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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) September 24, 1997
AMERICAN CRAFT BREWING INTERNATIONAL LIMITED
(EXACT NAME OF REGISTRATION BUSINESS AS SPECIFIED IN ITS CHARTER)
1-12119
(COMMISSION FILE NUMBER)
BERMUDA 72-1323940
(STATE OF OTHER JURISDICTION OF INCORPORATION) (I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
ONE GALLERIA BOULEVARD, SUITE 1714, METAIRIE, LOUISIANA 70001
(ADDRESS, INCLUDING ZIP CODE, OF PRINCIPAL EXECUTIVE OFFICES)
(504) 849-2739
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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Item 5. Other Events.
On September 24, 1997, Cerveceria Rio Bravo S.A. de C.V. ("Rio Bravo"), a
wholly-owned subsidiary of American Craft Brewing International Limited (the
"Company"), borrowed U.S. $300,000.00 from Internacional de Mexico S.A. de C.V.
(the "Lender"). Rio Bravo paid to the Lender an origination fee of U.S.
$6,000.00. Rio Bravo may use the proceeds of the loan solely for the purpose of
paying its past due, current and future obligations incurred in connection with
the maintenance and operations of its brewing facilities.
The outstanding principal amount of the note evidencing the loan bears
interest at the rate of 12% per annum, and the note is payable in a single
payment of principal and accrued interest on November 23, 1997. Rio Bravo may
prepay the loan, in whole or in part, without any prepayment penalty. The note
is secured by a security interest granted by Rio Bravo in favor of the Lender in
all of the accounts receivable, inventory, equipment, fixed assets, furniture
and fixtures of Rio Bravo.
As further consideration for the loan, the Company issued to the Lender
warrants to purchase 100,000 shares of common stock of the Company. The
exercise price of the warrants is U.S. $.50 per share, and the warrants are
exercisable at any time from and after the earlier of (i) November 23, 1997 or
(ii) the date of the repayment of the loan, until September 24, 2002.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
Not Applicable
(b) Proforma Financial Information.
Not Applicable
(c) Exhibits.
The following exhibits are filed herewith:
10.34 Lending and Proceeds of Loan Agreement dated September 24, 1997
among American Craft Brewing International Limited, Cerveceria Rio
Bravo S.A. de C.V. and Internacional de Mexico S.A. de C.V.
10.35 Promissory Note secured by Security Agreement dated September 24,
1997 in the original principal amount of U.S. $300,000 by Cerveceria
Rio Bravo S.A. de C.V. in favor of Internacional de Mexico S.A. de
C.V.
10.36 Security Agreement dated as of September 24, 1997 between Cerveceria
Rio Bravo S.A. de C.V. and Internacional de Mexico S.A. de C.V.
10.37 Redeemable Warrant dated September 24, 1997 between American Craft
Brewing International Limited and Internacional de Mexico S.A. de
C.V.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunder duly authorized.
AMERICAN CRAFT BREWING
INTERNATIONAL LIMITED
Date: October 6, 1997 By: /s/James L. Ake
---------------------------
James L. Ake
Executive Vice President
-2-
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EXHIBIT INDEX
10.34 Lending and Proceeds of Loan Agreement dated September 24, 1997 among
American Craft Brewing International Limited, Cerveceria Rio Bravo S.A.
de C.V. and Internacional de Mexico S.A. de C.V.
10.35 Promissory Note secured by Security Agreement dated September 24, 1997 in
the original principal amount of U.S. $300,000 by Cerveceria Rio Bravo
S.A. de C.V. in favor of Internacional de Mexico S.A. de C.V.
10.36 Security Agreement dated as of September 24, 1997 between Cerveceria Rio
Bravo S.A. de C.V. and Internacional de Mexico S.A. de C.V.
10.37 Redeemable Warrant dated September 24, 1997 between American Craft
Brewing International Limited and Internacional de Mexico S.A. de C.V.
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LENDING AND PROCEEDS OF LOAN AGREEMENT
This Agreement is entered into this 24th day of September 1997 at Tecate,
State of Baja California Norte, Mexico by and among the undersigned,
Cerveceria Rio Bravo S.A. de C.V., American Craft Brewing International
Limited and Internacional de Mexico S.A. de C.V. a Mexican corporation (the
"lender")
WHEREAS, Internacional de Mexico S.A. de C.V. has loaned to Cerveceria Rio
Bravo S.A. de C.V. the sum of Three Hundred Thousand and no/100 Dollars
($300,000.00) as evidenced by a note arid security agreement dated September 24,
1997; and
WHEREAS, American Craft Brewing International Limited as sole
shareholder of Cerveceria Rio Bravo S.A. be C.V. has consented to the
execution by Cerveceria Rio Bravo S.A. de C.V. of the note and security
agreement; and
WHEREAS, the loan in the sum of $300,000.00 is essential to the continued
operations of Cerveceria Rio Bravo S.A. be C.V. in which American Craft Brewing
International Limited is the sole shareholder.
NOW, THEREFORE, in consideration of the above, the parties hereto do
hereby agree as follows:
A. As consideration for the loan, Cerveceria Rio Bravo S.A. de C.V. agrees to
pay to Internacional de Mexico S.A. de C.V. two (2) points or $6,000.00 at
the funding of said loan.
B. Cerveceria Rio Bravo S.A. de C.V. and American Craft Brewing International
Limited agree that they shall pay from the loan proceeds of $300,000.00
only those obligations connected and associated with the maintenance and
operation of the brewing facility located in Tecate. That said proceeds
are limited to payments of past due, current and future obligations and
for no other purpose. In that regard, Cerveceria Rio Bravo S.A. de C.V. is
authorized to pay to Cabo Distributing Company, Inc. the sum of $39,000.00
for past due billings. It is agreed by the parties herein that the payment
to Cabo Distributing Company, Inc. is part of the consideration for
Internacional de Mexico S.A. de C.V. making said loan
C. As further consideration for Internacional de Mexico S.A. de C.V.'s loan
to Cerveceria Rio Bravo S.A. be C.V. of the sum of Three Hundred Thousand
and no/100 Dollars
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($300,000.00), American Craft Brewing International Limited herein agrees
to issue to the Lender One Hundred Thousand (l00,000) of its $0.50 five-
year six-month warrants to purchase shares of its common stock in the form
of Annex A hereto.
American Craft Brewing International Limited:
BY: /s/ Peter W. H. Bordeaux
-------------------------------
Peter W. H. Bordeaux President
BY: /s/ James L. Ake
-------------------------------
James L. Ake, Secretary
Cerveceria Rio Bravo S.A. de C.V.
BY: /s/ Peter Bordeaux
-------------------------------
Peter W. H. Bordeaux, President
BY: /s/ James L. Ake
-------------------------------
James L. Ake, Secretary
Iniernacional de Mexico S.A. de C.V.
BY: /s/ Fernando Guierrez Saenz
-------------------------------
Fernando Gutierrez Saenz, President
<PAGE>
Annex A
Lender acknowledges that it is a sophisticated financial institution
capable of evaluating and bearing the risks of investment and that it has had
full access to financial and other information concerning the borrower and the
issuer of the warrants and their respective officers and the opportunity to ask
such questions as it in its discretion desired. Lender acknowledges and agrees
that the warrants being issued nor the common stock issuable upon exercise
thereof has been registered under the United States Securities Act of 1933 or
any other Mexican or U.S. securities law. Lender acknowledges and agrees that it
is acquiring the warrants being issued to it pursuant hereto for investment and
not with any view to the distribution thereof and that it will not transfer the
warrants or any common stock issuable upon exercise thereof without registering
the same under the United States Securities Act of 1933 and any applicable
Mexican or other U.S. securities law unless it has first provided to the issuer
of the warrants an opinion of counsel satisfactory to it stating that it is not
necessary to register such warrants or such stock under the United States
Securities Act of 1933 or any other Mexican or U.S. securities law and the
transferee agrees to abide by the foregoing restrictions, and that a legend to
the foregoing effect may be placed on such warrants and any common stock
issuable upon exercise thereof.
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PROMISSORY NOTE SECURED BY SECURITY AGREEMENT
$ 300,000.00 SEPTEMBER 24, 1997
THIS PROMISSORY NOTE IS MADE THIS 24TH DAY OF SEPTEMBER, 1997 AT TECATE,
STATE OF BAJA CALIFORNIA NORTE, MEXICO.
FOR VALUE RECEIVED, the receipt of which is hereby acknowledged, the
undersigned, Cerveceria Rio Bravo S.A. de C.V. ("Maker'1) promises to pay to
Internacional de Mexico S.A. de C.V. ("Holder") or order, the sum of Three
Hundred Thousand and no/100 Dollars ($300,000.00) together with interest thereon
at the rate of twelve percent (12%) per annum, payable on or before November
23, 1997 when the balance of principal, together with interest accrued thereon,
shall become immediately due and payable.
PREPAYMENT. Maker may prepay the principal and interest under this Note in whole
or in part prior to the Maturity Date without any prepayment penalty.
DEFAULT. Maker will be in default if any of the following happens: (a) In the
event Maker fails make the payment when due after ten (10) days written notice
from Holder; (b) The occurrence and continuance of any one or more of the events
of default specified in the security agreement between Cerveceria Rio Bravo S.A.
de C.V., as debtor and Internacional de Mexico S.A. de C.V., as secured party,
signed this date: (c) Maker becomes insolvent, a receiver is appointed for any
part of Maker's property, Maker makes an assignment for the benefit of
creditors, or any proceeding is commenced either by Maker or against maker under
any bankruptcy or insolvency laws; (d) Any creditor tries by legal process to
take any of Maker's property on or in which Holder, Internacional de Mexico S.A.
de C.V. has a lien or security interest and such action continues without being
stayed or dismissed for 60 days.
Upon default, Holder may declare the entire unpaid principal balance on
this Note and all accrued unpaid interest immediately due, and then Maker will
pay that amount
In the event of a default hereunder that continues unremedied: (a) the
maker of this Note promises to pay to the holder hereof all costs of collection
and reasonable attorney's fees, and court cost incurred by the holder hereof on
account of
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such collection, whether or not litigation is commenced, including, but not
limited to, all attorney's fees and costs incurred by the holder hereof in any
bankruptcy proceedings; (b) maker agrees that the holder hereof shall have the
rights and remedies available to a creditor under, and that this Note shall be
construed in accordance with, the laws of the State of Baja California Norte,
Mexico. All cost of collection and attorney's fees shall be deemed added to
principal when such amounts are incurred by the holder hereof and shall accrue
interest at the rate provided in this Note until paid.
The maker agrees that the rights granted to the holder hereof pursuant to
this Note shall accrue to any endorsee of this Note who is lawfully in
possession of this Note.
COLLATERAL. This Note is secured by security agreement executed this date by
Cerveceria Rio Bravo S.A. de C.V
The undersigned, and any other party liable for the debt evidence by this Note,
severally waives demand, presentment, notice of dishonor and protest of this
Note; and consents to any extension or postponement of time of its payment
without limit as to number or period; to any substitution, exchange or release
of all or any part of the collateral securing this Note; to the addition of any
party; and to the release, discharge or suspension any right and remedies
against any person who may be liable for the payment of this debt. No delay on
the part of the holder in the exercise of any right or remedy shall operate as a
waiver, no single or partial exercise by the holder of any right or remedy shall
preclude any other or further exercise of that right or remedy or the exercise
of any other right or remedy; and no waiver or indulgence by the holder of any
default shall be effective unless it is in writing and signed by the holder; nor
shall a waiver on one occasion be construed as a bar to, or waiver of, any right
on any future occasion.
MAKER: Cerveceria Rio Bravo S.A. de C.V.
Boulevard Morelos # 750 Colonia Industrial City of Tecate
State of Baja California Norte, Mexico
BY: /s/ Peter Bordeaux
-------------------------
President
BY: /s/ James Ake
-------------------------
Secretary
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SECURITY AGREEMENT
THIS SECURITY AGREEMENT (the "Agreement") made as of the 24th day of
September 1997, by and between CERVECERIA RIO BRAVO S.A. de C.V. a Mexican
corporation ("Debtor"), and INTERNACIONAL de MEXICO S.A. de C.V. ("Secured
Party").
RECITALS:
A. Secured Party is the Holder of a Note dated September 24, 997 in which
Cerveceria Rio Bravo S.A. de C. V. ("Maker") promises to pay to Internacional de
Mexico S.A. de C.V. ("Holder") or order, the sum of Three Hundred Thousand and
no/100 Dollars ($300,000.00) together with interest thereon at the rate of
twelve percent (12 %) per annum, payable on or before November 23, 1997 when the
balance of principal, together with interest accrued thereon, shall become
immediately due and payable.
B. As security for the payment of the Note in the sum of $300,000.00,
Debtor, Cerveceria Rio Bravo S.A. de C.V herewith grants a Security interest in
and to all of the following property ("Collateral") in which Debtor now has or
hereafter acquires any right, title or interest, located at Boulevard Morelos #
750 Colonia Industrial, City of Tecate, State of Baja California Norte, Mexico
and wheresoever located and whether in the additions, substitutions and
replacements thereto and thereof and all proceeds thereof (including but not
limited to accounts, inventory, chattel paper, documents, instruments, deposit
accounts and general intangibles): All accounts receivable, inventory,
equipment, fixed assets, furniture and fixtures, computers together with all
other property situated at the above location.
NOW, THEREFORE, Debtor and Secured Party hereby agree as follows:
I. Creation of Security Interest.
Debtor hereby grants to Secured Party a security interest in the personal
property described above owned by Debtor and any and all additions,
replacements, accessions, substitutions, repairs and proceeds relating thereto
or therefrom (all such personal property collectively referred to as the
"Collateral") for the purpose of securing:
(a) Payment prior to delinquency of the indebtedness (including both
principal and interest) as set forth in the Note in the sum of $300,000.00.
(b) Performance by Debtor of all agreements, covenants, terms and
conditions contained in this Agreement.
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(c) Reimbursement to Secured Party of any and all monies expended by
Secured Party to protect her security interest in or the value of the Collateral
under the provisions of this Agreement.
(d) This Security Agreement also secures: (a) all extensions or
renewals of said promissory note: (b) the repayment of all sums, including but
not limited to reasonable legal expenses, that may be advanced or incurred by
Secured Party for the maintenance, protection or preservation of the Security,
or any part thereof; (c) any and all other sums that may hereafter be advanced
by Secured Party to or for the benefit of Debtor; (d) any and all other
expenditures that may hereafter be made by Secured Party pursuant to the
provisions hereof; and (e) any and all other debts and obligation of Debtor to
Secured Party that may hereafter be incurred.
All matters referred to in Paragraphs 1(a) through 1(d) above are sometimes
referred to as the "Obligations."
2. Warranties. Representations and Covenants of Debtor.
Debtor hereby warrants, represents and covenants as follows:
(a) Debtor is the sole owner of the Collateral, free from any adverse
lien, security interest, encumbrance or adverse claim of any kind whatsoever.
Debtor will notify Secured Party of and will defend the Collateral against all
claims and demands of all persons at any time claiming any interest therein.
(b) The Collateral will be kept at Boulevard Morelos # 750 Colonia
Industrial, City of Tecate, State of Baja California Norte, Mexico and Debtor
will not remove the Collateral without the prior written consent of Secured
Party.
(d) Debtor's principal place of business is Boulevard Morelos # 750
Colonia Industrial, City of Tecate, State of Baja California Norte, Mexico.
Debtor will immediately notify Secured Party in writing of any changes in
Debtor's principal place of business.
(e) At the request of Secured Party, Debtor will join Secured Party in
executing one or more financing statements pursuant to the laws of Mexico, in
form satisfactory to Secured Party, to be Filed in all public offices wherever
filing is deemed by Secured Party to be necessary.
(t) As to all Collateral in Debtor's possession, Debtor agrees as
follows:
(i) Except for sales of inventory in the ordinary course of
business at usual and customary rates of gross profit, Debtor will not, without
the prior written consent of Secured Party, sell, offer to sell or otherwise
transfer, exchange or dispose of the Collateral or any interest therein. If the
Collateral or any part thereof is sold, transferred, exchanged, or otherwise
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disposed of (either with or without the written consent of Secured Party), the
security interest of Secured Party shall extend to the proceeds of such sale,
transfer, exchange or other disposition.
(ii) Debtor shall keep the Collateral separate and identifiable
from all other similar property.
(iii) Debtor shall keep the Collateral in good condition and repair,
and will not misuse, abuse, allow to deteriorate, waste or destroy the
Collateral or any part thereof, except for the ordinary wear and tear of its
normal and expected use. Inventory compromising the Collateral shall be kept in
good and salable condition as necessary, and all Collateral shall be dealt with
in such ways as are considered good practice by owners of like property. Debtor
shall permit the Secured Party to inspect the Collateral at reasonable times.
(iv) Except for sales of Inventory comprising the Collateral in the
ordinary course of business, Debtor shall not sell, contract to sell, encumber,
create any security interest in, or transfer or in any manner and proceeds
thereof impair the value of the Collateral until the Obligations have been paid
(g) Debtor will execute any document alone or with Secured party, will
procure any document and do all other acts and pay all connected costs, in a
timely and proper manner which from the character or use of the Collateral may
be reasonably necessary to protect the Collateral against the rights, claims or
interests of third persons, and will otherwise preserve the Collateral as
security hereunder.
3. Preservation of Collateral by Secured Party.
Should Debtor fail or refuse to make any payment, perform or observe
any other covenant, condition or obligation, or fail to take any other action
which Debtor is obligated hereunder to make, perform, observe, take or do at the
time or in the manner herein provided, then Secured Party may, at Secured
Party's sole discretion, without notice to or demand upon Debtor and without
releasing Debtor from any obligation, covenant or condition thereof, make,
perform, observe, take or do the same in such manner and to such extent as
Secured Party may deem necessary to protect her security interest in or the
value of the Collateral. Debtor agrees to reimburse Secured Party on demand for
any payment made, or any expense incurred by Secured Party pursuant to the
foregoing authorization (including actual attorneys' fees), together with simple
interest at the maximum rate of interest permitted by law, from the date of any
such payment or expenditure. Furthermore, Secured Party may commence, appear or
otherwise participate in any action or proceeding purporting to affect her
security interest in or the value of the Collateral.
4. Use of Collateral by Debtor.
Until a Default occurs, Debtor shall have possession of the Collateral
and use it in
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any lawful manner not inconsistent with this Agreement.
5. Default.
Debtor shall be in default under this Agreement upon the occurrence of
any of the following events or conditions which continue or are uncured after
Secured Party gives ten (10) days' prior written notice to Debtor:
(a) Debtor defaults in the payment or fails to perform of any of the
Obligations, or covenant or condition set forth in this Agreement;
(b) Any warranty, representation or statement (including, without
limitation, those made in this Agreement) made or furnished to Secured Party by
or on behalf of Debtor, in connection with this Agreement proves to have been
false in any material respect when made or furnished;
(c) Debtor becomes insolvent; seeks, consents to or acquiesces in the
appointment of a trustee, liquidator or receiver of any substantial part of its
assets; make an assignment for the benefit of creditors; commences any
proceeding under any bankruptcy or insolvency law, or any of the Collateral is
levied or executed upon or seized;
(d) Debtor fails to obtain the dismissal of any bankruptcy or
insolvency proceedings instituted against it by one or more third parties within
sixty (30) days from the commencement thereof;
(e) Debtor fails to pay, is unable to pay or admits its inability to
pay debts as debts mature;
(f) The Collateral is removed in violation of the terms of Paragraph
2(c), above.
6. Remedies Upon Default.
Upon the occurrence of any one or more events of default as set forth
in Paragraph 5 above, Secured Party may, at its option, after giving ten (10)
days' prior written notice to Debtor, do any one or more of the following:
(a) Declare all indebtedness and Obligations then owed by Debtor to
Secured Party to be immediately due and payable, whereupon all unpaid principal
of and interest on such indebtedness, Obligations and other amounts declared due
and payable shall be and become immediately due and payable;
(b) Either personally or by means of a court appointed receiver, take
possession of all or any of the Collateral and exclude therefrom Debtor and all
others claiming under Debtor,
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and thereafter hold, store, use, operate, manage, maintain and control, take
repairs, replacements, alterations, additions and improvements to and exercise
all rights and powers of Debtor in respect of the Collateral or any part thereof
including (without limitation) leasing the Collateral for use in the operation
of the business of the Debtor, to any third party. In the event Secured Party
demands, or attempts to take possession of the Collateral in the exercise of any
rights under this Agreement, Debtor agrees to turn over promptly and deliver
complete possession to Secured Party;
(c) Without notice to or demand upon Debtor, make such payments and do
such acts as Secured Party may deem necessary to protect her security interest
in the Collateral, including (without limitation) paying, purchasing, contesting
or compromising any encumbrance, charge or lien which is or appears to be prior
to or superior to the security interest granted hereunder, and, in exercising
any such powers or authority, to pay all expenses incurred in connection
therewith;
(d) Require Debtor to assemble the Collateral, or any portion thereof,
at a place designated by Secured Party and reasonable convenient to all parties,
and to deliver such Collateral to Secured Party, or an agent or representative
designated by Secured Party. Secured Party, and her agents and representatives,
shall have the right without court order or upon any or all of Debtor's premises
and property, to exercise Secured Party's rights hereunder;
(e) Foreclose this agreement and the security interest granted hereby
in any manner permitted by law; and sell the Collateral in such order as Secured
Party may determine, as a whole or in such portions as Secured Party may
determine;
(f) Sell, lease or otherwise dispose of the Collateral at public or
private sale, without having the Collateral at the place of sale, and upon such
terms and in such manner as Secured Party may determine. Secured Party may be a
purchaser at any sale;
(g) Exercise any remedies of a secured creditor under the laws of
Mexico or any other applicable law;
(h) The proceeds of any sale under this Paragraph 6 shall be applied
as follows:
(1) To the repayment of the reasonable costs and expenses of
retaking, holding and preparing for the sale and of selling the Collateral
(including actual attorneys' fees and costs) and the discharge of all
assessments, encumbrances, charges or liens, if any, on the Collateral prior to
the lien hereof (except any taxes, assessments, encumbrances, charges or liens
subject to which such sale shall have been made);
(2) To the payment of the whole or any portion of the amount
then due and unpaid of any indebtedness or Obligations of Debtor to Secured
Party (including principal and interest);
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(3) To the payment of all other amounts (including principal and
interest) secured hereunder; and
(4) The surplus, if any, shall be paid to Debtor or to whomever
may be lawfully entitled to receive the same, or as a court of competent
jurisdiction may direct. Secured Party shall have the right to enforce one or
more remedies hereunder, successively or concurrently, and such action shall not
operate to estop or prevent Secured Party from pursuing any further remedy which
she may have, and any repossession or retaking or sale of the Collateral
pursuant to the terms hereof shall not operate to release Debtor until full
payment of any deficiency has been made in cash.
7. Termination.
In the event that Debtor shall not have suffered any default to occur in
the observance of any of the terms and conditions hereof (or shall have cured
any default to Secured Party's reasonable satisfaction), then upon payment and
performance in full of the Obligations, this Security Agreement shall terminate
and Secured Party (at Debtor's sole cost and expense) shall take all action
necessary to release the security interest granted hereby.
8. Notices.
All notices required or permitted hereunder shall be in writing or by fax
and may be delivered personally to the other party sent by registered mail or
wire or other telegraphic communication to the parties addressed as follows:
To Debtor:
Cerveceria Rio Bravo S.A. de C.V, Boulevard Morelos # 750 Colonia
Industrial, City of Tecate, State of Baja California Norte, Mexico.
American Craft Brewing International Limited, One Galleria Boulevard, Suite
1714, Metairie, Louisiana 70001.
To Secured Party:
Internacional de Mexico SA. de CV., Boulevard Cuauhtemoc 1711-302-B, Zona
del Rio, Tijuana, Baja California Norte, Mexico, C.P. 22320.
Such notices sent as provided above shall be effective when received by the
addressee thereof, but if sent by registered or certified mail, postage prepaid,
shall be effective three (3) business days after being deposited in the United
States mail.
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9. Other Remedies.
Any and all remedies expressly conferred on Secured Party shall be deemed
cumulative with, and not exclusive of, any other remedy conferred hereby or by
law on Secured Party, and the exercise of any one remedy shall not preclude the
exercise of any other.
10. Waiver.
By exercising or failing to exercise any of her rights, options or
elections hereunder, Secured Party shall not be deemed to have waived any breach
or default on the part of Debtor or to have released Debtor from any of its
indebtedness or Obligations hereunder, unless such waiver or release is in
writing, signed by Secured Party. In addition, the waiver by Secured Party of
any breach hereof or any default in payment of any indebtedness or obligations
secured hereby shall not be deemed to constitute a waiver of any succeeding
breach or default.
ii. General Terms.
(a) In this Agreement, whenever and wherever the context so requires,
the singular shall include the plural, and the masculine the feminine or neuter
gender, and vice versa.
(b) In any action or proceeding brought to enforce any provisions of
this Agreement, or to seek damages for a breach of any provision hereof, or
where any provision hereof is asserted as a defense, the successful party shall
be entitled to recover reasonable attorneys' fees and costs in addition to any
other available remedy.
(c) All agreements covenants, conditions and provisions of this
Agreement shall be binding upon the heirs, successors and assigns of Debtor and
the successors in interest of Debtor in and to the Collateral, and shall inure
to the benefit of Secured Party, her successors and assigns.
(d) The headings in this Agreement are inserted for convenience only
and shall not effect the meaning or interpretation of this Agreement or any
provision hereof.
(e) The validity, construction and effect of this Agreement shall be
governed by the laws of Mexico.
(f) This Agreement can be modified or rescinded only by an instrument
in writing expressly referring to this Agreement and signed by all of the
parties.
(h) If any provision of this Agreement or any application thereof
shall be invalid or unenforceable, the remainder of this Agreement and any other
application of such provision shall not be affected.
IN WITNESS WHEREOF, Secured Party and Debtor have executed this instrument.
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Dated: September 24, 1997 at Tecate, Mexico.
This Agreement is executed on behalf of DEBTOR, Cerveceria Rio Bravo S.A. de C.V
by its duly authorized officers.
DEBTOR: Cerveceria Rio Bravo S.A. de C.V
BY: /s/ Peter Bordeaux
-------------------------------
Peter W. H. Bordeaux, President
BY: /s/ James L. Ake
-------------------------------
James L. Ake, Secretary
SECURED PART : Internacional de Mexico S.A. de C.V.
BY: /s/ Fernando Gutierrez Saenz
-------------------------------
Fernando Gutierrez Saenz, President
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SHAREHOLDER CONSENT
The undersigned, American Craft Brewing International Limited, is the sole
shareholder of Cerveceria Rio Bravo S.A. de C.V. and consents to the execution
of the above security agreement and note in the principal sum of $300,000.00.
American Craft Brewing International Limited
BY: /s/ Peter Bordeaux
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Peter W. H. Bordeaux, President
BY: /s/ James L. Ake
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James L. Ake, Secretary
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THESE WARRANTS HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES FEDERAL OR
APPLICABLE STATE SECURITIES LAWS AND INSTEAD ARE BEING ISSUED PURSUANT TO
EXEMPTIONS CONTAINED IN SAID LAWS. THE WARRANTS REPRESENTED BY THIS CERTIFICATE
MAY NOT BE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT TO SUCH
WARRANTS AND THE SHARES UNDERLYING SUCH WARRANTS SHALL BE EFFECTIVE UNDER THE
UNITED STATES SECURITIES ACT OF 1933 OR (2) AMERICAN CRAFT BREWING INTERNATIONAL
LIMITED SHALL HAVE RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT
THAT NO VIOLATION OF SUCH ACT OR SIMILAR STATE ACTS WILL BE INVOLVED IN SUCH
TRANSFER.
WARRANT NO. W-1
REDEEMABLE WARRANT
TO PURCHASE SHARES OF COMMON STOCK,
PAR VALUE $0.01 PER SHARE,
OF
AMERICAN CRAFT BREWING INTERNATIONAL LIMITED
THIS IS TO CERTIFY THAT Internacional de Mexico S.A. de C.V., or such
holder's registered assigns (the "Investor"), is the owner of 100,000 Warrants
(as defined below), each of which entitles the registered holder thereof to
purchase from American Craft Brewing International Limited, a Bermuda company
(the "Company"), one fully paid, duly authorized and nonassessable share of
Common Stock, par value $0.01 per share, of the Company (the "Common Stock"), at
any time or from time to time after the earlier of (a) November 23, 1997, and
(b) the repayment of a certain promissory note, dated the Issue Date (the
"Note"), made by Cerveceria Rio Bravo S.A. de C.V., in favor of the Investor, on
or before 5:00 p.m., New York City time, on September 24, 2002, at an exercise
price of fifty cents (US$0.50) per share (the "Exercise Price"), all on the
terms and subject to the conditions hereinafter set forth.
The number of shares of Common Stock issuable upon exercise of each
such Warrant (the "Number Issuable"), which is initially one (1) share, is
subject to
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adjustment from time to time pursuant to the provisions of Section 2
of this Warrant Certificate. The Warrants evidenced by this certificate
constitute Class B Warrants being issued by the Company on the Issue Date (the
"Warrants").
Capitalized terms used herein but not otherwise defined shall have the
meanings given them in Section 11 hereof.
Section 1. Exercise of Warrant. Subject to the last paragraph of
this Section 1, the Warrants evidenced hereby may be exercised, in whole or in
part, by the registered holder hereof at any time or from time to time after the
earlier of (a) November 23, 1997, and (b) the repayment of the Note, on or
before 5:00 p.m., New York City time, on September 24, 2002, upon delivery to
the Company at the principal executive office of the Company in the United
States of America, of (a) this Warrant Certificate, (b) a written notice stating
that such holder elects to exercise the Warrants evidenced hereby in accordance
with the provisions of this Section 1 and specifying the name or names in which
such holder wishes the certificate or certificates for shares of Common Stock to
be issued and (c) payment of the Exercise Price for the shares of Common Stock
issuable upon exercise of such Warrants, which shall be payable by a certified
or official bank check payable to the order of the Company, (collectively, the
"Warrant Exercise Documentation").
As promptly as practicable, and in any event within five Business Days
after receipt of the Warrant Exercise Documentation, the Company shall deliver
or cause to be delivered (a) certificates representing the number of validly
issued, fully paid and nonassessable shares of Common Stock specified in the
Warrant Exercise Documentation, (b) if applicable, cash in lieu of any fraction
of a share, as hereinafter provided, and (c) if less than the full number of
Warrants evidenced hereby are being exercised, a new Warrant Certificate or
Certificates, of like tenor, for the number of Warrants evidenced by this
Warrant Certificate, less the number of Warrants then being exercised. Such
exercise shall be deemed to have been made at the close of business on the date
of delivery of the Warrant Exercise Documentation so that the Person entitled to
receive shares of Common Stock upon such exercise shall be treated for all
purposes as having become the record holder of such shares of Common Stock at
such time. No such surrender shall be effective to constitute the Person
entitled to receive such shares as the record holder thereof while the transfer
books of the Company for the Common Stock are closed for any purpose (but not
for any period in excess of five days); but any such surrender of this Warrant
Certificate for exercise during any period while such books are so closed shall
become effective for exercise immediately upon the reopening of such books, as
if the exercise had been made on the date this Warrant Certificate was
surrendered and for the Number Issuable of Common Stock specified in the Warrant
Exercise Documentation and at the Exercise Price.
The Company shall pay all expenses in connection with, and all taxes
and other governmental charges (other than income taxes of the holder) that may
be imposed in respect of, the issue or delivery of any shares of Common Stock
issuable upon the
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exercise of the Warrants evidenced hereby. The Company shall not be required,
however, to pay any tax or other charge imposed in connection with any transfer
involved in the issue of any certificate for shares of Common Stock in any name
other than that of the registered holder of the Warrants evidenced hereby.
In connection with the exercise of any Warrants evidenced hereby, no
fractions of shares of Common Stock shall be issued, but in lieu thereof the
Company shall pay a cash adjustment in respect of such fractional interest in an
amount equal to such fractional interest multiplied by the Current Market Price
per share of Common Stock on the Business Day which next precedes the day of
exercise. If more than one such Warrant shall be exercised by the holder
thereof at the same time, the number of full shares of Common Stock issuable on
such exercise shall be computed on the basis of the total number of Warrants so
exercised.
Section 2. Adjustments. The Number Issuable shall be subject to
adjustment from time to time as follows:
In case the Company shall at any time or from time to time after
the Issue Date:
(a) pay a dividend or make a distribution on the outstanding
shares of Common Stock in capital stock of the Company;
(b) subdivide the outstanding shares of Common Stock into a
larger number of shares;
(c) combine the outstanding shares of Common Stock into a smaller
number of shares; or
(d) issue any shares of its capital stock in a reclassification
of the Common Stock;
then, and in each such case, the Number Issuable in effect immediately
prior to such event shall be adjusted (and any other appropriate actions
shall be taken by the Company) so that the holder of any Warrant evidenced
hereby thereafter exercised shall be entitled to receive the number of
shares of Common Stock or other securities of the Company which such holder
would have owned or had been entitled to receive upon or by reason of any
of the events described above, had such Warrant been exercised immediately
prior to the happening of such event. An adjustment made pursuant to this
Section 2 shall become effective retroactively (x) in the case of any such
dividend or distribution, to a date immediately following the close of
business on the record date for the determination of holders of shares of
Common Stock entitled to receive such dividend or distribution, or (y) in
the case
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of any such subdivision, combination or reclassification, to the close of
business on the date upon which such corporate action becomes effective.
Section 3. Redemption. Commencing on the date that is six months
from the Issue Date, the Company may, on five days prior written notice, redeem
any or all of the Warrants at one cent (US$0.01) per Warrant.
Section 4. Certain Covenants. The Company covenants and agrees that
all shares of capital stock of the Company which may be issued upon the exercise
of the Warrants evidenced hereby will be duly authorized, validly issued and
fully paid and nonassessable. The Company shall at all times reserve and keep
available for issuance upon the exercise of the Warrants, such number of its
authorized but unissued shares of Common Stock as will from time to time be
sufficient to permit the exercise of all outstanding Warrants, and shall take
all action required to increase the authorized number of shares of Common Stock
if at any time there shall be insufficient authorized but unissued shares of
Common stock to permit such reservation or to permit the exercise of all
outstanding Warrants.
Section 5. Registered Holder. The person in whose name this Warrant
Certificate is registered shall be deemed the owner hereof and of the Warrants
evidenced hereby for all purposes.
Section 6. Transfer of Warrants. Any transfer of the rights
represented by this Warrant Certificate shall be effected by the surrender of
this Warrant Certificate, along with the form of assignment attached hereto,
properly completed and executed by the registered holder hereof, at the
principal executive office of the Company in the United States of America;
provided that (a) a registration statement with respect to the Warrants proposed
for transfer, and with respect to the shares of Common Stock underlying such
Warrants, shall be effective under the Securities Act or (b) the Company shall
have received an opinion of counsel reasonably satisfactory to it that no
violation of such act or similar state acts will be involved in such transfer.
Thereupon, the Company shall issue in the name or names specified by the
registered holder hereof and, in the event of a partial transfer, in the name of
the registered holder hereof, a new Warrant Certificate or Certificates
evidencing the right to purchase such number of shares of Common Stock as shall
be equal to the number of shares of Common Stock then purchasable hereunder.
Section 7. Denominations. The Company covenants that it will, at its
expense, promptly upon surrender of this Warrant Certificate at the principal
executive office of the Company in the United States of America, execute and
deliver to the registered holder hereof a new Warrant Certificate or
Certificates in denominations specified by such holder for an aggregate number
of Warrants equal to the number of Warrants evidenced by this Warrant
Certificate.
Section 8. Replacement of Warrants. Upon receipt of evidence
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant
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Certificate and, in the case of loss, theft or destruction, upon delivery of an
indemnity reasonably satisfactory to the Company (in the case of an
institutional investor, its own unsecured indemnity agreement shall be deemed to
be reasonably satisfactory), or, in the case of mutilation, upon surrender and
cancellation thereof, the Company will issue a new Warrant Certificate of like
tenor for a number of Warrants equal to the number of Warrants evidenced by this
Warrant Certificate.
Section 9. Governing Law. THIS WARRANT CERTIFICATE SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT
GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISIONS).
Section 10. Rights Inure to Registered Holder. The Warrants
evidenced by this Warrant Certificate will inure to the benefit of and be
binding upon the registered holder thereof and the Company and their respective
successors and permitted assigns. This Warrant Certificate shall be for the
sole benefit of the registered holder thereof. Nothing in this Warrant
Certificate shall be construed to give the registered holder hereof any rights
as a holder of shares of Common Stock until such time, if any, as the Warrants
evidenced by this Warrant Certificate are exercised in accordance with the
provisions hereof.
Section 11. Definitions. For the purposes of this Warrant
Certificate, the following terms shall have the meanings indicated below:
"Business Day" shall mean any day other than a Saturday, Sunday or
other day on which commercial banks in the City of New York are authorized or
required by law or executive order to close.
"Common Stock" shall have the meaning assigned to such term in the
Preamble hereof.
"Company" shall have the meaning assigned to such term in the Preamble
hereof.
"Current Market Price" per share shall mean, on any date specified
herein for the determination thereof, (a) if the Common Stock is then listed on
a national securities exchange, designated for quotation on the National Market
System or the Small Cap Market of the Nasdaq Stock Market or quoted in the over-
the-counter-market by a member firm of the NYSE, the average daily Market Price
of the Common Stock for those days during the period of 15 days, ending on such
date, on which the national securities exchanges were open for trading, and (b)
if the Common Stock is not then so listed, designated or quoted, the Market
Price on such date.
"Exercise Price" shall have the meaning given it in the preamble
hereof.
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"Fair Market Value" shall mean the amount which a willing buyer, under
no compulsion to buy, would pay a willing seller, under no compulsion to sell,
in an arm's-length transaction.
"Investor" shall have the meaning assigned to such term in the
Preamble hereof.
"Issue Date" shall mean September 24, 1997.
"Market Price" shall mean, per share of Common Stock, on any date
specified herein: (a) if the Common Stock is listed on any national securities
exchange designated for quotation on the National Market System or the Small Cap
Market of the Nasdaq Stock Market, the last trading price of the Common Stock on
such date as reported in the Wall Street Journal; or (b) if the Common Stock is
not so listed or designated, the average of the reported closing bid and ask
prices of the Common Stock in the over-the-counter-market, on such date as
reported by any member firm of the NYSE selected by the Company; or (c) if none
of (a) or (b) is applicable, the Fair Market Value per share determined in good
faith by the Board of Directors of the Company.
"Number Issuable" shall have the meaning given it in the Preamble
hereof.
"NYSE" shall mean the New York Stock Exchange, Inc.
"Person" shall mean any individual, corporation, limited liability
company, partnership, trust, incorporated or unincorporated association, joint
venture, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.
"Securities Act" shall mean the Securities Act of 1933.
"Warrants" shall have the meaning assigned to such term in the
Preamble hereof.
"Warrant Exercise Documentation" shall have the meaning given it in
Section 1 hereof.
Section 12. Notices. All notices, demands and other communications
provided for or permitted hereunder shall be made in writing and shall be
sufficient if delivered personally or sent by telecopy (with confirmation of
receipt) or by registered or certified mail, postage prepaid, return receipt
requested, (a) if to the holder of a Warrant, at such holder's last known
address or telecopy number appearing on the books of the Company; and (b) if to
the Company, at its principal executive office, or the telecopy number of such
office, in the United States, or such other address or telecopy number as the
party to whom notice is to be given may have furnished to the other party. Each
such
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notice, request or communication shall be effective when received or, if given
by mail, when delivered at the address specified in this Section or on the fifth
Business Day following the date on which such communication is posted, whichever
occurs first.
Section 13. Share Legend. Each certificate representing shares of
Common Stock or any other securities issued upon exercise of this Warrant shall
bear the following legend unless such shares or other securities have been
registered under the Securities Act and any applicable state securities laws:
"THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES FEDERAL
OR APPLICABLE STATE SECURITIES LAWS AND INSTEAD ARE BEING ISSUED PURSUANT TO
EXEMPTIONS CONTAINED IN SAID LAWS. THE SHARES REPRESENTED BY THIS CERTIFICATE
MAY NOT BE TRANSFERRED UNLESS (A) REGISTRATION STATEMENT SHALL BE EFFECTIVE
UNDER THE UNITED STATES SECURITIES ACT OF 1933 OR (B) AMERICAN CRAFT BREWING
INTERNATIONAL LIMITED SHALL HAVE RECEIVED AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO IT THAT NO VIOLATION OF SUCH ACT OR SIMILAR STATE ACTS WILL BE
INVOLVED IN SUCH TRANSFER."
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IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed as of the Issue Date.
AMERICAN CRAFT BREWING
INTERNATIONAL LIMITED
By:
---------------------------------
Name:
Title:
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[Form of Assignment Form]
[To be executed upon assignment of Warrants]
The undersigned hereby assigns and transfers this Warrant Certificate to
____________________ whose Social Security Number or Tax ID Number is
_________________ and whose record address is
_____________________________________, and irrevocably appoints ________________
as agent to transfer this security on the books of the Company. Such agent may
substitute another to act for such agent.
Signature:
____________________________________
Signature Guarantee:
____________________________________
Date: ___________________________
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