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EXHIBIT 10.1
SBA LOAN NUMBER
CLPGP5975053006SNA
U.S. Small Business Administration
NOTE
DANA Point, CA
(City and State)
445,000.00 (Date) 11/10, 93
For value received, the undersigned promises to pay to the order of
LIBERTY NATIONAL BANK its office in the city of HUNTINGTON BEACH, State of
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(Payee)
CALIFORNIA at holder's option, at such other place as may be designated from
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time to time by the holder **FOUR HUNDRED FORTY FIVE THOUSAND AND 00/100**
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(Write out amount)
dollars, with interest on unpaid principal computed from the date of each
advance to the undersigned at the rate of 8.750 percent per annum, payment to be
made in installments as follows:
Interest on this Note shall be computed on the basis of a 360 day year.
SIX (6) interest installment(s), payable monthly, commencing on the
first day of the month(s) from date of first disbursement followed by 120
installments including principal and interest each in the amount of FIVE
THOUSAND FIVE HUNDRED SEVENTY EIGHT AND 00/100 DOLLARS ($5,578.00), payable
monthly thereafter until TEN (10) years six months from the date of first
disbursement when the full unpaid balance of principal and interest shall
become due and payable. Each installment shall be applied to interest accrued
as of date of receipt and the balance, if any, to principal.
THIS IS A VARIABLE INTEREST RATE NOTE. Interest on unpaid principal
shall accrue at the initial rate of EIGHT AND THREE QUARTERS (8.750%) percent
per annum. Commencing on the first calendar day of the calendar quarter
following first disbursement, and quarterly thereafter, the interest rate shall
increase or decrease to TWO AND THREE QUARTERS (2.750%) percent above the
lowest New York Prime Rate in effect on the first business day of the month, as
published in the Money Rate Section of the West Coast Edition of The Wall
Street Journal.
NOTE: The amount of the monthly payment shown above is based upon
the prime interest rate as of the date of the receipt of the loan application
by SBA of SIX (6.000%) percent plus a spread of TWO AND THREE QUARTERS
(2.750%).
The amount of the monthly installments of principal and interest
required herein shall be increased or decreased, as appropriate, to an amount
necessary to amortize principal remaining unpaid as of the date of change in
the interest rate over the remaining term of this Note.
The Lender shall give the Borrower written notice of any change in the
interest rate of this Note and of any change (either an increase or decrease)
in the amount of the principal and interest installments required herein within
thirty (30) days after the effective date of any such change.
If the Borrower shall be in default in payment due on the indebtedness
herein and the Small Business Administration (SBA) purchases its guaranteed
portion of said indebtedness, the rate of interest on both the guaranteed and
unguaranteed portion herein shall become fixed at the rate in effect as of the
initial date of default. If the Borrower shall not be in default in payment
when SBA purchases its guaranteed and unguaranteed portion shall be fixed at
the rate in effect as of the date of purchase by SBA.
LATE CHARGE: If a payment is more than 10 days late, Borrower will be
charged 5.000% of the unpaid portion of the regularly scheduled payment or
$1.00, whichever is greater.
If this Note contains a fluctuating interest rate, the notice
provision is not a pre-condition for fluctuation (which shall take place
regardless of notice). Payment of any installment of principal or interest
owing on this Note may be made prior to the maturity date hereof without
penalty. Borrower shall provide lender with written notice of intent to prepay
part or all of this loan at least three (3) [days prior?] to the anticipated
prepayment. A prepayment is any payment made ahead of schedule that exceeds
twenty (20) percent of the then outstanding principal balance. If borrower
makes a prepayment and fails to give at least three weeks advance notice of
intent to prepay, then, notwithstanding any other provision to the contrary in
this note or other document, borrower shall be required to pay lender three
weeks interest on the unpaid principal as of the date preceding such
prepayment.
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The term "indebtedness" as used herein shall mean the indebtedness
evidenced by this Note, including principal, interest, and expenses, whether
contingent, now due or hereafter to become due and whether heretofore or
contemporaneously herewith or hereafter contracted. The term "Collateral" as
used in this Note shall mean any funds, guaranties, or other property or rights
therein of any nature whatsoever or the proceeds thereof which may have been,
are, or hereafter may be, hypothecated, directly or indirectly by the
undersigned or others, in connection with, or as security for, the Indebtedness
or any party thereof. The covenants and conditions set forth or referred to in
any and all instruments of hypothecation constituting the Collateral are hereby
incorporated in this Note as covenants and conditions of the undersigned with
the same force and effect as though such covenants and conditions were fully
set forth herein.
The indebtedness shall immediately become due and payable, without
notice or demand, upon the appointment of a receiver or liquidator, whether
voluntary or involuntary, for the undersigned or for any of its property, or
upon the filing of a petition by or against the undersigned under the
provisions of any State insolvency law or under the provisions of the
Bankruptcy Reform Act of 1978, as amended, or upon the making by the
undersigned of an assignment for the benefit of its creditors. Holder is
authorized to declare all or any part of the Indebtedness immediately due and
payable upon the happening of any of the following events: (1) Failure to pay
any part of the Indebtedness when due; (2) nonperformance by the undersigned of
any agreement with, or any condition imposed by, Holder or Small Business
Administration (hereinafter called "SBA"), with respect to the Indebtedness;
(3) Holder's discovery of the undersigned's failure in any application of the
undersigned to Holder or SBA to disclose any fact deemed by Holder to be
material or of the making therein or in any of the said agreements, or in any
affidavit or other documents submitted in connection with said application or
the indebtedness, of any misrepresentation by, on behalf of, or for the benefit
of the undersigned; (4) the reorganization (other than a reorganization
pursuant to any of the provisions of the Bankruptcy Reform Act of 1978, as
amended) or merger or consolidation of the undersigned (or the making of any
agreement therefor) without the prior written consent of Holder; (5) the
undersigned's failure duly to account, to Holder's satisfaction, at such time
or times as Holder may require, for any of the Collateral, or proceeds thereof,
coming into the control of the undersigned; or (6) the institution of any suit
affecting the undersigned deemed by Holder to affect adversely its interest
hereunder in the Collateral or otherwise. Holder's failure to exercise its
rights under this paragraph shall not constitute a waiver thereof.
Upon the nonpayment of the Indebtedness, or any part thereof, when
due, whether by acceleration or otherwise, Holder is empowered to sell, assign,
and deliver the whole or any part of the Collateral at public or private sale,
without demand, advertisement or notice of the time or place of sale or of any
adjournment thereof, which are hereby expressly waived. After deducting all
expenses incidental to or arising from such sale or sales. Holder may apply
the residue of the proceeds thereof to the payment of the Indebtedness, as it
shall deem proper, returning the excess, if any, to the undersigned. The
undersigned hereby waives all right of redemption or appraisement whether
before or after sale.
Holder is further empowered to collect or cause to be collected or
otherwise to be converted into money all or any part of the Collateral, by suit
or otherwise, and to surrender, compromise, release, renew, extend, exchange,
or substitute any item of the Collateral in transactions with the undersigned
or any assignee. Whenever any item of the Collateral shall not be paid when
due, or otherwise shall be in default, whether or not the indebtedness, or any
part thereof, has become due, Holder shall have the same rights and powers with
respect to such item of the Collateral as are granted in this paragraph in case
of nonpayment of the Indebtedness, or any part thereof, when due. None of the
rights, remedies, privileges, or powers of Holder expressly provided for herein
shall be exclusive, but each of them shall be cumulative with and in addition
to every other right, remedy, privilege, and power now or hereafter existing in
favor of Holder, whether at law or equity, by statute or otherwise.
The undersigned agrees to take all necessary steps to administer,
supervise, preserve, and protect the Collateral; and regardless of any action
taken by Holder, there shall be no duty upon Holder in this respect. The
undersigned shall pay all expenses of any nature, whether incurred in or out of
court, and whether incurred before or after this Note shall become due at its
maturity date or otherwise, including but not limited to reasonable attorney's
fees and costs, which Holder may deem necessary or proper in connection with
the satisfaction of the Indebtedness or the administration, supervision,
preservation, protection of (including, but not limited to, the maintenance of
adequate insurance) or the realization upon the Collateral. Holder is
authorized to pay at any time and from time to time any or all of such
expenses, add the amount of such payment to the amount of the Indebtedness, and
charge interest thereon at the rate specified herein with respect to the
principal amount of this Note.
The security rights of Holder and its assigns hereunder shall not be
impaired by Holder's sale, hypothecation or rehypothecation of any note of the
undersigned or any lien of the Collateral, or by any indulgence, including but
not limited to (a) any renewal, extension, or modification which Holder may
grant with respect to the Indebtedness or any part thereof, or (b) any
surrender, compromise, release, renewal, extension, exchange, or substitution
which Holder may grant in respect of the Collateral, or (c) any indulgence
granted in respect of any endorser, guarantor, or surety. The purchaser,
assignee, transferee, or pledgee of this Note, the Collateral, and guaranty,
and any other document (or any of them), sold, assigned, transferred, pledged,
or repledged, shall forthwith become vested with and entitled to exercise all
the powers and rights given by this Note and all applications of the
undersigned to Holder or SBA, as if said purchaser, assignee, transferee, or
pledgee were originally named as Payee in this Note and in said application or
applications.
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This promissory note is given to secure a loan which SBA is making or
in which it is participating and, pursuant to Part 101 of the Rules and
Regulations of SBA (13 C.F.R. 101.1(d)), this instrument is to be construed and
(when SBA is the Holder or a party in interest) enforced in accordance with
applicable Federal law.
Upon any breach of this Note, the balance shall continue to accrue interest at
the rate specified herein.
DUE ON SALE - CONSENT BY LENDER. Lender may, at its option, declare
immediately due and payable all sums secured by this Deed of Trust upon the
sale or transfer, without the Lender's prior written consent, of all or any
part of the Real Property, or any interest in the Real Property. A "sale or
transfer" means the conveyance of Real Property or any right, title or interest
therein; whether legal or equitable; whether voluntary or involuntary; whether
by outright sale deed, installment sale contract, land contract, contract for
deed, leasehold interest with a term greater than three (3) years, lease-option
contract, or by sale, assignment, or transfer of any beneficial interest in or
to any land trust holding title to the Real Property, or by any other method of
conveyance of Real Property interest. If any Trustor is a corporation or
partnership, transfer also includes any change in ownership of more than
twenty-five percent (25%) of the voting stock or partnership interests, as the
case may be, of Trustor. However, this option shall not be exercised by Lender
if such exercise is prohibited by applicable law.
HERITAGE BREWING COMPANY, INC.
BY: /s/ JOHN G. STONER
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JOHN G. STONER, CHIEF EXECUTIVE OFFICER
BY: /s/ MARK B. MERICLE
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MARK B. MERICLE, PRESIDENT/SECRETARY
Note. -- Corporate applicants must execute Note, in corporate name, by duly
authorized officer, and seal must be affixed and duly attested:
part-applicants must execute Note in firm name, together with signature of
a general partner.
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