EXHIBIT 10.34
THIRD AMENDMENT TO LOAN ARRANGEMENT
This Third Amendment to Loan Arrangement ("THIRD AMENDMENT") is between Portland
Brewing Company, an Oregon corporation ("BORROWER") and MacTarnahan Limited
Partnership, an Oregon limited partnership ("LENDER").
RECITALS
A. Borrower and Lender are parties to a Promissory Note, as amended (the
"EXISTING NOTE"), and an Agreement Concerning Loans and Security
Interests, each dated November 1, 2001;
B. Borrower has requested that certain amendments be made to the
Existing Note; and
C. Lender is willing to make certain amendments to the Existing Note on
the terms and conditions provided in this Third Amendment.
D. The parties wish to amend and restate the Existing Note to reflect
the changes requested by Borrower, as well as changes contained in
the First Amendment to Loan Arrangement dated June 1, 2002 ("FIRST
AMENDMENT"), and the Second Amendment to Loan Arrangement dated
October 1, 2002 ("SECOND AMENDMENT").
AGREEMENT
1. AMENDED AND RESTATED PROMISSORY NOTE. The Parties agree that the
Existing Note will be surrendered, and an Amended and Restated
Promissory Note will be executed. The Amended and Restated Promissory
Note is attached as Exhibit A.
2. FURTHER ASSURANCES. The parties will sign other documents and take
other actions reasonably necessary to further effect and evidence
this Third Amendment.
3. GOVERNING LAW. This Third Amendment is governed by the laws of the
State of Oregon, without giving effect to any conflict-of-law
principle of any jurisdiction.
4. VENUE. Any action or proceeding arising out of this Third Amendment
will be litigated in courts located in Multnomah County, Oregon. Each
party consents and submits to the jurisdiction of any local, state,
or federal court located in Multnomah County, Oregon.
5. ATTORNEY'S FEES. If any arbitration or litigation is instituted to
interpret, enforce, or rescind this Third Amendment, including but
not limited to any proceeding brought under the United States
Bankruptcy Code, the prevailing party on a claim will be entitled to
recover with respect to the claim, in addition to any other relief
awarded, the prevailing party's reasonable attorney's fees, costs,
and expenses incurred at arbitration, at trial, on appeal, and on
petition for review, as determined by the arbitrator or court.
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6. ENTIRE AGREEMENT. This Third Amendment contains the entire
understanding of the parties regarding the subject matter of this
Third Amendment and supersedes all prior and contemporaneous
negotiations and agreements, whether written or oral, between the
parties with respect to the subject matter of this Third Amendment.
7. SIGNATURES. This Third Amendment may be signed in counterparts. A fax
transmission of a signature page will be considered an original
signature page. At the request of a party, the other party will
confirm a fax-transmitted signature page by delivering an original
signature page to the requesting party.
Dated effective: January 1, 2003
MacTarnahan Limited Partnership, by
Xxxxxx Mill & Logging Supply Co., its General
Partner
/s/ XXXXXX X. XXXXXXXXXXX
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By: Xxxxxx X. XxxXxxxxxxx
Its: President
PORTLAND BREWING COMPANY
/s/ XXXXXX XXXXXXXX
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By: Xxxxxx Xxxxxxxx
Its: Chief Executive Officer
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EXHIBIT A
THIS PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
ANY STATE SECURITIES LAWS. THIS PROMISSORY NOTE MAY NOT BE SOLD, ASSIGNED, OR
OTHERWISE NEGOTIATED TO ANY PERSON UNLESS PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT FILED UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES
LAWS, OR UNLESS BORROWER RECEIVES AN OPINION OF COUNSEL, IN FORM AND FROM
COUNSEL ACCEPTABLE TO BORROWER, THAT THE SALE, ASSIGNMENT, OR OTHER NEGOTIATION
IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933 AND
APPLICABLE STATE SECURITIES LAWS.
AMENDED AND RESTATED
PROMISSORY NOTE
$1,700,000.00 January 1, 2003
This Amended and Restated Promissory Note ("NOTE") is made by Portland Brewing
Company, an Oregon corporation ("BORROWER"), in favor of MacTarnahan Limited
Partnership, an Oregon limited partnership ("LENDER"). This Note replaces the
Promissory Note dated November 1, 2001 between the parties (the "ORIGINAL
NOTE"). In connection with the execution of this Note, the Original Note will be
surrendered and cancelled.
8. PAYMENT. Borrower promises to pay to the order of Lender the principal
amount of $1,700,000.00, together with interest on the unpaid principal
amount from the date of this Note, as follows:
(a) on January 1, 2004, and on the same day of each of the following 34
months, $15,000.00 together with accrued interest;
(b) on April 10, 2004 - and on the same day of each following year until
the entire principal amount, together with accrued interest, has been
paid in its entirety - $35,000.00;
(c) on July 10, 2004 - and on the same day of each following year until
the entire principal amount, together with accrued interest, has been
paid in its entirety - $35,000.00; and
(d) on November 1, 2005, the entire unpaid principal amount together with
accrued interest.
9. VARIABLE INTEREST RATE.
(a) The interest rate on this Note is subject to change from time to time
based on changes in an independent index which is the annual interest
rate, adjusted daily,
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published from time to time in The Wall Street Journal (Western
Edition) as the "Prime Rate" in the "Money Rates" section, as of any
date of determination (the "INDEX"). If the Index becomes unavailable
during the term of this loan, Lender may designate a substitute index
after notice to Borrower. Lender will tell Borrower the current index
rate upon Borrower's request. The interest rate change will not occur
more often than each day. The Index on the date of the Original Note
was 5.50% per annum. The interest rate to be applied to the unpaid
principal balance will be at a rate of 1.25 percentage points over
the Index, resulting in an initial rate of 6.75% per annum. The Index
is currently 4.25% per annum, resulting in an interest rate of 5.50%
per annum.
(b) The annual interest rate for this Note is computed on a 365/360
basis; that is, by applying the ratio of the annual interest rate
over a year of 360 days, multiplied by the outstanding principal
balance, multiplied by the actual number of days the principal
balance is outstanding.
(c) Interest on the regular monthly payments originally due between June
2002 and December 2003 (with the exception of the payment for
December 2002, which was made), as well as interest on the payments
originally due on April 10 and July 10 of 2002 and 2003, will be
accrued monthly and will be added to the principal amount of this
Note.
10. PLACE OF PAYMENTS. All payments under this Note will be made to Xxxxxx Mill
& Logging Supply Co., Lender's general partner, at 00000 XX Xxxxxxxxx
Xxxxxx, Xxxxxxxx, Xxxxxx 00000, or to any other person or any other address
that Lender may designate by notice to Borrower.
11. APPLICATION OF PAYMENTS.
(a) All payments made under Section 1(a) and all prepayments will apply as
follows:
(1) first to any costs and expenses due to Lender;
(2) then to accrued interest to date of payment; and
(3) then to the unpaid principal amount; and
(b) All payments made under Section 1(b) and Section 1(c) will apply as follows:
(1) first to any costs and expenses due to Lender; and
(2) then to the unpaid principal amount.
12. PREPAYMENTS. Borrower may prepay a part or all of the unpaid principal
amount at any time. Excess payments or prepayments will not be credited as
future scheduled payments required by this Note.
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13. CASH FLOW REVIEWS. On or about January 15, April 15, July 15, and October
15 of each year until the entire principal amount, together with accrued
interest, has been paid in its entirety, the president of Borrower will
meet with Lender to review the cash flow situation of Borrower.
14. SECURITY. The obligations of Borrower under this Note are secured by the
Security Agreement dated as of the date of the Original Note between
Borrower and Lender (the "SECURITY AGREEMENT").
15. EVENTS OF DEFAULT. Each of the following is an event of default under this
Note:
(a) Borrower fails to make any payment required by this Note within 20
days after Lender notifies Borrower of the failure to make the
payment when due;
(b) Borrower voluntarily dissolves or ceases to exist, or any final and
nonappealable order or judgment is entered against Borrower ordering
its dissolution;
(c) Borrower fails to pay, becomes insolvent or unable to pay, or admits
in writing an inability to pay Borrower's debts as they become due,
or makes a general assignment for the benefit of creditors;
(d) a proceeding with respect to Borrower is commenced under any
applicable law for the benefit of creditors, including but not
limited to any bankruptcy or insolvency law, or an order for the
appointment of a receiver, liquidator, trustee, custodian, or other
officer having similar powers over Borrower is entered; and
(e) an event of default occurs under the Security Agreement.
16. REMEDIES. On and after an event of default under this Note, Lender may
exercise the following remedies, which are cumulative and which may be
exercised singularly or concurrently:
(a) upon notice to Borrower, the right to accelerate the due dates under
this Note so that the unpaid principal amount, together with accrued
interest, is immediately due in its entirety;
(b) any remedy available to Lender under the Security Agreement; and
(c) any other remedy available to Lender at law or in equity.
17. AMENDMENT. This Note may be amended only by a written document signed
by the party against whom enforcement is sought.
18. WAIVER.
(a) Borrower waives demand, presentment for payment, notice of dishonor
or nonpayment, protest, notice of protest, and lack of diligence in
collection, and
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agrees that Lender may extend or postpone the due date of any payment
required by this Note without affecting Borrower's liability.
(b) No waiver will be binding on Lender unless it is in writing and
signed by Lender. Lender's waiver of a breach of a provision of this
Note will not be a waiver of any other provision or a waiver of a
subsequent breach of the same provision.
19. SEVERABILITY. If a provision of this Note is determined to be
unenforceable in any respect, the enforceability of the provision in
any other respect and of the remaining provisions of this Note will not
be impaired.
20. GOVERNING LAW. This Note is governed by the laws of the State of
Oregon, without giving effect to any conflict-of-law principle of any
jurisdiction.
21. VENUE. Any action or proceeding arising out of this Note will be
litigated in courts located in Multnomah County, Oregon. Borrower
consents and submits to the jurisdiction of any local, state, or
federal court located in Multnomah County, Oregon.
22. ATTORNEY'S FEES. If any arbitration or litigation is instituted to
interpret, enforce, or rescind this Note, including but not limited to
any proceeding brought under the United States Bankruptcy Code, the
prevailing party on a claim will be entitled to recover with respect to
the claim, in addition to any other relief awarded, the prevailing
party's reasonable attorney's fees, costs, and expenses incurred at
arbitration, at trial, on appeal, and on petition for review, as
determined by the arbitrator or court.
23. COSTS AND EXPENSES. If an event of default under this Note occurs and
Lender does not institute any arbitration or litigation, Borrower will
pay to Lender, upon Lender's demand, all reasonable costs and expenses,
including but not limited to attorney's fees and collection fees,
incurred by Lender in attempting to collect the indebtedness evidenced
by this Note.
BORROWER:
Portland Brewing Company
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By: Xxxxxxxxx X. Xxxxxx
Its: President
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