AMENDMENT
This Amendment (the "Amendment") to (i) the Investment Agreement (the
"Investment Agreement") dated January 30, 1997, by and among Nor'Xxxxxx Brewing
Company, Inc. ("Nor'Xxxxxx"), North Country Joint Venture, LLC ("North
Country"), Willamette Valley, Inc. Microbreweries Across America ("WVI") and
each of the entities identified in Schedule 1.0 thereto (collectively, the "WVI
Subsidiaries"), Xxxxx X. Xxxxxx ("Xxxxxx") and United Breweries of America, Inc.
("UBA"); (ii) the Credit Agreement (the "Credit Agreement") dated January 30,
1997, by and between Nor'Xxxxxx and UBA; and (iii) various exhibits and
schedules to the Investment Agreement and the Credit Agreement all as more fully
described below, is entered into as of May 14, 1997.
RECITALS
WHEREAS, certain of the parties entered into the Investment Agreement,
the Credit Agreement and certain related documents, instruments and agreements
on January 30, 1997; and
WHEREAS, the parties desire to amend the Investment Agreement, the
Credit Agreement and certain related documents, instruments and agreements.
NOW, THEREFORE, in consideration of the above Recitals and the mutual
covenants herein contained, the parties hereto agree as follows:
AGREEMENT
1. The definition of "Bridge Loan Shares" on page 2 of the
Investment Agreement shall be deleted.
2. On page 2 of the Investment Agreement, the following paragraph
shall be added after the definition of "Business Day" and before the definition
of "Capital Expenditures":
""Cancellation Shares" shall have the meaning set forth in Section
2.1."
3. The definition of "Diluted Basis" on page 3 of the Investment
Agreement shall be amended by adding the words "or to Xxxxx Xxxxxx pursuant to
the Services Agreement" after the words "Employment Agreement" in the eighth
line of such definition.
4. Section 2.1 of the Investment Agreement shall be amended to read
in its entirety as follows:
"2.1 PURCHASE AND TRANSFER OF EQUITY SECURITIES. Subject to the
terms and conditions set forth in this Agreement, (i) the Purchaser agrees
to subscribe for and
purchase from UCB, and UCB agrees to issue and sell to the Purchaser,
1,047,619 shares of Common Stock (the "Purchase Shares"), for $5,500,000
and (ii) Xxxxxx agrees to transfer to Purchaser 83,109 shares of Common
Stock (the "Transfer Shares"), and Xxxxxx agrees to transfer to UCB 174,912
shares of Common Stock (the "Cancellation Shares"), in consideration for
(a) forestalling any potential lawsuits from current shareholders of the
Constituent Corporations and thus supporting the financial viability of UCB
on an ongoing basis, (b) inducing the investment by the Purchaser
contemplated by this Agreement, thus protecting Xxxxxx'x investment in the
Constituent Corporations, and (c) protecting Xxxxxx'x goodwill and general
business reputation, all as more fully described in Section 2.2 hereof.
After giving effect to the Consolidation and the other transactions
contemplated by this Agreement, the Purchase Shares and the Transfer Shares
shall collectively total 40.00% of the outstanding Common Stock of UCB on a
Diluted Basis."
5. The second paragraph of Section 2.2 of the Investment Agreement
shall be amended in its entirety to read as follows:
"On the Closing Date, (i) Xxxxxx shall deliver to the Purchaser
certificates representing the Transfer Shares to be transferred to the
Purchaser registered in the Purchaser's name (subject to the requirements
of Section 10.4) and in such denominations as the Purchaser requests, (ii)
Xxxxxx shall deliver to UCB certificates representing the Cancellation
Shares to be transferred to UCB registered in UCB's name and UCB shall take
all necessary corporate action to have such Cancellation Shares cancelled,
and (iii) UCB shall deliver to the Purchaser certificates representing the
Purchase Shares, registered in the Purchaser's name (subject to the
requirements of Section 10.4) and in such denominations as the Purchaser
requests against delivery by the Purchaser of the purchase price therefor
consisting of (a) a certified or bank check in the name of UCB in the
amount of $2,750,000 plus an amount equal to the difference between the
full amount of the $2,750,000 Bridge Loans and the actual amount loaned by
UBA under the Bridge Loans and (b) if all of the outstanding principal
amount due under the Bridge Loans has been repaid, a certified or bank
check in the name of UCB in the amount of $2,750,000, otherwise, by
contributing to UCB the aggregate principal amount due under the Bridge
Loans as of the Closing Date."
6. Section 2.4 of the Investment Agreement shall be amended by
adding the words "and Black & Company" after the words "hereof, (a) Xxxxxx" on
the first line of that section and by adding the words ", Black & Company" after
the words "between Xxxxxx" on the third line of that section.
7. Section 3.2 of the Investment Agreement shall be amended by (i)
replacing the words "Nor'Xxxxxx and Xxxxxx shall take all necessary corporate
action to cause, and shall cause, UCB to" in the first and second lines of text
with the words "UCB shall"; (ii) by deleting the words "and the Bridge Loan
Shares" in the eighth and ninth lines of text; (iii) by replacing the number
"45.00000%" with the number "40.00%"; and (iii) by replacing the number
"10.000005%" with the number "10.00%".
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8. Section 6.1(l)(v) shall be amended to read in its entirety as
follows:
"(v) the Employment Agreement between Xxxxx Xxxxxx and UCB dated the
Closing Date and in a form satisfactory to the Purchaser and UCB (the
"Services Agreement") in which, among other things, UCB agrees to pay Xxxxx
Xxxxxx $126,000 per year for services rendered and UCB grants Xxxxx Xxxxxx
options to purchase shares of UCB Common Stock in an amount equal to 4% of
the oustanding Common Stock of UCB on a Fully Diluted Basis at an exercise
price of $5.25 per share."
9. Section 6.1(n) of the Investment Agreement shall be amended to
read in its entirety as follows:
"(n) The net worth of the Constituent Corporations combined, prepared
in accordance with GAAP shall not be less than $10.0 million as of the
Closing Date and before taking into account any write downs related to the
sale of the assets of Bayhawk Ales, Inc. and any gains related to the sale
of the assets of Mile High Brewing Company."
10. Section 6.1 of the Investment Agreement shall be amended by
adding a new section 6.1(u) which shall read in its entirety as follows:
"(u) UCB shall have received the Cancellation Shares as contemplated
by Section 2.2 and shall have cancelled the Cancellation Shares."
11. Section 6.1 of the Investment Agreement shall be amended by
adding a new section 6.1(v) which shall read in its entirety as follows:
"(v) If the Purchaser contributes the aggregate principal amount due
under the Bridge Loans as partial payment for the Purchase Shares as
described in Section 2.2, then the accrued interest up to and including the
Closing Date due under the Bridge Loans shall have been paid in cash to
Purchaser."
12. Section 6.2 of the Investment Agreement shall be amended by
deleting the words "and the Bridge Loan Shares" in the second and third lines of
text and adding the words "and the Cancellation Shares" after the words
"Transfer Shares" in the third line of text.
13. Section 7.28 of the Investment Agreement shall be amended by
adding the words "After the Closing Date, but not prior to such date, any" and
deleting the word "Any" at the beginning of the second sentence.
14. Section 10.13 of the Investment Agreement shall be amended by
adding the words "; provided, further, that all costs and expenses (including
legal fees and expenses) incurred by Purchaser in connection with the
Consolidation shall be reimbursed by Nor'Xxxxxx, or alternatively, Purchaser may
use funds from the Bridge Loans to pay such
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costs and expenses. If this Agreement is terminated prior to Closing, all costs
and expenses (including legal fees and expenses) that have not been previously
reimbursed or funded through the Bridge Loans shall be added to the principal
amount outstanding under the Bridge Loans. In addition, all costs and expenses
incurred by the Purchaser relating to the possible acquisition of other
companies or other investment opportunities shall be reimbursed if the Closing
occurs and UCB is the acquiring company or the company making the investment."
after the words "the Bridge Loans" in the last line of that section.
15. Schedule 3.1(d) to the Investment Agreement shall be replaced in
its entirety by Revised Schedule 3.1(d), a copy of which is attached hereto as
ATTACHMENT A.
16. Schedule 6.1(l)(i) to the Investment Agreement shall be amended
by replacing the fourth bullet point with a new bullet point to read in its
entirety as follows:
"- Receive options to purchase shares of Common Stock in an amount
equal to 4% of the total number of shares outstanding on a Fully
Diluted Basis
- 25% of the shares vest upon Closing, remaining shares
subject to three year straight-line vesting
- Fully vest upon termination
- Exercisable up to 5 years following termination
- Exercise price equal to $5.25 per share"
17. Schedule 6.1(n) of the Investment Agreement shall be deleted.
18. Exhibit 2.4(a) to the Investment Agreement, the Stockholder's
Agreement, shall be deleted in its entirety and replaced with Revised Exhibit
2.4(a) to read in its entirety as set forth in ATTACHMENT B.
19. Exhibit 5.9(a)(i) to the Investment Agreement, the Form of
Certificate of Incorporation for United Craft Brewers, Inc., shall be deleted in
its entirety and replaced with Revised Exhibit 5.9(a)(i) to read in its entirety
as set forth in ATTACHMENT C.
20. Exhibit 5.9(a)(ii) to the Investment Agreement, the Form of
By-laws for United Craft Brewers, Inc., shall be deleted in its entirety and
replaced with Revised Exhibit 5.9(a)(ii) to read in its entirety as set forth in
ATTACHMENT D.
21. Exhibit 6.1(a) to the Investment Agreement shall be replaced in
its entirety by Revised Exhibit 6.1(a), a copy of which is attached hereto as
ATTACHMENT E.
22. Exhibit 6.2(h) to the Investment Agreement shall be replaced in
its entirety by Revised Exhibit 6.2(h), a copy of which is attached hereto as
ATTACHMENT F.
23. Each reference in the Credit Agreement to "Convertible Note"
shall be deleted and replaced with the term "Note", the definition of
Convertible Note set forth in
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Section 1.01 of the Credit Agreement as so deleted and replaced shall be moved
so that the definition of "Note" immediately preceeds the definition of "North
Country", and the word "convertible" appearing in Section 2.03 of the Credit
Agreement shall be deleted.
24. Exhibit A to the Credit Agreement (the Form of Convertible
Promissory Note) shall be deleted in its entirety and replaced with a new
Exhibit A to the Credit Agreement (the Form of Note) to read in its entirety as
set forth on ATTACHMENT G.
25. Each reference in the Credit Agreement, the Security Agreement,
the Pledge Agreement and the Personal Guaranty to the "Investment Agreement"
shall be deemed to be a reference to the Investment Agreement as amended by this
Amendment.
26. Each reference in the Security Agreement, the Pledge Agreement
and the Personal Guaranty to the "Credit Agreement" shall be deemed to be a
reference to the Credit Agreement as amended by this Amendment.
27. The amendments effected above shall become effective on May 14,
1997, subject to (i) execution by each of the parties hereto in the space
provided below, (ii) receipt by UBA of an amended and restated Convertible
Promissory Note, duly executed by Nor'Xxxxxx, in the form of Exhibit A to the
Credit Agreement, as amended by this Amendment and (iii) receipt by Nor'Xxxxxx
of the Guarantor Consent, duly executed by UB International Ltd., in the form
set forth on ATTACHMENT H.
28. The parties hereby affirm that the Investment Agreement, the
Credit Agreement, the Security Agreement, the Pledge Agreement and the Personal
Guaranty as amended hereby, constitute the entire agreements among the parties
pertaining to the subject matters thereof and supersede all prior agreements and
understandings pertaining thereto.
29. The Investment Agreement, the Credit Agreement, the Security
Agreement, the Pledge Agreement and the Personal Guaranty as amended hereby,
remain in full force and effect.
30. United Craft Brewers, Inc., for the consideration set forth above
and in the Investment Agreement, hereby affirms its rights and obligations under
the Investment Agreement, as hereby amended, and agrees to comply with all of
its agreements thereunder or hereunder.
31. Unless otherwise defined herein, all capitalized terms used
herein and defined in the Investment Agreement or the Credit Agreement shall
have the respective meanings given to those terms in the Investment Agreement or
the Credit Agreement.
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IN WITNESS WHEREOF, this Amendment has been duly executed as of the
date written above.
NOR'XXXXXX BREWING COMPANY
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
NORTH COUNTRY BREWING COMPANY
By: /S/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
WILLAMETTE VALLEY, INC.
MICROBREWERIES ACROSS AMERICA
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
AVIATOR ALES, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
BAYHAWK ALES, INC.
By: /S/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
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MILE HIGH BREWING COMPANY
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
XXXXX X. XXXXXX
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
UNITED BREWERIES OF AMERICA, INC.
By: /S/ Xxxxx Xxxxxx
-----------------------------------------
Name: Xxxxx Xxxxxx
Title: Chairman
UNITED CRAFT BREWERS, INC.
By: /s/ Xxxxx Xxxxxx
-----------------------------------------
Name: Xxxxx Xxxxxx
Title: Chairman and Chief Executive Officer
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