Document:

LOAN
AND SECURITY AGREEMENT

 

This
Loan and Security Agreement (as amended, modified or supplemented from time to time, this “Agreement”) effective as
of the 11th day of July 2017, by and between Catamaran Services, Inc., a Delaware corporation (“Catamaran” or “Holder”)
and Mendocino Brewing Company, Inc., a California corporation (“MBC” or “Maker”).

 

1.
LOAN:

 

Subject
to the terms and conditions of the Agreement, from time to time prior to the July 1, 2018, Lender shall make loans and advances
(the “Loans”) to MBC in an amount up to Two Million Dollars ($2,000,000) on the terms and conditions set-out in this
Agreement.

 

2.
REQUESTS FOR LOAN INSTALLMENT PAYMENTS:

 

A
request for a Loan Installment shall be made in the following manner: MBC shall give Catamaran written notice at least fourteen
(14) days prior to the proposed borrowing date of MBC’s request for a Loan Installment and shall specify the amount and
the proposed borrowing date; the request shall be accompanied by a Promissory Note in the form attached hereto as Exhibit A. Each
Loan Installment request shall be accompanied by a list of MBC’s intended uses of loan installment funds.

 

However,
that no such Loan Installment request may be made, and Catamaran shall not be obligated to make a payment, at a time when there
exists an Event of Default or an event which, with the passage of time or giving of notice, will become an Event of Default.

 

3.
FIRST LOAN INSTALLMENT PAYMENT

 

Notwithstanding
the provisions of Paragraph 2, the first Loan Installment payment shall be Five Hundred Thousand dollars ($500,000), and shall
be disbursed by Catamaran to MBC, seven business days after receipt of the executed Loan and Security Agreement and Promissory
Note Modification Agreement. A condition to the distribution of the payment is receipt by Catamaran of a Promissory Note executed
by MBC in the form attached hereto as Exhibit A contemporaneously therewith.

 

4.
MAKER’S PROMISE TO PAY.

 

In
return for the Loans, MBC promises to pay the total amount of all Loan Installment payments made to MBC (the “Principal”)
plus interest to the order of Catamaran or any other lawful holder of a Promissory Note.

 

All
payments shall be 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 Agreement or any Promissory Note shall be made to Catamaran as directed by Catamaran in writing.

 

Any
Promissory Note issued under the terms of this Agreement may be prepaid in whole or in part, without penalty, at the option of
MBC and without the consent of Catamaran. All payments shall be applied first to accrued and unpaid interest, and then to the
principal balance outstanding.

 

    	 	 1	 

     

    

 

MBC
understands that Catamaran may transfer any Promissory Note. Catamaran or any party who takes a Promissory Note by transfer and
who is entitled to receive payments under a Promissory Note shall be called the “Holder.”

 

5.
INTEREST.

 

Interest
shall accrue on the unpaid and outstanding principal balance from the date of each Promissory Note to Maker 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.

 

6.
PAYMENTS.

 

All
payments made pursuant to any Promissory Note are expressly subject to the following condition:

 

a)
No portion of Principal or interest on this Note will be payable or paid until 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, (the “Credit
Agreement”)between Maker, Releta Brewing Company LLC, and Cole Taylor Bank) to Cole Taylor Bank, now known as MB Financial
Bank, N.A. (“Bank”) has been paid and satisfied in full (“Bank Loan”).

 

The
full payment of any Promissory Note, and accompanying interest, shall be due six (6) months from the date of the Promissory Note.
Should Maker not be able to satisfy a Promissory Note at the end of the original six (6) month term, the Promissory Note shall
be extended for additional six (6) month terms until such time as the Bank Loan has been satisfied in full.

 

7.
SECURITY INTEREST.

 

As
security for the prompt and full satisfaction of the outstanding principal balance of each Promissory Note, and all other sums
due under a Promissory Note, Maker agrees that Holder shall 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 to the same extent as Maker has granted a security interest to the Bank in the property pursuant to
the Credit Agreement (collectively “Property”). Except for that security interest in Maker’s Property granted
pursuant to the Credit Agreement, and any Permitted Liens (as defined in the Credit Agreement), 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 in 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 Note, 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 Note 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 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.

 

    	 

    	 

    

 

Holder
agrees and acknowledges that the security interest granted to Holder by Maker in this Promissory Note is subject and subordinated
to the security interest created pursuant to the Credit Agreement and the Subordination Agreement entered into by Maker, Releta
Brewing Company LLC, Holder and Bank, dated July 11, 2017.

 

8.
MAKER’S FAILURE TO PAY AS REQUIRED.

 

Subject
to any senior rights of the Bank, upon the occurrence of any one of the following events (“Event of Default”), the
entire principal amount outstanding and all accrued interest thereunder shall at the option of the Holder, without any prior notice,
presentment or demand, become immediately due and payable in full:

 

(i)
Failure of the Maker to make payments whenever due, and the continuation of such failure for a period of thirty (30) days; or

 

(ii)
Failure of the Maker to perform or observe any of the Maker’s covenants or agreements under this Note and the continuation
of such failure for a period of thirty (30) days; or

 

(iii)
An assignment by the Maker of any of its assets for the benefit of the Maker’s creditors, or the commencement by or against
the Maker of any bankruptcy, insolvency, liquidation, receivership or similar proceedings.

 

9.
MAKER’S WAIVERS.

 

Maker
waives the right to require the Holder to do certain things. Those things are: (a) to demand payment of amounts due (known as
“presentment”); (b) to give notice that amounts due have not been paid (known as “notice of dishonor”),
except as expressly provided in a Promissory Note; (c) to obtain an official certification of nonpayment (known as a “protest”).
Anyone else who agrees to keep the promises made in a Promissory Note, or who agrees to make payments to the Holder if Maker fails
to keep the promises under a Promissory Note, or who signs a Promissory Note to transfer it to someone else also waives these
rights. These persons are known as “guarantors, sureties and endorsers.”

 

10.
NO USURY.

 

Maker
and Holder intend to comply at all times with applicable usury laws. If, at any time, such laws would render usurious any amounts
under a Promissory Note, it is Maker’s and Holder’s express intention that Maker shall never be required to pay interest
on a Promissory Note at a rate in excess of the maximum lawful rate then allowed. The provisions of this Section 10 shall control
over all other provisions of any Promissory Note, which may be in apparent conflict hereunder. Any excess amount shall be immediately
refunded by Holder to Maker, and the provisions hereof and any Promissory Note shall be immediately reformed, and the amounts
thereafter collectible under any Promissory Note shall be reduced, without the necessity of the execution of any further documents,
so as to comply with the then applicable law, but so as to permit the recovery of the fullest amount otherwise called for under
the Section 10. Any such refund shall not cure or waive any default by Maker under a Promissory Note. Maker agrees that in determining
whether or not any interest payable under a Promissory Note, exceeds the highest rate not prohibited by law, any non-principal
payment (except payments specifically stated in this Note to be “interest”), including, without limitation, late charges,
shall, to the maximum extent not prohibited by law, be an expense, fee, or indemnification amount rather than interest. The term
“applicable law” as used in in this Section 10 shall mean the laws of the State of California or the laws of the United
States, whichever laws allow the greater rate of interest, as such laws now exist or may be changed or amended or come into effect
in the future.

 

    	 

    	 

    

 

11.
GIVING OF NOTICES.

 

Any
notice that must be given to Maker under this Agreement or a Promissory Note shall be given by hand delivery, by certified mail,
or overnight mail addressed to Maker at 1601 Airport Road, Ukiah, California 95482. Notice shall be delivered or mailed to Maker
at a different address only after Maker gives the Holder written notice of the different address.

 

Any
notice that must be given to the Holder under this Agreement or a Promissory Note shall be given by hand delivery, by certified,
or overnight mail addressed to Holder’s Registered Agent in C.A., M/s GKL CORPORATE/SEARCH,
INC. ONE CAPITOL MALL STE 660, SACRAMENTO CA 95814, with an additional copy to 700 Larkspur Landing Circle, Suite 208,
Larkspur, CA 94939. Notice shall be delivered or mailed to Holder at a different address only after Holder gives the Maker written
notice of the different address.

 

12.
EXTENSIONS/RENEWALS.

 

Holder
may, without notice and without releasing the liability of Maker, grant extensions and/or renewals hereof from time to time or
for any term or terms. No delay by Holder or their assignee in exercising any power or right hereunder, and no partial exercise
of such power or right, shall operate in any way as a waiver of any subsequent exercise thereof. Holder shall not be liable for
or prejudiced by failure to collect or lack of diligence in bringing suit on this Agreement or a Promissory Note or any renewal
or extension thereof.

 

13.
ASSIGNMENTS.

 

Maker
agrees that its liability hereunder shall be binding upon its successors and assigns; provided, however that Maker may not assign
or transfer its obligation hereunder or in any Promissory Note without the prior written consent of Holder. This Agreement and
any Promissory Note may be assigned by Holder without the consent of Maker.

 

14.
AMENDMENTS.

 

This
Agreement may not be changed or amended orally, but only by an agreement in writing, signed by the party against whom enforcement
is sought.

 

15.
CAPTIONS.

 

All
paragraph and subparagraph captions are for convenience of reference only and shall not affect the construction of any provision
herein.

 

    	 

    	 

    

 

16.
GOVERNING LAW.

 

Except
as specifically provided in Section 10, this Agreement and any Promissory Note shall be construed in accordance with and governed
by the laws of the State of California, without regard to any conflict of law principles.

 

17.
SEVERABILITY.

 

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

 

NOTICE
TO MAKER

Do
not sign this Agreement if it contains blank spaces.

All
spaces should be completed before you sign.

 

IN
WITNESS WHEREOF, and intending to be legally bound hereby, this Agreement has been executed and delivered under seal as of the
date first written above.

 

	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

 

AGREED
AND CONSENTED TO:

 

	Releta
    Brewing Company, LLC	 
	By:	Mendocino
    Brewing	 
	Company,
    Inc., its sole member	 

 

	/sd/	 
	Mahadevan
    Narayanan,	 
	Chief
    Financial Officer	 

 

    	 

    	 

    

 

EXHIBIT
A

 

PROMISSORY
NOTE

 

$000,000.00

_________,
201_

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 ______ ($_______.00) (“Principal”),
with interest as defined below.

 

Maker
promises to pay interest to Holder from the date of this Promissory 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.

 

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

 

This
Promissory 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 Promissory Note are expressly subject to the following condition:

 

a)
No portion of Principal or interest on this Promissory Note will be payable or paid until the Obligations(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 (the “Credit
Agreement”), between Maker, Releta Brewing Company LLC, and Cole Taylor Bank) to Cole Taylor Bank, now known as MB Financial
Bank, N.A. (“Bank”) has been paid and satisfied in full (“Bank Loan”).

 

The
full payment of this Promissory Note, and accompanying interest, shall be due six (6) months from the date of the Promissory Note.
Should Maker not be able to satisfy this Promissory Note at the end of the original six (6) month term, the Promissory Note shall
be extended for additional six (6) month terms until such time as the Bank Loan has been satisfied in full.

 

    	 

    	 

    

 

This
Promissory Note is secured. As security for the prompt and full satisfaction of the outstanding principal balance of this Promissory
Note, and all other sums due under this Promissory Note, Maker agrees that Holder shall 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, Maker’s
subsidiary Releta Brewing Company, LLC granted to the Bank in connection with the Credit Agreement and any Permitted Liens (as
definedin the Credit Agreement), 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 in 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 Promissory Note, 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 Promissory Note 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 reasonablynecessary
or advisable from time to time in order to perfect, to continue perfected and to preserve the priority of such lien and security
interest.

 

Holder
agrees and acknowledges that the security interest granted to Holder by Maker in this Agreement is subject and subordinated to
the security interest ofthe Bank pursuant to the Credit Agreement.

 

Subject
to any senior rights of the Bank, upon the occurrence of any one of the following events (“Events of Default”), the
entire principal amount outstanding and all accrued interest thereunder shall at the option of the Holder, without any prior notice,
presentment or demand, become immediately due and payable in full:

 

(i)
Failure of the Maker to make payments whenever due, and the continuation of such failure for a period of thirty (30) days; or

 

(ii)
Failure of the Maker to perform or observe any of the Maker’s covenants or agreements under this Note; and the continuation
of such failure for a period of thirty (30) days;or

 

(iii)
An assignment by the Maker of any of its assets for the benefit of the Maker’s creditors, or the commencement by or against
the Maker of any bankruptcy, insolvency, liquidation, receivership or similar proceedings.

 

Maker
waives the right to require the Holder to do certain things. Those things are: (a) to demand payment of amounts due (known as
“presentment”); (b) to give notice that amounts due have not been paid (known as “notice of dishonor”),
except as expressly provided elsewhere in this in a Promissory Note; (c) to obtain an official certification of nonpayment (known
as a “protest”). Anyone else who agrees to keep the promises made in this a Promissory Note, or who agrees to make
payments to the Holder if Maker fails to keep the promises under this a Promissory Note, or who signs this a Promissory Note to
transfer it to someone else also waives these rights. These persons are known as “guarantors, sureties and endorsers.”

 

The
terms and conditions of the CreditAgreementare hereby incorporated into this Promissory Note by this reference.

 

    	 

    	 

    

 

NOTICE
TO MAKER

Do
not sign this Promissory Note if it contains blank spaces.

All
spaces should be completed before you sign.

 

IN
WITNESS WHEREOF, and intending to be legally bound hereby, Maker, by its appropriate officers duly authorized, has executed this
Promissory Note and affixed its corporate seal on this day and year first written above.

 

	MAKER	ACCEPTED
    AND AGREED BY HOLDER
	MENDOCINO
    BREWING COMPANY, INC.	CATAMARAN
    SERVICES, INC. 
	a
    California corporation. 	a
    Delaware corporation

 

		 	
	Mahadevan
    Narayanan,	 	Rajwinder
    Kaur, Director
	Chief
    Financial OfficerPROMISSORY
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.

 

     1

     

    

 

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.

 

     2

     

    

 

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

 

     3

     

    

 

ATTACHMENT
A

SUBORDINATION
AGREEMENT

 

ATTACH
SUBORDINATION AGREEMENTHERE

 

     4

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