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EXHIBIT 10.1
PROMISSORY NOTE AND SECURITY AGREEMENT
$1,500,000.00
Maturity Date: earlier to occur of:
(i) February 20, 2001; or
(ii) Equipment Loan Closing
Detroit, Michigan
Date of Note: August 21, 2000
INDEBTEDNESS
FOR VALUE RECEIVED, the undersigned, BUCK & BASS, L.P., Missouri limited
partnership ("Borrower"), promises to pay to the order of BIG BUCK BREWERY &
STEAKHOUSE, INC., a Michigan corporation ("Holder"), at its offices at 550 South
Wisconsin Street, Gaylord, Michigan 49735, or at such other place as the Holder
hereof may designate in writing from time to time, the principal sum of One
Million Five Hundred Thousand and 00/100 ($1,500,000.00) Dollars, together with
interest as hereinafter provided, in lawful money of the United States, which
shall be legal tender in payment of all debts and dues, public and private, at
the time of payment, in the manner hereinafter provided.
RATE OF INTEREST
So long as there is no default hereunder or under the Security Instruments
(as defined below), the principal balance of this Promissory Note and Security
Agreement ("Note") shall bear interest at the rate of Twelve (12%) percent
simple interest per annum ("Contract Rate") during the term of this Note.
If Borrower does not make timely payments as provided in this Note, a late
payment fee in an amount equal to three (3%) percent of the past due amount
shall be payable in connection with any amount due under this Note that is not
received by Holder within ten (10) days of when due. In the Event of Default
hereunder, Holder shall have the right and option to charge interest on the then
outstanding principal balance at a default rate of Four (4%) percent in excess
of the Contract Rate.
LIMITATIONS ON INTEREST RATE
It is the intention of Borrower and Holder that the rates of interest from
time to time applicable hereunder, including all sums and charges that may
properly be deemed to constitute interest, shall not exceed the maximum lawful
rate of interest applicable to each such rate. To that end, it is agreed that
any rate of interest applicable hereunder shall not at any time exceed the rates
or amount of interest then permitted to be charged by stipulation in writing
between Borrower and Holder hereunder (the "Interest Rate Limitation").
In the event that any rate of interest otherwise applicable hereunder
(including any sums paid independent of this Note and properly determined under
applicable law to be interest) shall exceed the Interest Rate Limitation, the
interest rate applicable to this Note shall automatically be reduced to the
applicable maximum interest rate which does not exceed the applicable Interest
Rate Limitation, and sums paid as interest which would cause any effective rate
of interest hereunder to exceed the applicable Interest Rate Limitation shall be
applied to reduce the principal balance of this Note.
MANNER OF PAYMENT
Borrower shall make interest only payments due under this Note commencing
September 1, 2000 and continuing on the first (1st) day of each month thereafter
until the Maturity Date (as defined below). The balance of the principal amount
and all accrued but unpaid interest due under this Note shall be paid by
Borrower in a lump sum or balloon payment on the earlier to occur of (i)
Equipment Loan Closing (as hereinafter defined) or (ii) February 20, 2001 (the
"Maturity Date"). Payments hereunder shall be applied in the following order of
priority: late charges, costs, expenses, accrued interest and thereafter to the
reduction of principal. This Note will not be self amortizing and instead of a
substantial lump sum balloon
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installment of principal and interest will be due on the Maturity Date. For the
purposes of this Note, the term "Equipment Loan Closing" shall mean the closing
and funding of a permanent loan for the financing of equipment and fixtures to
Borrower and/or to Holder with respect to the Grapevine, Texas development
("Grapevine Facility").
All interest shall be payable in arrears. Interest hereon shall be
calculated on the basis of a 360-day year applied to the actual number of days
elapsed. All payments of interest and principal shall be payable in lawful
currency of the United States of America.
PREPAYMENT
Prepayment of the principal of this Note is permitted, in whole or in part,
without premium or penalty of any kind.
DEFAULT
The unpaid principal balance, all accrued and unpaid interest due under
this Note and all other amounts due hereunder or under the Security Instruments
shall become immediately due and payable at the option of Holder upon the
occurrence of any of the following (collectively, "Events of Default"):
a. the Borrower shall fail to pay any principal of or interest on this
Promissory Note when the same shall become due and payable, whether at the
stated date of maturity or any accelerated date of maturity or at any other
date fixed for payment; or
b. the Borrower shall make an assignment for the benefit of creditors, or
admit in writing its inability to pay or generally fail to pay its debts as
they mature or become due, or shall petition or apply for the appointment
of a trustee or other custodian, liquidator or receiver of the Borrower or
of any substantial part of its assets, or shall commence any case or other
proceeding relating to the Borrower under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or liquidation
or similar law of any jurisdiction, now or hereafter in effect, or shall
take any action to authorize or in furtherance of any of the foregoing, or
if any such petition or application shall be filed or any such case or
other proceeding shall be commenced against the Borrower and the Borrower
shall indicate its approval thereof, consent thereto or acquiescence
therein or shall fail to contest the same in a timely manner;
c. an involuntary petition shall be filed or an involuntary proceeding
shall be commenced seeking liquidation, reorganization or other relief in
respect of the Borrower or of its debts or any substantial part of its
assets, under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar law of any
jurisdiction, now or hereafter in effect, and in any such case, such
proceeding or petition shall continue undismissed for sixty (60) days or an
order or decree approving or ordering any of the foregoing shall be
entered;
Borrower shall pay all costs and reasonable attorneys' fees incurred in
collecting or enforcing this Note, whether suit be brought or not. Any failure
of Holder to exercise such option to accelerate shall not constitute a waiver of
the right to exercise such option to accelerate at any future time. Any failure
of Holder to exercise such option to accelerate shall not constitute a waiver of
the right to exercise such option to accelerate at any future time.
Acceptance by Holder of any payment in an amount less than the amount then
due shall be deemed an acceptance on account only, and the failure to pay the
entire amount then due shall be and continue to be an Event of Default or
default. At any time thereafter and until the entire amount then due has been
paid, Holder shall be entitled to exercise all rights conferred upon it in this
Note, upon the occurrence of an Event of Default.
Borrower and every person and entity at any time liable for the payment of
the evidenced debt expressly authorize Holder to immediately apply to the
payment of this Note any sum of money or other property belonging to Borrower or
any such person or entity, deposited or otherwise in the hands of Holder;
provided, however, that neither this authority, nor the fact that it may not be
exercised, shall alter or modify in any manner the obligation herein incurred.
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SECURITY AGREEMENT
The obligations of Borrower hereunder are secured by a security interest in
all equipment, trade fixtures and fixtures of Borrower related to the Grapevine
Facility. The undersigned agrees that this Note shall also constitute a security
agreement within the meaning of the Texas Uniform Commercial Code or the Uniform
Commercial Code of any other applicable state ("Code") with respect to
Borrower's interest in all equipment, trade fixtures and fixtures and all
proceeds thereof with respect to the Grapevine Facility; a security interest in
and to the personal property, equipment, contracts, licenses, permits, goods,
inventory, fixtures, general intangibles, trade fixtures, and products and
proceeds (collectively, "Collateral") with respect to the Grapevine Facility is
hereby granted to Holder by Borrower; and Borrower hereby pledges and assigns to
Holder all of Borrower's right, title and interest in the Collateral, all to
secure the payment of the indebtedness of Borrower to Holder under this Note. In
event of default or Event of Default hereunder, the Holder shall have the right
to foreclose its security interest in Borrower's interest in the Collateral with
respect to the Grapevine Facility in a manner provided by law for the
foreclosure of a security interest under the Code or as otherwise provided in
law or in equity. Until the indebtedness evidenced by this Note is paid in full,
the Borrower shall sell, assign, transfer or otherwise dispose of the Collateral
with respect to the Grapevine Facility or any interest therein, and Borrower
covenants and represents that the Collateral will be free and clear of all
liens, encumbrances or security interests of others, other than Holder's. The
Borrower, upon demand, shall execute and deliver to Holder financing statements
and/or title applications for certificates and other documents in form necessary
and satisfactory to Holder, and will do all such acts and things as Holder may
at any time or from time to time, reasonably request or may be necessary or
appropriate to establish and maintain the first perfected security interest in
the Collateral with respect to the Grapevine Facility, subject to no liens,
encumbrances or other security interests.
ASSIGNMENT
This Note is being assigned by Holder to Wayne County Employees' Retirement
System ("WCERS") as security for the indebtedness evidenced by that certain
Promissory Note dated August 21, 2000 ("Big Buck Note") from Holder to WCERS.
Upon any default under this Note and the Big Buck Note, WCERS has the right to
seek all rights and remedies under this Note, the Big Buck Note and all loan
documents and agreements evidencing and securing this Note and the Big Buck
Note.
WAIVER
Borrower, for itself and its legal representatives, successors and assigns,
and every person and entity at any time liable for the indebtedness hereunder,
or any part thereof, expressly waives presentment, demand, protest, notice of
dishonor, notice of nonpayment, notice of maturity, notice of protest,
presentment for the purpose of accelerating maturity, diligence in collection,
marshalling rights, subrogation rights, and any exemption under the homestead
exemption laws, if any, or any other exemption or insolvency laws. Borrower
consents that Holder may release, exchange or substitute any real estate and/or
personal property or other collateral security now held, or which may hereafter
be held as security for the payment of this Note, and may extend the time for
payment or otherwise modify the terms of payment of any part or the whole of the
debt evidenced hereby.
GOVERNING LAW, SUCCESSORS AND ASSIGNS AND MISCELLANEOUS
This Note is delivered and accepted in the State of Michigan and shall be
governed and construed in accordance with its laws. If any provision of this
Note is in conflict with any statute or applicable rule of law, or is otherwise
unenforceable for any reason whatsoever, such provision shall be deemed null and
void to the extent of such conflict or unenforceability and shall be deemed
separate from and shall not invalidate any other provision of this Note. Time
shall be of the essence under this Note. This Note may not be amended except by
a writing signed by Borrower and Holder. This Note shall, in accordance with its
terms, be binding upon Borrower, its partners and their respective personal
representatives, heirs and successors and assigns and shall inure to the benefit
of Holder and its successors and assigns. The paragraph captions provided in
this Note are for convenience only and shall not affect the meaning,
interpretation or construction of the provisions hereof.
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IN WITNESS WHEREOF, Borrower has caused this Note to be executed on the day
and year first written above.
BUCK & BASS, L.P.,
a Missouri limited partnership
By: BBBP Management Company,
a Michigan corporation
Its: General Partner
By: /s/ William F. Rolinski
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Its: President
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Address: 505 South Wisconsin
P.O. Box 1430
Gaylord, MI 49735-0617
Tax I.D. No. 38-3439133
