing Broken 7 beer for the Company. The Company, with the approval of Blue Spike, can continue selling products manufactured by Blue Spike in the Company's own distribution network. Products sold within the Company's own distribution network are subject to higher margins for the Company. The Company is responsible, at its expense, for the marketing and promotion of Broken 7, and has agreed to invest 25% of the gross margin of its products for marketing and advertising. The Company granted Blue Spike a right of first refusal if the Company sells or transfers all or a portion of its rights in its brands. If the Company is sold during the term of the agreement, the Company is obligated to pay Blue Spike 2.5% of the purchase price for every $250,000 of product sales, up to $5 million. The agreement also provides for various payment returns to Blue Spike if the Company is sold when the agreement is no longer in effect, depending on when and why the agreement is no longer in effect. The agreement is for an initial term of five years and is automatically renewed for five years unless either party notifies the other of its intention not to renew 180 days prior to the expiration of the term. The Company granted Blue Spike a right of first refusal to manufacture or act as exclusive agent for the distribution and sale of its products in other territories other than Quebec. On April 1, 2016, BBII amended the manufacturing and distribution agreement (the “Amendment”) with Blue Spike to clarify sections 2.1.6 “BBII Margin”, 5.1.4 Limitation, 5.2.1 Price, 6.2 Distribution Network, 6.7 Price of Products, and 6.8 BBII Sales Network. The Amendment also lists new Broken 7 products under Schedules A and D, and includes the updated BBII Margins for new Broken 7 products into Schedule F. For all the terms of the Manufacturing and Distribution Agreement, reference is hereby made to such Agreement annexed hereto as Exhibit 10.32. All statements made herein concerning such document are qualified by references to said exhibit.

Contract Brewing Agreement

9 Months Ended

Feb. 28, 2018

NOTE 4 - CONTRACT BREWING AGREEMENT

On December 2, 2014, Biere Brisset International Inc., a company incorporated under the Canada Business Corporations Act which is a wholly owned subsidiary of the Company, entered into a Manufacturing and Distribution Agreement with a company incorporated in Quebec which does business under the name “Breuvages Blue Spike” (“Blue Spike”). The agreement sets forth minimum quantities which Blue Spike will manufacture for the Company, manufacturing costs and a gross margin upon which the Company will earn its commission.

Blue Spike is responsible for brewing, labeling and distributing Broken 7 beer for the Company. The Company, with the approval of Blue Spike, can continue selling products manufactured by Blue Spike in the Company's own distribution network. Products sold within the Company's own distribution network are subject to higher margins for the Company. The Company is responsible, at its expense, for the marketing and promotion of Broken 7, and has agreed to invest 25% of the gross margin of its products for marketing and advertising.

The Company granted Blue Spike a right of first refusal if the Company sells or transfers all or a portion of its rights in its brands. If the Company is sold during the term of the agreement, the Company is obligated to pay Blue Spike 2.5% of the purchase price for every $250,000 of product sales, up to $5 million. The agreement also provides for various payment returns to Blue Spike if the Company is sold when the agreement is no longer in effect, depending on when and why the agreement is no longer in effect. The agreement is for an initial term of five years and is automatically renewed for five years unless either party notifies the other of its intention not to renew 180 days prior to the expiration of the term. The Company granted Blue Spike a right of first refusal to manufacture or act as exclusive agent for the distribution and sale of its products in other territories other than Quebec.

On April 1, 2016, BBII amended the manufacturing and distribution agreement (the “Amendment”) with Blue Spike to clarify sections 2.1.6 “BBII Margin”, 5.1.4 Limitation, 5.2.1 Price, 6.2 Distribution Network, 6.7 Price of Products, and 6.8 BBII Sales Network. The Amendment also lists new Broken 7 products under Schedules A and D, and includes the updated BBII Margins for new Broken 7 products into Schedule F. For all the terms of the Manufacturing and Distribution Agreement, reference is hereby made to such Agreement annexed hereto as Exhibit 10.32. All statements made herein concerning such document are qualified by references to said exhibit.