March 19, 2001
Xxxxxxx X. Xxxxx
Chairman and President
Portland Brewing Company
0000 XX 00xx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Re: Portland Brewing Company ("Company")
Dear Xxxx:
Portland Brewing Co. had a term loan payable to the MacTarnahan Limited
Partnership of $2.5 million with a maturity date of April 1, 2001. In February
2001, the Company refinanced the $2.5 million term loan with Western Bank,
secured by the Company's assets and guaranteed by Xxxxxx Mill & Logging Supply
Co., MacTarnahan Limited Partnership, MacTarnahan Family Trust and by me
("Guarantors"). The maturity date of the replacement term loan is August 2,
2001, with an extension of 90-days. The Company expects to place the debt
permanently with a financial institution by September 30, 2001 or pay off the
debt through the raising of additional capital. We are aware there is no
assurance that the Company will be able to obtain permanent financing from a
financial institution or that the Company will be able to raise additional
capital on commercially reasonable terms or at all.
To the extent that the Company is unable to refinance the $2.5 million term loan
with Western Bank by its maturity date, either (a) the Guarantors will support
and guaranty a replacement term loan with Western Bank, which loan will extend
for at least a 12 month period; or (b) MacTarnahan Limited Partnership ("MLP")
will repay or purchase the Western Bank term loan and refinance the loan for at
least a 12 month period with a 5 year amortization at market rates secured by
the assets of the Company and subject to customary financial covenants.
To the extent that the Company incurs working capital deficiencies in 2001, MLP
will provide funding to the Company in the form of debt or equity in an amount
not to exceed $500,000 to remedy cash deficiencies that may be necessary to fund
operations through December 31, 2001.
This agreement is binding and non-cancelable.
Very Truly Yours,
/S/ XXXXXX X. XXXXXXXXXXX
Xxxxxx X. XxxXxxxxxxx
On Behalf of MacTarnahan Limited Partnership,
Xxxxxx Mill & Logging Co., Xxxxxx X. XxxXxxxxxxx
Acknowledged:
/S/ XXXXXXX X. XXXXX
By: Xxxxxxx X. Xxxxx
Chairman & President
March 22, 2001
Date
Cc: Xxxx Xxxxxxx, Xxxxxx Xxxxxxxx
