PROMISSORY NOTE MODIFICATION AGREEMENT

 

THIS AGREEMENT is made as of the30th day of June 2017, by and between Catamaran
Services, Inc., a Delaware corporation (the “Holder”) and Mendocino Brewing
Company, Inc., a California corporation (the “Maker”).

 

RECITALS

 

A. Holder has loaned to Maker certain moneys evidenced by seven (7) promissory
notes (individually a “Note” and collectively the “Notes”) as follows:

 

January 22, 2014  $500,000  April 24, 2014  $500,000  February 5, 2015 
$500,000  June 30, 2015  $500,000  March 14, 2016  $325,000  March 30, 2016 
$75,000  May 22, 2017  $200,000  Total  $2,600,000 

 

B. The Notes are currently unsecured, not subject to any guarantee by any third
party, nor has Maker granted a security interest in its property to Holder in
relation to the Notes; and

 

C. In order to secure additional loans from Holder, Maker is willing to modify
the Notes in order to grant to Holder a security interest in all of Makers
property.

 

D. Notwithstanding any terms to the contrary in that Credit And Security
Agreement, dated June 23, 2011 (the “Credit Agreement”), MB Financial Bank, N.A,
successor in interested to Cole Taylor Bank, has agreed and acknowledged that
Maker may grant to Holder the security interest in Maker’s property as described
in this Agreement and in subsequent promissory notes by Maker in favor of
Holder, as set forth in Subordination Agreement entered into July 11, 2017 and
attached hereto as Attachment A.

 

NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement, Holder and Maker agree as follows:

 

AGREEMENT

 

1. Maker hereby acknowledges that as of June 30, 2017 the unpaid principal
balance of the Notes is $$2,600,00 and accrued interest of $301,686, and that
the interest on that sum is payable at the rate set out in the Notes and (a)
agrees that any extensions, renewals, or forbearance of any portion of the
obligations evidenced by the Notes shall in no way affect Maker’s liability
under the Notes; and (b) agrees to pay all principal and interest of the Notes
in the time and manner set forth in the Notes.

 

2. As security for the prompt and full satisfaction of the outstanding principal
balances of the Notes, and all other sums due under the Notes, Maker agrees that
Holder shall upon the execution of the Agreement have, and Maker hereby grants
to and creates in favor of Holder, a lien and security interest in any and all
of the assets, real, personal and intangible of the Maker and Maker’s subsidiary
Releta Brewing Company, LLC (collectively “Property”). Except for that security
interest in Maker’s Property granted to MB Business Credit, successor in
interested to Cole Taylor Bank pursuant to the Credit Agreement, any Permitted
Liens (as defined in the Credit Agreement), and any other security interests
that may be granted to Holder now or in the future, Maker agrees that it shall
not, without the prior written consent of the Holder, grant or create or permit
to attach or exist any mortgage, security interest, lien, judgment, or other
encumbrance on or in any of the Property or any portion thereof. Maker agrees
that to the fullest extent allowed by law, the Holder’s security interest in the
Property shall be of the same nature and to the same extent at the security
interest granted pursuant to the Credit Agreement. Maker agrees that it shall
preserve and protect Holder’s security interest in the Property. In addition to
all rights and remedies given to Holder by this Agreement, Holder shall have all
the rights and remedies of a secured party under the Uniform Commercial Code
(the “UCC”). The parties hereto agree that this Agreement constitutes a security
agreement under the UCC. Maker agrees from time to time at the request of Holder
to file or record, or cause to be filed or recorded, such instruments, documents
or notices, including assignments, financing statements and continuation
statements as the Holder may deem reasonably necessary or advisable from time to
time in order to perfect, to continue perfected and to preserve the priority of
such lien and security interest.

 

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3. Holder agrees and acknowledges that the security interest granted to Holder
by Maker in this Agreement is subject and subordinated to the security interest
of MB Business Credit, successor in interested to Cole Taylor Bank, as that
security interest is described in the Credit Agreement.

 

4. Holder hereby agrees to the amendment of the terms of the Notes to the extent
specifically set forth in this Agreement, but only on the conditions stated in
Paragraphs 1, 2, and 3, above, and on the further condition that the amendment
shall not prejudice any present or future rights, remedies, benefits, or powers
belonging or accruing to Holder under the terms of the Notes as hereby amended.

 

5. Except as otherwise provided in this Agreement, the Notes shall remain
unaffected, unchanged, and unimpaired by reason of the foregoing amendments.

 

6. If any provision of this Agreement or the Notes shall for any reason be held
invalid or unenforceable, such invalidity or unenforceability shall not affect
any other provision(s) of this Agreement or Notes, but this Agreement and the
Notes shall be construed as if this Agreement and the Notes had never contained
the invalid or unenforceable provision(s).

 

5. In this Agreement, whenever the context so requires, the masculine gender
includes the feminine and/or neuter, and the singular number includes the
plural.

 

6. This Agreement shall be construed and governed by the laws of the State of
California.

 

7. This Agreement shall be binding upon and inure to the benefit of Holder and
Maker, their respective heirs, legal representatives, successors and assigns,
without limitation. Holder and Maker and the persons signing below warrant that
the person signing below on such Holder’s and Maker’s behalf is authorized to do
so and to bind such party to the terms of this Agreement.

 

8. This Agreement constitutes the entire agreement and understanding between the
parties with respect to the subject of this Agreement and shall supersede all
prior written and oral agreements concerning this subject matter. This Agreement
may not be amended, modified or otherwise changed in any respect whatsoever
except by a writing duly executed by authorized representatives of the
respective parties. Each party acknowledges that it has read this Agreement,
fully understands all of this Agreement’s terms and conditions, and executes
this Agreement freely, voluntarily and with full knowledge of its significance.
This Agreement is entered into by the Parties with and upon advice of counsel.
The interpretation of this Agreement shall be without regard to which party is
the “drafting party” and the Parties waive the benefit of any law providing
otherwise.

 

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9. Counterparts. This Agreement may be executed in counterparts, including by
facsimile or “pdf”, and such counterparts together shall constitute but one
original of the Agreement. Each counterpart shall be equally admissible in
evidence, and each original shall fully bind each party who has executed it.

 

HOLDER MAKER Catamaran Services, Inc. Mendocino Brewing Company, Inc. a Delaware
corporation. a California corporation

 

/sd/   /sd/ Rajwinder Kaur, Director   Mahadevan Narayanan,   Chief Financial
Officer

 

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ATTACHMENT A

SUBORDINATION AGREEMENT

 

ATTACH SUBORDINATION AGREEMENTHERE

 

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