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Exhibit 10.2
RED BELL BREWING CO.
(A Pennsylvania Corporation)
5% CONVERTIBLE SUBORDINATED DEBENTURE
THIS DEBENTURE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933
OR ANY APPLICABLE STATE STATUTE
$460,000.00
Due August 1, 2006
Philadelphia, PA Dated August 12, 1996
FOR VALUE RECEIVED, and intending to be legally bound hereby, RED BELL
BREWING CO., a Pennsylvania corporation, having an address at 3100 West
Jefferson Street, Philadelphia, Pennsylvania 19121 ("Company"), hereby promises
to pay to RED BELL PARTNERS, L.P., a Pennsylvania limited partnership
("Obligee"), having an address at 334 Louella Avenue, Wayne, PA 19087, or such
other place as Obligee may designate in writing, the principal sum of Four
Hundred Sixty Thousand Dollars ($460,000) lawful money of the United States of
America, on August 1, 2006 ("Date of Maturity"), together with interest on the
unpaid principal balance of the Debenture at the rate of five percent (5%) per
annum, from the date of the Debenture, payable semi-annually, on the 1st day of
February and the 1st day of August in each year, commencing February 1, 1997,
at the address of Obligee set forth above or such other place as Obligee may
designate in writing.
This Debenture has been issued pursuant to a separate Debenture Purchase
Agreement of even date herewith between Company and the Obligee, and is in all
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provisions of such Agreement, which is incorporated by reference herein. As
provided therein, this Debenture is subject to prepayment, in whole or in part,
after a certain date.
At the option of the holder hereof, the principal amount of this
Debenture, subject to adjustment, is convertible into fully paid and
nonassessable shares of Company's Common Stock, upon the terms and conditions
and subject to the limitations set forth in the Agreement, at an initial
conversion price, subject to adjustment, of $2.00 per share.
This Debenture and all payments hereon, including principal and interest,
are subordinated to Company's Senior Debt, as defined in the Agreement, to the
extent and in the manner specified therein.
Company agrees to make payment of the principal on the date specified in
the Agreement.
If an event of default, as defined in the Agreement, occurs and is
continuing, the principal of this Debenture may be declared due and payable in
the manner and with the effect provided in the Agreement.
RED BELL BREWING CO.
Corporate Seal By: /s/ James R. Bell
--------------------------------
President
