PROMISSORY NOTE

 

$500,000

April 24, 2014

Ukiah, California

 

FOR VALUE RECEIVED, MENDOCINO BREWING COMPANY, INC. (“Maker”), a California
corporation, promises to pay to the order of CATAMARAN SERVICES, INC.
(“Holder”), a Delaware corporation, the principal sum of Five Hundred Thousand
Dollars ($500,000) (“Principal”), with interest as defined below.

 

Maker promises to pay interest to Holder from the date of this Note on unpaid
Principal owing from time to time at a rate equal to the lesser of (i) one and
one-half percent (1.50%) per annum above the prime rate offered from time to
time by the Bank of America Corporation in San Francisco, California, or (ii)
ten percent (10%) per annum, until the Principal is fully paid.

 

Maker shall make payments in lawful money of the United States of America and in
immediately available funds. Computations of interest shall be based on a year
of 365 days but shall be calculated for the actual number of days in the period
for which interest is charged.

 

All payments under this Note shall be made to Holder as directed by the Holder
in writing.

 

This Note may be prepaid in whole or in part, without penalty, at the option of
Maker and without the consent of Holder. All payments shall be applied first to
accrued and unpaid interest, and then to the principal balance outstanding.

 

All payments made pursuant to this Note are expressly subject to the following
conditions:

 

  a) No portion of Principal or interest on this Note will be payable or paid
until either 1) the Obligation (as that term is defined in the Credit and
Security Agreement dated as of June 23, 2011, as amended, modified, or
supplemented from time to time, between Maker, Releta Brewing Company LLC, and
Cole Taylor Bank) to Cole Taylor Bank has been paid and satisfied in full; or 2)
the repayment is a Permitted Payment (as defined below).         b) If Maker
receives a cash contribution for the purchase of equity from its majority
shareholder (the “Investment”), Maker may use that portion (and only that
portion) of the Investment that is in excess of $500,000 (“Excess Contribution”)
to make payment on this Note in an amount not greater than the amount of the
Excess Contribution (“Permitted Payment”).

 

The full payment of this Note, and accompanying interest, shall be due within
six (6) months of the date of this Note, subject to the Maker having received an
Investment sufficient to pay the Note either through 1) Permitted Payments, or
2) a complete satisfaction of both the Obligation to Cole Taylor Bank and the
Note. Should Maker not be able to satisfy this Note at the end of the original
six (6) month term, this Note shall be automatically extended for additional six
(6) month terms until such time as Maker receives such an Investment sufficient
to satisfy this Note.

 

 

 

  

This Note is unsecured, not subject to any guarantee by any third party, nor has
Maker granted a security interest in any of its property to Holder in relation
to this Note.

 

Maker waives presentment, protest, and demand, notice of protest, notice of
demand, and dishonor, and notice of nonpayment of this Note. Except for the
right to demand and receive payments of the Permitted Payments, if any, Holder
agrees to take no enforcement action on this Note until the Obligation to Cole
Taylor Bank has been paid and satisfied in full. Maker expressly agrees that
this Note or any payment under this Note may be extended by Holder from time to
time without in any way affecting the liability of Maker. Further, for the
benefit of Cole Taylor Bank, this Note may not be amended or modified without
the prior written consent of Cole Taylor Bank.

 

This Note shall be governed by the laws of the State of California excluding its
conflict of law rules.

 

The prevailing party in any action (i) to collect payment on this Note, or (ii)
in connection with any dispute that arises as to its enforcement, validity, or
interpretation, whether or not a legal action is instituted or prosecuted to
judgment, shall be entitled to all costs and expenses incurred, including
attorneys’ fees.

 

If any provision or any word, term, clause, or part of any provision of this
Note shall be invalid for any reason, the same shall be ineffective, but the
remainder of this Note and of the provision shall not be affected and shall
remain in full force and effect.

 

Except as those terms and conditions concerning Cole Taylor Bank or the
Obligation, any of the terms or conditions of this Note may be waived by Holder,
but no such waiver shall affect or impair the rights of Holder to require
observance, performance, or satisfaction, either of that term or condition as it
applies on a subsequent occasion or of any other term or condition of this Note.

 

IN WITNESS WHEREOF, Maker, by its appropriate officers duly authorized, has
executed this promissory note on the day and year first written above.

 

MAKER   Accepted and Agreed:       MENDOCINO BREWING COMPANY, INC.   CATAMARAN
SERVICES, INC.A       [logo1.jpg]     [logo2.jpg] Chief Financial Officer  
Secretary Mendocino Brewing Company, Inc.   Catamaran Services, Inc. 1601,
Airport Road,   2711, Centerville Road, Suite 400 Ukiah, CA 95482   Wilmington,
DE 19808