SENIOR PROMISSORY NOTE
$900,000.00 Date of This Note:
November 11, 1997
FOR VALUE RECEIVED, the undersigned AMERICAN CRAFT BREWING
INTERNATIONAL LIMITED., a Bermuda corporation ("Maker"), promises to pay to the
order of ENTREPRENEURIAL INVESTORS, LTD. ("Payee") at Freeport, Bahamas, or at
such other place as Payee may from time to time designate by written notice to
Maker, in lawful money of the United States of America, the sum of Nine Hundred
Thousand Dollars (U.S. $900,000.00), together with interest on the principal
balance from time to time remaining unpaid at the rate hereinafter provided.
Maker further agrees as follows:
SECTION 1. INTEREST RATE.
(a) Interest will accrue on the unpaid principal balance of this
Note at a rate equal to: Ten Percent (10%) per annum (not
compounded).
(b) Interest will be computed on the basis of a year of Three
Hundred Sixty Five (365) days for the actual number of days
elapsed.
(c) All agreements between Maker and Payee are expressly limited so
that in no contingency or event whatsoever shall the amount paid
or agreed to be paid to Payee for the use, forbearance, or
detention of the indebtedness evidenced by this Note shall
exceed the maximum amount permissible under applicable law. If
from any circumstance Payee should ever receive as interest or
imputed interest an amount which would exceed the highest lawful
rate, such amount as would be excessive interest shall be
applied to the reduction of the principal amount owing under
this Note and not to the payment of interest.
(d) Interest will be paid in cash, unless Maker and Payee agree
otherwise in writing.
SECTION 2. PAYMENTS.
All outstanding amounts owing under this Note, including accrued
interest and the outstanding principal, will be due and payable in full on March
31, 1998. All payments will be applied first to accrued interest and then to
principal.
SECTION 3. SECURITY.
This Note is secured by and entitled to the benefits of (a) Nine
Hundred and Fifty (950) shares of the common stock of AmBrew, USA, Inc., (b)
Nine Hundred Ninety Nine (999) shares of the capital stock of Cerveceria Rio
Bravo, S.A. de C.V., (c) the sixty percent (60%) percentage interest of Maker in
Celtic Brew LLC (as evidenced by certified copies of (i) the Articles of
Organization of Celtic Brew LLC, and (ii) the Operating Agreement of Celtic Brew
LLC, such certified copies to be delivered to Payee on or prior to the date
hereof), and (d) Four Thousand Seven Hundred and Forty Nine (4,749) shares of
South China Brewing Company Limited represented by Certificate No. 17 registered
in the name of Debtor (the items described in Sections 3(a) through 3(d), above
are hereinafter collectively referred to as the "Collateral"). The portion of
the Collateral described in Sections 3(a) and 3(b) above, along with executed
stock powers in blank, will be deposited with Cardinal International Bank &
Trust Co., Ltd., Nassau, Bahamas (the "Escrow Agent") within two (2) business
days of the Date of This Note. Prior to funding, Maker will provide, execute
and deliver to Payee any and all documents necessary to perfect the security
interest in the portion of the Collateral described in Section 3(c) above. The
portion of the Collateral described in Section 3(d) above, along with executed
stock powers in blank, will be deposited by Maker with Locke, Purnell, Rain,
Harrell, P.C. (New Orleans office), as escrow agent for Payee, prior to funding.
SECTION 4. DEFAULT.
Any of the following will constitute an event of default ("Event of
Default"):
(a) Any failure on the part of Maker to make any payment when due
under this Note, whether by acceleration or otherwise, and the
continuation of such failure for a period of five (5) days after
written notice thereof from Payee.
(b) Any failure on the part of Maker to keep or perform any of the
terms or provisions of this Note (other than a monetary default
described in Section 4(a) above), or any other documents
evidencing, governing, or securing this Note and the
continuation of such failure for more than five (5) days after
written notice thereof from Payee.
(c) Maker shall commence (or take any action for the purpose of
commencing) any proceeding under any bankruptcy, reorganization,
arrangement, readjustment of debt, moratorium or similar law or
statute.
(d) A proceeding shall be commenced against Maker under any
bankruptcy, reorganization, arrangement, readjustment of debt,
moratorium or similar law or statute and relief is ordered
against it, or the proceeding is controverted but is not
dismissed within sixty (60) days after the commencement thereof.
(e) Maker consents to or suffers the appointment of a receiver,
trustee or custodian to any substantial part of its assets that
is not vacated within sixty (60) days.
(f) The occurrence of any event of default under the terms of any
documents evidencing, governing or securing any indebtedness of
maker now existing or hereafter arising in favor of equity
services, ltd. or payee.
Upon the occurrence of an Event of Default, Payee will have the right and
option, without notice or demand (except as otherwise provided herein) to
accelerate the unpaid balance of principal and accrued interest on this Note.
If this Note is not paid at its maturity, regardless of how such maturity may be
brought about, Payee may exercise any of its rights provided hereunder or in any
instrument which evidences, governs or secures payment of this Note, or at law
or in equity. Failure to exercise any of such rights upon the occurrence of an
Event of Default will not constitute a waiver of the right to exercise any of
them at any time. If, after default, this Note is placed in the hands of an
attorney for collection, or if collection is sought through judicial
proceedings, Maker will pay, in addition to the sums referred to above,
reasonable attorneys fees and other reasonable costs incurred by Payee in the
collection of the unpaid amounts due hereunder.
SECTION 5. SUBORDINATION.
This Note will be a general obligation of Maker and is senior and not
subordinated to any and all obligations of Maker (e.g., to any bank or other
financial institution), regardless of whether such obligations are presently
existing or are subsequently incurred.
SECTION 6. WAIVERS.
Maker and all sureties, endorsers, guarantors and any other party now
or hereafter liable for the payment of this Note in whole or in part, hereby
severally (i) waive (except as otherwise herein provided) demand, presentment
for payment, notice of nonpayment, protest, notice of protest, notice of intent
to accelerate, notice of acceleration and all other notice, filing of suit and
diligence in collecting this Note or enforcing any of the security herefor, (ii)
agree to any substitution, subordination, exchange or release of any such
security or the release of any party primarily or secondarily liable hereon,
(iii) agree that Payee shall not be required first to institute suit or exhaust
its remedies hereon against Maker or others liable or to become liable hereon or
to enforce its rights against them or any security herefor, and (iv) consent to
any extension or postponement of time of payment of this Note and to any other
indulgence with respect hereto without notice thereof to any of them.
SECTION 7. ASSIGNMENT OF NOTE.
Neither Maker nor Payee may assign or transfer this Note in any manner
whatsoever. Any such purported assignment shall be void ab initio.
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SECTION 8. MISCELLANEOUS.
(a) This Note may be altered only by prior written agreement signed
by the party against whom enforcement of any waiver, change,
modification, or discharge is sought. This Note may not be
modified by an oral agreement, even if supported by new
consideration.
(b) This Note shall be governed by, and construed in accordance
with, the laws of the State of Delaware without giving effect to
such state's principles of the conflict of laws.
(c) All notices and other communications provided for or permitted
hereunder shall be made in writing by hand delivery, express
overnight courier, registered first class mail, overnight
courier, or telecopied, initially to the address set forth
below, and thereafter at such other address, notice of which is
given in accordance with the provisions of this Section 8(c):
IF TO MAKER:
American Craft Brewing International Limited
One Galleria Blvd., Suite 1714
Metaire, Louisiana 70001
Attn: Peter W. H. Bordeaux, Chairman or
James Ake, Executive Vice-President
Telephone: (504)849-2739
Telecopier: (504)849-2740
WITH A COPY (WHICH SHALL NOT CONSTITUTE NOTICE) TO:
Locke, Purnell, Rain, Harrell, P.C.
601 Poydras St., Suite 2400
New Orleans, Louisiana 70130
Attn: Donald Ensenat, Esq.
Telephone: (504)558-5100
Telecopier: (504)558-5200
IF TO PAYEE:
Entrepreneurial Investors, Ltd.
Citibank Building, Second Floor
East Mall Drive
P.O. Box 40643
Freeport, Bahamas
Attn: Mr. Robert E. Cordes, Director
Telephone: (242)352-7063
Telecopier: (242)352-3932
WITH A COPY (WHICH SHALL NOT CONSTITUTE NOTICE) TO:
Novakov, Davidson & Flynn, P.C.
2000 St. Paul Place
750 N. St. Paul Street
Dallas, Texas 75201-3286
Attn: I. Bobby Majumder, Esq.
Telephone: (214)922-9221
Telecopier: (214)969-7557
All such notices and communications shall be deemed to have been duly given: (i)
when delivered by hand, if personally delivered; (ii) three (3) business days
after being deposited in the mail, postage prepaid, if mailed; (iii) the next
business day after being deposited with an overnight courier, if deposited with
a nationally recognized, overnight courier service; or (iv) upon receipt, if
telecopied.
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IN WITNESS WHEREOF, Maker has executed this Note effective as of the
date first set forth above.
MAKER:
AMERICAN CRAFT BREWING
INTERNATIONAL LIMITED
By: /s/ PETER W. H. BORDEAUX
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PETER W. H. BORDEAUX, Chairman
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