STONE BREWING CO.

noun
1. A craft brewer known for making distinctive, big character beer. 2. The tenth-largest craft brewery in the United States: Stone Brewing Co. produced 213,000 barrels of beer in 2013. 3. A private company with core operations in brewing, packaging, and distribution, with additional operations in hospitality and retail: a trip to Stone Brewing Co. see also: Stone Company Store, Stone World Bistro & Gardens, Stone Distributing Co.

ORIGIN Late 20th century in Escondido, California (San Diego County)

A MESSAGE FROM THE COFOUNDERS

Stone Brewing Co. has come a long way since we opened in 1996. We have grown from a small microbrewery with just two founders into the tenth-largest craft brewery in the United States, employing nearly 900 amazing men and women. Stone beers are now distributed in 40 states and seven countries. From the beginning, our goal has been to brew outstanding, unique beers while maintaining an unwavering commitment to sustainability, business ethics, and the art of brewing. We dont just make beer; we make craft beer. That means were independently owned, comparatively small, and use traditional brewing methods and ingredients. We focus exclusively on making distinctive, high-quality beers that taste nothing like mass-produced lagers. The purpose of this booklet is to acquaint you with our concept and serve as a Request For Proposal for a new Stone Brewing Co. location East of the Mississippi. If you believe your community has the right combination of elements to be the new Eastern home of the Stone Brewing Co., we invite you to provide a proposal. We thank you for your time and look forward to hearing from you!

The guy who loves to crank it up.

The guy who sometimes has to say Turn that *@#! down!

STONE BREWING CO. EAST: EXECUTIVE SUMMARY

Stone Brewing Co. is the tenth-largest craft brewery in the United States, headquartered in Escondido, California (San Diego region). Founded in 1996 by Greg Koch and Steve Wagner, Stone today employs nearly 900 talented men and women. In 2013 produced 213,000 barrels of beer and exceeded $135,000,000 in revenue. In addition to its core operations, brewing, packaging, and distribution, Stone owns: Stone World Bistro & Gardens Escondido: farm-to-table restaurant since 2006, winner of awards such as: 2007 Peoples Choice Orchid Award at the San Diego Architectural Foundations annual Orchids & Onions awards 2009 American Society of Landscape Architects Presidents Award San Diego County Supervisor Pam Slater-Prices Sustainability Award in 2009 Stone World Bistro & Gardens Liberty Station: farm-to-table restaurant since May 2013 Winner of the 2013 Peoples Choice Orchid Award at the San Diego Architectural Foundations annual Orchids & Onions awards At 23,500 square feet under roof, it is the largest restaurant in San Diego county Stone Brewing Co. restaurant at the San Diego International Airport Stone Farms: a 19-acre organic farm supplying its Bistros Stone Company Stores: local/community retail stores Stone Distributing Co.: The largest independent craft beer wholesaler in Southern California, representing 35 craft & specialty brands in the marketplace. Stone has experienced tremendous growth in our 17 years and the following is confirmation of that: Annual sales have grown a year-on-year average of 46 percent since the company was founded, making us the fastest-growing brewery in the United States. In 2013, we were recognized by the San Diego Business Journal as one of the regions 100 Fastest-Growing Private Companies for the tenth year in a row (the only San Diego company to ever achieve that distinction) We were named one of Inc. Magazines 5,000 Fastest-Growing Private Companies for the seventh year in a row. In 2011, Ernst & Young named our CEO, Greg Koch, Ernst & Young San Diego County Entrepreneur of the Year. In 2012, the San Diego Business Journal honored Greg as the 2012 Most Admired CEO. The San Diego Business Journal named our Chief Financial Officer Craig Spitz as the 2013 Chief Financial Officer of the Year for a medium privately held company. We are also proud to have grown without compromising our commitment to business ethics. In an industry known for its vigorous and at times unseemly competition, we have embraced collaboration, integrity, and quality as the hallmarks of our business. We view fellow craft breweries as compatriots rather than competitors and, indeed, often provide assistance with their business by serving their beer at our restaurants, distributing their beer, assisting in the design of their brewery, or providing key beer ingredients (e.g., malts, hops) when they are in need. The craft beer industry in the San Diego region has developed into a vibrant community-based industry with more than 78 active breweries. According to a recent National University report, the San Diego Craft brewing industry generated a $300,000,000 direct economic impact, creating 2,796 jobs and contributing enormous tax revenue in a difficult economy. Former San Diego mayor Jerry Sanders stated that Breweries generate one of the highest job multipliers of any of the different industry clusters: 5.7 indirect jobs for each job they create. Stone has become one of the most popular tourist destinations in the San Diego region. In 2012, the Stone Brewing World Bistro & Gardens - Escondido hosted more than 600,000 visitors, and more than 60,000 took our informative and entertaining brewery tour. Our bold, flavorful, and often hop-centric beers have made us known throughout the world. Paramount to our brand is that our beer is always available fresh; each bottle is clearly marked with an expiration date. In 2014 Stone Brewing Co. intends to identify the site for and begin work on our new Eastern US facility. The ideal location will be East of the Mississippi and allow for us to easily be served by our suppliers and for us to easily serve our customers and fans throughout the Eastern half of the US. Beyond a pure focus on creating innovative, fresh craft beer of the highest quality, Stone Brewing Co. follows two additional operating tenets: to create a superior, engaging experience for our customers and to be an integral, beneficial member of the community. Our operations facility will feature a full-production brewery, packaging, distribution and administrative support operations, which will produce beer to be distributed East of the Mississippi, as well as for export. Our Stone World Bistro & Gardens, retail and potential other operations will follow. The entire operation will be staffed with local employees, and we strive to source all materials locally. We seek to establish local business relationships with all necessary partners to initiate and conduct business in the selected location, and with relevant nearby universities to engage in talent and industry development, student internships and potential lab/research initiatives, as we do in San Diego. Capital expenditures are projected to well exceed $20,000,000 for the initial phase of the business plan. Production is projected to exceed 120,000 barrels in the first phase and eventually scale to nearly 500,000. Payroll will grow in number to the low to mid-hundreds with a balanced mix of exempt and non exempt employees as the operations expand. Revenue projected from the facility will exceed $100M in year four and grow over time into hundreds of millions annually. Of course, this excludes the broader economic impact of business partners (including university students, agriculture, heavy equipment, controls/automation, software, IT, logistics and other materials) and patronage of our Stone World Bistro & Gardens locations and stores. Once developed, the Stone World Bistro & Gardens outside area will be beautifully landscaped, and where visitors will be able to enjoy craft beer, dine, and enjoy our gardens. Similar to our Escondido and Liberty Station locations in California, we anticipate the next Stone World Bistro & Gardens becoming a wildly successful destination that the local community and people from throughout the region will visit. Our selection of a location will be based upon a number of factors, including completeness of responses, advantageous operational expenses (e.g., labor, utilities, logistics, etc.), development challenges, availability/ timing, unique attributes (e.g., redeveloped or historic properties, sustainable sites), creativity as well as a significant weighting on incentive/development packages available. If there are any questions that we can answer to help inform your response, please do not hesitate to ask via the contact information provided on page 36. In the meantime, we eagerly await your response. Sincerely,

Pat Tiernan Chief Operating Officer

TABLE OF CONTENTS
STONE BREWING CO. OVERVIEW
Brewery Operations 9 Beers 11 Stone Packaging & Distribution Center 13 Stone World Bistro & Gardens 15 Stone Company Store 17

SITES
Stone World Bistro & Gardens Escondido Stone World Bistro & Gardens Liberty Station 19 23

COMPANY GROWTH 25 COMMUNITY INVOLVEMENT

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SITE REQUIREMENTS 29 Operational Requirements 31 Proposal Response 35

Stone Brewing Co. is made up of four components: brewery operations, Stone packaging and distribution center, Stone World Bistro & Gardens, and Stone Company Store. Each element is a critical in bringing our Stone beer, philosophy, and experience to our fan base and new customers.

A major contender in the United States craft beer market, Stone Brewing Co. currently employs more than 875 people. Our company occupies more than 238,000 sf of brewing, packaging, warehousing, distribution, and office space. Due to ever-increasing demand, our production capacity has been in a state of constant expansion since our inception in 1996. Part of our success can be attributed to our insistence on purchasing the most up-to-date and efficient brewing equipment available. Of the more than 250 craft breweries operating in California, we are one of only two to employ start-of-the-art brewhouse systems manufactured by ROLEC GmbH of Munich, Germany. A major investment of several million dollars, these systems have provided a significant increase in production and efficiency. Using both of our ROLEC systems, we have the capability of brewing up to 1,000 barrels of beer in a single day. In addition, we have separate facilities that produce and package our specialty beers, which include barrel aged, limited release, and sour beers.

Stone IPA named Top-Rated Ale

Consumer Reports Magazine

OVERVIEW
10

FOUR COMPONENTS

BREWERY OPERATIONS

SCORES

We pride ourselves on brewing the beers that we like to drink. Yes, Stone has won prestigious awards and received countless accolades; however, we choose to brew our beers the way we do because we love them. They are unique, big-character beers featuring bold flavors that defy traditional style guidelines and expectations. Our brewing decisions do not take into account cost or focus-group preferences. We reject lowest-common-denominator avor proles and mediocrity. We treat beer as an art form rather than as a commodity. In short, our beers reflect our passion for brewing.

STONE LEVITATION ALE STONE PALE ALE STONE SMOKED PORTER STONE IPA STONE CALI-BELGIQUE IPA STONE RUINATION IPA STONE SUBLIMELY SELF-RIGHTEOUS ALE ARROGANT BASTARD ALE OAKED ARROGANT BASTARD ALE

94 96 99 100 98 100 100 99 99

4.4% 5.4% 5.9% 6.9% 6.9% 7.7% 8.7% 7.2% 7.2%

Stone Brewing Co. has mentored brewmasters and created demand for some seriously offbeat ales.

SPECIAL RELEASES
STONE ANNIVERSARY ALE STONE OLD GUARDIAN BARLEY WINE STONE IMPERIAL RUSSIAN STOUT DOUBLE BASTARD ALE STONE ENJOY BY IPA VARIES 99 100 100 100 VARIES 11.0% 10.5% 10.5% 9.4%

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OVERVIEW
12

BEERS

YEAR-ROUND RELEASES

ABV

Current kegging and bottling capacity per day: Kegging

466 1/2 bbl per day 264 1/6 bbl per day

To keep up with our monumental growth, in 2013 we completed construction of a 60,000 sf state-of-theart bottling and kegging facility next to our current brewery. In addition, this facility houses our quality assurance lab, offices, and some equipment storage. The Stone Packaging Hall is anticipated to achieve LEED Silver certification. One of the key sustainability features of this facility is our grid-tied 360.9 kW DC (318 kW AC) photovoltaic system, which offsets a significant portion of the buildings energy needs.

Reflecting our commitments to collaboration, growing the craft beer category, and mutual economic benefit, Stone also distributes beer from more than thirty U.S. and import craft breweries, providing crucial access to the market for these valuable small- and medium-size businesses. For example, Stone is now the secondlargest U.S. wholesaler for Belgiums famed Duvel brand, and is the largest wholesaler for respected breweries such as AleSmith, Lost Abbey, Russian River, The Bruery, Avery Brewing, Bear Republic, and others.

Bottling line
12 oz = 154,296 per day 22 oz = 66,972 per day

Stone Distributing Co.

287,628 bbl of beer 37 Breweries 530 Brands 2,158 Varieties

Stone Packaging Hall is awarded 2013 - The Roof-Mount Project of the Year Solar Builder Magazine

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OVERVIEW
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STONE PACKAGING AND DISTRIBUTION CENTER

Our Stone World Bistro & Gardens offers a unique dining experience and a reprieve from the hustle and bustle of everyday life. At our Stone World Bistro & Gardens, we provide our fans with the opportunity to explore and enjoy Stone beer in a relaxed, intimate setting framed by our award-winning architecture. The style has been described as industrial-becomingorganic, and it embodies our affinity for melding organic features of reclaimed wood, stone, plant life, and fresh air with industrial elements of metal, concrete, and glass. At our World Bistro & Gardens, we serve food that complements the harmonious nature of the physical surroundings; our restaurants specialize in using locally grown, organic ingredients to create eclectic, world-inspired cuisine. As ambassadors of the craft beer movement, we proudly feature extensive arrays of exceptional craft and specialty beers from all over the world on tap and in bottles. Outstanding wine selections and house-made sodas round out our lineup of world-class artisanal beverages.

Stone World Bistro & Gardens allows us to promote awareness and appreciation of the craft brewing industry and local businesses through the numerous recreational and educational opportunities we provide to our patrons at these locations. Each month we hold Beer University classes and beer pairing events that educate guests while they sample craft beers paired with such diverse foods as sushi, cheese, and chocolates. At these events, we customarily feature foods and goods produced within our region, such as gourmet chocolates from local chocolatiers and fresh-pressed olive oils from local orchards. Our very popular Fresh Dinner series has become an icon of the slow food movement, showcasing food harvested in the morning from local farms and served that evening for dinner. During the summer, we show popular movies outdoors in our gardens, promoting a convivial and relaxed atmosphere where hundreds of local residents congregate for entertainment and socializing.

The arrival of a craft brewery was also often one of the first signs that a neighborhood was changing. From New England to the West Coast, new businesses bubbled up around breweries, drawing young people and creating a vibrant community where families could plant roots and small businesses could thrive. USA Today
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OVERVIEW

STONE WORLD BISTRO & GARDENS

To complement the brewery and World Bistro & Gardens, our Stone Company Store offers a unique retail experience where our fans have the opportunity to purchase year-round beers, special and one-time releases, and periodic archived vintages in bottles, kegs, and growlers. In addition, in our company store, our fans have the ability to purchase Stone Brewing Co. merchandise and gifts ranging from favorite staples to uncommon novelties, including T-shirts, glassware, soap, candles, dog treats, jewelry, books, and more.

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OVERVIEW
18

STONE COMPANY STORE

Stone Brewing World Bistro & Gardens Escondido is an acre of indoor and outdoor dining, events space, and gardens. Our World Bistro has an dynamic and expansive interior and a beautiful open-air patio with a one-acre organic beer garden. In addition, our World Bistro & Gardens proudly specializes in locally grown, small-farm ingredients and features an eclectic menu of world-inspired cuisine and our unique take on comfort food. As strong advocates for environmental responsibility and highquality food, we are now the largest restaurant purchaser of local, smallfarm organic produce in San Diego County. With 32 craft and specialty beers on tap, an extensive wine list, and distinctive banquet and wedding accommodations, our Bistro has become one of the premier culinary destinations in San Diego County. Beyond the food, the San Diego Architectural Foundation awarded the Stone Brewing World Bistro Escondido its coveted People Choice Orchid Award and named it a bold symphony of concrete, stone and steel. This compelling and unique environment reflects our culinary and ethical philosophy.

World Bistro size: 8,500 sf | Outdoor space: 34,000 sf Brewery space: 50,000 sf | Company store space: 1,850 sf

Stone Brewing World Bistro & Gardens Escondido is Americas Best Beer Garden Food & Wine Magazine, 2013
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OVERVIEW SITES

STONE WORLD BISTRO & GARDENS ESCONDIDO

Stone World Bistro & Gardens Escondido received the ASLA Presidents Medal in 2009.
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SITES

ESCONDIDO SITE LAYOUT

The venue opened in May 2013 and encompasses approximately 45,500 sf of indoor dining and brewery space and 43,000 sf of outdoor space, which is made up of outdoor dining, gardens, private events space, a bocce ball court, and an outdoor cinema space. The facility also houses a ten-barrel brewing system that brews original beers separate from our main brewing facility in Escondido.

World Bistro size: 41,750 sf Outdoor space: 43,000 sf Brewery space: 3,750 sf Company store space: 1,250 sf

Stone Brewing World Bistro & Gardens Liberty Station was awarded the 2013 Peoples Choice Orchid.

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SITES
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STONE WORLD BISTRO & GARDENS - LIBERTY STATION

COMPANY GROWTH
Since our founding in 1996, Stone Brewing Co. has been the fastestgrowing brewery in America. From producing 2,100 barrels in our first full year of operation to 213,000 barrels in 2013, we have had to work diligently to keep up with the strong demand for our beers. In addition to the brewery, we also operate Stone Distributing Co., a beer wholesaler in Southern California, delivering beer in 46 refrigerated trucks to more than 5,500 pubs, restaurants, hotels, markets, and grocery stores.

$135,000,000

2013

$103,325,538

2012

$48,404,836

2009

$16,782,217 $940,895
1998

2006

$6,025,318

2002

REVENUE

Stone Brewing Co. [is] considered one of the industry leaders...

MILESTONES
HITTING THE SCENE STONE DISTRIBUTING EXPANSION CONTINUES NEW DIGS FARM-TO-TABLE EATERIES STONE FARMS BEYOND THE BREWHOUSE DECADE OF DECADENCE

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In 1996, Steve and Greg opened Stones doors with a small but eager four-deep employee base and an unflagging determination to brew beers they personally believed in.

In 2000, to further our goal to deliver exceptional beer, we established Stone Distributing. Today, that business gets over two million cases annually to market at the peak of freshness.

Stone is currently sold in 40 states, six countries and one U.S. territory, and continues to expand, quenching the thirst of numerous markets with new, innovative, high-quality beers.

After pushing beyond the limits of our original brewhouse, we built a brand-new, state-of-the-art facility in Escondido, Calif., in 2005, greatly increasing our capacity and brewing abilities.

In 2006, we set out to elevate the dining world through beer, opening Stone Brewing World Bistro & Gardens. Seven years later, we opened a second, larger restaurant near San Diegos bay front.

In 2011, we took over a North San Diego County farm, from which we now supply our brewery restaurants with local, sustainable, ber-fresh meats, poultry, fruits, vegetables, and herbs.

In 2012, we added a second brewhouse, doubling our production capacity, and built an immense Stone Packaging Hall directly south of our brewery, upping our bottling and QA capabilities.

Amongst titans of biochemistry, tourism, engineering, and construction, Stone has consistently ranked among San Diegos 100 fastest-growing businesses and is the first to do so for 10 straight years.

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COMMUNITY INVOLVEMENT
We are dedicated to supporting our community and promoting a culture of social responsibility. Since Stones founding in 1996, we have contributed more than $3 million to charity, and in 2013 alone, we made contributions exceeding $650,000 in value to more than 400 charitable organizations! Over the years, we have raised more than $1,750,000 on behalf of local charitable organizations just through our annual Stone Anniversary Celebration & Invitational Beer Festival. We do support national and regional charities, but the majority of our philanthropic efforts are focused on local groups so that our money goes back to the community where we live and work. In addition to direct donations, we also host numerous fundraisers and charitable events at our two restaurants and provide meeting space for local environmental, social, and community groups. Members of our ownership and management teams also take social responsibility personally and sit on the boards of several local charitable and philanthropic organizations.

As a philanthropic leader in the community, Stone Brewing Co. has raised the bar for other local businesses to get involved in making an impact on the lives of others. Shelly Anguiano Figueroa, CEO

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SITE REQUIREMENTS
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OPERATIONAL REQUIREMENTS
BREWERY OPERATIONS FACILITY
Existing Building, Planned Development, or Undeveloped Land

For consideration by Stone Brewing Co., the site should meet the following standards:
The ideal building would enclose all brewing, packaging, and distribution

operations in one minimum 130,000 sf facility with room to expand within or to an adjacent building or buildings to a maximum of 220,000 sf.
Minimum Utility Requirements Please also provide maximum services available to the site. Electric service 5,200 Amps 480 V Brewery (2,400 A) Packaging (1,600 A) Distribution (1,600 A) Gas service 20,000 CFH (5 psi) Domestic water - 225,000 gal/day. Source should be potable, odor free, and clear. Ideal hardness is 75-300 ppm. Ideal alkalinity is 50-100 ppm. Maximum 100 ppm chloride. Seasonal swings in mineral content are not desirable Wastewater 100,000 gal/day Municipal wastewater facility capable of processing 100,000 gal/day from brewery (5,000 ppm BOD) Other building design/site requirements. Within one mile of major freeway/access routes Low-impedance access to freeway/major routes and lower-impedance freeways desirable Commercial, light industrial, industrial suitable for logistics operations, early/late deliveries and loading operations 8-12 docks, all with levelers; may accept some ramps/grade level as well 33 minimum ceiling clearance Well-lit facility (range 20-60 foot candles minimum), controlled/ programmable desirable, skylights, LED/CFL preferable 12-18 reinforced slab designed for 4000 psi Secure overnight parking for all employees as well as box trucks and 55 trailers

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SITE REQUIREMENTS
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 Stone World Bistro & Gardens and Retail Store Hospitality Operations Facility This will ideally be a part of the Brewery Operations Facility but must at least be directly adjacent. Outdoor Garden/Dining There should be an
outdoor area of one acre that can be permitted for use as an outdoor dining area and improved as an outdoor garden and event space. Indoor Dining/Bar The building should have 15,000-30,000 sf that can be permitted for use as an indoor dining area with a beer and wine bar. Kitchen The building should have 6,000 sf that can be easily converted and permitted for use as a full-service kitchen. The 6,000 sf includes kitchen cold storage, dry storage, and service areas. Retail The building should have 1,500 sf that can be improved as a Stone Company Store. Service Area The building should have 4,000 sf that can be used for deliveries, trash, and storage.

Minimum Utility Requirements Electric service 1,090 A Gas service 5 psi 5,700 CFH Domestic water 80 GPM Sewer 4 into main Wastewater 3,000-gallon grease interceptor Mechanical Minimum 1 ton per 600 sf

BOTH BREWERY AND HOSPITALITY FACILITIES REQUIRE THE FOLLOWING:

On-site Parking Parking area paving and striping in good shape, current with ADA standards, adequate lighting, proper drainage, well-maintained landscape and irrigation, and adequate number of spaces for Stone Brewing Co. employees and guests. Automatic Fire Sprinklers The existing riser and sprinkler system should adequately serve the requirements or the uses listed above with minor modification. Facility IT should be served by multiple ISPs (i.e., Cox, ATT, Verizon, etc.) 1. Facility ISPs should have fiber connections 2. Facility ISP should have a 25-pair cable into the building for analog phone services. 3. Minimum 100 MB

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SITE REQUIREMENTS
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HOSPITALITY FACILITY

Please provide the following information in your proposal: Specific location (exact address). Provide a traffic study for the area specific to the routes that the distribution trucks would take to access major freeways and for the major freeways. Description of the area. Site description for each existing site or site under development. Year built Current and historical use Basic features and any unique/distinguishing characteristics Construction materials and type, including roofs Area (square feet) and dimensions (length, width, and height) Potential for growth (availability of adjacent land/buildings) Existing drawings floor plan, site plan, section Approximate (or exact) asking rent price or whether the site is available underanother arrangement. If a lease, what are the lease terms? Your relationship to the site and why you are in a position to propose it? Availability and reason for its availability. Why Stone Brewing Co. would be a good fit for this location and community? If entitlements are not in place for this type of use, what would the timing and estimated cost be for the approval process? Provide property information: land use/zoning, any planning group oversight, community groups, property tax information, master plan, setbacks, rights of way, historical review requirements, CC&Rs and any other relevant information.

Cost of utilities (gas, water, sewage, electricity) for the area, including any fees associated with wastewater processing. Provide monthly climate averages, such as rain, snow, temperature. Provide an overlay map of the area locating existing businesses, listing their attributes, and giving a general description. Provide a demographic profile for the local population. Provide a biology report for the native vegetation. Provide a list of any nearby quarries. Provide information on the hydrologic system and quality of the domestic water supply, assuring that the available quantities are adequate for our operations 24/7/365. Identify major users of the domestic water supply and identify any planning that includes major users. Ensure that there are contingencies in place if the normal supply chain is interrupted by loss of water or contamination.

Please provide information on existing or possible future environmental and sustainable building features and any available incentives. Please summarize any existing or potential development or operational challenges - regulatory, cost, environmental, transportation, utilities, demographic, or other. Stone Brewing Co. will evaluate all proposals and prioritize them based on the strengths of their features and the feasibility for development. We will then reach out to owners of the leading proposals to request additional information and/or arrange site visits. Thank you, and we look forward to receiving your proposal! If you have questions, please contact: Randy Pruitt randy.pruitt@stonebrewing.com (760) 294-7899 ext.1808 All proposals should submitted by March 15, 2014 to: Email: eastcoastrfp@stonebrewing.com Mailing Address: 2120 Harmony Grove Drive Escondido, CA 92029

Known/available development incentives private, local, state, federal, or other. Known hazardous materials or contamination caused by current or past use and potential required remediation. If there is any remediation required, how will it be financed and executed? Provide Existing Phase I, Phase II, soils report, title report (and copies of schedule B documents), ALTA survey, civil survey, and any relevant closure documents if available.

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SITE REQUIREMENTS
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PROPOSAL RESPONSE