MEMBERSHIP TERMINATION AGREEMENT
This Agreement entered into as of the ___ day of January, 1997, is made by
and among Nor'Xxxxxx Brewing Company, Inc. ("Nor'Xxxxxx"), Willamette Valley,
Inc. Microbreweries across America ("WVI"), North Country Brewing Company, Inc.
("North Country"), and North Country Joint Venture, LLC ("Joint Venture").
RECITALS:
A. Nor'Xxxxxx and North Country established the Joint Venture for the
purpose of building and operating a regional craft brewery in Saratoga Springs,
New York. The operations, ownership, and management of the Joint Venture is
governed by the North County Joint Venture, LLC Operating Agreement (the
"Operating Agreement"). North Country is a wholly-owned subsidiary of WVI.
B. The purchase price for North County's Membership Interest (as that
term is defined in the Operating Agreement) in the Joint Venture was paid, in
part, by an unsecured, non-interest bearing note payable to the Joint Venture
by North Country in the amount of $2,550,000, and payable on October 1, 1996.
It was contemplated at the time of formation of the Joint Venture that North
Country would pay the amount owed under the note with proceeds from North
Country's public offering of its Common Stock, which offering was to have been
completed prior to the due date of the note.
C. North Country's public offering has been suspended and North Country
has not paid the amount due under the note. Therefore, pursuant to the terms of
this Agreement, North Country withdraws from the Joint Venture and Nor'Xxxxxx
consents to such withdrawal.
NOW, THEREFORE, in consideration of the promises exchanged and the
covenants contained in this Agreement, the parties agree as follows:
1. WITHDRAWAL OF MEMBER. In accordance with Section 4.3 of the Operating
Agreement, North Country hereby withdraws from the Joint Venture and transfers
its Membership Interest to Nor'Xxxxxx, and Nor'Xxxxxx, being the only other
member of the Joint Venture, hereby consents to North Country's withdrawal.
2. PURCHASE PRICE FOR MEMBERSHIP INTEREST. Concurrently with the
execution of this Agreement, Nor'Xxxxxx is delivering a promissory note in the
form attached as Exhibit A to this Agreement (the "Note") payable to North
Country evidencing the purchase price for North Country's Membership Interest in
the amount of $192,358, representing the $100,000
1 - MEMBERSHIP TERMINATION AGREEMENT
investment in the Joint Venture by WVI and $92,358 of other costs incurred by
North Country on behalf of the Joint Venture.
3. TERMINATION OF ALL RIGHTS. North Country hereby acknowledges that by
withdrawing from the Joint Venture it forfeits all of its rights with respect to
any ownership interest it may have in the Joint Venture, including the assets of
the Joint Venture, its contributions, and distributions and allocations of
income and loss from the Joint Venture. North Country further agrees and
acknowledges that the sole consideration being paid in connection with its
withdrawal from the Joint Venture is the Note.
4. VARIATION FROM OPERATING AGREEMENT. To the extent that the
determination of the amount of and procedure for payment of consideration in
exchange for North Country's Membership Interest in the Joint Venture, as
described in this Agreement, may vary from the procedures and terms of the
Operating Agreement, the parties waive, in connection with this transaction
only, those provisions of the Operating Agreement which vary from the terms of
this Agreement.
5. GENERAL PROVISIONS.
5.1 RESOLUTION OF DISPUTES. This Agreement shall be governed by the
internal laws of the State of Oregon. If the parties are unable to amicably
resolve between themselves any serious disagreements relating to or arising from
this Agreement, no party hereto shall seek redress against the other in any
court or tribunal in any part of the world, but instead all parties hereto shall
submit such dispute or claim will be settled by binding arbitration in Multnomah
County, Oregon, under the Commercial Arbitration Rules of the American
Arbitration Association, appointed in accordance with said rules. The
arbitrators will apply Oregon and U.S. law, as applicable, to the merits of such
dispute or claim without reference to rules of conflicts of law. No party
hereto shall have the right to further appeal or redress in any court or
tribunal except solely for the purpose of obtaining execution of the judgment
rendered by the arbitrators. The parties hereto arbitrating differences agree
to share equally all costs and expenses of such arbitration proceeding
irrespective of its outcome, unless the arbitrators rule otherwise, which they
may do for cause. Notwithstanding the foregoing, the parties may apply to any
court of competent jurisdiction for injunctive relief without breach of this
arbitration provision.
5.2 NOTICES. Any notice required or permitted by this Agreement will
be in writing and will be delivered in person with receipt acknowledged or sent
by prepaid registered or certified mail return receipt requested, addressed to
the other party as set out below. Such notice will be deemed to have been given
when delivered or, if delivery is not accomplished by some fault of the
addressee, when tendered. Contacts for such notices are:
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Willamette Valley, Inc. Nor'Xxxxxx Brewing Company, Inc.
Microbreweries Across America 00 X.X. Xxxxxxxx Xxxxxx
00 X.X. Xxxxxxxx Xxxxxx Xxxxxxxx, Xxxxxx 00000
Xxxxxxxx, XX 00000 Attention: _____________________
Attention: ______________________
North Country Brewing Company, Inc. North Country Joint Venture, LLC
Excelsior Avenue, Building 3 Excelsior Avenue, Building 3
X.X. Xxx 000 X.X. Xxx 000
Xxxxxxxx Xxxxxxx, Xxx Xxxx 00000 Xxxxxxxx Xxxxxxx, Xxx Xxxx 00000
Attention: ______________________ Attention: ______________________
5.3 BINDING EFFECT. This Agreement will be binding upon and inure to the
benefit of the parties thereto, their successors and assigns.
5.4 PARTIAL INVALIDITY. If any provision of this Agreement is held to be
invalid by a court of competent jurisdiction, then the remaining provisions will
nevertheless remain in full force and effect. The parties agree to re-negotiate
in good faith any term held invalid and to be bound by the mutually agreed
substitute provision.
5.5 LEGAL EXPENSES. The prevailing party in any legal action brought by
one party against the other and arising out of this Agreement will be entitled,
in it addition to any other rights and remedies it may have, to reimbursement
for its expenses, including court costs and reasonable attorneys' fees and
costs.
5.6 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original and all of which together
will constitute one instrument.
5.7 NO WAIVER. No waiver of any term or condition of this Agreement will
be valid or binding on any party unless the same will have been mutually
assented to in writing by an officer of such party. The failure of any party to
enforce at any time any of the provisions of this Agreement or the failure to
require at any time performance by any other party of any of the provisions of
this Agreement, will in no way be construed to be a present or future waiver of
such provisions, nor in any way affect the validity of any party to enforce each
and every such provision thereafter.
5.8 CAPTIONS. The captions of Sections of this Agreement are for
reference only and are not to be construed in any way as terms.
5.9 ENTIRE AGREEMENT. This Agreement sets forth the entire agreement and
understanding of the parties relating to the subject matter herein and
supersedes all prior
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discussion, whether oral or written, between them. No modification or
amendment of this Agreement, nor any waiver of any rights under this Agreement,
nor any waiver of any rights under this Agreement, will be effective unless in
writing signed by duly authorized officers of all parties.
Signed and agreed to by the duly empowered officers of the respective
corporations listed below:
NOR'XXXXXX BREWING COMPANY, INC. WILLAMETTE VALLEY, INC.
MICROBREWERIES ACROSS AMERICA
By: ____________________________ By: ____________________________
Xxx Xxxxxx Name: __________________________
Its: President Its: ___________________________
NORTH COUNTRY BREWING COMPANY, INC. NORTH COUNTRY JOINT VENTURE, LLC
By: ____________________________ By: ____________________________
Name: __________________________ Name: __________________________
Its: ___________________________ Its: ___________________________
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EXHIBIT A
PROMISSORY NOTE
State of Oregon $192,358
County of Multnomah January ___, 1997
FOR VALUE RECEIVED, the undersigned, NOR'XXXXXX BREWING COMPANY, INC., an
Oregon corporation (the "Maker"), promises to pay to WILLAMETTE VALLEY, INC.
MICROBREWERIES ACROSS AMERICA, an Oregon corporation (the "Holder"), at such
place as the Holder may designate, the principal sum of ONE HUNDRED NINETY-TWO
THOUSAND THREE HUNDRED FIFTY-EIGHT AND NO/100 DOLLARS (U.S. $192,358), together
with interest on the outstanding principal balance of this Promissory Note from
the date hereof until fully paid at the interest rate hereinafter set forth.
Interest shall accrue on the unpaid principal balance hereof from the period
from the date hereof until paid at the rate of the prime rate quoted by Bank of
America Oregon plus one percent.
The outstanding principal balance, and all accrued and unpaid interest,
shall be due and payable on closing of the investment by United Breweries of
America, Inc. in Nor'Xxxxxx and its affiliates, pursuant to terms of the
Investment Agreement dated ________________________, 19______, or if closing has
not occurred by September 30, 1997, then in eight (8) equal quarterly payments
of principal and interest, beginning on December 31, 1997.
The undersigned shall pay upon demand any and all expenses, including
reasonable attorney fees, incurred or paid by the Holder of this Promissory Note
without suit or action in attempting to collect funds due under this Promissory
Note. In the event an action is instituted for the collection of this
Promissory Note, the prevailing party shall be entitled to recover, at trial or
on appeal, such sums as the court may adjudge reasonable as attorney fees, in
addition to costs and necessary disbursements.
Maker and its successors and assigns hereby waive presentment for payment,
notice of dishonor, protest, notice of protest, and diligence in collection and
consent that the time of payment on any part of this Promissory Note may be
extended by the Holder without otherwise modifying, altering, releasing,
affecting or limiting their liability.
This Promissory Note is to be construed in all respects and enforced
according to the laws of the State of Oregon.
1 - EXHIBIT A -- PROMISSORY NOTE
IN WITNESS WHEREOF, the Maker has caused this Promissory Note to be
executed and delivered by its duly authorized officer on the day and year first
above written.
NOR'XXXXXX BREWING COMPANY, INC.
By: ____________________________
Name: __________________________
Its: ___________________________
2 - EXHIBIT A -- PROMISSORY NOTE
